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Old 03-16-2010, 09:40 PM   #41
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I learned that sending another $150 dollars to the government every payday and being furloughed one day a month means I will only send $65 dollars on April 15th instead of $2000. I guess that's good, right?
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Old 03-16-2010, 10:55 PM   #42
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That the government gets too much of my money at the time I need it to save for retirement. Can't wait to formally retire so my bracket will change. I am unable to take advantage of most deductions as they are phased out....but don't think I haven't pumped my CPA husband as to why not!
By the way...have never been able to contribute to a Roth. Am thinking about a Roth conversion for 2010. Several years ago knowing this was coming I started putting the 6K a year into a Nondeductible IRA. (since I had maxed out my Simple IRA)....thinking ...oh...I will just convert my Nondeductible IRA and I won't have to pay any tax for the conversion. Wrong! And to complicate things still further I have losses from 2008 on my basis in this Nondeductible IRA....that I can not take advantage of ...unless I convert all of my IRA's to a Roth....which I won't do as I'm not giving the government that much money right now.
Sadly I also found out that while the income level for converting to a Roth IRA has been eliminated for 2010....the allowed contribution levels to continue to contribute to that Roth have not changed (and I probably won't be allowed). So I would have to still make a contribution to a nondeductible IRA...and then do a conversion to the Roth...year after year...after year. Of course...until they change the rules. If anyone has any different thoughts than what I have found out from the 8606 form, the IRS and my broker investigating the Nondedutible IRA conversion...please let me know.
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Old 03-17-2010, 06:03 AM   #43
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I learned that more money is better than less money.

It did mean we were bumped into a higher tax bracket. That part is not better.
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Old 03-17-2010, 10:42 AM   #44
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I've learned in the past that the IRS can be very difficult to deal with if you have a dependent in college and fail to write her correct social security number on your return. And I learned that just because you make this nasty mistake one year, you may not remember and you might actually(using the error ridden return as your guide) do it for three out of four years of her college career. By the 3rd time of four, the IRS got kind of nice about it: I got a letter that in so many words said: "You did something wrong in your return, we know what it is, but you have to call us about it before we can fix it." I got a little old lady sounding person on the phone who said, "Oh poor dear, what did they do to you? Did they take your college deduction away? Did they take away your dependent deduction. Oh, we'll fix what they did right now."

She was being so nice, I couldn't say, "Um..... aren't "THEY" actually "YOU"?"

I also learned that you need to use the programs and that you can't do it yourself. I thought I could, and checked the box for final return(I figured it was my final return for the year). What I got was an audit because final return proved I was DEAD. When they discovered I wasn't actually DEAD, they were annoyed. And when they discovered that all they had to audit was my income and one small CD, they were even more annoyed that they had to call. But I discovered that my small town actually had an IRS office in it!!
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Old 03-17-2010, 11:11 AM   #45
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I learned that I paid much less tax than I forecast, in retirement.

Sometimes, you do get ahead by "dumb luck" ...

Last tax year (2008) I did screw up by purchasing a vehicle and paying cash from my retirement portfolio. I learned quickly about how taxes in retirement are important (since my withdrawl put me in a higher tax bracket).
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Old 03-17-2010, 11:43 AM   #46
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In tax year 2008 we paid no federal taxes. So, I decided not to pay federal estimated taxes last year as no matter what there would not be a penalty provided that I paid my taxes by April 15 of this year. I know we will pay fed taxes this year due to the sale of real estate and other income. I have no idea how much and I am on a trip and it is going to be tough to even guess by April 15 in order to file an extension and pay the estimated amount.
Didn't think that one through.
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Old 03-17-2010, 11:50 AM   #47
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I learned that I may be entitled to the "First Time Home Buyer's Tax Credit" in 2010 for the purchase of my motorhome, even though I already own a home. But will probably still earn too much this year to take advantage of it.
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Old 03-17-2010, 12:01 PM   #48
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Quote:
Originally Posted by Martha View Post
In tax year 2008 we paid no federal taxes. So, I decided not to pay federal estimated taxes last year as no matter what there would not be a penalty provided that I paid my taxes by April 15 of this year. I know we will pay fed taxes this year due to the sale of real estate and other income. I have no idea how much and I am on a trip and it is going to be tough to even guess by April 15 in order to file an extension and pay the estimated amount.
Didn't think that one through.
Whoops!

I guess one advantage of being a fulltimer is that we always have all the docs, etc., with us.

Most 1099s etc. are available for download - assuming you have a computer with you and can run some tax software for at least estimating. I guess you need some other docs as well from your sales? Can additional copies be forwarded to you?

Audrey
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Old 03-17-2010, 12:32 PM   #49
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Whoops!

I guess one advantage of being a fulltimer is that we always have all the docs, etc., with us.

