Income tax thread v2.0

[Owensdad]

Last year's thread seemed well received by the BARFmosphere so let's try it again.

If you have a *hypothetical* tax question, the *hypothetical* tax treatment will be explained.

DISCLAIMER: Nothing in this thread constitutes tax advice within the meaning of IRS Circular 230. Nothing in this thread is intended to be used, nor may be used, to avoid any penalties setforth in title 26 of the united states code and the regulations there under. Consult your tax advisor for *actual* tax advice with respect to your specific fact pattern.

Post away...

(I prefer not to reply to PMs.)

 

[BaCaRdIR1]

What are the requirements to claim a child not your offspring?

 

[2strokeYardSale]

Hypothetically, if someone were sending checks to an IRS address in San Francisco, and called for a payoff amount, and got a recording that said to send payment to an address in St. Louis, then spoke to a person who said to send payment to an address in Fresno, what would be the best way to cover one's ass?

 

[Owensdad]

What are the requirements to claim a child not your offspring?

I assume you mean to claim the child as a dependent.

The child must be a "qualifying child". In general that means it must be your adopted child, you must provide support and no other taxpayer may claim the child as a dependent.

There are also age, residency, and joint return requirements.

See http://www.irs.gov/Individuals/Qualifying-Child-Rules

 

[Owensdad]

Hypothetically, if someone were sending checks to an IRS address in San Francisco, and called for a payoff amount, and got a recording that said to send payment to an address in St. Louis, then spoke to a person who said to send payment to an address in Fresno, what would be the best way to cover one's ass?

Excellent question. It depends on what the payment is for. Is this remittance accompanying a return? Is it settling a prior year obligation?

Retain the ID# and name of the IRS employee you spoke to and direct the payment to the address you were given.

A misdirected payment may not be considered timely. You will CYA by having support for where you were told to send your payment.

Keep copies of every document submitted. Mail everything with return receipt.

Fresno sounds right for a payment not submitted with a return. Otherwise probably Ogden, UT.

 

[KennyMonster]

This is the first year I've been renting a property out. I have no idea what I'm doing tax wise. How boned am I?

 

[Owensdad]

This is the first year I've been renting a property out. I have no idea what I'm doing tax wise. How boned am I?

If you are not in the trade or business of rental real estate, you probably are engaged in what's known as a 'passive' activity.

In general, net losses from a passive activity may only offset other passive income. An exception exists in the case of "active participation" in rental real estate. If you meet certain requirements, you may use up to $25,000 of passive rental real estate losses to offset other income.

Check out: http://www.irs.gov/publications/p527/index.html

 

[2strokeYardSale]

As a salaried wage slave, I've been doing 1040EZ forms. This year I'm expecting some W-9s in excess of $600 for other things. Do I have to go 1040A?

 

[HIglesias]

wtf? how come last year my wife and i got a couple g's. nothing has changed in our work status or filing and now we are getting back $12! plus we owe the state! this shit sucks

 

[xgambit]

wtf? how come last year my wife and i got a couple g's. nothing has changed in our work status or filing and now we are getting back $12! plus we owe the state! this shit sucks

didnt you have a daughter to claim last year? old man

 

[JesasaurusRex]

I'm officially going to change my primary residence to the property I picked up in NV this year. How do I make sure the ftb doesn't try to tax me on my entire annual income for 2013 and won't harass me in 2014?

 

[n10sive]

I have a son who I paid his rent and living expenses this year while in school (qualified dependent). He received a 1098-T for his tuition (which we both paid).

I am claiming him as a dependent this year since he didn't have any earned income while a full time student and I paid for the roof over his head. What can I deduct? Can I claim his lodging expenses? Use his 1098-T on my filing?

 

[ThumperX]

This year I had an enormous loss of income relating to occupied rental property and an eviction that took 8 months. Other than the legal fees can I deduct the loss of income from the property?

 

[Owensdad]

This year I had an enormous loss of income relating to occupied rental property and an eviction that took 8 months. Other than the legal fees can I deduct the loss of income from the property?

You will be in the same boat as the other rental property poster. If passive, track those disallowed losses to offset future years' passive income.

 

[Owensdad]

I'm officially going to change my primary residence to the property I picked up in NV this year. How do I make sure the ftb doesn't try to tax me on my entire annual income for 2013 and won't harass me in 2014?

Keep excellent records. Expect FTB inquiry.

 

[Owensdad]

I have a son who I paid his rent and living expenses this year while in school (qualified dependent). He received a 1098-T for his tuition (which we both paid).

I am claiming him as a dependent this year since he didn't have any earned income while a full time student and I paid for the roof over his head. What can I deduct? Can I claim his lodging expenses? Use his 1098-T on my filing?

Room and board are not qualified educational expenses for a dependent. Tuition is. The max deduction is $4000.

Publication 970 is your friend. http://www.irs.gov/publications/p970/ch06.html#en_US_2012_publink1000295021

 

[Raider]

wtf? how come last year my wife and i got a couple g's. nothing has changed in our work status or filing and now we are getting back $12! plus we owe the state! this shit sucks

Same thing happened with us. Last year got some g's back, this year barely any federal and owe a few hundred in state. First time I've owed $$$ except when I moved into the state. Wtf. No changes in employment or wit holdings or anything. Up a few $$$ in income, but still same tax bracket.

 

[Owensdad]

As a salaried wage slave, I've been doing 1040EZ forms. This year I'm expecting some W-9s in excess of $600 for other things. Do I have to go 1040A?

I think you mean that you are expecting 1099s (form w9 is used to request a tax ID number, which you would have received from whomever paid you for your non-employee services).

If so you are most likely are a sole proprietor and you will need to file the long form 1040 plus schedule C and schedule SE.

 

[Owensdad]

wtf? how come last year my wife and i got a couple g's. nothing has changed in our work status or filing and now we are getting back $12! plus we owe the state! this shit sucks

Hard to say. Rates did not change in 2012. Did you have fewer deductions? Refinance a mortgage that resulted in less interest?

 

[Owensdad]

Same thing happened with us. Last year got some g's back, this year barely any federal and owe a few hundred in state. First time I've owed $$$ except when I moved into the state. Wtf. No changes in employment or wit holdings or anything. Up a few $$$ in income, but still same tax bracket.

Remember that tax rates are marginal. Any additional income will be taxed at your highest marginal rate.