The $RK Tax Advice Thread

[lseelba]

I'm a Professional Tax Preparer. If you live in Tucson, please come to my office :). For all the other SRK'ers out there, just post a question or PM me and I'll give you a straightforward, CORRECT answer.

Here's my first useful thing: Download HR Block TaxCut Standard (http://store.taxcut.com/dr/v2/ec_Main.Entry17c?V1=731345&PID=731345&PN=1&SP=10023&SID=33195&CUR=840&CID=206485) for free. Be sure to remove the $4.99 download protection in your cart. No credit card or payment info needed. You can prepare and print your Federal taxes for free. You still have to do your state, but you can either do that with your state forms, or pay for HR Block's state program.

FREE FILE PROGRAM: If you have an AGI of $50,000 or less, and are under the age of 50, you qualify for the Free File Program (http://www.hrblock.com/taxes/partner/index.jsp?otpPartnerId=180). Your online Federal tax return and E-File will be free. The state return will still cost you around $25 though.

$25 Coupon for new clients: If you did not use H&R Block last year, and you are going into an office this year, print out this coupon here (http://www.hrblock.com/taxes/office/pi_form.html?retailCoupon=77337).

[Koop]

clear your pm's...

[lseelba]

clear your pm's...

Done.

[lseelba]

Updated my first post with lots of money saving links.

[Scorpio_G]

Ok....ok....

I currently live in BKLYN,NY and I'm 21. I'm in Work study, I go to school full time and this is the first time I'm actually working. Ever.

My mother says taxes arent suppose to be taken out of my paycheck because 1. I'm a student and 2. I'm a dependent. When I saw my Direct Deposit stub I found they're taking federal out.

Now before I even got a check I filled out the paperwork stating I am exempt and they still taking it out. I asked the guy who in charge of payroll for my dept and he says that's 'normal', my mom says he's wrong, and my Finacial aid advisour says it doesnt even matter if they were taking it out or not 'cause I'll get it back. Now here's my questions.

1. Is this going to fuck up my finacial aid?

2. Can I ever get my money back? Will I get a refund? And if I do if that's going to screw up my finacial aid? ( My mom says I'm not going to get anything back and If I do it's going to screw up my FA. My Financial Aid advisor says I should get money back and it wont mess with my FA because I make WAY below 20,000. But I want a third opinion.)

3. Can I fix it so taxes wont get taken out the next time?

At first I was going to PM but I figured there's a lot of people in NYC WS who are probably dealing with the same thing or had in the past. Please! Anyone post what happened.:angel:

[MagnuScruB]

stickied? i guess...

hot deals and free stuff should be stickied also!

[L1qu1d]

word, nice to see someone doing something productive like this, big props man if i had premium status id rep you

[cakes]

The university I work at just handed me a W-4 form, presumably for last year's work.

I'm completely clueless as to what the fuck it's for. Have any guides / shit I could read that's reliable and easy to understand?

[lseelba]

Ok....ok....

I currently live in BKLYN,NY and I'm 21. I'm in Work study, I go to school full time and this is the first time I'm actually working. Ever.

My mother says taxes arent suppose to be taken out of my paycheck because 1. I'm a student and 2. I'm a dependent. When I saw my Direct Deposit stub I found they're taking federal out.

Now before I even got a check I filled out the paperwork stating I am exempt and they still taking it out. I asked the guy who in charge of payroll for my dept and he says that's 'normal', my mom says he's wrong, and my Finacial aid advisour says it doesnt even matter if they were taking it out or not 'cause I'll get it back. Now here's my questions.

1. Is this going to fuck up my finacial aid?

2. Can I ever get my money back? Will I get a refund? And if I do if that's going to screw up my finacial aid? ( My mom says I'm not going to get anything back and If I do it's going to screw up my FA. My Financial Aid advisor says I should get money back and it wont mess with my FA because I make WAY below 20,000. But I want a third opinion.)

3. Can I fix it so taxes wont get taken out the next time?

At first I was going to PM but I figured there's a lot of people in NYC WS who are probably dealing with the same thing or had in the past. Please! Anyone post what happened.:angel:

This is pretty common actually. What your employer is doing is illegal, but a lot of them do it. You can try to submit another W-4 to claim EXEMPT but if your employer didn't change it the first time, they might not change it the second time. They do it because (1) they are lazy and (2) they can get in trouble if too LITTLE is withheld.

Your financial aid adviser is right. Do your taxes, and you will get a good chunk of that withholding back. It won't fuck up your financial aid. Your filing status is single and you are not claiming your own exemption (because your parents are claiming it). Don't claim any education credits because your parents have to claim those. If no NY taxes were withheld, you might owe a few bucks to the state of NY, or you might owe nothing. It depends on how much you made and what New Yorks filing requirements are.

I'd do it online via that link I posted at the top. Shouldn't take you more than an hour.

[lseelba]

The university I work at just handed me a W-4 form, presumably for last year's work.

I'm completely clueless as to what the fuck it's for. Have any guides / shit I could read that's reliable and easy to understand?

I'm assuming your parents are claiming you as a dependent, so you have to file your taxes if your gross income is greater than $4,850. If your income is less than that, you don't have to file, but you might want to if there was any tax withheld (check box 2 on the W-2).

If they actually gave you a blank W-4, they just want you to fill it out to determine how much tax to withhold.

Good straightforward resources are kinda hard to come by. This page isn't bad, but it could be better: http://hrblock.com/learning/firstfilers/index.html?WT.svl=124

[Scorpio_G]

This is pretty common actually. What your employer is doing is illegal, but a lot of them do it. You can try to submit another W-4 to claim EXEMPT but if your employer didn't change it the first time, they might not change it the second time. They do it because (1) they are lazy and (2) they can get in trouble if too LITTLE is withheld.

Man that's wierd. Please explain more if you can.

Your financial aid adviser is right. Do your taxes, and you will get a good chunk of that withholding back. It won't fuck up your financial aid. Your filing status is single and you are not claiming your own exemption (because your parents are claiming it). Don't claim any education credits because your parents have to claim those. If no NY taxes were withheld, you might owe a few bucks to the state of NY, or you might owe nothing. It depends on how much you made and what New Yorks filing requirements are.

I'd do it online via that link I posted at the top. Shouldn't take you more than an hour.

No I dont think I'll pay any state or city taxes. It's just a blank and it's been a blank in the boxes since paycheck #1. Now I'm waiting for my 10-98 form to get in the mail and my W2 and my mom will stop complaining to me. Besides I want to get everything done so I can file in my Finacial Aid and continue working in WS over the summer. (because finding a summer job is the worst thing to do...ever.)

