It's tax time again and I'm open for business

@Barney That would be double my usual rate.

@Barney @Felton10 Hmm… I am not sure I’d trust an accountant who says that 0+0=2

@Barney @Kidsandliz Sorry didn’t have my calculator handy. Any computation above 21 and I am lost without my calculator.

@Barney @Felton10 But wait!!! So you are saying 0+0 > 21???

@Barney @Kidsandliz Under the right circumstances-maybe.

@Barney @Felton10 @Kidsandliz

@mike808 I’m still using OG paper tax forms, which only costs the price of a stamp. Since the feds upped the standard deduction and added charitable deductions to the first page of the 1040, it doesn’t make sense for me to itemize once I paid off my mortgage. The NY State decoupling still makes me crazy though.

@mike808 H&R Block Deluxe + State software was $17 from Newegg. It included up to 5 Fed e-files for no charge. E-file for Oregon state taxes was $20, which seems crazy since it must cost them (or, ultimately, taxpayers) more than that to process paper returns. So fuck that, we print the state taxes out and mail them. We usually owe a small amount on state anyway, so who cares how long it takes.

@macromeh As I noted, H&R Block (and Quicken/TurboTax) withdrew from the IRS “non-compete” free e-filing program.

You can figure out which politicians they contributed heavily towards to ensure the IRS was fucked before they weaseled out of their “deal” with captured regulators appointed by those same politicians.

opensecrets.org is where you can find some of the info. You probably won’t find “bribes” in any of their corporate disclosures to shareholdes either.

You also won’t find the fuckery being done behind closed doors in dark money PACs pretending it isn’t just blatant grifting, bribery, and corruption. It’s not a conspiracy if the entire political party is in on the conspiracy, it seems. We have the packing of the courts by the Federalist Society and Moscow Mitch McConnell to thank for the inherent corruption of the Citizens United decision and its part in creating a dysfunctional government to advance their authoritarian kleptocrat oligarchy dreams.

@LJeAYsy4LoqxEC Not really-think we are stuck with them until something better comes along. Had a client who purchased it one year and filled in all the info and sent it to me with his source docs. He did it perfectly so not sure why he needed me. Also have a client who has three tax docs-W-2, 1099-Int and Div and has used me for 30 years. Some people feel more comfortable not doing it themselves.

But for the most part those programs are pretty good and accurate for most people’s returns.

BTW-my tax prep software which is a low end professional one costs me about $ 1,800 a year but is perfect for my needs and contains every federal and state tax form.

@LJeAYsy4LoqxEC not a tax professional, but I have used a free 1040 excel spreadsheet for the last 10 years – I have super simple taxes nowadays, but had businesses in the past… Then I check with turbotax free, and file through them.
Spreadsheet can be found here, but 2021 isn’t published yet:

https://sites.google.com/view/incometaxspreadsheet/home

@LJeAYsy4LoqxEC @mikibell Unfortunately turbotax is not free this year if you had any unemployment involved. They want $59 for deluxe for you to file your taxes if unemployment is involved this year. Sucks. Seems to me if all you have is what I had, because of the unemployment it still should be part of the government subsidized free program. I have simple taxes. Unemployment and one 6 week contract W2. I could do it by hand but my whomever designed the state tax form is an asshat as it is a far more complicated mess. Not to mention last year turbotax had an error in it which caused me to underpay and I am still fighting turbo tax to refund me the penalty since it was their error.

@Kidsandliz @LJeAYsy4LoqxEC @mikibell If I make a mistake that causes a client to incur a penalty, my policy has always been it is my responsibility to pay the penalty.

@Kidsandliz Does AARP offer tax prep assistance in your area? They do here, and you don’t have to be a member.

@Kyeh No clue. I could do federal taxes with my eyes shut. I just want something to do state. And I read that the IRS is so far behind that if you don’t file electronically good luck on getting your refund any time in 2022. They apparently still owe some paper return refunds from 2020 (eg 2019 income year taxes).

@Kidsandliz Check here - they do them for you (fed and state) and file electronically:
https://www.aarp.org/money/taxes/aarp_taxaide/
Looks like the location function isn’t up yet for 2022:
The Tax-Aide Site Locator Tool will be up and running again in time for the 2022 tax season; please come back and visit us at that time

@Kyeh Thanks I hadn’t gotten as far as even really thinking about this yet.

@LJeAYsy4LoqxEC last year I used TaxAct because it was free. Though I did them with TurboTax too just to check myself. TT came back with an extra couple grand in a deduction that TaxAct and OLT.com didn’t find. So I used TaxAct forms and edited them with TT credit and had to file on paper.

@katbyter What were the credits that TaxAct didn’t find?

@callow Additional child tax credit using prior year earned income since it was greater in 2019 than 2020. Schedule 8812. $2800.

Cash App Taxes (previously Credit Karma Tax) is great and it’s free. I’ve used it for years without issue. State and federal all free… “Pay $0 to file, no matter your tax situation. No upsells, no hidden fees, no nonsense.” https://cash.app/taxes

@bobby555

All these are available regardless of income.

Main one is being able to itemize deductions (real estate taxes and mortgage interest) although with the higher standard deduction and the 10 k limit on all type of taxes it is less likely than in the past and you have to run the numbers. They may be some additional expenses on the settlement sheet such as taxes paid at settlement and points or loan origination fees that are deductible. Also the home mortgage insurance deduction which went away in 2017 is back for 2021.

This should point you in the right direction.

@mikibell As with most things that have options especially with taxes, which one you choose depends on your particular situation. The statement you quoted refers to the fact that the AOC is a refundable credit which means even if have no tax liability, the IRS will send you money back, but with the LLC, if you have no tax liability at all, the credit does you no good.

