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furushotakeru posted:Audits are almost never random, they only audit your return if they think there is something to find. We got stuck with a training audit this year. "Why are you auditing our client?" "To train our new agent." Gotta learn somewhere, I guess.
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Mar 19, 2011 01:19
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KennyG posted:
Hey, it's less than that, two weren't my fault! 
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Mar 19, 2011 01:20
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AbbiTheDog posted:We got stuck with a training audit this year. The local IRS office (San Jose) puts on "practitioner liaison meetings" three times a year, hosted by the Mission Society of Enrolled Agents. These meetings are usually attended by district and regional level management from the IRS. I don't think one of these meetings has gone by that I can remember that at least one person hasn't cracked a joke about sending the IRS a bill for training their greenhorn agents. The IRS is having a lot of problems with high turnover for agents, who are going through the IRS training and then quitting to go make money in the private sector before a year has gone by, so there is a shortage of experienced auditors out there and they are constantly hiring new ones.
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Mar 19, 2011 01:31
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furushotakeru posted:The local IRS office (San Jose) puts on "practitioner liaison meetings" three times a year, hosted by the Mission Society of Enrolled Agents. These meetings are usually attended by district and regional level management from the IRS. In talking to the ones up here in Portland, most of the "small business" agents they hired last year have all quit.
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Mar 19, 2011 16:46
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furushotakeru posted:The local IRS office (San Jose) puts on "practitioner liaison meetings" three times a year, hosted by the Mission Society of Enrolled Agents. These meetings are usually attended by district and regional level management from the IRS. Without getting too political, this is what 2 year pay freezes, proposals for promotion freezes and all the federal funding budget politics do to the government workforce. Hard to argue that the IRS auditors are overpaid. Also, really, they tell you its a training audit, but it costs you money? That seems so, so, SO wrong. I guess that's better then them just not telling you its a training audit even though it really is.
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Mar 19, 2011 19:57
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KennyG posted:Without getting too political, this is what 2 year pay freezes, proposals for promotion freezes and all the federal funding budget politics do to the government workforce. Hard to argue that the IRS auditors are overpaid. The enforcement budget of the IRS has grown significantly every year for some time now.
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Mar 19, 2011 21:21
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furushotakeru posted:The enforcement budget of the IRS has grown significantly every year for some time now. *cough* government unions *cough*
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Mar 19, 2011 22:27
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I have a feeling it is more about the gigantic, enormous, stupendous, and unsustainable deficits the government runs each year, and somehow they keep growing. There seems to be a mentality that if they throw more money at enforcement they can solve these problems but instead there seems to be a point of diminishing returns that is not being acknowledged.
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Mar 20, 2011 00:49
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politics of taxation and auditing itt
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Mar 20, 2011 05:41
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a quickie, I hope: is there any way to stave off the .5% monthly interest from not being able to pay my taxes on time? I've filed, I just can't pay until I have income. I'm unemployed (but collecting no benefits) and looking with no other outstanding debts.
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Mar 20, 2011 07:03
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I have a local tax question. I live in PA, but I think this is more of a theory question than something specific to my location. Mid-way through 2010, I moved from a township that charges 1% income tax to one that charges no income tax. However I did not update my address formally in any capacity (drivers license, etc) since I was renting month-to-month and living with the owner. When I filed my taxes, I thought since my drivers license address didn't change, and I see that as the government's primary ID, that I wouldn't be able to show I moved halfway through the year. I already paid the full 1% for the year, however I'm thinking that was very stupid and I should submit an adjustment to get $300-$400 back. I do have a very informal paper that I am calling my "lease" agreement with the owner's signature and my signature on it, so I think that would hold as legal proof. And I could go back to the person I was living with and get something more official notarized stating that I lived there if necessary. I'm wondering if there is any reason I wouldn't want to submit an adjustment, or if there are any other consequences I should consider? I mean I did submit an incorrect tax form, however I didn't understand my ability to prove my location of residence. I honestly did live in the other township for half the year, so I see an adjustment as being the right thing to do. Thoughts? Thanks in advance for any help!