Oh, and one more question. It isnt for me it's for my mom. She wants to be a certified Tax Prepairer too for part time work where did you take your classes?

But thanks lseelba! I'll rep you but I'm not a PM! :lovin: :Huggles:

[DrumlinerJoe]

Man that's wierd. Please explain more if you can.


You're taxed based on how much you make throughout the year. Your federal withholdings alleviate that tax amount. So let's say you have a tax amount of 200 dollars, and the amount they took out for taxes is 500. The amount left over is 300 dollars, which comes to you in the form of a refund. Conversely, if you only had 150 dollars taken out of what you earned, you would owe 50. So you always gotta make sure you have enough taken out so you don't owe.

[Saotome Kaneda]

Good shit. What's your thoughts on taxslayer.com?

[lseelba]

Man that's wierd. Please explain more if you can.



No I dont think I'll pay any state or city taxes. It's just a blank and it's been a blank in the boxes since paycheck #1. Now I'm waiting for my 10-98 form to get in the mail and my W2 and my mom will stop complaining to me. Besides I want to get everything done so I can file in my Finacial Aid and continue working in WS over the summer. (because finding a summer job is the worst thing to do...ever.)

Oh, and one more question. It isnt for me it's for my mom. She wants to be a certified Tax Prepairer too for part time work where did you take your classes?

But thanks lseelba! I'll rep you but I'm not a PM! :lovin: :Huggles:

This is for your mom: http://hrblock.com/taxes/planning/tax_courses/enroll.html?sellCode=

If she does well in the class she will have no problem getting hired.

[lseelba]

All PM's responded to.

[ShinkuuR]

As someone who works at a GA tax office but who doesn't know anything about Income tax(I'm a clerk lol), this thread is pretty solid. Thanks Iseelba for giving all sorts of information I was too lazy/confused to learn on my own. Thread Suscribed.

[hn2682]

Good shit. What's your thoughts on taxslayer.com?

They are pretty good. I've been using them to file my taxes online for the past 3 years. Also, depending on your income and age, you might qualify for free filing on both federal and state. You can also go to the IRS website and they'll list a bunch of sites where you can file for free based on certain requirements.

[Saotome Kaneda]

They are pretty good. I've been using them to file my taxes online for the past 3 years. Also, depending on your income and age, you might qualify for free filing on both federal and state. You can also go to the IRS website and they'll list a bunch of sites where you can file for free based on certain requirements.
omgthx2u

[AL the great]

good thread Iseelba!

[Million]

Thanks....I've never had to deal with this tax junk until now...

why the hell don't they teach this in schools? (*or perhaps they did and I kinda daydreamed through it..)

[K Balch]

1st off thank you so much for this thread. I am actually in need of some advice.

This year i am applying to medical school. I remember hearing from some people that you can write off money spent on the application process in your taxes. Things like fees for entrance exams (mcat), flights to medical interviews, secondary application fees, etc... Then other people have said you cannot. I paid for all of these things myself and they are expensive (i've dropped several thousand at this point) so writing these off will help a lot especially since I have such a low income. My question is are application fees/etc for higher education really something I can write off?

Thanks in advance for any knowledge. If you ever need free medical advice in the coming months PM me and I'll help you out.

[lseelba]

1st off thank you so much for this thread. I am actually in need of some advice.

This year i am applying to medical school. I remember hearing from some people that you can write off money spent on the application process in your taxes. Things like fees for entrance exams (mcat), flights to medical interviews, secondary application fees, etc... Then other people have said you cannot. I paid for all of these things myself and they are expensive (i've dropped several thousand at this point) so writing these off will help a lot especially since I have such a low income. My question is are application fees/etc for higher education really something I can write off?

Thanks in advance for any knowledge. If you ever need free medical advice in the coming months PM me and I'll help you out.

Sorry I've been away so long. I spent Friday and Saturday at a tourney in Phoenix.

This one is a bit tricky. First of all, the education credits are usually more valuable than normal schedule A deductions, so you want to see if you might be eligible for those.

Unfortunately, qualified education expenses for those credits only consist of expenses covering tuition and required course fees, books, equipment, and other supplies if REQUIRED by the course. Qualified expenses do not include the costs of meals, room and board, athletic fees, insurance, and transportation.

The Lifetime Learning Credit is an education credit that covers a little more. Specifically, you may claim the credit for any courses taken to acquire or improve job skills of the student. These courses have to be at an accredited, eligible educational institution though.

From what you have written, it doesn't appear that any of your expenses qualify for an education credit, so you would want to look at itemizing them on your Schedule A.

On the Schedule A, you can deduct costs related to a new job search. However, the job has to be in the same field that you are already working in. If you have never worked in the medical profession, your job seeking expenses are not deductible.

Here is the good news though: even if you could deduct these expenses, it is unlikely that it would benefit you at all. In order for itemized deductions to save you any money, they have to exceed the standard deduction for your filing status. I'm assuming your filing status is Single. If so, you would need to have itemized deductions in excess of $5,000 to save a single cent.

AIM me if you need further clarification.

[Pimp Willy]

I need some advice about school expenses on my tax return.

My school tuition costs me about $2500 a year (2 semesters worth of classes) at the Cal State level. This is just the basic tuition costs. There are a ton of other costs, such as parking pass, books, supplies, equipment, etc that go towards it as well.

This year, I received cal grants (Federak Pell and State University)that covered all of my expenses plus some. I don't have the exact numbers, as I haven't received my 1098-T form yet. I also took out Student Loans, a Subsidized Stafford Loan.

My question is how can I maximize my tax return to get the most out of my schooling expenses?

I don't think I can deduct supplies/books/room and board, or the like. Last year on my taxes I put that I spent about $3000, and my tax return went through and was accepted no problem. I spent about the same, if not more, this year (especially with tuition skyrocketing here). Am I safe placing $3000 for school expenses?

Edit:
Looks like you covered the school supply question in the post above, as I was posting. Does that mean if the class requires books, we are allowed to deduct those as an expense? Or only if the class assigns the books as part of the registration fee?

[lseelba]

I need some advice about school expenses on my tax return.

My school tuition costs me about $2500 a year (2 semesters worth of classes) at the Cal State level. This is just the basic tuition costs. There are a ton of other costs, such as parking pass, books, supplies, equipment, etc that go towards it as well.

This year, I received cal grants (Federak Pell and State University)that covered all of my expenses plus some. I don't have the exact numbers, as I haven't received my 1098-T form yet. I also took out Student Loans, a Subsidized Stafford Loan.

