Post: #76

Today’s Tax Tip of the Day – Due to the Affordable Care Act mandate, you will have to prove you had health insurance throughout 2016 on your 2016 tax return. You should receive Form 1095-A, 1095-B, Form 1095-C, or another document from either your employer or insurance plan that will be proof of insurance coverage for 2016. Whether this form will have to be submitted to the IRS with your tax return and how this will be handled when e‐filing returns is still undetermined.

Employees who rely on employer‐offered plans for their health insurance coverage should not automatically select the same coverage or plan they had in 2016, and instead should take time to compare plans since their 2016 choice may no longer be the most cost effective. Many companies are using spousal surcharges to increase premiums. More commonly, they are creating different rates for different family situations (employee and spouse, employee plus children, etc.).

If your spouse's employer also offers insurance coverage and the premiums plus the deductibles for each of you going with your own employer add up to less than the premiums and deductibles for both of you on any single plan, you should probably consider splitting up your coverage.

Families with children should compare the cost of covering them on each spouse's plan, then with full coverage on each plan. You should consider setting‐up a Health Savings Account (HSA) where in 2017 you can contribute up to $3,350 (single) and $6,750 (families), and those over 55 can contribute an additional $1,000. Amounts contributed to HSAs are deductible in computing adjusted gross income (AGI) on your tax return, which means these contributions are deductible even if you don't itemize deductions.

Lastly, if you are self‐employed, 100% of your self‐employed health insurance premiums paid for yourself, spouse, and dependents are deductible in determining your Adjusted Gross Income (but not in determining net income from self‐employment on Schedule C). This includes dental insurance premiums and certain long‐term care premiums. It also includes premiums paid for coverage for any child of yours who was under age 26 by the end of the year, even if the child was not your dependent.

NOTE - In light of the new Trump administration, much of this is likely to change in 2018.

Post: #77

For whatever reason, I'm not finding a 100% clear answer to my question anywhere else on the internet, so I am posting it here. As I have posted before, I had serious, serious financial problems in the past. I was able to turn it all around years ago and do not deal with debt or loans in any way, shape, or form and have not done so for several years. Back in either 2005 or 2006, I "bought" a condo and it was easily the worst mistake, personal or professional, I have ever made. At the time the condo was purchased, I entered into both a first and second mortgage. The second mortgage was entered into because additional funding was needed to buy the property. I never received any cash from the second mortgage, nor did I use it to repair or renovate the property. The property was my primary residence.

Eventually, I stopped paying for the property completely, but continued to live there for quite some time. Foreclosure proceedings were initiated, but took it took a while for the foreclosure sale to be completed and ratified. I moved out of the place in 2010 and the foreclosure sale was ratified in early 2011. I heard absolutely nothing further about this situation until a few months ago when I received a letter saying that the debt from the second mortgage had been forgiven.

Earlier today, I received a 1099-C from the holder of the second mortgage. The form listed the fair market value of the property and the amount of debt discharged and the fair market value was higher than the amount of debt. It also lists as the identifiable event "decision or policy to discontinue collection" rather than "foreclosure election."

My specific question is as follows, do I qualify for an exemption under the Mortgage Debt Forgiveness Relief Act when the amount which was forgiven was a second mortgage, the home was my primary residence, the second mortgage was used to buy the home and not for repairs or renovations, I received no cash from the second mortgage, the debt was forgiven in 2016, and the fair market value of the property as listed in the 1099-C is greater than the amount of debt discharged?

Post: #78

@ mereng-

That sounds like tax hell. The specific act you mention expired in 2014, the debt would have had to have been cancelled in years prior (2016 too late)-
https://www.irs.gov/uac/home-foreclosure...ncellation

What about starting on page 9?-
https://www.irs.gov/pub/irs-pdf/p4681.pdf

Post: #79

How big of a deal is it if you don't have a 1099 from a company that issued you one?

I somehow lost the one I was sent and the company is being fucking lazy about getting me a new one.

