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Old 04-04-2012, 12:42 PM   #21
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... I've even considered rebalancing on Jan 2 and Dec 30 so that I'd only have to deal with the tax consequences every other year.
Interesting idea... I'll have to mull that one over. I guess you would still have to fill out a Sch D each year due to CG distributions, but you would only need to enter rebalancing sale transactions every other year. I think I like it.
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Old 04-04-2012, 12:53 PM   #22
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One thing that's always concerned me is that if you get less than $10 interest on an account -- let's just say $6 -- and neither you nor the IRS gets the 1099, and if the amount of interest you reported was $6 greater than what the IRS has recorded as your interest income off of the 1099s it *did* receive, does this raise any potential for your return to be scrutinized more closely?
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Old 04-04-2012, 12:58 PM   #23
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My gripe is my own fault I guess. I didn't get a form I was expecting (I think it was an interest paid form on a mortgage?), and when I called the bank they said "We only have to send you one if you paid more than $xx (I think it was like $600?). It's never happened to me before, so they said just report it as you see it on your statement, but you won't have a form for it. News to me.

Other than that, filed the taxes last week, and I have a few followups with our accountant this week. This is our first year filing with the LLC...so it will be a new experience and I'll study the outcome carefully to see what he did. We lost about $6k on the business side in 2011...which was expected since we're ramping up.
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Old 04-04-2012, 12:59 PM   #24
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Originally Posted by TromboneAl
Vent your tax return frustrations on this thread.

Here's a minor example. I don't find a 1099 for my local checking account nor for VG Prime Money market. I suspect that it's because the amounts were low, so I do some Googling, and find that yes, if the amount is under $10, then there's no 1099. I note that a lot of other people have had this same question.

I also learn that you still need to report the interest, even if it is under $10, so a little more online research is necessary to find these amounts. I could probably ignore it, but you never know.

I know, it's a minor gripe, but indicative of how something that should take a few seconds to do ends up taking longer.
I have always known about not receiving 1099s for under $10 as I have had a few of those types of accounts over the years, but I did not know about having to report it. I always thought if they didnt have to report it, I didnt have to claim it. I dont feel guilty though, as they might have been shorted $15 bucks over the years but I have missed a few minor deductions I was to lazy to refile over, so they are still ahead.
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Old 04-04-2012, 01:06 PM   #25
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Interesting idea... I'll have to mull that one over. I guess you would still have to fill out a Sch D each year due to CG distributions, but you would only need to enter rebalancing sale transactions every other year. I think I like it.
Actually, if you get cap gain distributions ONLY then you might not need to complete a Sched D. This happened with my friend in 2010 and with me in 2011. All you do is enter the amount in Form 1040 (or 1040A) and complete the CG/QD worksheet in the instruction booklet.

One more gripe....

That friend whose taxes I just finished the other night is so inept and insecure, he has called me THREE times since Monday night with questions about assembling the already completed returns (federal and state). These returns consist of 3 forms each but because he wanted to make copies of each return before mailing them out, I could not actually finish the work, leaving him with what should be a trivial task. Never mind I showed him and wrote out what he was supposed to do. Never mind he added some of his own notes. Never mind he has the instruction booklets which would answer his questions. It's like dealing with an 8-year-old. I am afraid to answer the phone these days!

In the same vein as TromboneAl's advice, I can bunch most of my estimated state income taxes into a single calendar year by paying one year's taxes in the following January and the following year's in December of the same calendar year. Besides a small tax benefit, I won't have to file Sched A every year, only in alternating years.
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Old 04-04-2012, 01:10 PM   #26
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Good idea. In the past, I have made changes in things to avoid extra tax work. I've even considered rebalancing on Jan 2 and Dec 30 so that I'd only have to deal with the tax consequences every other year.

That's an interesting idea -- to time the rebalancing on those days.

I just rebalance near the start of the year, and when possible, within my IRA holdings to not have a taxable event.
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Old 04-04-2012, 01:51 PM   #27
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I'm owed a refund for fed and state, but I'm too chicken to file early in case I get corrected forms. Only thing worse than filling out complex tax forms is correcting them after they've been sent in.
+1
I hate 1040x, so I wait each year until a last moment. In 2011 I got corrected Sch K-1 on April 10th (online). I am slowly giving up on LMPs and the headaches with so many fields ( and codes) on K-1, that do not apply.
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Old 04-04-2012, 02:13 PM   #28
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That's an interesting idea -- to time the rebalancing on those days.

I just rebalance near the start of the year, and when possible, within my IRA holdings to not have a taxable event.
One reason not to do that: Isn't there often an increase in stock prices on the last day of the year?
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Old 04-04-2012, 02:34 PM   #29
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I don't report it, even though I know that technically I should. This is pure rationalization on my part, but I figure that most people don't, so why should I take the extra effort, maybe be rewarded by having to pay more taxes for my effort/honesty, just for being a 'chump'?
You might want to have the moderators delete this part of your post, in the event an IRS agent might be reading this forum, and ask Andy for your IP address in order to track you down.