My question is how can I maximize my tax return to get the most out of my schooling expenses?

I don't think I can deduct supplies/books/room and board, or the like. Last year on my taxes I put that I spent about $3000, and my tax return went through and was accepted no problem. I spent about the same, if not more, this year (especially with tuition skyrocketing here). Am I safe placing $3000 for school expenses?

Edit:
Looks like you covered the school supply question in the post above, as I was posting. Does that mean if the class requires books, we are allowed to deduct those as an expense? Or only if the class assigns the books as part of the registration fee?

Be sure to enter exactly what is listed on your 1098-T form. Then you can list ancillarry expenses like books. As a general rule, any books that are on the syllabus, or special equipment required by the class, is a qualified expense. You are supposed to only claim these expenses if it is required to buy them directly from the university, but different tax pros and offices treat this area differently.

[regulate]

I have a question. I live at home with the parents but they cant claim me as a dependant and i made less than 10k the past year, do i get some sort of EIC? I had an ex coworker tell me he gets EIC for making too little money, but hes married and lives with his wife.

[lseelba]

I have a question. I live at home with the parents but they cant claim me as a dependant and i made less than 10k the past year, do i get some sort of EIC? I had an ex coworker tell me he gets EIC for making too little money, but hes married and lives with his wife.
I'm assuming you have no children. You will qualify for the Earned Income Tax Credit if you are between the ages of 25 and 64 as of 1/1/06, live in the US more than half the year, are not eligible to be claimed as a dependent, are not filing Married Filing Separately, and have earned income of less than $13,750.

For taxpayers with one qualifying child, you will qualify for the EITC if you are not filing Married Filing Separately, and have earned income of less than $33,263. For two or more children, the income limit is $37,263. There is no age or US residency requirements.

All the above limits are for Married Filing Joint. They are about $2,000 lower if you are filing Single, Head of Household, or Qualifying Widower.

[regulate]

damnit, im only 21, so i dont qualify right? oh and i dont have any children

[lseelba]

damnit, im only 21, so i dont qualify right? oh and i dont have any children

Yeah. Its pretty lame that they have that age thing for EITC when you don't have any kids. I can't think of any other credits that work like that. Stinks of ageism to me :sad:

[Sans Logique]

I'm a 21 year old college student. Made almost 20 grand last yr.
How much am i looking to pay H&R block to do my taxes for me?

[lseelba]

I'm a 21 year old college student. Made almost 20 grand last yr.
How much am i looking to pay H&R block to do my taxes for me?

It's based on the number of forms, not income. If you are being claimed as a dependent by your parents, probably about $75. My advice is to use the Free File Program in my first post if you are comfortable doing it yourself. The only thing you don't get is tax planning advice (which can save you a lot of money NEXT year), and the ability to get your refund immediately.

[Starhammer]

I've said it before and I'll say it some more lseelba................ not only does your av rock, but you are the man as well. :tup:

-Starhammer-

[DrumlinerJoe]

It's based on the number of forms, not income. If you are being claimed as a dependent by your parents, probably about $75. My advice is to use the Free File Program in my first post if you are comfortable doing it yourself. The only thing you don't get is tax planning advice (which can save you a lot of money NEXT year), and the ability to get your refund immediately.

I don't know, I've never known the price of HR to be actually worth it. For those damn prices you been get a massage and a BJ along with a quick return. Not to mention they're still slppy as hell. Better off doing it alone.

[lseelba]

I don't know, I've never known the price of HR to be actually worth it. For those damn prices you been get a massage and a BJ along with a quick return. Not to mention they're still slppy as hell. Better off doing it alone.
That all depends on the preparer. I just saved a guy $200 today based on an obscure IRS tax ruling that only applies to employees of the Arizona State Government. I know for a fact that no tax program sold in the store or average self preparer would have caught it. Most of my colleagues wouldn't have even caught it.

Taxes are confusing as hell, and I made about a $400 tax mistake on my own return back before I was trained. That was when I was using TurboTax online. Truth is, a good professional preparer will save you money if you have any sort of complexity in your return.

[DrumlinerJoe]

That all depends on the preparer. I just saved a guy $200 today based on an obscure IRS tax ruling that only applies to employees of the Arizona State Government. I know for a fact that no tax program sold in the store or average self preparer would have caught it. Most of my colleagues wouldn't have even caught it.

Taxes are confusing as hell, and I made about a $400 tax mistake on my own return back before I was trained. That was when I was using TurboTax online. Truth is, a good professional preparer will save you money if you have any sort of complexity in your return.

True enough. I've just been noticing a pattern of folks around my area pissed off cause HR makes ridiculous mistakes like telling customers they qualify for EIC when they clearly don't, claim children they're not able to, and just awful and obviously wrong advice. But hey maybe it's just the ones here around where I work.

I hate having to divide mileage now after 9/1 thanks to the Katrina thing.

[Sans Logique]

It's based on the number of forms, not income. If you are being claimed as a dependent by your parents, probably about $75. My advice is to use the Free File Program in my first post if you are comfortable doing it yourself. The only thing you don't get is tax planning advice (which can save you a lot of money NEXT year), and the ability to get your refund immediately.
Well, so far it seems that doing this myself will cost me around $25 with the program you posted, or $50 to go to them with the coupon you posted, and i would appreciate the planning advice, since i dont know shit about taxes.
A couple of people have told me that they have free consultation, so i think i'm going to go that route. I've been getting jack shit for the past 4 years....
Thanks man.

[Suavion]

Iseelba, I have a couple of questions. I didn't file at all last year, "lazy," but this year I wanna file. Do I have to report last years tax information? and if I do, will I get more money back? A friend told me I would end up having to owe the government money since I didn't file last year. I hope thats not true!!!!!!!!!

[lseelba]

Iseelba, I have a couple of questions. I didn't file at all last year, "lazy," but this year I wanna file. Do I have to report last years tax information? and if I do, will I get more money back? A friend told me I would end up having to owe the government money since I didn't file last year. I hope thats not true!!!!!!!!!

Whether you HAD to file last year depends on the 2004 filing requirements. Go through this set of webpages. The income limits are a little lower than 2005 but they are close: http://www.irs.gov/individuals/article/0,,id=96623,00.html

If you were due a refund in 2004, you will want to file. The IRS still owes you that money, you just haven't claimed it. There is no penalty for filing late if a refund is due. You will need to file a 2004 tax return with all your 2004 information.

Your 2005 return is completely separate. If you want more details or an estimate of how much your 2004 refund might be, PM me more information.

