Like last years' sticky, FWF is seeing a sharp increase in tax threads. Rather than have multiple threads clogging the forum, use this thread to post tax questions and provide assistance to others.
When responding to posts, please link relevant IRS publications where appropriate.
Please post any tax strategy , tax tip, and tax-information threads/links in the QUICK SUMMARY so people can easily find them. If you have a tax question, check the QUICK SUMMARY before posting, to see if the topic already has its own thread. Thanks!
And remember, FW and helpful readers are a great resource, but are not a substitute for professional tax advice. Never rely on anything just because you read it in an internet forum! Edit by Moderator: A new thread has been started due to the size of this one. You can find it Here.
I highly recommend people to search the usenet group "misc.taxes.moderated". For those who don't know or don't have access to usenet, go through google's group:
The answers are screened so you have a better chance to getting the correct answer on 1st try. Most of the people who provide answer there are EA or Enrolled Agent or are CPAs:
Excellent lostdude, thanks. According to the IRS, one of the biggest credits that people fail to take is the EIC as well as the Saver's Credit (on the new 2005 1040A, these are lines 41a & line 32 + Form 8880, respectively). They are NOT difficult to figure out & with a bit of preplanning, they help out the middle class as well as investors.
I've used both Turbotax and TaxCut...I'm leaning towards TaxCut for 2005 because I've read Turbotax doesn't include the free e-file anymore.
My question is this....I have a little business now. It's not an llc or incorportated, just a county business license. I'll be deducting milegae, hotels, meals, parts, expenses I incur in amateur racing. Do I need the 'premier' version of this software or can I get away with the cheaper 'deluxe' version?
ckojali said:I've used both Turbotax and TaxCut...I'm leaning towards TaxCut for 2005 because I've read Turbotax doesn't include the free e-file anymore.
My question is this....I have a little business now. It's not an llc or incorportated, just a county business license. I'll be deducting milegae, hotels, meals, parts, expenses I incur in amateur racing. Do I need the 'premier' version of this software or can I get away with the cheaper 'deluxe' version?
This is gonna be my first year filing on a normal, full-year salary. ~$40k, single with no kids, don't own stocks or a house. All my debt consists of a $15k student loan with monthly payments of about $130. Just started my 401k a few months ago.
Are there any strategies for improving the tax return? I read this thread but since there's no state income tax in Fl I (well, the TaxCut software) can only use the sales tax deduction.
A quick question - this being my first post my apologies if it is elementary. I am paid bi-weekly, and receive a paycheck on the 10th of each month which pays me wages for the trailing two weeks of the previous month. My question is whether my paycheck on 1/10/06, paying me for my earnings 12/15-12/31/05, will be included on my 2005 W-2. The relevance is that i have control over how much of my time I take as pay, and how much I take as vacation (future compensation). I need to stay under 150K on this year earnings for my wife and i to max out our roth IRA contribution, and I happen to be very close to the number right now. I tried looking in multiple places, but haven't found the answer. Anyone out there know how this goes? Thanks
This is gonna be my first year filing on a normal, full-year salary. ~$40k, single with no kids, don't own stocks or a house. All my debt consists of a $15k student loan with monthly payments of about $130. Just started my 401k a few months ago.
Are there any strategies for improving the tax return? I read [url=http://www.fatwallet.com/forums/messageview.php?catid=52&threadid=550123]this thread[/url] but since there's no state income tax in Fl I (well, the TaxCut software) can only use the sales tax deduction.
Well, the interest on the student loan is tax-deductable. If you were a student for any part of the year you may also be eligible for the Lifetime Learning Credit or Hope Credit (go to www.irs.gov for more info). If you have 401k deductions, that will help. IRA contributions are tax deductable.
rab75 said:A quick question - this being my first post my apologies if it is elementary. I am paid bi-weekly, and receive a paycheck on the 10th of each month which pays me wages for the trailing two weeks of the previous month. My question is whether my paycheck on 1/10/06, paying me for my earnings 12/15-12/31/05, will be included on my 2005 W-2. The relevance is that i have control over how much of my time I take as pay, and how much I take as vacation (future compensation). I need to stay under 150K on this year earnings for my wife and i to max out our roth IRA contribution, and I happen to be very close to the number right now. I tried looking in multiple places, but haven't found the answer. Anyone out there know how this goes? Thanks
It will not be included in your 2005 W-2, the IRS goes by check date (the date the on the check).
I am a payroll auditor for a workers comp insurance company so I know that it is only the check dates in a given quarter or year that are reported as I balence payrolls to quarterly tax returns every day.
However, I am just some dude on the internet, check with a CPA or IRS.gov for a official answer.
Jackietreehorn81 said:rab75 said:A quick question - this being my first post my apologies if it is elementary. I am paid bi-weekly, and receive a paycheck on the 10th of each month which pays me wages for the trailing two weeks of the previous month. My question is whether my paycheck on 1/10/06, paying me for my earnings 12/15-12/31/05, will be included on my 2005 W-2. The relevance is that i have control over how much of my time I take as pay, and how much I take as vacation (future compensation). I need to stay under 150K on this year earnings for my wife and i to max out our roth IRA contribution, and I happen to be very close to the number right now. I tried looking in multiple places, but haven't found the answer. Anyone out there know how this goes? Thanks
It will not be included in your 2005 W-2, the IRS goes by check date (the date the on the check).
I am a payroll auditor for a workers comp insurance company so I know that it is only the check dates in a given quarter or year that are reported as I balence payrolls to quarterly tax returns every day.
However, I am just some dude on the internet, check with a CPA or IRS.gov for a official answer.
ckojali said:blueking said:Wow, amateur racing related business?
Well, really it's a hobby. I certainly don't make money from it but I do fundraisers for diabetes research.
Since you're admitting that this is a hobby and that you are not receving income from it, then you should not be deducting any items you mention in your previous post. In general, you can only deduct expenses incurred for your hobby to the extent you have hobby income. I believe there are some exceptions, but nothing you mention above.
While it's admirable that you do fund raisers, it sounds like what you are donating is your time, which is not a deductible item for the purposes of charitable contributions either.
wdsaltman95 said:While it's admirable that you do fund raisers, it sounds like what you are donating is your time, which is not a deductible item for the purposes of charitable contributions either.
Let me put it this way....if someone were to deduct expenses from their hobby as business expenses, would they need the premier versions of taxcut or turbotax or would the deluxe version be fine?
The lectures are fine but at least answer my question at the same time.
ckojali said:Let me put it this way....if someone were to deduct expenses from their hobby as business expenses, would they need the premier versions of taxcut or turbotax or would the deluxe version be fine?
The lectures are fine but at least answer my question at the same time.It's a question better left for the Turbotax folks.
brentpresley said:Well, the interest on the student loan is tax-deductable. If you were a student for any part of the year you may also be eligible for the Lifetime Learning Credit or Hope Credit (go to www.irs.gov for more info). If you have 401k deductions, that will help. IRA contributions are tax deductable.
I assume you mean the interest paid throughout 2005 (at least that's what I filed for 2004). I wasn't a student at all so the LLC and HC are not an option. No IRA, just the 401k.
wdsaltman95 said:Since you're admitting that this is a hobby and that you are not receving income from it, then you should not be deducting any items you mention in your previous post.Of course, it's possible for a taxpayer to think of as a hobby an activity that, for tax purposes, is a business -- if, maybe, you actually do something because you enjoy it, but it has objective indicia of a profit motive, like substantial, consistent profits. But it's pretty unlikely.
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