Post: #80

(02-07-2017 05:43 PM)frozen-ace Wrote:  @ mereng-

That sounds like tax hell. The specific act you mention expired in 2014, the debt would have had to have been cancelled in years prior (2016 too late)-
https://www.irs.gov/uac/home-foreclosure...ncellation

What about starting on page 9?-
https://www.irs.gov/pub/irs-pdf/p4681.pdf

Thanks. It's not a ton of money, but I obviously don't want to incur any additional taxes. I also read something that if the fair market value of the property exceeds the amount forgiven, which it does in my case, it is not considered income.

Post: #81

(02-07-2017 05:50 PM)SamuelBRoberts Wrote:  How big of a deal is it if you don't have a 1099 from a company that issued you one?

I somehow lost the one I was sent and the company is being fucking lazy about getting me a new one.

Not huge, if you report the income even if the IRS gets up in your face later you have reported the income and won't owe more.

Remember the IRS has a copy of your 1099 from your employer, even if you don't report it.

Post: #82

(02-07-2017 06:11 PM)Merenguero Wrote:  

(02-07-2017 05:43 PM)frozen-ace Wrote:  @ mereng-

That sounds like tax hell. The specific act you mention expired in 2014, the debt would have had to have been cancelled in years prior (2016 too late)-
https://www.irs.gov/uac/home-foreclosure...ncellation

What about starting on page 9?-
https://www.irs.gov/pub/irs-pdf/p4681.pdf

Thanks. It's not a ton of money, but I obviously don't want to incur any additional taxes. I also read something that if the fair market value of the property exceeds the amount forgiven, which it does in my case, it is not considered income.

The act has been extended through December 31, 2016, but has not yet been extended any longer than that. The debt was discharged in mid 2016. What I need to do is file a Form 982 along with my 2016 tax return and seek an exemption. As far as I can tell, I should be in the clear. If they try to give me a problem down the road, I may have an argument that they waited too long to forgive the debt. If they had not forgiven the debt, they may have very well been barred from suing me by the statute of limitations. They might not have really forgiven anything.

Post: #83

I sold some stock last year for a small profit, it was less than $1000. Do I need to report it? My brokerage house doesn't have a tax form ready for me online which either means they're slow or I don't owe tax.

Post: #84

(02-08-2017 11:58 AM)DJ-Matt Wrote:  I sold some stock last year for a small profit, it was less than $1000. Do I need to report it? My brokerage house doesn't have a tax form ready for me online which either means they're slow or I don't owe tax.

More than likely that will need to be reported. I've noticed that brokerage companies are being extra slow to send out Consolidated Tax Reporting statements this year, so keep checking with them.

Post: #85

An update to using the free CK tax app this year. They don't have any place for 1099-B or 1099-OID both of which I got for Lending Club notes. The way to enter them into the system is to use the interest income section for the OID and Stocks And Bonds for the B.

Post: #86

Today's Tax Tip of the Day - Transgender surgery may be deductible. For example, a man who felt he was a woman trapped in a male body was diagnosed with gender‐identity disorder. He tried to deduct $25,000 in medical costs for multiple surgeries, including hormone therapy, sexual‐reassignment surgeries, and breast augmentation, in order to become a woman. The IRS allowed the costs of the hormone therapy and sex‐change operation as qualified medical expenses because those procedures helped treat a mental disorder, but they disallowed the cost of breast augmentation, saying it was nondeductible cosmetic surgery.

Interesting how the IRS considers Transgenderism to be a mental illness, yet society at large apparently doesn't. If anyone here on the forum is friends with Bruce/Caitlyn Jenner, please share this with him (them?), thanks.

Also, since Valentine's Day is coming up - expenses for a legal abortion are deductible. Birth control pills, fertility enhancement, and pregnancy test kits are also deductible. Cosmetic surgery is not deductible unless it's to correct a congenital abnormality, personal injury due to trauma, or a disfiguring disease.

Condoms are not considered tax-deductible expenses unless you can convince the IRS that the condom would be an ordinary and necessary expense for your job and not used for your personal enjoyment. Good luck with that.