[Suavion]

Hey thanks, ima check this out now

[Pat the Great]

hey,

i started work as a freelance writer. i got a 1099-misc for the first time (been paid under the table until now) and as far as I can tell, i have to report this as self-employment income? 15% of $2000 is a lot of money for me and not so much for the IRS...

[lseelba]

hey,

i started work as a freelance writer. i got a 1099-misc for the first time (been paid under the table until now) and as far as I can tell, i have to report this as self-employment income? 15% of $2000 is a lot of money for me and not so much for the IRS...

Yeah self employment income sucks. You are going to have to pay income tax on that $2,000 AND social security / medicare tax (fill out Schedule SE). The thing is, that 1099-MISC has also been sent to the IRS, so you got to report it. If you don't, the IRS computers will match your social security number to that 1099-MISC and send you a notice in about two years that you owe backtaxes and penalties.

FYI the self employment tax rate (Social Security and Medicare) is 15.3% You can get out of paying this if you can convince the IRS that you are actually an employee of whoever sent your the 1099-MISC, then they have to pay that tax.

[Pat the Great]

fuck, i was afraid of that. oh well. thanks for the advice, man. i don't get why employed income isn't taxed until like the first few grand but self-employed is $400. bam.

[Pimp Willy]

It's feb 2nd, and my school still hasn't updated my account with my 1098-T form (they are doing it electronically this year). However, my fiance has hers posted already. So either they're just really slow (Her last name starts with M, mine with R) or they skipped me (which wouldn't make sense). Is there a hard deadline that the schools are required to report the form to students, so that we are able to get our taxes done non-last minute?

Last year, I got my 1098-T form AFTER I had already sent in my taxes, leaving me going "wtf?", and I'd like to avoid that this year.

[lseelba]

Technically, the educational institution has to send you your 1098-T by January 31. My wife got her's yesterday. They have to file the information with the IRS by February 28 (or March 31 if they file electronically).

Complain if you don't get it in the mail in the next few days.

[nuctang]

0_o

Ok, I am deaf, and how about my Social Security Income since I've just received this mail from SSA. What should I do?

[lseelba]

0_o

Ok, I am deaf, and how about my Social Security Income since I've just received this mail from SSA. What should I do?

Social Security is generally not taxable, unless you had a lot of other taxable income. There is a worksheet to figure out if anything is taxable.

http://www.irs.gov/pub/irs-pdf/p915.pdf

Check out page 6. Ignore the numbers in there and do the worksheet. I wish I could find a blank one for you

:tup:

[KungfuJoe]

what is this amt all about and what indivuals get hit with I heard that it sucks if you fit in the amt(alternative minimum tax) requirements.

KFJ

[lseelba]

The Alternate Minimum Tax (AMT) is pretty much a tax nightmare. Congress needs to do some shit about that soon. Basically, it was designed so that higher income individuals with lots of deductions, credits, and exemptions can't avoid paying very little tax. If you have a lot of schedule A deductions, and you have a lot of income, you might get hit by AMT. You figure out the AMT tax, and if its higher than the normal tax rules, you have to pay AMT tax instead.

The problem is that AMT exemptions and tax brackets are not adjusted for inflation each year. So more and more middle income taxpayers are finding out that they are being hit with AMT.

[KungfuJoe]

The Alternate Minimum Tax (AMT) is pretty much a tax nightmare. Congress needs to do some shit about that soon. Basically, it was designed so that higher income individuals with lots of deductions, credits, and exemptions can't avoid paying very little tax. If you have a lot of schedule A deductions, and you have a lot of income, you might get hit by AMT. You figure out the AMT tax, and if its higher than the normal tax rules, you have to pay AMT tax instead.

The problem is that AMT exemptions and tax brackets are not adjusted for inflation each year. So more and more middle income taxpayers are finding out that they are being hit with AMT.

So what income bracket does it fall in for example

single person making 50K does that qualify or is it higher than that.

KFJ

[DEMON_JIM]

I used that free file on HRblock and its charging me $20 to submit it. Ive used it the last 2 years and it always done it for free. It asks for credit card or direct deposit account which I dont have either and I dont want to send this in via snail mail.

Is there a way I can submit it online without the above info I need or am I screwed? I have never had to pay to submit it online before so why is it charging me now? can I just print out the results and then go to an HRBlock and get them to cash it out for me or will they charge me for that too? does it cost alot doing it that way? Im not getting alot back in my refund so any little bit of savings helps me out to keep as much as I can.

-DJ-

[lseelba]

I used that free file on HRblock and its charging me $20 to submit it. Ive used it the last 2 years and it always done it for free. It asks for credit card or direct deposit account which I dont have either and I dont want to send this in via snail mail.

Is there a way I can submit it online without the above info I need or am I screwed? I have never had to pay to submit it online before so why is it charging me now? can I just print out the results and then go to an HRBlock and get them to cash it out for me or will they charge me for that too? does it cost alot doing it that way? Im not getting alot back in my refund so any little bit of savings helps me out to keep as much as I can.

-DJ-

Demon_Jim,
They will still charge for filing your state return. Are you sure that's not what you are being charged for? If not, then I'd email their technical support or call them. You can't really take it to an HR Block office because the Free File Program is online only.

[Daigojin]

www.taxslayer.com is another good site with lots of help and allows you to file state and federal for free. I can't wait to get my tax money back. I need to go to the arcade to burn it all up. :D

[Rhio2k]

I need a little help: I want to file as Head of Household, since I make the most taxable income, but Taxact tells me to enter the name and social of the person that qualifies me as Head Of Household if they are a child, but not my dependent. At the bottom of that page it says "If you are claiming a child as your dependent, no entry is required." There's no kids here. Just me, mom and dad. What do I do?

[lseelba]

I need a little help: I want to file as Head of Household, since I make the most taxable income, but Taxact tells me to enter the name and social of the person that qualifies me as Head Of Household if they are a child, but not my dependent. At the bottom of that page it says "If you are claiming a child as your dependent, no entry is required." There's no kids here. Just me, mom and dad. What do I do?

I'm assuming your parents are married. If that is so, you can't file Head of Household and claim them as dependents if they file Married Filing Jointly. There is an exception if neither spouse is required to file a return, but they file a return just to get their withholding back. They would BOTH have to have income of less than $5,000 for this to be the case.

One possibility, if one spouse makes more than $5,000 and the other makes less than $5,000, is for your parents to file Married Filing Separately. Then you could claim the parent with income less than $5,000 and file Head of Household. Whether this makes any sense to do depends on your family's unique financial situation.

As for how to put the information into Taxact, I have no idea. :confused:

[Rhio2k]

Actually, they're just divorced, but living together.

[JackTenrac!]

