Tax Season!

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Re: Tax Season!

Postby BigMcK on Fri Jan 17, 2014 7:29 pm

DelPen wrote:
viva la ben wrote:Have kids


And turn a hobby into a business that makes no money :)


Is having kids hobby enough to qualify as a business?
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Re: Tax Season!

Postby ulf on Sat Jan 18, 2014 7:41 am

If your schedule C business loses money for a certain number of years, the IRS deems it a hobby so you can't deduct the losses. How nice of them
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Re: Tax Season!

Postby mac5155 on Thu Jan 30, 2014 10:04 am

Well the estimator I used was complete bull cause I just prepared and am getting about $5k back. Sheesh
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Re: Tax Season!

Postby shafnutz05 on Thu Jan 30, 2014 10:08 am

mac5155 wrote:Well the estimator I used was complete bull cause I just prepared and am getting about $5k back. Sheesh


Between buying a home and having a baby, we are hoping for a large enough return to pay off our credit cards (which are high as a result of having a baby and buying a home :lol: ) and some other leftover bills. Might set aside like three or four hundred for a luxury item, but the vast majority of the return this year is going to clearing those CCs. Can't wait.
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Re: Tax Season!

Postby mac5155 on Thu Jan 30, 2014 10:18 am

Same..wife transfered a balance from our wedding to a 0% interest card so were slowly paying it off but it's about to go up, so might as well knock it out. Sucks that is what it has to go to, but I guess that's grown up life. Lol
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Re: Tax Season!

Postby 60sixx on Thu Jan 30, 2014 10:36 am

I've said it before, and I'll say it again. I do both corporate and individual returns for a living (corp for job, indiv on side.) If you have a question you want to bounce off of me, send me a PM. (Remember, I do TAXES, I'm not a financial advisor. 8-) )

Also - PET PEEVE of the tax world:

Your RETURN = the FORM YOU FILE

Your REFUND = THE AMOUNT YOU RECEIVE. REFUND. NOT RETURN. REFUND.
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Re: Tax Season!

Postby mac5155 on Thu Jan 30, 2014 10:43 am

Is the lifetime learning credit something new this year? I dont remember getting that in the past and Turbo Tax said I am now eligible.
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Re: Tax Season!

Postby 60sixx on Thu Jan 30, 2014 10:50 am

mac5155 wrote:Is the lifetime learning credit something new this year? I dont remember getting that in the past and Turbo Tax said I am now eligible.


Been around for a number of years.
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Re: Tax Season!

Postby mac5155 on Thu Jan 30, 2014 10:57 am

hmm, I wonder if I've gotten it in teh past and just not realized. I had about $7k worth of tuition I paid this year.
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Re: Tax Season!

Postby 60sixx on Thu Jan 30, 2014 11:01 am

mac5155 wrote:hmm, I wonder if I've gotten it in teh past and just not realized. I had about $7k worth of tuition I paid this year.


Several education-y type items you could have claimed in years prior, depending on your situation. Lifetime Learning, American Opportunity (formerly "Hope Credit"), or the tuition & fees deduction (pg 1 adjustment, not a credit).
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Re: Tax Season!

Postby shmenguin on Thu Jan 30, 2014 11:19 am

something disturbing just happened. i had a nice little return goin' on, with only my wife's W2 left to enter. i added it into turbo tax and my return took a nose dive. i make a lot more than her, so did she basically just get my tax rate retroactively applied to her income - which would mean she drastically under paid throughout the year and it's now time to make up for it?

if that's the case, should people with such an income disparity even be filing jointly?
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Re: Tax Season!

Postby Pitt87 on Thu Jan 30, 2014 11:23 am

ulf wrote:If your schedule C business loses money for a certain number of years, the IRS deems it a hobby so you can't deduct the losses. How nice of them


Opportunity... :fist:

Along those lines... a buddy of mine has been trying to a buy a house every two years, live in construction, and resell it. When I ran his numbers his cash flow is positive, but he loses money each time he sells a house, though when you consider the offset of his living expenses he comes our ahead. For tax purposes, would there be any benefit to starting an LLC, calling his home and investment, renting it to himself, and capturing the losses on schedule c?
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Re: Tax Season!

Postby SoupOrSam on Thu Jan 30, 2014 11:31 am

Just an FYI... for those that use H&R free web service and efile in past years (i go back 4 years):

This year they decided to screw you heavily. Instead of the free fed filing and like $20 state... this year they decided to charge you $19.99 to upgrade to basic(that is irreversible to your account) and then if you're owed any Earned Income Credit regardless of amount you must pay to claim that and then even when you say screw it... I'll pay this crap, they hit you with a $37.99 state filing fee.

Hell with that crap. Use taxact.com. I used them 2 years prior to using HRBlock's and it works just the same. Switched to H&R for the simplicity of theirs, but now taxact's is just about as easy. Pay for the $17 "Deluxe" version and that is ALL you will have to pay for fed and state.

Also wanted to add, both refunds came out the same. Taxact even let's you automatically(with the $17 deluxe upgrade) compare married filing jointly vs married filing sep... in case you wee interested in seeing the diff.
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Re: Tax Season!

Postby shmenguin on Thu Jan 30, 2014 11:35 am

shmenguin wrote:something disturbing just happened. i had a nice little return goin' on, with only my wife's W2 left to enter. i added it into turbo tax and my return took a nose dive. i make a lot more than her, so did she basically just get my tax rate retroactively applied to her income - which would mean she drastically under paid throughout the year and it's now time to make up for it?

if that's the case, should people with such an income disparity even be filing jointly?


erm...and since i probably need 60sixx's help here, i acknowledge that i meant REFUND - not RETURN. my sincerest apologies.
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Re: Tax Season!

