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  1. #1
    Join Date
    Jun 2005
    Location
    Texas
    Posts
    3,051

    Default Post Tax Questions Here

    I know it's not the traditional time of year to be thinking about these things (unless you've filed an extension), but I just wanted to start a thread where these kinds of questions can be asked and answered.

    And besides, it's much better to get questions answered before the end of the year, than a month before the deadline!

  2. #2
    Join Date
    Jun 2005
    Posts
    90

    Default

    OK - I have one...

    On Thursday we are selling our current house and buying a new one.

    Capital gains on the current house. We will have owned it for 2 years to the day (bought it 6/30/03 and closing 6/30/05) - so we won't have to worry about paying capital gains tax, but what do we need to keep in order to document that we don't have to pay any? Is it enough that we meet the 2 year requirement and the house is selling for less than the $300K cap?
    Is there anything else that we should consider with this sale and tax implications?

    On the new house - we aren't paying any points when we close. I know all the standard mortgage interest and property tax deduction stuff. Is there anything else we should be thinking about?

    Thanks!

  3. #3
    Join Date
    Jun 2005
    Posts
    60

    Default Capital Gains

    As far as capital gains go you are correct - you won't have to pay them. I don't know of any other documentation than the settlement statements from the purchase and selling of your home (as far as proof for you tax return). If you have your taxes done by an accountant, I usually ask for both statements (purchase & sell) so that I can get all the necessary information. Price, closing cost, RE taxes ect. So keep that where you can find it. A lot of the time people lose this in the move.

    HTH
    "Life is not about the number of breaths you take, but the moments that take your breath away"
    OS

  4. #4
    Join Date
    Jun 2005
    Posts
    90

    Default

    Thanks!
    I'm trying to avoid misplacing paperwork in the move (this time around)...I've already made a tab for the paperwork in our filing cabinet.

  5. #5
    Join Date
    Jun 2005
    Location
    North Carolina
    Posts
    1,824

    Default

    I believe that you will get something in the mail after your closing that is the official statement to be used for taxes. I attended many closings as a realtor, and the seller's attorney always had the seller provide some sort of information to prepare this form that he would later mail out.

    Here's my tax question: We are expecting a baby in September. We're not married, but we do live together and own a home. The house is in my name only, although we both pay for it. Anyway, will only one of us be able to claim the baby as a dependent? Will we be better off if whoever earns the most money takes the deduction? I get a pretty good tax break already since the house is a two-family and there's all sorts of depreciation. We do plan on getting married eventually, so I'm wondering if it's worth it to do a courthouse wedding just for tax purposes, and then a bigger wedding down the road. Currently we are running into one financial problem after another stemming from not being married. For example, we want to refinance and add BF's name to the mortgage, but the mortgage company won't allow it because they say he has no interest in the home even though he's lived here and paid for it since day one. To them, he's just a roommate. It's really aggravating.

  6. #6
    Join Date
    Jun 2005
    Location
    Texas
    Posts
    3,051

    Default

    A couple who isn't married obviously file separate returns, so only one of you can claim the child as a dependent. I would figure it both ways and use whichever is more advantageous (i.e. results in lowest total tax).

  7. #7
    Join Date
    Jun 2005
    Posts
    1,873

    Default Taxes and education expenses....

    I'm in grad school this summer, and will be for the next 2 summers after this. What portion of my expenses can I deduct? Tuition, books? Transportation? (train, gas, parking???) Should I be saving all my receipts for train passes, etc?

    Also, if my job reimburses me for a portion of my tuition (I'm a teacher) does that amount need to be deducted from the amount I personally deduct?

    Thanks, Jasonsbride! (I mean, the doorchick)

  8. #8
    Join Date
    Jun 2005
    Posts
    10,940

    Default

    here's some advice. don't take it as the gospel truth. make sure to validate everything i have said bc i am not a tax professional. i jhave ust read a lot about money related things, and i ask my accountant tons of questions.

    notkk - capital gains tax? i thought that there was no time requirement anymore now that they have changed the laws as long as you are using your home as your primary residence. though, i heard that if you abuse that too much they will see you as an investor, and charge you the capital gains tax if you have lived there for less than two years. obviously, if it is your first house i don't think that would be an abuse. also, i thought 500k or less profit per couple on the sale of your primary residence does not not get a capital gains tax.

    Katie1 - we found that being married actually gets you taxed higher. so, i wouldn't rush and do a courthouse wedding. whoever is in the higher tax bracket should claim your child as the dependent. even if you already claim the house, if you are in a much higher tax bracket than your fh than i would claim your child. this year we filed married but filing separately. since, we lived in two different states this past year, it was monetarily advantageous for us to do that. we saved ourselves a huge chunk of change by filing separately. my dh took all the deductions bc he is in a much higher tax bracket. oh yes, my tax accountant said that those who are not married but living together can file jointly if they say they have a common law marriage. if one of you makes very little and the other makes quite a bit, it would actually be better to file jointly. kinda debunking my first statement, but it worked out for us bc of our incomes that filing separately was better.

    FallingforPhil - you cannot deduct tuition that someone else pays for. you already are getting a tax advantage bc that grant money for your tuition is tax free. yes, i believe you can deduct books. not quite sure about travel expenses. my guess is no bc you cannot deduct living expenses (ie room and board). just make sure you and your dh do not fall above a certain dollar amount otherwise you are not allowed to deduct anything.

  9. #9
    Join Date
    Jun 2005
    Posts
    7,321

    Default

    I just got tax paperwork in the mail yesterday and I'm really confused. I can't find a phone number on it to ask them questions.

    Last year we owed about $1400, which was a total shock. The problem was that DH is a substitute teacher and districts only took taxes if he worked more than 14 days there. This didn't happen a lot, so he made a lot of untaxed money last year.

    We had no idea this would happen, since in past years he was taxed as if he was working all year like a normal person, so his not working June-August ended up making us get a large tax return. I guess the laws changed somehow and things are different now.

    Now we got this 1040-ES form that says that we need to start making estimated tax payments because we owed over $1000 last year. But this year he has a permament substitute position which means he's like a regular teacher, but without a contract. So he's not jumping among different schools, he's in one school all year like a regular job.

    The paperwork seems to imply that we need to do this "to avoid a penalty". But we paid the full amount due last year in one check. It was hard, but we didn't need to make late payments or installments or anything.

    Can I ignore this, or do I need to try to figure out how to contact someone and inform them that we don't need to do this? Or do I actually need to do it? Is there a special number I can call, or just try the general help line?
    Writing: a socially acceptable form of schizophrenia.

  10. #10
    Join Date
    Jun 2005
    Location
    Sunny SoCal
    Posts
    12,975

    Default

    Now that we're taking care of my FIL (and he'll be staying with us through many of his treatments), is there a way to claim him as a dependent on our taxes? So far, we've been footing most of the bills ($197 for medicine today!) and his house is "mostly paid for" and will be transferred over to his other son within the next couple months. He retired at the end of last year and he said his only income now is his SS payments.

    We're planning on getting a new accountant this year (as we've had quite a few biz expenses and whatnot) so we figure if we ask the questions now, we'll be more prepared when we meet our new CPA in a couple months.

    Thanks in advance for your help...
    Katy
    There is no value in life except what you choose to place upon it and no happiness in any place except what you bring to it yourself. - Thoreau

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