Do you cover Canadian advice also?

[lseelba]

Do you cover Canadian advice also?

Nope...not unless you are an American citizen who had a part time job in Canada and paid no Canadian taxes for it. :rofl:

[REALPLAYER]

Iseelba,

Do you have a list of uncommon tax deductible items??
Most people know of the common ones, but every year, I feel like there're some other items I can deduct but don't b/c they aren't common knowledge.
As a matter of fact, do you have a list of ALL tax deductible items, ranging from the common to the more obscure??

[Turtle Genocide]

i'm absolutely clueless about filing taxes, never have before. my parents told me that i don't have to file taxes because they were going to claim me and that would save them money cuz it would get them into a different tax bracket (no clue what that means), i've been working full time for about 7 months now, and something doesn't sit right with me not filing. if i do file taxes, will that screw with my parents stuff? they're telling me it's a matter of them saving a couple grand rather than me getting back a couple hundred. if you need any more clarity on anything, let me know. thanks.

[RoninChaos]

I was going thru HRblock's tax program, and I've been having trouble filing my state one. After spending 4 hours waiting to get an answer, I was told it was POSSIBLE that the state of GA isn't accepting state returns currently.

This can't be right, can it?

Since I already did my federal with them, should I wait till they get it sorted out, or should I go to another site? Any suggestions for the latter?

[lseelba]

Iseelba,

Do you have a list of uncommon tax deductible items??
Most people know of the common ones, but every year, I feel like there're some other items I can deduct but don't b/c they aren't common knowledge.
As a matter of fact, do you have a list of ALL tax deductible items, ranging from the common to the more obscure??

Oh man...this post might go on for a while. I'll do it by category:

MEDICAL AND DENTAL EXPENSES:
Prescription drugs, insulin, medical insurance premiums, long term care isurance premiums, fees to doctors, dentists, psychologists, psychiatrists, chiropractors, Christian Science practitioners, hospital services, lab tests, acupuncture, quit smoking programs (excludes OTC gum and patches), weight loss programs & surgery if diagnosed by a physician, cosmetic surgery (only for an accident or disease), bandages, blood meters, eyeglasses, contact lenses, contact solution, hearing aids, prosthetic limbs, crutches, wheelchairs, maintenance supplies for the above items, seeing eye dogs, food for seeing eyedogs, telecommunications equipment for the deaf, braille books for the blind, capital expenditures for a home due to medical reasons, transportation to and from medical care providers.

TAXES PAID:
State and local income tax paid, general sales taxes paid, real estate property tax, personal property taxes (eg yearly car registration), foreign taxes paid (you'll see this one on mutual funds with international holdings).

INTEREST PAID:
Interest paid on business loans, loans to purchase investments, and home mortgage loans. Credit card debt and car payments do not count.

CHARITABLE CONTRIBUTIONS:
Cash contributions, fair market value of goods and property donated, the extra cost of girl scout cookies above what a grocery store would charge, cost of transportation for volunteer work.

CASUALTY AND THEFT LOSSES:
Limited to amount above 10% of adjusted gross income. Something REALLY bad has to happen to claim this one.

MISCELLANEOUS DEDUCTIONS SUBJECT TO 2% AGI FLOOR:
These generally encompass expenses used for the production of income. Examples: unreimbursed employee expenses (ie crap your boss makes you do that you pay out of pocket for), education expenses that were not eligible for an education credit, job seeking expenses, subscriptions to trade magazines, union dues, professional dues, cost of small tools, supplies, and licenses required for employment, cost of safety equipment, specialized uniforms, including costumes for strippers, hobby losses to the extent of hobby income, tax advice and preparation fees, investment expenses, custodial fees, safety deposit boxes.

FULLY DEDUCTIBLE MISCELLANEOUS DEDUCTIONS:
Gambling losses to the extent of gambling winnings, impairment related work expenses for handicapped individuals, federal estate taxes on decedents income, casualty and theft losses from income producing property.


Thats a pretty thorough list. My favorite is stripper outfits. :tup:

[lseelba]

i'm absolutely clueless about filing taxes, never have before. my parents told me that i don't have to file taxes because they were going to claim me and that would save them money cuz it would get them into a different tax bracket (no clue what that means), i've been working full time for about 7 months now, and something doesn't sit right with me not filing. if i do file taxes, will that screw with my parents stuff? they're telling me it's a matter of them saving a couple grand rather than me getting back a couple hundred. if you need any more clarity on anything, let me know. thanks.

Look at your W-2. If you had any federal income taxes withheld (box 2) you WILL want to file. Your filing won't affect your parents taxes at all, unless they are doing something shady and they can't legally claim you. If you do file, you will file single and be sure not to claim your own exemption. The number of exemptions you will claim will be zero (line 6d, or if you use 1040EZ check YES). Tell your parents that you are filing only to get your withholding back, and that it won't affect them at all.

By the way. They cannot claim you as a dependent if you provided more than 50% of your own support during 2005. Your income doesn't matter. What matters is how much they spent on you (including rent) versus what you paid for yourself.

[lseelba]

I was going thru HRblock's tax program, and I've been having trouble filing my state one. After spending 4 hours waiting to get an answer, I was told it was POSSIBLE that the state of GA isn't accepting state returns currently.

This can't be right, can it?

Since I already did my federal with them, should I wait till they get it sorted out, or should I go to another site? Any suggestions for the latter?

It could be right. There are a few states who still haven't got their shit together. I have a list at work.

The best thing to do is probably to print it out (this should be an option) and mail it in. It will cost an additional $.39 for postage, but at least you will know it is done and not have to worry about it anymore. For most people, their state refunds are pretty small anyway, so a few extra weeks waiting for that refund isn't a huge deal.

[REALPLAYER]

Thanks Iseelba.
More questions.

1. Health insurance from your employer can be a 'funny' thing sometimes. You may think that'll it'll cover the full expenses of prescription drugs and eyeglasses, but then you end up paying something out-of-pocket.
With that, I'm assuming that whatever you pay out-of-pocket is tax deductible?
2. State income tax paid is recorded on your last paystub of the year??
3. Where is local income tax paid recorded?
4. General sales taxes paid----this accounts for EVERYTHING that you purchased throughout the year that was subject to sales tax like food, gas, work related clothing, non-work related clothing, condoms, videogames, cell phone, etc.??
5. 2% AGI floor?

[lseelba]

Thanks Iseelba.
More questions.