Post: #87

Today’s Tax Tip of the Day – For any smokers who want to try quitting, many stop-smoking aids are considered tax deductible. Smoking cessation programs, nicotine patches, nicotine gum, prescription medications, and even hypnotherapy are legitimate medical expenses that can be written off on Schedule A, subject to 10% of your adjusted gross income.

Similar to smoking cessation, weight loss and exercise related expenses can be tax deductible under certain circumstances. If your doctor has prescribed weight loss (in writing) for a medical condition that poses a serious risk to your health such as diabetes, high cholesterol, heart disease, hypertension, or obesity, you may be able to deduct the cost of remedies that might help you lose weight, lower your blood pressure, etc. as medical expenses.

Examples of these include the cost of memberships to support groups such as Weight Watchers/Jenny Craig, FDA-approved prescription weight loss drugs, appointments with dieticians and nutritionists, and even gastric bypass surgery.

NOTE – not all diet and weight loss costs are included as deductible expenses. Disallowed deductions include the cost of diet foods, vitamins, supplements, home exercise equipment, gym memberships, or any costs covered by insurance.

Post: #88

GAAAAH
FUCK I JUST TALKED TO THE STUPIDEST WOMAN IN HISTORY AT THE IRS.

IRS sends me a letter asking for some minor info and a penalty of perjury statement saying when I filed my tax return. I'm not sure if "filed" refers to the day it's mailed or the day the IRS receives it, and I can't afford to waste any more time over stupid bureaucratic nonsense, so I decide to call the department and double check. The phone is answered by this obese black woman who cuts me off in the middle of my explanation and tells me that THE LETTER I'M HOLDING IN MY HANDS DOES NOT EXIST. When I read her the text on the letter, which was sent from HER DEPARTMENT, she tells me that the text on the letter is incorrect. She further tells me that I don't need it at all, but can "send it if I want". I could potentially have six figures riding on this goddamn letter, and I want to get it right, and here this dumb bitch is telling me that the letter doesn't exist!

What kind of bullshit Kafkaesque crap is this? I'm about ready to go full AnCap here. I'd rather live in fucking Somalia than try to deal with a government that demands things from you and then doesn't even know what the hell it's asking for.

Post: #89

(02-14-2017 01:49 PM)SamuelBRoberts Wrote:  I could potentially have six figures riding on this goddamn letter, and I want to get it right, and here this dumb bitch is telling me that the letter doesn't exist!

When I get a retard or someone who NO SPEAKU ENGLISH on the phone, and I'm fairly confident they're just one rep among many, I'll just make an excuse and hang up, wait a minute or two to reduce the risk they're still on the bench, and then call again to get someone else. Just remember their voice or their name if they give it.

Post: #90

(02-14-2017 01:49 PM)SamuelBRoberts Wrote:  What kind of bullshit Kafkaesque crap is this? I'm about ready to go full AnCap here. I'd rather live in fucking Somalia than try to deal with a government that demands things from you and then doesn't even know what the hell it's asking for.

Wow, we must have talked to the same woman. After explaining to her that I had my bank account configured to mail them checks automatically and asking a question about the timing of the last check, she put me on hold for a few minutes.

When she returned, she accused me of claiming to have a direct debit agreement, which did not exist. I had to explain to her, very patiently, that I did not say anything of the kind: they do not direct debit my account, my bank issues a paper check.

"In our terminology," she says, "that would be a direct debit, and that's not what you're doing. You're mailing us a check."

I don't know why, but that just filled me with rage. "It has nothing to do with my arrangement. The IRS is not a party to it. It's also not relevant to my question. Do not bring this up again. My only narrow question is..."

Her answer was wrong, but smug, and it became clear that she was arguing about the payment arrangement because she didn't understand my question and thought she could change the subject to something she thought she did understand. Ended up hanging up and calling back.

Post: #91

(02-08-2017 11:58 AM)DJ-Matt Wrote:  I sold some stock last year for a small profit, it was less than $1000. Do I need to report it? My brokerage house doesn't have a tax form ready for me online which either means they're slow or I don't owe tax.

Yes and they will find you and send you a bill albeit not that much.