Take a look at the the attached chart from my tax resource book and see if this helps. If not a little more whispered to me about your particular situation would help me point you in the right direction.

@mikibell Just to clarify owing something is different that no tax liability. If your tax liability is 5,000 and you have 3,000 withheld, you owe 2,000. Both credits will get you money back since you have a tax liability of 5,000. But if your tax liability is 0 and you had 3,000 withheld, the AOC could get you back 4,000/5,000 where the LLC would only only get you back the 3,000 you had withheld.

Refundable tax credit like the AOC are usually the best deal.

@Felton10 cool beans… Thank you! Hopefully my w2 arrives soon so I have real #s to work with…:)

@onae I would like to add my friend is also very humble and would never admit to these things in first person.

@onae There is no federal first time homebuyer “tax credit”. One was proposed but never passed. Text of that bill was

“has no present ownership interest in
any residence during the 3–year period ending
on the date of the purchase of the principal residence to which this section applies”

Along with other restrictions.

@onae Unksol is correct. Since the law was never exacted, it is a moot point. But his idea has bad news written all over it. Would tell him as a good friend you will visit him in prison.

@Felton10
Isn’t there a one-time primary residence capital gains tax offset? Perhaps that’s what they’re thinking this is.

IIRC, you can offset your capital gains against your estate exclusion (something like $10Mil now) after you die.

@mike808 There is a 500k married (250k single) exclusion for sale of personal residence that can be used every two years. Don’t think it was confused with that.

Not aware of any capital gains offset against estate tax, but if that is a ? I can look it up. You can offset any excess yearly gifts over 15k against your estate exclusion rather than paying gift tax.

@Felton10 Yeah, that’s what I was mis-remembering and conflating.

@callow Doesn’t make any difference whether you provide services or sell goods-as a SP if you receive over $600 from a business, the people who pay you “should” give you a 1099-NEC.

If you give a contractor money to put new flooring in your home/workroom and the amount of the flooring you allocate to your business is over $ 600, I would err on the side of caution and give him a 1099 for that amount. There is a question on schedule C regarding your obligation to give anyone a 1099 and asking where you did it or not.

@Felton10 Thanks!
Can you get in trouble for not giving someone a 1099 when you should have?

@callow
Yes-the IRS can actually fine you the amount of the 1099 as a penalty.

@mbersiam When you went to settlement on your old house and as part of your papers, you might have received a 1099-S which is the form they give you and send a copy to the IRS showing how much you sold your house for. It may be sent separately to you now.

If you got such a form, you definitely should report the sale on your tax return even if is shows a loss or is under the exemption amount as the IRS has no idea what your cost of the old house was or if you qualify for the exemption.

Even if you didn’t get the form, probably a good idea to report it anyway .Yes a PIA, but since it won’t have any tax effect at least you covered all your bases if a question arises.

@Felton10 It was more than $10. What do I do if I can’t find the 1099-INT the IRS sent me for that interest? I remember putting it in my 2021 tax file folder and even had the envelope it was in stand upright but it isn’t there so I must have moved it. Trouble is I have no memory of that and have hunted everywhere (obviously not everywhere since I haven’t found it yet).

I have been searching the internet for how you get another one (I am presuming no way can I get through on the phone tomorrow to find out how to get a duplicate or at least the amount). I wish they put that crap in documents in one’s online IRS account. I have a rough idea of the amount so I can estimate high and pay my state taxes and once I find it get a refund (so filed for an extension and will send a check), but I am still going to need to get a duplicate or at least the amount so I can get my federal refund and whatever small amount the state will need to pay me back.

Thanks.

@Kidsandliz Estimate it. The IRS FEIN you will need to file it is 38-1798424. If it is that far off (low) they will send you an adjustment and a bill for it.

@Felton10 Thanks for the FEIN.

I will need to overestimate it as I owe state taxes (from unemployment and my W2 comes from another state) so I don’t get a penalty later for underpaying the state. I’ll have to file an amended state form once I know what the amount actually is but if all they do is adjust your refund on your federal tax it sounds like I won’t get the actual amount that way.

I have filed an extension for the state (and feds although I don’t need to do that except the state won’t give you an automatic extension if you don’t) and overestimating it I will send in money (to the state) so eventually I’ll get a refund once I can fine an amended form. For the feds I have a refund coming regardless.

@Felton10 PS thanks for the FEIN. I called the state today and asked them if they could look and see what it was. They told me it wasn’t in my account yet with them, sometimes it takes several years to show up and sometimes it never shows up… humm if it never shows up I can get away with not claiming on my state return? LOL Nope too chicken to do that.

@Kidsandliz State usually never gets things like that. You don’t show it on your federal return and the IRS picks it up as an error and then forwards that error to the state. States rarely pick up things except not filing on their own-most of the time a result of info passed on to them by the IRS.

@Felton10 Ok. Good to know how it works.

@mike808 looked at a couple different sources and what governs is what the IRS pub says—

To be eligible to claim the AOTC or the lifetime learning credit (LLC), the law requires a taxpayer (or a dependent) to have received Form 1098-T, Tuition Statement, from an eligible educational institution, whether domestic or foreign.

So unless the non-custodial parent in some way gets to claim the child as a dependent, they can’t take advantage of any credits that attach to the child.

@Felton10 So, the mom gets a tax break for the after-tax dollars the dad paid for the kid’s tuition. On top of the tax-free child support. And the free healthcare insurance. Got it.

@Felton10 @mike808 Yeah, it sucks. For my case, the one tiny pearl buried in the huge mound of shit was that once she turned 18, the child support payments went directly to my daughter without passing through mom’s hands (in Oregon, anyway).
To be clear, I was not opposed to supporting my child in college - I would have done it without being forced to by law, but the tax (and other) rules imposed by the feds/state sucked.