1. Health insurance from your employer can be a 'funny' thing sometimes. You may think that'll it'll cover the full expenses of prescription drugs and eyeglasses, but then you end up paying something out-of-pocket.
With that, I'm assuming that whatever you pay out-of-pocket is tax deductible?
2. State income tax paid is recorded on your last paystub of the year??
3. Where is local income tax paid recorded?
4. General sales taxes paid----this accounts for EVERYTHING that you purchased throughout the year that was subject to sales tax like food, gas, work related clothing, non-work related clothing, condoms, videogames, cell phone, etc.??
5. 2% AGI floor?

1. Everything you pay out of pocket is deductible. Copays, coinsurance, deductibles, etc. If you pay health insurance premiums out of pocket, they are deductible too. Anything your insurance plan pays is not deductible.
2. State income taxes are shown at the bottom of your W-2.
3. Local income taxes are the same place. A lot of cities don't have local income tax.
4. You can either take income taxes paid (state and local) or general sales tax. You can't claim both. For most people, income taxes are higher. For lower income people who can itemize, sales tax is sometimes higher. There is a formula that 99% of people use to determine how much sales tax to claim. Its based on the local rate and how many days you lived there. For the truly insane, you can keep a record of every sales tax item paid, and claim that instead. I've never heard of anyone actually doing it, but the option is there. :rofl:
5. For those items, take your AGI, and multiply it by 2%. You have to come up with miscellaneous deductions above that amount before you get anything. Kind of sucks.

[Gandido]

Just wanted to say that this thread is gold and should NEVER be unstickied.

lseelba: Many thanks for this. Helped my girlfriend out on her taxes a bunch. I refferred her to this and she said that if she's ever in a pinch she'll stop by the office. :)

[GreyFoxx]

I work for Gamestop and got my W-2 ages ago and got a question. Is it feasible to get my taxes done by H/R block or go thru a personal family friend that did my stuff before? Also im 22 and still live with the folks should they claim me or what? Or going on my own be a better option? Also i made like 6500 yet i work in IL and live in Indiana anything i can do to maximize my tax return or am i looking at very close to nill? Thanks for the help and keep this good thread a going!!!

[GalzPanic]

Iseelba!!! I work at Liberty. Let's battle!

I work for Gamestop and got my W-2 ages ago and got a question. Is it feasible to get my taxes done by H/R block or go thru a personal family friend that did my stuff before? Also im 22 and still live with the folks should they claim me or what? Or going on my own be a better option? Also i made like 6500 yet i work in IL and live in Indiana anything i can do to maximize my tax return or am i looking at very close to nill? Thanks for the help and keep this good thread a going!!!

It's very feasible to go either way. In most cases, it's not really worth the money (like 75 bucks)to go to a preparing franchise if all you have is a W-2. You can do it cheaper with the websites people are talking about or even on paper. If you start paying for college, then you might want to consider talking to a pro. Once you buy a house or if you get a job or business with special circumstances, then you definitely should get a professional preparer.

Your parents can claim you until you're 24 as long as you are a full-time student.

I don't know the state rules for IL or IN. In your case, you probably should talk to a pro.

[catchafire]

Thanks for all the advice Iseelba! I'm going to have to go over this and re-read everything. Anywho, here is my scenario:

I'm 23, just moved from Michigan to New Jersey. Started a job, live by myself, no kids, and i've never done my own taxes before. I simply want to get this done without any hassle. I have my W2 form from my last job and I have the W2 form from my new job. What do you advise me doing in order to complete this?

Thanks!

[lseelba]

Thanks for all the advice Iseelba! I'm going to have to go over this and re-read everything. Anywho, here is my scenario:

I'm 23, just moved from Michigan to New Jersey. Started a job, live by myself, no kids, and i've never done my own taxes before. I simply want to get this done without any hassle. I have my W2 form from my last job and I have the W2 form from my new job. What do you advise me doing in order to complete this?

Thanks!

What are the circumstances of your move? Did you move during 2005 or 2006? If you moved for job related reasons, your moving expenses are fully deductible. Just fill out Form 3903 (or be sure whatever program you use includes this form in your taxes). Even if you didn't keep records of your hotel rooms or tolls or any of that, you still know how many miles you drove from Michigan to New Jersey. Those miles will save you some money on your taxes.

If you have income from both Michigan and New Jersey, you might have to fill out tax returns for both states. All states are different, so I can't tell you for sure without actually looking at those states' laws.

My advice is to use one of the free file programs. The one in my first post is good for efiling your Federal return for free. I've heard good things about taxslayer but I've never used it myself.

Just remember...find out for sure if anyone (ie a parent) is claiming you as a dependent for 2005. This makes a huge difference on your (and their) taxes.

[cakes]

I'm assuming your parents are claiming you as a dependent, so you have to file your taxes if your gross income is greater than $4,850. If your income is less than that, you don't have to file, but you might want to if there was any tax withheld (check box 2 on the W-2).

If they actually gave you a blank W-4, they just want you to fill it out to determine how much tax to withhold.

Good straightforward resources are kinda hard to come by. This page isn't bad, but it could be better: http://hrblock.com/learning/firstfilers/index.html?WT.svl=124

:D Thanks for the help!

[REALPLAYER]

Iseelba,

I'm a little confused about something.
I bought my car in July of 2005. I'm financing it. The sales tax for my car recorded on my receipt by itself is more than the state income tax recorded on my W-2.I understand I can't itemize both my general sales tax AND my state income taxes paid from my W-2. With that said....

1. In order for me to deduct the sales tax from my car, would it be mandatory for me to have kept all my receipts for the year to deduct ALL the sales tax I paid for 2005, even though the sales tax from my car purchase is more than my state income taxes from my W-2?
What if I don't have all my receipts?
Can I just deduct the sales tax from my car purchase??
Would it look suspicious (resulting in me getting audited) that I'm just deducting the sales tax from my car to get a bigger refund?
Being that I'm financing, I'm not even sure if I paid all the sales tax up front or if I'm partially paying it with my payments.

[Starhammer]

That all depends on the preparer. I just saved a guy $200 today based on an obscure IRS tax ruling that only applies to employees of the Arizona State Government. I know for a fact that no tax program sold in the store or average self preparer would have caught it. Most of my colleagues wouldn't have even caught it.

Taxes are confusing as hell, and I made about a $400 tax mistake on my own return back before I was trained. That was when I was using TurboTax online. Truth is, a good professional preparer will save you money if you have any sort of complexity in your return.
I can't rep yet, but I love that cammy booty. I'd lick her until my tounge got tired.

-Starhammer

[lseelba]

Iseelba,

I'm a little confused about something.
I bought my car in July of 2005. I'm financing it. The sales tax for my car recorded on my receipt by itself is more than the state income tax recorded on my W-2.I understand I can't itemize both my general sales tax AND my state income taxes paid from my W-2. With that said....