I know because I had that happen to me. Check the cap gains bracket you're in and set some aside.

Post: #92

(02-15-2017 10:31 AM)The Beast1 Wrote:  

(02-08-2017 11:58 AM)DJ-Matt Wrote:  I sold some stock last year for a small profit, it was less than $1000. Do I need to report it? My brokerage house doesn't have a tax form ready for me online which either means they're slow or I don't owe tax.

Yes and they will find you and send you a bill albeit not that much.

I know because I had that happen to me. Check the cap gains bracket you're in and set some aside.

Finally got the email from crapital one investing saying they're ready. FYI the brokerage places lobbied to get the deadline extended so they have until the 15 of Feb. to send them out and basically waited until the last minute on mine.

Looks like I owe another $25 to the feds now.

Post: #93

Just filed mine today. Totally not what I expected. Made way more than I did last year,though I don't make much .single with no kids.

About 5 ish in taxes came out of my salary .
Owed uncle same took about a grand n change and I'm left with about 950 on my return.

Tax wizards does that make sense?

I never finished filing it so maybe I messed up somewhere ,maybe not.

Post: #94

(02-15-2017 08:30 PM)ShotgunUppercuts Wrote:  Just filed mine today. Totally not what I expected. Made way more than I did last year,though I don't make much .single with no kids.

About 5 ish in taxes came out of my salary .
Owed uncle same took about a grand n change and I'm left with about 950 on my return.

Tax wizards does that make sense?

I never finished filing it so maybe I messed up somewhere ,maybe not.

Did you have any self-employment type of income (Form 1099-MISC, contractor side gigs, etc)? That's often a preliminary culprit when this happens....

Post: #95

i worked through a temp agency. I also remember making an adjustment to my w4 in the middle of the summer .......maybe that's where I fucked up.

Post: #96

My tax situation has gotten increasingly more complex for 2016, unfortunately, and I just fired my accountant and am trying to sort some of these things out. Hoping some of the knowledgeable members could provide insight:

1. I have rental property income, where do I list the rent expense for this property on schedule e? Would it be appropriate to put this in the "other" category, do I have to provide additional support somewhere?

2. No 1099 was issued for this income, theoretically, what would happen if I didn't report this and someone finds out. Can I just use plausible deniability then pay the tax with a penalty? Or does it escalate something more serious much faster?

2. Started a new LLC in 2016 in inventory/sales realm. Would this go on schedule E or schedule C?

3. The LLC technically had a loss in 2016 as I only bought inventory and didn't ramp up any sales. How do I account for this loss, can it offset gains from my rental property, or from my brokerage activity (capital gains)?

4. If I say there was a loss in 2016 for the LLC, and I'm accounting for it on a cash basis, does that mean all sales incurred in 2017 are taxed on total amount received? Seems unfair since proceeds from each sale don't represent profit. How do I calculate taxable profit for this type of business.

5. I got some crypto currency gains and have a long-term capital loss carryover from last year (related to stocks). Can I use the long-term carryover to offset the crypto gains? Also, traded one type of crypto currency for another, does this qualify as a 1031 exchange, or do I owe tax. Some research on the internet indicates this is taxable, but was hoping someone had more insight.

Post: #97

(02-16-2017 08:17 PM)Armogan Wrote:  My tax situation has gotten increasingly more complex for 2016, unfortunately, and I just fired my accountant and am trying to sort some of these things out. Hoping some of the knowledgeable members could provide insight:

1. I have rental property income, where do I list the rent expense for this property on schedule e? Would it be appropriate to put this in the "other" category, do I have to provide additional support somewhere?

2. No 1099 was issued for this income, theoretically, what would happen if I didn't report this and someone finds out. Can I just use plausible deniability then pay the tax with a penalty? Or does it escalate something more serious much faster?

2. Started a new LLC in 2016 in inventory/sales realm. Would this go on schedule E or schedule C?

3. The LLC technically had a loss in 2016 as I only bought inventory and didn't ramp up any sales. How do I account for this loss, can it offset gains from my rental property, or from my brokerage activity (capital gains)?

