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Old 03-18-2010, 01:55 PM   #61
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I learned that, for everyone but bona fide currency traders, currency gains and losses on foreign currency denominated cd's are ordinary income/loss reportable on line 21 of form 1040. I learned that you must make this calculation yourself, because it is not reported on any sort of 1099 from Everbank (although it's easy enough to figure out from account history).
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Old 03-18-2010, 03:39 PM   #62
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I am planning on the first time home buyers credit for 2009 tax year. Here is how I see the situation: What you're coming from and going into are two different things. You can be going to almost anything shy of a tent. Coming from is another story. No one has clearly defined what is a "home". As a former
realtor, the description of a residence is that is has to be attached to property for which you get a tax bill. Currently we live in a manufactured home that is on a rental lot. We don't own the property (land) and pay a monthly rental fee. To me, that is the same as renting an apartment. We are not "home owners" even the manufactured home is worth $125k. We bought a new home on land that we now own so we are claiming the credit. Going to is another story. As I see it, you can buy almost anything and have it qualify as a home as long as it is your primary residence and you have to live in at least three years. My BIL has already filed his taxes for 2009, has now bought a new house and wants to claim the $6500 credit. He will close by 6-30-10 and claim it on his 2009 taxes but will have to file an ammended return. What a mess.
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Old 03-18-2010, 03:42 PM   #63
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I learned that I wasn't doing the withholding right. The IRS has a nice online calculator that lets me know exactly what DW and I should each be withholding to come out even on April 15th. This online calculator is much better than the old paper estimator form.
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Old 03-18-2010, 04:16 PM   #64
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I learned how great Quicktax (Turbo in US) is, how much I really enjoy doing our returns. Also how simple my finances really are-pension, dividends and interest income. Medical alimony,and donation expenses. what could be simpler. Got a big refund too-yay!!
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Old 03-18-2010, 04:34 PM   #65
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Quote:
Originally Posted by JOHNNIE36 View Post
I am planning on the first time home buyers credit for 2009 tax year. Here is how I see the situation: What you're coming from and going into are two different things. You can be going to almost anything shy of a tent. Coming from is another story. No one has clearly defined what is a "home". As a former
realtor, the description of a residence is that is has to be attached to property for which you get a tax bill. Currently we live in a manufactured home that is on a rental lot. We don't own the property (land) and pay a monthly rental fee. To me, that is the same as renting an apartment. We are not "home owners" even the manufactured home is worth $125k. We bought a new home on land that we now own so we are claiming the credit. Going to is another story. As I see it, you can buy almost anything and have it qualify as a home as long as it is your primary residence and you have to live in at least three years. My BIL has already filed his taxes for 2009, has now bought a new house and wants to claim the $6500 credit. He will close by 6-30-10 and claim it on his 2009 taxes but will have to file an ammended return. What a mess.
Interesting. Filing an amended return is not that big of a deal IMO. Turbo tax handles it readily, and it's well worth the tax credit. Or, he could wait until next year if he is sure that 2010 income will still let him qualify.

The language on mobile homes on leased land is not so clear, as buying a new one even on leased land still qualifies for the tax credit. So why wouldn't the prior one be considered a residence?
Quote:
Q. Is a taxpayer who purchases a mobile home and places the home on leased land eligible for the first-time homebuyer credit?

A. Yes. A mobile home may qualify as a principal residence and it is not necessary that the taxpayer own the land to qualify for the first-time homebuyer credit.
However, there is still room for getting some tax benefit from changing principal residences if you have lived in the first one long enough.

Fortunately for us, the IRS language is very explicit about us RV fulltimers qualifying as "first-time" homebuyers - i.e. not having a principal residence.
Quote:
Q. Can an individual who has lived in an RV qualify for the credit?

