BITOG Tax Thread

[Tom NJ]

Originally Posted By: simple_gifts
I hear form 1040 is outdated, should I be moving to form 1030 or maybe 520?


Actually all the forms are being replaced for 2009 with the new simplified form 1050. It only has two lines:

Line 1: How much money did you make in 2009?
Line 2: Send it in.

Tom NJ

 

[ksJoe]

Does a small church that owns no real estate have to form a corporation (or obtain any other formal approval for tax exempt status)? From what we can tell, incorporating seems to be encouraged, but not required.

Same question, if it owns real estate (meeting place building)?

I know of old churches that are not incorporated and own their building. But they've been around "forever" so they could be grandfathered in. What I cannot figure out is if its still permissible.

If you know where to look in the code to see this, that would be helpful too.

Thanks!

 

[Kestas]

I have a question on the TurboTax program I buy each year. It's gotten expensive and I am considering going to TaxAct this year. But I'm not sure what their price structure is.

I do four returns... mine, mother's and two friends. We're all in the same state. With TurboTax I can buy one program, get one state program free, and do as many returns as I want (I don't bother with e-filing). With TaxAct I can do all federal taxes free, but do I need to buy a state program separately for each return?

 

[JustinH]

Unfortunately, I am stuck with turbotax. I have a schedule E from rental properties, and they save my depreciation worksheets in a .TAX format to import to next years product.

Have you looked at turbotax taxfreedom?Taxfreedom

It is a income dependant program, if you make under $35k (I think), then you can file the entire application for absolutely free including state.

This works great for KIDDO's with part time jobs, or someone with low income. Also it is free for active duty military. I have used it for several years when my girlfriend was going to school and not working much.

 

[BeanCounter]

Originally Posted By: Dooskey
I had a question about doing a Roth Conversion on a small IRA I have. The value of the IRA is around $7200 right now.

My household income for the year will probably be right around $40,000. I'm married and have a child and we just bought a house this year. So, with all that, I think my effective tax rate will be pretty low. If I do the Roth Conversion this year, I will only have to pay taxes on the conversion at my tax rate for this year, correct? Or are there other fees or rates at which this type of a conversion might be taxed? Thanks a lot for your help.


You should be in good shape to simply include the amount in your gross income of all pre-tax contributions AND growth accumulated. The income limitation is $100,000 for 2009 tax year and is nonexistent in 2010.

You shouldn't need to, and I wouldn't likely advise this, but if you were to elect to move the money over in 2010, you have the option of claiming 50% of the conversion amount in 2011 and the other 50% in 2012, to ease the tax burden.

Let me know if that doesn't answer everything you were asking for.

 

[BeanCounter]

Originally Posted By: ksJoe
Does a small church that owns no real estate have to form a corporation (or obtain any other formal approval for tax exempt status)? From what we can tell, incorporating seems to be encouraged, but not required.

Same question, if it owns real estate (meeting place building)?

I know of old churches that are not incorporated and own their building. But they've been around "forever" so they could be grandfathered in. What I cannot figure out is if its still permissible.

If you know where to look in the code to see this, that would be helpful too.

Thanks!


Does said church not qualify for tax-exempt (501(c)(3)) status?

http://www.irs.gov/pub/irs-pdf/p1828.pdf

Get back to me on this so I can help.

 

[BeanCounter]

I have used Turbo Tax briefly before, but those programs drive me nuts sometimes. They definitely aren't designed for tax professionals it doesn't seem like.
Sorry that I am no help on the Turbo Tax/Tax Act question.
Hopefully some more people may chime in to help on this issue.

 

[ksJoe]

Originally Posted By: BeanCounter

Does said church not qualify for tax-exempt (501(c)(3)) status?

http://www.irs.gov/pub/irs-pdf/p1828.pdf

Get back to me on this so I can help.


I read through that document (thanks for the link!), and yes, it qualifies for 501(c)(3) status.

Its about as simple as a church can get. Only income is through weekly contribution. Only expenses are minister's wages, building expenses (rent, insurance, utilities), minimal supply expenses (books, etc). No political or "business" activity.

 

[BeanCounter]

You should be in great shape then.
Churches have a lot of tax advantages, just as long as they don't do anything to endanger their tax exempt status.