4. If I say there was a loss in 2016 for the LLC, and I'm accounting for it on a cash basis, does that mean all sales incurred in 2017 are taxed on total amount received? Seems unfair since proceeds from each sale don't represent profit. How do I calculate taxable profit for this type of business.

5. I got some crypto currency gains and have a long-term capital loss carryover from last year (related to stocks). Can I use the long-term carryover to offset the crypto gains? Also, traded one type of crypto currency for another, does this qualify as a 1031 exchange, or do I owe tax. Some research on the internet indicates this is taxable, but was hoping someone had more insight.

Armogan - I'll take a stab at some of my thoughts on these -

1. When you say "rent expense", do you mean that you pay rent on the place that you rent out to others rather than own the property yourself? If so, "Other Expenses" (Line 19 on page one of Schedule E) is the place where you would list that. No other support is needed though make sure you have proof of these rent payments in case called upon later.

2. If you don't report it and the IRS find out, they'll probably just send you a notice in the mail suggesting that you have a balance due for whatever the amount is that you under reported and they'll tack a modest penalty and/or some interest on it. You can deny it at that point, but it won't matter - unless you go through the painstaking process of proving you aren't responsible for it, you'll be on the hook. It won't get escalated any further than the notice unless you refuse to pay it and don't correspond back with a valid reason. That said, if this was a cash-basis arrangement you made with your tenant and no official documents were signed (lease, property management agreements, etc), it's less likely any of the rental income will pop up on the IRS's radar.

2(b). Schedule E is generally for passive activities like Rental Income and K-1's, etc. Assuming your LLC is a disregarded entity (meaning you are the sole proprietor) it would go on your Schedule C.

3. Inventory goes on a Schedule C, and technically you aren't supposed to deduct any of it that wasn't sold. Part III on page two of the Schedule C is how you calculate the Cost of Goods Sold (beginning inventory + purchases - ending inventory = COGS) and that's the only "expense" that's deductible as far as inventory goes, generally speaking.

4. If you end up with a net loss on your Schedule C for the LLC then nothing should be taxable. If anything, you'd be able to reduce your Adjusted Gross Income with whatever the amount of the loss was. I'd definitely recommend you make sure you are properly accounting for the expenses and start-up costs though, as large Schedule C losses can be a flag for an audit. Also, you'll want to start showing a profit for the LLC (even if it's a small one) after a couple of years because of the Hobby Loss rule which is where the IRS disallows the losses from your Schedule C if it's considered a hobby rather than a business. Three straight years of losses tends to catch their eye for this, so just keep that in mind.

5. I'll have to look into this a bit further, too much tax prep work to get through tonight. But I'll check it out.

Post: #98

Appreciate the response and guidance. Can the loss from the LLC offset gains from the rental property income and/or capital gains from stock activity?

Post: #99

(02-18-2017 11:41 PM)Armogan Wrote:  Appreciate the response and guidance. Can the loss from the LLC offset gains from the rental property income and/or capital gains from stock activity?

Not directly. All of those flow onto the first page of the Form 1040 though so the end result is actually a "yes" (for a simplified instance, if you have $1,000 in net rental income and a $800 net Schedule C loss from the LLC, you'll just be paying taxes on the $200 combined total), but they go on different forms and have a few different rules as far as expenses, depreciation, etc. go.

Post: #100

Today’s Tax Tip of the Day - Unreimbursed moving expenses are deductible if your new place of work is 50 miles farther from your former residence than your former place of work and you expect to stay in the new job for at least 39 weeks. If you quit or get fired before the time period is met, you have to report it to the IRS.

Also, expenses to look for a new job in the same line of work, such as travel expenses, cost of resumes, etc. are deductible. Job hunting expenses incurred while looking for your first job upon graduating from school don’t qualify. Deductible job‐search costs include, but aren’t limited to: food, lodging and transportation if your search takes you away from home overnight; cab fares; employment agency fees; and costs of printing resumes, business cards, postage, and advertising. These are included on Schedule A (Itemized Deductions), but are subject to 2% of your Adjusted Gross Income.