A. For purposes of the first-time homebuyer credit, an RV with a built-in motor is personal property that is not affixed to land and does not qualify as a principal residence. Accordingly, someone who has owned and lived in an RV within the past three years may still qualify as a first-time homebuyer.
from First-Time Homebuyer Credit Questions and Answers: Basic Information

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Your "Effective Tax Rate"?
Old 03-18-2010, 04:38 PM   #66
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Your "Effective Tax Rate"?

I learned that my tax program does not know how to calculate "effective tax rate" for Federal Income Tax.

This is a number I always calculated for myself, before the days of using a tax program. I would look at what I really paid net, divided by AGI (which is already a slightly manipulated number, but close enough for comparison). So net taxes was always: Taxes Withheld plus/minus any refund/due amount.

But now we have credits, and refundable credits in the mix, and this GOVT RETIREE CREDITS/MAKE WORK PAY thing, and.... TaxAct gives a different number than I would calculate for myself. They base it on a "total tax"/AGI, where "Total Tax" is before credits. Makes no sense to me, a credit is tax I don't pay.

Tax regs are too complex for even the tax programs.

-ERD50
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Old 03-18-2010, 06:13 PM   #67
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I learned (again) that my in-laws pay a financial advisor fee to a large company US** and it gets them nothing but some churning, over-diversification, and pretty quarterly reports. Well, they were pretty until they stopped printing them in color mid-way thru the year.
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Old 03-18-2010, 06:27 PM   #68
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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.
I'm sorry, I'm not understanding this. You have to pay your taxes by Apr 15, but how is that relevant to the estimated taxes you paid? I understand how you don't have to pay estimated tax amounts greater than the tax you paid in the prior year, but don't see how that affects your situation. Are those things related in a way I'm unaware of?
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Old 03-18-2010, 06:47 PM   #69
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T-Al,

I'm not confused (might be wrong tho). My interpretation of what Martha says
is:
1) paid no taxes for 2008
2) paid no est. taxes for 2009 (safe harbor based on 2008)
3) owes taxes this yr (I interpret as for tax yr 2009...in Apr 2010)
4) does not know how much to pay in Apr 2010....even if filing for
extension, must pay your best guess as to full amount (Martha used the word
estimated here but I think differently than when used in "estimated taxes" paid quarterly;

am I confused?
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Old 03-18-2010, 06:49 PM   #70
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I learned I have a ridiculously complicated return (for me) due to the closing of the business, the rentals, and the closing of an activley managed account with it's 100+ trades, so I'm going to still let my CPA do it until it becomes more normalized and after the final business return is filed.

I also learned that I'm still a little lazy when it comes to paperwork.
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Old 03-18-2010, 07:53 PM   #71
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I learned that an optimal strategy for minimizing taxes, or even reducing Federal taxes to zero, is to simply not have any income. Of course, since the state defines income differently, I still owe them taxes.
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Old 03-18-2010, 07:59 PM   #72
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I learned that Gainskeeper might not have saved me any hassle or time, and I wish I could get my money back...
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Old 03-18-2010, 09:19 PM   #73
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I learned that retiring part way through the year was a really good idea, because my salary income was less than if I had worked the full year so my marginal tax rate was lower than in past years. Consequently, I got an unexpectedly large refund.
I also got a whopper of a refund since I only worked 6.5 months in 2009 and I was witholding too much even if I had worked all year. Actually, I got four refunds...federal, state, village and school district. Good for funding two over-50 IRA's. No big refund next year since I am witholding the bare minimum. I can easily change my W-4 online at work and the change takes effect the following pay period. I'll double-check in early November and have extra taken out if it doesn't look like I'm going to make it.
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Old 03-18-2010, 10:04 PM   #74
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I learned that retiring part way through the year was a really good idea, because my salary income was less than if I had worked the full year so my marginal tax rate was lower than in past years. Consequently, I got an unexpectedly large refund.
I had a similar thing happen to me the first year I began working (1985). I figured out that I would have my withholding determined as if I were going to work the whole year although I would end up with only half the income. This was before the 1986 Tax Reform Act so there were many more brackets back then.