 

[Scienceman]

do I have to pay taxes?

 

[BeanCounter]

Originally Posted By: Troy_Built
do I have to pay taxes?

Not if you make less than $5,700, give or a take a joint filing and a few personal exemptions here and there.

 

[benjamming]

Talk to me about the Making Work Pay credit. TaxAct is telling me that my credit is $800 ($400 for me & $400 for my wife - both work, not retired). Thanks.

 

[BeanCounter]

This is a credit that the government implemented to return money back to taxpayers during these economic times. Instead of being a straight credit though, they actually had employers (many/most/all?) adjust their withholding schedules to allow you to realize that $400 or $800 throughout the tax year.
Effectively, the money you received lowered your withholding, which is then covered by the credit you take on you 2009 tax return.

Most of the folks who may have problems are those who work more than 1 job a piece. Then, you may have multiple jobs withholding money that you are only going to get 1 dose of in the credit.

Simply take the appropriate credit amount on your "below-the-line" portion of your tax return. There should be some qualifications on the 1040 instructions that you have to meet, but I'm sure you apply.
Feel free to PM me if you need any specific help. Also, make sure to let us know on here if that answered your question!

 

[Schmoe]

On my W2 from Uncle Sam, Box 14, there is an amount under letter K, I've never seen that before. What is that from? I did start taking out supplemental dental insurance last year, but I didn't think it was pre-tax. Also under box 14, would my medical contributions that are pre-tax show up in that box?

 

[Scienceman]

Originally Posted By: BeanCounter
Originally Posted By: Troy_Built
do I have to pay taxes?

Not if you make less than $5,700, give or a take a joint filing and a few personal exemptions here and there.

not me.

 

[BeanCounter]

Originally Posted By: Schmoe
On my W2 from Uncle Sam, Box 14, there is an amount under letter K, I've never seen that before. What is that from? I did start taking out supplemental dental insurance last year, but I didn't think it was pre-tax. Also under box 14, would my medical contributions that are pre-tax show up in that box?


This is what I have seen so far about Box 14 "Other":

Quote:

Box 14 - records any other information for the employee, such as union dues, health insurance premiums, and educational assistance payments. Contributions to retirement plans that have no code can be listed here too. All entries should be clearly labeled. Most will be nontaxable earned income.


I believe K is going to relate to your dental insurance.
Do you have an employer-plan?
Can you verify that these amounts are not pre-tax from your employer? Do a quick calc and see if it appears that this amount was excluded from you taxable wages.

From what I have seen, Box 14 is for other information that does not typically relate to anything pre-tax, but see if you can add or subtract this figure from wages to determine the plausibility.

See page 13 of the following, left hand column:
http://www.irs.gov/pub/irs-pdf/iw2w3.pdf

Get back to me on this, as I am glad to help.

 

[BeanCounter]

Originally Posted By: Troy_Built
Originally Posted By: BeanCounter
Originally Posted By: Troy_Built
do I have to pay taxes?

Not if you make less than $5,700, give or a take a joint filing and a few personal exemptions here and there.

not me.


Wouldn't that be the life though?
Must be nice to be the receivers of redistribution...

 

[PandaBear]

Question: If I help out one of my friend by sending him a check, I've heard that you can deduct it as long as you file it under their income (gift) as long as it is less than $10k, is this correct?

 

[Boatowner]

No, No and NO. If you send a friend a gift and it is under $ 11,000, you don't have to report it on a gift tax return. There are no other tax consequences. It is not income to him, it is not deductible for you.

 

[Ursae_Majoris]

Originally Posted By: Kestas
I have a question on the TurboTax program I buy each year. It's gotten expensive and I am considering going to TaxAct this year. But I'm not sure what their price structure is.

I do four returns... mine, mother's and two friends. We're all in the same state. With TurboTax I can buy one program, get one state program free, and do as many returns as I want (I don't bother with e-filing). With TaxAct I can do all federal taxes free, but do I need to buy a state program separately for each return?


Just saw you question. I've been using TaxCut for 4 years. You have 5 free E-Filings with the federal tax software. State package is extra $30, IIRC. We do not have state income tax, so I never had to buy that module.