1. In order for me to deduct the sales tax from my car, would it be mandatory for me to have kept all my receipts for the year to deduct ALL the sales tax I paid for 2005, even though the sales tax from my car purchase is more than my state income taxes from my W-2?
What if I don't have all my receipts?
Can I just deduct the sales tax from my car purchase??
Would it look suspicious (resulting in me getting audited) that I'm just deducting the sales tax from my car to get a bigger refund?
Being that I'm financing, I'm not even sure if I paid all the sales tax up front or if I'm partially paying it with my payments.

You'll want to take general sales tax. You are lucky...for certain items, namely cars and boats, you can add the actual sales tax paid on that item to the standard sales tax amount you can claim (you look that up in the Optional State Sales Tax Tables). So you get the best of both worlds.

I wouldn't worry about being audited over paying sales tax on your car, especially if you have the receipt. I'm not sure if you paid all the sales tax up front...but a simple call to the dealership could clear that up for you.

[strider999]

ok here is my deal. i am missing a w2 form from a job i had for the holidays. turbo tax says i am entitled to a sizable refund already from my other w2's. and i am in a pinch for money at the moment. should i file as is, and amend the other w2 later? im not sure when ill be able to get it.

[lseelba]

ok here is my deal. i am missing a w2 form from a job i had for the holidays. turbo tax says i am entitled to a sizable refund already from my other w2's. and i am in a pinch for money at the moment. should i file as is, and amend the other w2 later? im not sure when ill be able to get it.

Yeah, there's nothing illegal or unethical about filing with what you have. You have two options:

1) File only listing the W-2's you have right now. Then when you get the last one, you will have to file an ammended return and you might have more taxes owed or more refund due. It depends on the withholding from that job.

2) Try to find the last paycheck you received from that job (the one with the missing W-2), then find out how much year-to-date withholding and year-to-date income were. You can file with that information and not have to worry about filing an ammended return.

Which option to do just depends on whether you know how much you made and had withheld on that last job.

[catchafire]

What are the consequences of NOT doing your taxes?

[lseelba]

What are the consequences of NOT doing your taxes?

That all depends. If you are owed a refund the IRS doesn't charge you penalties. If you don't file you will simply lose your refund due in three years.

If you owe money, and don't file, the IRS will hit you with a failure to file penalty and charge you interest on the money you owe. The interest charges will continue until you pay the IRS. Believe me, the IRS is better than almost any other creditor in getting their money. If you owe them too much, and don't respond to their letters, they can legally contact your bank, find out how much money you have in your account, and take what you owe them.

:tdown:

[AHVB]

How do I Obtain the tax forms regarding a Limited Liability Company?

[lseelba]

How do I Obtain the tax forms regarding a Limited Liability Company?

You can download them from the IRS:

http://www.irs.gov/businesses/small/article/0,,id=99160,00.html

If it's a single member LLC, then generally you ignore the fact that it is an LLC and file the relevent income on the Schedule C. Follow the instructions in that link I provided you.

:tup:

[AHVB]

You can download them from the IRS:

http://www.irs.gov/businesses/small/article/0,,id=99160,00.html

If it's a single member LLC, then generally you ignore the fact that it is an LLC and file the relevent income on the Schedule C. Follow the instructions in that link I provided you.

:tup:

THe form they have there is really short. How do i obtain the form which i have to send to the IRS so that i can find out how much money i Owe in taxes?

[lseelba]

THe form they have there is really short. How do i obtain the form which i have to send to the IRS so that i can find out how much money i Owe in taxes?

What kind of partnership do you participate in? There are a lot of forms and most of them are not short. You should have clicked on the link at the bottom under "Forms for Federal Tax Entities" that says "Partnership (2 or more people)". Here is a direct link:

http://www.irs.gov/businesses/small/article/0,,id=98999,00.html

[REALPLAYER]

Iseelba, clear your PM's.

[strider999]

ok i need to fill out an amendment to my taxes. do i need to send just the 1040X or that and the newly recalculated 1040A as well?

[lseelba]

ok i need to fill out an amendment to my taxes. do i need to send just the 1040X or that and the newly recalculated 1040A as well?

What you have to send is the 1040X, any forms which might have changed or been added, and if the change is because you got an additional W-2 or 1099, attach that with your ammended return. Include a check too if you owe more :tdown:

[EvilKing]

In the tax code who should use the rules under section 861 to determine their domestic taxable income?

This may sound kind of science fiction but if you ask anyone at H&R block this question they will tell you its not their policy to answer that question. Ask the the IRS you'll recieve a threatening letter mailed to you. You won't get an answer from the US government either.

http://tree3.com/861/index.html Click the link if you're curious. The evidence provided is shocking in this flash presentation.

[lseelba]

In the tax code who should use the rules under section 861 to determine their domestic taxable income?

This may sound kind of science fiction but if you ask anyone at H&R block this question they will tell you its not their policy to answer that question. Ask the the IRS you'll recieve a threatening letter mailed to you. You won't get an answer from the US government either.

http://tree3.com/861/index.html Click the link if you're curious. The evidence provided is shocking in this flash presentation.

I looked at that flash presentation. It was interesting and raised a lot of good points (specifically about the government overstepping its bounds) but its arguments are still fundamentally erroneous.

To answer your question directly, the tax code applies to everyone. Section 861 applies to everyone too. If you don't have any foreign taxable income, then all your income is domestic. The IRS has called this argument frivolous because it IS frivolous. Here is the exact section (http://www.fourmilab.ch/ustax/www/t26-A-1-N-I-861.html):

Sec. 861.(a) Gross income from sources within the United States
The following items of gross income shall be treated as income from sources within the United States:
...
(3) Personal services
Compensation for labor or personal services performed in the United States;...

I omitted the rest of subsection (3) because it applies only to nonresident aliens. Its very clearly written, despite what that presentation may claim.

If you need some relevant case law, see Takaba v. Commissioner, 119 T.C. 285 (2002) (concluding that “[t]he 861 argument is frivolous” and sanctioning both the taxpayer and his attorney for making such frivolous arguments); and Madge v. Commissioner, T.C. Memo. 2000-370 (concluding that the argument that only foreign income is taxable is frivolous). Those cases will cite the exact section that I cited above.

By the way, I have libertarian leanings, but I'm not about to say that section 861 means the average American doesn't have to pay income tax. The constitution gives Congress the ability to levy taxes, Congress passed the laws that tax the average American, and with the clear intent to do so. There is no conspiracy here.