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Mar 20, 2011 16:45
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Here is a question about the Residential Energy Credit: Our home was hit by a tornado in 2010. It did about 40k of damage. We had several windows replaced as well as a large patio door. In all, the amount of 'Window product cost" which qualifies for the Federal Tax Credit was $8000. We had insurance and ended up writing a check to the company doing the installation of $3500. My question is, the reciept I have from the company shows the total invoice of $8000 but I only paid around 3500 of that, do I take the 3500 as the base amount for the credit or the 8,000? Looks like some tax professionals think I can deduct the entire amount, whoopie! http://community.intuit.com/posts/residential-energy-tax-credit Anyone have a dissenting opinion? Gimbal_Machine fucked around with this message at 20:35 on Mar 20, 2011 |
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Mar 20, 2011 20:18
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Gimbal_Machine posted:Here is a question about the Residential Energy Credit: On it's face, it seems illogical that you could take the full $8000 product cost to qualify for the credit when you paid $3500, but it seems you can. Insurance settlements on your personal property are not taxable except to the extent you realize a gain. (ie, you bought the house for $30,000 and they paid you $40,000, 10K is gain). Barring that, it's money and money is fungible. I'm curious if anyone has a different interpretation, but I would take all of it.
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Mar 20, 2011 20:47
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It makes a little sense to me as not 100% of that additional amount is gain - you've paid insurance premiums the whole time, so that money that is paid out is not simply coming out of nowhere - you've paid a fee to receive it. To try one more time, does anyone have any insight into what changes I would make (if any) if I will get married in June? My fiancee is a student and makes about 20k/yr while I make 40k. Should I/can I change my withholding? Plan for any particular tax credits?
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Mar 20, 2011 21:08
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Zeta Taskforce posted:On it's face, it seems illogical that you could take the full $8000 product cost to qualify for the credit when you paid $3500, but it seems you can. Insurance settlements on your personal property are not taxable except to the extent you realize a gain. (ie, you bought the house for $30,000 and they paid you $40,000, 10K is gain). Barring that, it's money and money is fungible. I'm curious if anyone has a different interpretation, but I would take all of it. I'm going to disagree on this one, since your out-of-pocket costs are only $3,500. But it's not my return.
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Mar 20, 2011 21:12
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AbbiTheDog posted:I'm going to disagree on this one, since your out-of-pocket costs are only $3,500. But it's not my return. Seconded. Use what you actually paid.
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Mar 21, 2011 09:10
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starcraft87 posted:I have a local tax question. I live in PA, but I think this is more of a theory question than something specific to my location. Well you should have not only a lease but cancelled rent checks or receipts so I don't see any reason to not submit the adjustment. The worst they will say is no.
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Mar 21, 2011 09:11
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Red Saucer posted:a quickie, I hope: Once the tax and penalties have been paid (or you enter into a formal installment agreement to pay them) you can apply for penalty abatement if you can convince the IRS that being unemployed is "reasonable cause" for not paying your taxes on time. I don't know whether or not this would fly but would lean strongly to the side of "not" as it is very hard to convince the IRS to abate anything. In reality it is most likely that the amount of money involved is simply not worth the amount of time and effort involved in requesting the abatement and seeing it through. Hopefully you will find work soon and then can make payments to take care of this ASAP.
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Mar 21, 2011 09:15
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furushotakeru posted:Seconded. Use what you actually paid. Just wondering why you'd go with this? Is it just the 'safe play'? If I had kept the money and done the work myself and bought a new car then installed new windows at a later time using 8k of my own money, I would be able to make the deduction, right? Seems logical to me that the decision to spend the insurance proceeds on energy upgrades was my decision to make, no?
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Mar 21, 2011 18:56
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Gimbal_Machine posted:Just wondering why you'd go with this? Is it just the 'safe play'? If I had kept the money and done the work myself and bought a new car then installed new windows at a later time using 8k of my own money, I would be able to make the deduction, right? Seems logical to me that the decision to spend the insurance proceeds on energy upgrades was my decision to make, no? If you'd kept the money and bought a new car the amount spend on the new car would be taxable income to you through the involuntary conversion rules.
