Ask MetaFilter posts tagged with 1040

I should've sorted this out ages ago but ... care to answer a last minute US tax/education credit question?

zeph — Mon, 14 Apr 2008 15:44:41 -0800

Egads! Last-Minute-(US)Tax-Question-Filter: Can a person generally claim the "Qualified Payments" as listed on their 1098-T form (sent from the university in addition to a W-2) towards an education credit? Or only the amount that they themselves paid, rather than the amount that was paid on their behalf by the university as part of their whole assistantship package? I know you're not my accountant and of course this isn't "official" tax advice, but suddenly I'm getting cold feet in terms of what I believe I can or cannot claim on my US Federal Income Tax for the year. I've read the IRS's Publication 970 (Tax Benefits for Education) but it still isn't clear to me and so I was hoping maybe someone else has figured it out for themselves and would be willing to share, or at least to reassure me that I won't wake up tomorrow surrounded by IRS commandos. So here goes:

My university sent me a 1098-T form, where Box 1 lists "Qualified Payments" as X dollars, and Box 5 lists my Scholarships/Grants as Y dollars. Those scholarships were a little bit less than my total "Qualified Payments" (or tuition), so every bit of them went to paying my tuition. Should I, therefore, claim the "Qualified Payments" amount as an educational tax credit? Or only the part I paid out of pocket (X - Y = Small Out of Pocket Amount)?

Looking at the eligibility requirements for the Lifetime Learning tax credit, it indicates (unless I'm grossly misunderstanding it) that any money that is paid towards my education, whether by me or someone else, can be claimed by me as a tax credit so long as that "someone else" doesn't claim it on -their- taxes. I'm assuming that this applies even if that someone else is the university itself so I think I'm okay in claiming this - but again, I don't want to misstep simply because I misunderstood the terms of the credit. Looking at my 1098-T, though, it does say "Summary of Educational Tax Credit Transactions" directly above the by-semester listing of my spring and fall tuition, so I'm assuming/hoping I'm on the right track here.

The difference in my refund between taking this credit with the full 'Qualified Payment' amount or not is somewhat large (at least for a very broke student like me!), so of course I would really like to take it if I could - so long as it's 100% legal, which is why I just want to double-check that my understanding of the matter is right. Again, I know this isn't official advice, but if someone could either raise the red flag for me if I -am- doing things wrong, or give me a tentative thumbs-up if I'm right in thinking I can claim my Qualified Payments as a tax credit, I would be most grateful either way!

(next year I'm going to go to a professional, AND I'm going to do it long before my taxes are actually due ... honest and for truly!)

I hear some people pay taxes. Not me though. Oh, damn.

Anonymous — Thu, 17 Jan 2008 14:16:50 -0800

I haven't filed (US and NJ) taxes in... hm. Possibly ever. I'd like to fix that, but have no idea what I made and when, and how to start. Problem is, I'm not sure what I have and haven't filed. And I certainly don't have any W2s or such. And I have no sense of time, so I'm not sure where I worked and in what years. I shouldn't need to go back more than a decade .... Is there a way to get all that from the IRS? I'm pretty sure I WOULD have gotten money back all these years, so I shouldn't be in too much trouble for dodging, I'd hope. Oh, I suck.

(As a side note, this may be iffy in terms of needing anonymous, but my username is my real name, and I'd rather not have this amazingly stupid lack of follow-thru come up in a Google search by current or future employers or the like. I'm user 17389.)

Tax MetaFilter

sprocket87 — Fri, 28 Sep 2007 20:54:47 -0800

I'm planning to do some on-the-side freelance photography in the next year. I'd like some advice on how to play the tax game most effectively. I have an 8-5 weekday job that pays my bills, but I'll probably be doing a small-potatoes amount of photography as a side business over the next year. Nothing to warrant obtaining a business license, incorporating, or anything like that; probably about 6-12 or so events/jobs at a modest rate. My expected earnings will almost certainly be higher than the $600 minimum for reporting additional income, but not anything in the several-thousand range. After doing a bit of research, here's my game plan:

1. Keep detailed receipts and records of ALL income and potential business-related expenses
2. Use 1040 (long) as normal for personal filing of W2s
3. Also file as "sole proprietor" using form Schedule C-EZ for business income based on receipts

Seems simple enough, right? Well, I'm wondering about deductions: I know with the Schedule C-EZ I'm allowed to file up to $5,000 worth of business expenses. I'm NOT planning on filing a home office expense, etc. But what about photo gear, computer equipment, software, or web hosting/printer subscription costs? Should I deduct these?

The obvious answer to me would be "yes", but I'm wondering that since I won't be making a tremendous amount of profit, it might be wiser to ignore some of those deductions to keep "under the radar". I mean, I'd love to get a new MacBook for my photo editing and write it off as a business deduction [which it legitimately would be], but if that offsets the majority of my profit, would the IRS consider me as being a "hobby" and screw me in the long run?

I know that the IRS looks for net profitability in 3 out of 5 years after filing as a sole proprietor. I don't plan on making this a primary source of income - be it next year or in five. Just a little side earnings. So would it be smarter to take the hit on my tax return and skip deducting too many expenses or to deduct away and keep my fingers crossed?

Would it be safe if I just made sure my net profits above were above $600 after all deductions?

Oh, and you can skip the "you should see a CPA" comments, I know you all ANACPA or ANAL, but I'm just "querying the hive mind" :)

gift taxes

saffron — Tue, 11 Apr 2006 07:13:15 -0800

Must I report gifts on my tax return? I know the giver must pay the gift tax on gifts over $11,000, but do I have to report having recieved it anywhere on my 1040?

Picking a good CPA in South Jersey?

Orb2069 — Tue, 20 Dec 2005 10:34:09 -0800

My wife and I are probably going to have a complicated 1040 this year. I've found plenty of places that list licenced accountants, but no clear idea how to judge one from another. Does anybody have personal reccomendations or ideas of what to look out for?