What I ended up doing was to file a W-4 form with 12 (yes, twelve) exemptions, something which was legal back then and needed no justification, even to my payroll division. This boosted my biweekly paycheck by about $160 and it worked out perfectly, as I ended up owing the Feds and getting a refund from the state (or vice versa, I forget) each for less than $100. All that extra money I collected ended up helping me buy my first car for cash, avoiding the nuisance and expense of getting a car loan.
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Old 03-19-2010, 08:19 AM   #75
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I learned that if your income is low enough that the federal government will pay you $1000 to possess a child. We have a seven year old and this is the first year we have ever received any such credit.

I also learned that the mileage to and from the doctor's office can be deducted.

I don't think that I would have a prayer at getting my taxes correct without a computer program such as Turbotax. Every time I do my taxes I keep having these visions of politicians sitting around in lush leather chairs, smoking cigars, drinking liquor, and speaking amongst themselves saying "Wait, wait, wait, I think we can make it even more complicated!"

Unfortunately, we were supposed to get our refund five days ago and it still hasn't shown up. The IRS web page doesn't provide any useful information either.
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Old 03-19-2010, 11:05 AM   #76
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I learned that:

1) There are 2009 tax policies to reward pursuit of higher education.
2) There are 2009 tax policies to punish pursuit of higher education.
3) Both of these can apply to the same student in a family, one effectively counter-acting the other.

For #1, there are various education credits (with some refundable credit elements). So if the goal is to economically motivate people towards pursuit of higher education, fine.

But for #2, you can be 'punished' if your child has savings/earnings in their name. In some cases, this gets taxed at the parent's rate rather than the child's rate. But what really, really makes this weird is being a student is a negative in this case. So if the goal is to economically motivate people towards pursuit of higher education, this opposes the same goal that is supported in #1.

Quote:
* Before a child reaches age 19 (24 for full-time students), the next $950 in income is taxed at the child's rate. Earnings above $1,900 are taxed at the parent's marginal rate.

* All income (after the first $950) earned by children age 19 and older (24 for full-time students) is taxed at the child's rate.
So, a 21YO who *is* a student can get taxed at their parent's rate.

But a 21YO who is *not* a student gets taxed at their own (probably lower) rate.

Counterproductive, no?

-ERD50
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Old 03-19-2010, 11:51 AM   #77
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I learned 2 things:

First, that Obama signed a Military Spouse Relief Act into effect last November that I somehow never heard about until doing our taxes, which means I had to file as a non-resident of GA to get my estimated payments I'd been making all last year back because I now qualify to be a resident of the same state as my Army husband. There was apparently no warning or preparation for this act, and state agencies are scrambling to make sense of it all. Big old mess!

Second, that my husband was having WAY too much money withheld from his paychecks (we only got married last year), which means an embarrassingly large refund (going straight to our retirement house fund), and also meant getting him to immediately reduce his withholdings.
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Old 03-19-2010, 01:23 PM   #78
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What do I do now? I just got a 1099-misc in the mail today.

I've had my refund for almost a month now.
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Old 03-19-2010, 02:20 PM   #79
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File an amendement and mail a check with the balance due, by April 15. 1099 misc goes on sch. c. you owe the fica taxes and any income tax that applies to the income
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Old 03-19-2010, 03:13 PM   #80
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As a freelancer, I get a sizeable stack of 1099-MISCs every year. It's extremely frustrating how (illegally) late some of them are. By law, they're supposed to get them to you by Jan. 31 and to the IRS by Feb. 28. If you're in the same kind of situation I am, you don't want to complain about the lateness because the person might just decide not to hire you anymore. I just report every bit of income whether I receive 1099s or not, so I don't worry about any potential IRS problems. Or, at the very least, keep a record through the year of every employer/job that has your SSN.
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