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Mar 21, 2011 19:41
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Gimbal_Machine posted:Just wondering why you'd go with this? Is it just the 'safe play'? If I had kept the money and done the work myself and bought a new car then installed new windows at a later time using 8k of my own money, I would be able to make the deduction, right? Seems logical to me that the decision to spend the insurance proceeds on energy upgrades was my decision to make, no? Would the insurance have just paid you the remaining $4500 if you hadn't used it towards windows? Or was that amount only for the windows? I think if the money could have been used towards anything else, then you did legitimately "spend" all $8000 and should be entitled to the full deduction. I think that was confusion here...but IANATP
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Mar 21, 2011 19:44
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AbbiTheDog posted:If you'd kept the money and bought a new car the amount spend on the new car would be taxable income to you through the involuntary conversion rules. Then wouldn't I be able to claim the damage to my house as a loss to offset it? The value of my house was reduced by the amount of repairs required to fix it? I guess I was buying the 'money is fungible' argument from http://community.intuit.com/posts/residential-energy-tax-credit kaishek posted:Would the insurance have just paid you the remaining $4500 if you hadn't used it towards windows? Or was that amount only for the windows? I think if the money could have been used towards anything else, then you did legitimately "spend" all $8000 and should be entitled to the full deduction. I think that was confusion here...but IANATP Yes, the company doing part of the work gave me a quote for the entire 40k worth of repairs, then I subcontracted parts of it. The $40k was reimbursement to me for the amount they estimated it would take to repair the house. I guess the problem is I'm an engineer but not a lawyer. 
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Mar 21, 2011 19:57
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Gimbal_Machine posted:Just wondering why you'd go with this? Is it just the 'safe play'? If I had kept the money and done the work myself and bought a new car then installed new windows at a later time using 8k of my own money, I would be able to make the deduction, right? Seems logical to me that the decision to spend the insurance proceeds on energy upgrades was my decision to make, no? Just since Abbi didn't really explain what he meant by involuntary conversion rules: the money paid by the insurance company is only non taxable if you use it to replace or repair the property that they were paying the claim for. However, you do have I think 18 months from the loss to spend it before it becomes income.
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Mar 21, 2011 20:19
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furushotakeru posted:Just since Abbi didn't really explain what he meant by involuntary conversion rules: the money paid by the insurance company is only non taxable if you use it to replace or repair the property that they were paying the claim for. However, you do have I think 18 months from the loss to spend it before it becomes income. Ninja edit - some is three years, some is two years after the close of the first tax year. AbbiTheDog fucked around with this message at 21:37 on Mar 21, 2011 |
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Mar 21, 2011 21:35
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AbbiTheDog posted:Ninja edit - some is three years, some is two years after the close of the first tax year. Ok, so, this $800 return difference is a lot to me, so I'm going to ask a few more questions, just let me know when you are sick of me. The involuntary conversion would apply if i had not invested back into my house. The car example was poor, because thats clear. If I had used 50% of the money to do emergency fixes to the roof and the other 50% to buy new HVAC, all being property improvements, then spent my own 10k to replace the windows in the house even though they were broken by the storm and insurance gave me money for them, I would still be able to deduct the full amount, correct? The thing that makes it gray to me is that what I spend the money on, in so far that its a property improvement to improve my basis in the house, i have control over.
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Mar 21, 2011 22:19
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You are free to put whatever you want on your return. You asked what we would do and we have given our answer. If you disagree, then use what you want for your return. I think I have narrowed down why this doesn't pass the "smell test" for me: If you had received the insurance money and then paid $8K for the invoice, that would be one thing. However, the insurance company paid the installers the balance of the invoice directly. To me, this means that your cost for the repairs was the $3500 you actually paid and not the $8K total for the invoice. furushotakeru fucked around with this message at 22:36 on Mar 21, 2011 |
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Mar 21, 2011 22:29
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Right, I understand. Thanks to you both for your opinions. Helpful to see what pros think
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Mar 21, 2011 22:52
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Gimbal_Machine posted:Right, I understand. Thanks to you both for your opinions. Helpful to see what pros think If my firm was doing your taxes, I'd tell you to use the smaller amount. If it was my own return, I'd still use the smaller amount. If I was preparing Furu's return, I'd ignore it, because big pink talking things don't deserve tax credits. Your milage may vary.
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Mar 21, 2011 23:55
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Which were going down this year, self employment taxes or estimated taxes?