As a final warning, if you meet a 'tax professional' who tells you the 861 argument is valid, run far and run fast. Trusting such a person with your taxes is tantamount to trusting a mafia lawyer to give you legal advice :rofl:

[EvilKing]

thankyou for answering my question. I don't have any problems paying taxes and not anti government i'm just anti corruption. I hear lots of other tax protester theories but the section 861 seemed the most hard to understand concept. I have another video i'd like to show you. its a lot shorter than the flash presentation. i think less than 20 mins. could u verify the claims that joe banister makes is legit in this video? Its probably frivoulous also but it sounds so crazy. I think he mentions something that we are a slave to this system. I'm sorry to be a pain I don't really have a keen sense for law. btw, who is that chick in you're avatar?:hitit:

[PsychoSquall]

That chick is Alisa

http://www.alisachan.com/

[Yamizaki]

I was in Iraq from last Jan to last Dec. I was told I would not have to pay any taxes on the income that I earned while I was out of country. I got a $750 refund using HRBlock last April 15. So why do they now say I owe $2,562? Bull fucking shit, I didn't spend a year in the desert to give away those dollars when I was told I didn't have to pay taxes...

...just in case there are any military peeps in here who've been on deployment, give me a clue here y'know?

[lseelba]

I was in Iraq from last Jan to last Dec. I was told I would not have to pay any taxes on the income that I earned while I was out of country. I got a $750 refund using HRBlock last April 15. So why do they now say I owe $2,562? Bull fucking shit, I didn't spend a year in the desert to give away those dollars when I was told I didn't have to pay taxes...

...just in case there are any military peeps in here who've been on deployment, give me a clue here y'know?

I've done returns for a few military taxpayers and this is what I know. Non-taxable combat pay SHOULD be listed on your W-2 with the code Q. It should not be listed in box one. If you have a bunch of wages in box one that shouldn't be there, you need to contact your employer and have them issue you a revised W-2 with the wages in box 12 with code Q and not in box 1. I hope this helps...

[hihi]

I was wondering if we filed our taxes online, how would our "college tax papers" be entered into the filing process? I remember filing online last year but it never had a form for the "1098-T" form. Does this give me back some of my tuition or anything similar to that or does it even matter?

[Night]

"College tax papers" can be used an expense to offset taxes you owe. Simply put, if you use the tuition forms you receive from your college in your taxes, it's favorable to you. I did that this year and woo hoo, getting about $1,100 back yay.

[lseelba]

I was wondering if we filed our taxes online, how would our "college tax papers" be entered into the filing process? I remember filing online last year but it never had a form for the "1098-T" form. Does this give me back some of my tuition or anything similar to that or does it even matter?

The simplest answer is look at the difference between what you were billed and how much scholarship money you received on the 1098-T. That is what you paid out of pocket (or through students loans...it doesn't matter as long as it wasn't through scholarships). You can claim an education credit based on that amount. Rule of thumb is that Freshman and Sophmores should claim the Hope Credit, and everone else should claim the Lifetime Learning Credit.

The longer answer is that most schools are inept at billing and accounting for scholarships, and you should use your own detailed financial records to figure out how much you ACTUALLY paid out of pocket during the year on education. If you don't have detailed records though, then just go off your 1098-T.

[Jenova_KMFDM]

How do i know if i need to send in my Schedule CT-40 County Tax Schedule for Indiana Residents with my IT-40EZ?

Just wondering thanks man.

[lseelba]

How do i know if i need to send in my Schedule CT-40 County Tax Schedule for Indiana Residents with my IT-40EZ?

Just wondering thanks man.

It will say on the IT-40 EZ. Read the form (not the instructions but the actual form) very carefully and it will tell you what you need to attach and where to attach them (front of form or back of form). If you can't find it, it wouldn't hurt to send it in anyways.
:rock:

[catchafire]

Iseelba, thanks for all the help you gave me! I'll be getting (hopefully!) 1500 back =) . Also, it's important to save all your receipts (entertainment receipts, travel receipts, rent receipts, TUITION, EVERYTHING) you can get these things written off... Basically the money you spent on tax back, or a portion of it...

[Jenova_KMFDM]

You rock :) I don't have 2. Thanks so much man.

[Javi]

Just a reminder - April 17th is the last day you can file on time (April 18th for some states due to Patriot's Day). This thread will be unstickied at the end of the 17th.

[Gandido]

Someone should log all of lseeba's posts and save them on a huge file so we don't have to make a new thread next year. Same goes for all of the great info here.

Much appretiated. :D

[lseelba]

Two more days to file.

Thanks for the nice comments everyone. I'm glad I could help out :tup:

[AHVB]

It's Finally, OVER :)

[lseelba]

Thanks everyone for participating in this thread. A few post offices are open until midnight, so if you are on the west coast...GOGOGO!

I'll be back next year with updates, etc...

Mods please unsticky :clap:

[catchafire]

Would you recommend saving receipts Iseelba? I'm thinking that I should save EVERY receipt I get from "entertainment, food, clothing, schooling" expenses. That way I can get most of the money back.

[Insaniac2]

How do I determine if it's better to not exercise my stock options (15% discount) and file normally, or to do so and have to do that AMT crap?

[lseelba]

Would you recommend saving receipts Iseelba? I'm thinking that I should save EVERY receipt I get from "entertainment, food, clothing, schooling" expenses. That way I can get most of the money back.

You only need to save your receipts if you are A) claiming an education credit, or B) itemizing. There are other reasons (like if you are a school teacher), but those are the most common.

If you pay a lot of sales tax during the year, and you itemize, then saving every receipt where you paid sales tax can save you money. I haven't met anyone who has done it yet...but it is an option :clap:

As far as education expenses, I highly recommend saving receipts because the 1098-T's that schools send out never seem to be accurate.

[lseelba]

How do I determine if it's better to not exercise my stock options (15% discount) and file normally, or to do so and have to do that AMT crap?

The best way to find out if you need to worry about the AMT is to use the IRS's AMT Assistant (http://apps.irs.gov/app/amt/). Just put in your tax return information from last year (2005) and add in the hypothetical stock options. As long as your situation doesn't change TOO much from 2005 to 2006, it should be accurate.

[Mycah Leonhart]

If you fucked around and FORGOT about your taxes - how screwed are you?

[lseelba]

If you fucked around and FORGOT about your taxes - how screwed are you?

Not very. File in the next week and your penalties and interest will be negligible (if you even owe any...if you are due a refund you are 100% OK).

[catchafire]

Thanks for the information Iseelba. Why do they always seem to want to scare the living day lights out of people about taxes?