Most 1099s etc. are available for download - assuming you have a computer with you and can run some tax software for at least estimating. I guess you need some other docs as well from your sales? Can additional copies be forwarded to you?

Audrey
The 1099s and K-1s are doable. The tough nut is the sale of rental real estate. I don't have the depreciation information and a bunch of other info I need to estimate the gain, a good portion of which is recapture of depreciation. So I am going to wing it and likely over pay but file as soon as I can after I return north.
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Old 03-17-2010, 12:32 PM   #50
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I learned that I may be entitled to the "First Time Home Buyer's Tax Credit" in 2010 for the purchase of my motorhome, even though I already own a home. But will probably still earn too much this year to take advantage of it.
You can choose which year you apply the tax credit - 2009 OR 2010. I am choosing 2009, even though we are closing in 2010.

By some miracle they are allowing you to take the credit against the prior years taxes if you so choose. I guess the reasoning was so that you would "know" in advance if you qualified for the credit income wise. What a gift!

This is great for us, because I had no problems keeping 2009 income down (happened all by itself!), but this year will be close already as I am realizing some cap gains before the tax rates change.

Anyway - since we don't expect to close until early May, we'll be filing an extension for 2009 taxes and then filing as soon as we have all the house paperwork.

Audrey
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Old 03-17-2010, 12:43 PM   #51
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You can choose which year you apply the tax credit - 2009 OR 2010. I am choosing 2009, even though we are closing in 2010.
Yup. 2009 we're clearly over the threshold. 2010 I'll have gotten paid only through mid-April but I might still have too much income to qualify.

What I found surprising though, is that I'm a current home owner and I can still qualify for the "first time buyer's" credit . . . and for a motor home, too. Silly.
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Old 03-17-2010, 12:48 PM   #52
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I learned that I may be entitled to the "First Time Home Buyer's Tax Credit" in 2010 for the purchase of my motorhome, even though I already own a home. But will probably still earn too much this year to take advantage of it.
Are you planning for your motorhome to be your new primary residence? Have been yearning for that $6500 for a new home buyer who has been in their current home for 5 years, but to do so would require me to declare new residence. As I understand it. OK to have the existing home as a secondary, but credit has to be on the primary home. That is my understanding, but am eager for someone to set me straight - would love to be second home shopping with $6500 in play money in my pocket!
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Old 03-17-2010, 12:51 PM   #53
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Are you planning for your motorhome to be your new primary residence?
Yup.
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Old 03-17-2010, 12:55 PM   #54
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This may be a dumb question, but wouldn't you incur higher property taxes and/or insurance by making your bricks and mortar home your secondary home? In particular, I thought insurance companies were pretty sticky about having someone in full time residence at a home.
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Old 03-17-2010, 01:09 PM   #55
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Yup. 2009 we're clearly over the threshold. 2010 I'll have gotten paid only through mid-April but I might still have too much income to qualify.

What I found surprising though, is that I'm a current home owner and I can still qualify for the "first time buyer's" credit . . . and for a motor home, too. Silly.
Oh right - Calmloki points out that the "new home" has to be your primary residence.

Some things might be tricky with a motorhome IMO. Our current motorhome does not qualify as a "home" as it is not fixed to a location. This is what is allowing us to qualify as first-time homebuyers because we have not owned a house for over 3 years. And I thought I read some IRS language that said our motorhome did not "count" as a home for the purposes of this credit because it is mobile - has been moved around.

So it might be a little more complex than you expect - not that it matters since you have been too "rich" in both years - LOL!

Audrey
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Old 03-17-2010, 01:54 PM   #56
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I learned that DW and I pay way too much in taxes (higher tax bracket and all that). We need to find more ways to shelter income legally from the taxman.
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Old 03-17-2010, 02:11 PM   #57
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Some things might be tricky with a motorhome IMO. Our current motorhome does not qualify as a "home" as it is not fixed to a location.
Yup, I think you're right. When I read the regs the first time I may have mistook "mobile home" for "motor home". I swear I looked at the actual legislation and saw that it specifically mentioned motorhomes as qualifying . . . but I can't find it now.

So I guess what I learned from doing my taxes this year is to read more carefully.
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Old 03-18-2010, 11:27 AM   #58
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I should have lowered my exemptions when I lowered my 401K %.... DOOH!
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Old 03-18-2010, 12:22 PM   #59
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I learned the standard deduction for over 65 is larger, and I don't have enough itemized deductions. It will be better for me to double property tax deductions in 2010 and take standard in 2011. If we pay off the house this year then even this won't work.
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Old 03-18-2010, 01:20 PM   #60
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I learned the standard deduction for over 65 is larger...
Oooooh! I didn't know that - 3 more years
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