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Mar 22, 2011 21:39
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In the past I wasn't required to itemize my charity/educational donations. This year it doesn't give me any other option. Is this new? If I only made contributions totaling between $1,000 and $1,500, is it worth going through my bank statements to find all the donations?
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Mar 23, 2011 01:26
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Tortilla Maker posted:In the past I wasn't required to itemize my charity/educational donations. This year it doesn't give me any other option. Nobody knows what you're talking about because you didn't say what tax software you are using. If your total itemized deductions (incl. charitable donations) are under $5700 then it doesn't matter what you put since you'll end up taking the standard deduction anyway.
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Mar 23, 2011 02:21
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scribe jones posted:Nobody knows what you're talking about because you didn't say what tax software you are using. If your total itemized deductions (incl. charitable donations) are under $5700 then it doesn't matter what you put since you'll end up taking the standard deduction anyway. Just got to that point (using Turbotax). Standard Deduction it is.
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Mar 23, 2011 02:50
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dms666 posted:Which were going down this year, self employment taxes or estimated taxes?
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Mar 23, 2011 04:30
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Small White Dragon posted:FICA (and by extension, self employment tax) are reduced slightly for this year only. Alright, thanks, was just making sure esimated taxes didnt change before I paid them
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Mar 23, 2011 15:22
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I think I'm going to go to an H&R Block for my first non-1040EZ form because I'm just so overwhelmed. Based on my income I believe I can still file 1040EZ however my brother and I have inherited a house the past year and I don't know what to do now. If I head on over to H&R Block or another tax preparation place, would I just bring over my W-2 and copies of the checks written for the property tax payments? The house is a paid off small home so we just pay property tax. It just really complicates things, I made really little working full time last year and I'm hoping a refund or something comes out of this as money is tight.
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Mar 27, 2011 02:13
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Jose Cuervo posted:So it seems to say I am responsible for income tax (nothing about self employment tax), but that I am definitely not considered an employee of the administering agency (Program). Any thoughts please? I know with the NDSEG fellowship (ASEE administered, government program - sounds like your fellowship?) you're considered an independent contractor and not self employed. At least according to:http://ndseg.asee.org/assets/File/2008-Tax-Memo.pdf. Of course, since I'm just starting to think about taxes I have no idea what this really means, but there you go.
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Mar 27, 2011 02:49
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I had a question about estimated tax payments. I trade stocks infrequently (not a daytrader) and can have both gains and losses per month. I've been paying estimated taxes on gains every estimated payment period. But if I have a loss and a gain, do I sum the two together before determining if estimated tax is due? For example, if this month I made $1,000 on a stock sale, but then lost $1,000 on another stock sale, would I need to pay estimated tax on the $1,000 gain come April 15th, or do I net the two together for a total gain of zero, so no estimated tax is due?
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Mar 27, 2011 19:41
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This year I received a $6000 rebate from NH for installing roughly 5kW of solar panels on my home. I got a 1099-G from the state listing the $6000 as a "Taxable Energy Grant". Is a rebate considered the same thing as a grant? I'm a little annoyed because I feel like I'm getting taxed twice - Once on the income I used to pay for the system, then again on the $6000 rebate of post-tax money.
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Mar 27, 2011 21:28
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In the year 2010, I took one class at a college (fall semester) costing me about $1100. I signed up for four spring classes but I did not attend. I received a tax notice from the school (form 1098-t) early January saying that I was billed for $5500. This included the four spring classes I did not take and obviously did not pay for. This tax year, students/their parents get about $2500 they paid in tuition reimbursed. I think my tax preparer used the information in this 1098-t to prepare my taxes. Anyway, will this work itself out or do I have to tell him to redo my taxes and enter in the correct information?
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Mar 28, 2011 21:47
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seriously! posted:In the year 2010, I took one class at a college (fall semester) costing me about $1100. I signed up for four spring classes but I did not attend. The only way it will work itself out is if your university realizes their mistake and sends a corrected 1098-T to the IRS. Then the IRS will realize that you got a credit you shouldn't have and bill you for the difference. You'd have to redo the taxes to avoid this happening. Not sure if any penalties would be assessed?
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Mar 28, 2011 22:39
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