In actuality, my guess is the IRS would never know you didn't report it (since no 1099 was filed) unless they were looking over your return for something else (e.g., to make sure all of your options trades were reported properly ).
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Old 04-04-2012, 02:44 PM   #30
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You might want to have the moderators delete this part of your post, in the event an IRS agent might be reading this forum, and ask Andy for your IP address in order to track you down.

In actuality, my guess is the IRS would never know you didn't report it (since no 1099 was filed) unless they were looking over your return for something else (e.g., to make sure all of your options trades were reported properly ).

That reminds me of a funny incident . We hired a painter to paint the inside of our house . He asked for cash so he would not have to report it .The funny thing was my husband was an IRS agent .
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Old 04-04-2012, 02:48 PM   #31
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That reminds me of a funny incident . We hired a painter to paint the inside of our house . He asked for cash so he would not have to report it .The funny thing was my husband was an IRS agent .
Did you tell him?
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Old 04-04-2012, 02:52 PM   #32
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I've reported and not reported dividends from checking, etc. Never had an issue either way. My Credit Union conveniently list interest paid for the previous year for all my accounts, including my travel trailer loan. Easy to find the interest for the second home deduction.

I don't know how people did this stuff before turbo tax. I itemize and did three schedule Cs. Ug! Thanks to my health insurance being so crappy this year, I did get to take a medical expenses deduction of almost $3000. Would rather have had the insurance cover those costs but better than a poke in the eye with a sharp stick.

All I know is that after working with Oregon, enduring might be a better term, on my FIL's unpaid state taxes, I am glad I live in Nevada! I even get to deduct my sales tax now.

The last indignity Oregon put us through was one section told us the final amount we, rather the estate, owed and told us to send it in. The section that receives payments didn't have it in their computer system yet and so instead of just holding on to it for the 24-48 hours it took for it to show, they sent it back to us and charged us interest. After a call to find out WTF we were told it was in the system and we could submit and were given the new amount with interest included. They make the IRS look downright friendly and helpful. I can't tell you how many tears my DW shed trying to pay those SOBs.
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Old 04-04-2012, 04:20 PM   #33
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Did you tell him?

No, we just laughed about it !
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Old 04-04-2012, 04:30 PM   #34
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My gripe. My 2009 Fed return was closed 2 weeks ago and they still haven't sent me the money. Because they notified my state (1 month prior to accepting my return) that I was deficient, the state re-opened my 2009 return and sent me an assessment. Now I have to unwind the state people.
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Old 04-04-2012, 04:41 PM   #35
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One reason not to do that: Isn't there often an increase in stock prices on the last day of the year?
Perhaps. But I try not to let individual dates dictate when I choose to rebalance.
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Old 04-04-2012, 04:51 PM   #36
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+1.

For this reason, the last time I started a new checking account, I made sure that it does not pay interest to avoid this situation.
I preferred the pre-interest paying demand deposit accounts with free checks and no fees that were the standard in the 1960's.
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Old 04-04-2012, 04:55 PM   #37
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On the lack of 1099 for small amounts of interest: I get the number off my last statement of the year for 2011. It has the YTD (12/31/2011) interest paid. I've done this for years.

And a new one: I received a 1099 that showed 1 cent of tax-exempt municipal bond income. TurboTax rounds it down to $0, but then makes me figure out how to fill in a bunch of extra lines related to that tax-exempt interest. Then TT complains that I've filled in the lines when I have $0 of tax-exempt interest ... and round and round we go.
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Old 04-04-2012, 04:55 PM   #38
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Oh yeah! We had a line on the state tax return this year for "use tax". We're supposed to total up all the state tax we didn't pay by shopping online. One of those old tax rules, always ignored, that was resurrected to bring in some additional income. And there are lots of exceptions, like food. Although I keep good records in Quicken, I don't track state taxes paid. I ended up totalling all of my Amazon purchases and paid the tax on that. I think some of those purchases were excepted items, but we probably had other non-Amazon purchases to make up for it. That one may disappear next year, since it was not very popular.
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Old 04-04-2012, 05:01 PM   #39
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And the good old foreign tax credit/deduction. The IRS is handling this pretty easily now, as long as I remember to enter it correctly in TT. But the state wants to know the country for each little bit of foreign tax. I have to skip the deduction for state as a waste of more time than it is worth.
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Old 04-04-2012, 05:09 PM   #40
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The NYS form IT-2 and Fed 1040V seem quite superfluous.
So far even utilities, our real estate taxes, and credit card companies provide you with an envelope to pay your bill; Guess our govt's are more cost effective, or arrogant . The only nongovernmental entity that would bill me thousands of dollars per month and not provide a payment envelope was my Mom's 'Skilled Nursing Care' facility.
The instructions for assembling forms for a paper filling of NYS income tax is an abortion.
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