Postby Kraftster on Thu Jan 30, 2014 11:35 am

shmenguin wrote:something disturbing just happened. i had a nice little return goin' on, with only my wife's W2 left to enter. i added it into turbo tax and my return took a nose dive. i make a lot more than her, so did she basically just get my tax rate retroactively applied to her income - which would mean she drastically under paid throughout the year and it's now time to make up for it?

if that's the case, should people with such an income disparity even be filing jointly?


This has happened to me this year and last as well. Same situation. My wife never changed her withholding after I finished school and began working. As my income has gone up her withholding has been more and more insufficient.
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Re: Tax Season!

Postby mac5155 on Thu Jan 30, 2014 11:36 am

Im thinking the reason for the large refund this year is that we both got our first bonuses in 2013?
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Re: Tax Season!

Postby columbia on Thu Jan 30, 2014 11:39 am

mac5155 wrote:Im thinking the reason for the large refund this year is that we both got our first bonuses in 2013?


Possible.

I cashed in about 200 hours of leave time last year, after I left a job. The withholdings on that particular check were :shock: , but I got a very healthy refund as a result.
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Re: Tax Season!

Postby Kraftster on Thu Jan 30, 2014 11:40 am

The child care credit is even more laughable than the student loan interest deduction. I get 20% of the maximum $3000 that can be claimed and paid over $14k in daycare costs for my one child. Sweet.
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Re: Tax Season!

Postby shmenguin on Thu Jan 30, 2014 12:15 pm

Kraftster wrote:The child care credit is even more laughable than the student loan interest deduction. I get 20% of the maximum $3000 that can be claimed and paid over $14k in daycare costs for my one child. Sweet.


we get no deduction for childcare since we use someone under the table. It comes out to more than $1,000 per month totally out of pocket.
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Re: Tax Season!

Postby KennyTheKangaroo on Thu Jan 30, 2014 12:18 pm

Pitt87 wrote:
ulf wrote:If your schedule C business loses money for a certain number of years, the IRS deems it a hobby so you can't deduct the losses. How nice of them


Opportunity... :fist:

Along those lines... a buddy of mine has been trying to a buy a house every two years, live in construction, and resell it. When I ran his numbers his cash flow is positive, but he loses money each time he sells a house, though when you consider the offset of his living expenses he comes our ahead. For tax purposes, would there be any benefit to starting an LLC, calling his home and investment, renting it to himself, and capturing the losses on schedule c?


does your buddy realize he has to report that rent income ?
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Re: Tax Season!

Postby mac5155 on Thu Jan 30, 2014 12:19 pm

Again a choice you made :pop:

I think it will be cheaper for me to pay my moms monthly salary to watch our child if/when the time comes. Shmenguin not being nosey but if your wifes income is low why not just have her stay home with the kid?
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Re: Tax Season!

Postby shmenguin on Thu Jan 30, 2014 12:20 pm

mac5155 wrote:Again a choice you made :pop:

I think it will be cheaper for me to pay my moms monthly salary to watch our child if/when the time comes. Shmenguin not being nosey but if your wifes income is low why not just have her stay home with the kid?


who said her income was low :pop:
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Re: Tax Season!

Postby 60sixx on Thu Jan 30, 2014 12:37 pm

shmenguin wrote:
shmenguin wrote:something disturbing just happened. i had a nice little return goin' on, with only my wife's W2 left to enter. i added it into turbo tax and my return took a nose dive. i make a lot more than her, so did she basically just get my tax rate retroactively applied to her income - which would mean she drastically under paid throughout the year and it's now time to make up for it?

if that's the case, should people with such an income disparity even be filing jointly?


erm...and since i probably need 60sixx's help here, i acknowledge that i meant REFUND - not RETURN. my sincerest apologies.


HA HA HA! In the words of Homer Simpson, "Urge to kill: fading...fading...."
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Re: Tax Season!

Postby 60sixx on Thu Jan 30, 2014 12:39 pm

KennyTheKangaroo wrote:
Pitt87 wrote:
ulf wrote:If your schedule C business loses money for a certain number of years, the IRS deems it a hobby so you can't deduct the losses. How nice of them


Opportunity... :fist:

Along those lines... a buddy of mine has been trying to a buy a house every two years, live in construction, and resell it. When I ran his numbers his cash flow is positive, but he loses money each time he sells a house, though when you consider the offset of his living expenses he comes our ahead. For tax purposes, would there be any benefit to starting an LLC, calling his home and investment, renting it to himself, and capturing the losses on schedule c?


does your buddy realize he has to report that rent income ?


Just FYI, rental income goes on Schedule E.

Also - renting your house to yourself and claiming losses would be a no-no in the eyes of the IRS. I'm sure there's some loophole though - but that would need to be heavily vetted.
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Re: Tax Season!

Postby mac5155 on Thu Jan 30, 2014 12:54 pm

shmenguin wrote:
mac5155 wrote:Again a choice you made :pop:

I think it will be cheaper for me to pay my moms monthly salary to watch our child if/when the time comes. Shmenguin not being nosey but if your wifes income is low why not just have her stay home with the kid?


who said her income was low :pop:


lol, ok so you said she makes less, not low. My bad. :D
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