I've always done our joint federal taxes for DH and I. This year things have changed.
Anybody have any tips about whether I should try to do this myself, or hire a tax preparer?
Situation: he is employed by the company, gets taxes taken out. In the past he's had a company vehicle, and they paid for all gas and maintenance. In April 2014 they took away the company truck. He bought a vehicle on our own dime which he uses for work (he drives all over southern New England for work). He receives a company vehicle allowance every pay period for it, as 1099-MISC income. So all his income shows on the W2 except the vehicle allowance, which is on the 1099.
The new thing is where to report the 1099-MISC income, and whether we should try to figure depreciation. I have printed lots of IRS forms and publications, but this is looking fairly complicated.
My simple guess solution would be to do the taxes myself, and report the 1099 income on line 21 (other income) of the 1040. He's not self-employed so it doesn't look like we should complete a schedule C. I was going to forget about doing the depreciation because it just looks too complicated. The 1099 income is only about $5800.00. So we're not paying a whole lot in taxes on that. I always do a Schedule A and itemize other deductions.
What do you think? Should I do our taxes myself using the method in the paragraph above? Or should we go to H & R Block?
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No matter how educated, talented, rich or cool you believe you are,
I got a headache just reading it so I vote H&R Block, but I have never done my taxes myself. Maybe after H&R Black does them this year you can see how to do it for future years.
You have unreimbursed employee business expenses (Form 2106, I think), which are substantial, for the mileage driven in his personal vehicle for work. That should more than offset the 1099-misc.
He will have to calculate the mileage, whether you go to a paid professional, use TurboTax, or do it all yourself.
Make sure he has records for the mileage, and any other expenses he incurred for overnight travel (room, dinners and breakfasts). Notes he's made in his personal calendar are normally enough, but he should have written receipts for rooms and meals, and anything else that was $10.00 or more.
I've been happily using TurboTax Deluxe for over 20 years, and it has handled everything I've needed it for.
But I agree that, at least once, you should first use TurboTax or TaxCut to calculate it yourself, then go to the professional.
TurboTax will ask you a long series of questions, and at the very least it will show you what records and numbers you need to take with you to the professional. It's much more efficient to do this at home, where you can save the program and go looking for things, than to get to H&R Block, and have them ask for something you didn't know to take with you.
If the professional comes up with something different than you calculate at home, make sure you understand why. The professional accountant I used (briefly) was taking some deductions I didn't tell him to take (he just made them up, saying "They won't audit this".) So I had to re-do my taxes at the last minute. Then I fired him. (I'd rather pay a little more in taxes, than worry about lies he wanted me to sign.)
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In terms of calculating depreciation for the truck, you will probably get a higher deduction by claiming the mileage instead. But again, you should calculate this both ways at least once.
__________________
The Principle of Least Interest: He who cares least about a relationship, controls it.
I'm going to try the Turbo Tax, but I think we may end up with H & R Block.
Ed, your paragraph I pasted below is why I'm hesitant about paid preparers. But I think if we ask a lot of questions and make sure we understand everything he's doing and there is nothing bogus, I think we'll be okay. I like to do things myself because hiring it out can lead to ignorance of our situation, which we don't want.
The professional accountant I used (briefly) was taking some deductions I didn't tell him to take (he just made them up, saying "They won't audit this".) So I had to re-do my taxes at the last minute. Then I fired him. (I'd rather pay a little more in taxes, than worry about lies he wanted me to sign.)
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A flock of flirting flamingos is pure, passionate, pink pandemonium-a frenetic flamingle-mangle-a discordant discotheque of delirious dancing, flamboyant feathers, and flamingo lingo.
Can I do a spin off of this? I started a new S Corp at the beginning of the year with a brand new partner. We are finally starting to get paid. And, there is just the 2 of us, so do I really need to bother with an accountant and payroll and all that baloney? We can be flexible on how we get paid and I don't know that I need a CPA to do all that if I can get some software and do it myself? Can anyone recommend good business software?
I've never felt that way, IKWTDS. Before I married G, they did mine a few times and I never had a problem with them...
I've been led to believe that their employees use the same TaxCut software that we can all buy retail. They ask the same questions the software asks, and plug in numbers, just like you would at home.
__________________
The Principle of Least Interest: He who cares least about a relationship, controls it.
Can I do a spin off of this? I started a new S Corp at the beginning of the year with a brand new partner. We are finally starting to get paid. And, there is just the 2 of us, so do I really need to bother with an accountant and payroll and all that baloney? We can be flexible on how we get paid and I don't know that I need a CPA to do all that if I can get some software and do it myself? Can anyone recommend good business software?
An S-corporation was the reason I had a lawyer and the CPA in the first place.
You might search at " download.com " then read reviews of anything that looks appropriate.
This site is run by C-Net, which has a good reputation.
__________________
The Principle of Least Interest: He who cares least about a relationship, controls it.
I've never felt that way, IKWTDS. Before I married G, they did mine a few times and I never had a problem with them...
I've been led to believe that their employees use the same TaxCut software that we can all buy retail. They ask the same questions the software asks, and plug in numbers, just like you would at home.
This too.
__________________
Sometimes you're the windshield, and sometimes you're the bug.
Can I do a spin off of this? I started a new S Corp at the beginning of the year with a brand new partner. We are finally starting to get paid. And, there is just the 2 of us, so do I really need to bother with an accountant and payroll and all that baloney? We can be flexible on how we get paid and I don't know that I need a CPA to do all that if I can get some software and do it myself? Can anyone recommend good business software?
An S-corporation was the reason I had a lawyer and the CPA in the first place.
You might search at " download.com " then read reviews of anything that looks appropriate.
This site is run by C-Net, which has a good reputation.
LGS it depends on what is involved. Do you have equipment you are depreciating? Are you claiming a home office? I would recommend that you use an accountant for the first year anyway, same advise to Blankie. Then you have a guide for future filings.
__________________
Sometimes you're the windshield, and sometimes you're the bug.
I've never felt that way, IKWTDS. Before I married G, they did mine a few times and I never had a problem with them...
But how many different forms did you have to file? They charge a lot per form. With Blankie's situation, she will have many.
I'm hoping Turbo Tax will work. Did all the preliminary figuring and document gathering, going to try it tonight.
The problem is all the car expenses you are talking about are job related. If he has other employment related expenses that are reimbursed, such as business travel, then it gets dicey. If he goes to an office everyday and from there, travels to customers, the travel from his employer's office to the customer is deductible but if he goes straight from home to the customer it is handled differently. This is why I suggest going to an accountant for at least the first year so you know how to handle the expenses. I used to prepare tax returns so know a bit about this.
__________________
Sometimes you're the windshield, and sometimes you're the bug.
I've never felt that way, IKWTDS. Before I married G, they did mine a few times and I never had a problem with them...
But how many different forms did you have to file? They charge a lot per form. With Blankie's situation, she will have many.
I'm hoping Turbo Tax will work. Did all the preliminary figuring and document gathering, going to try it tonight.
The problem is all the car expenses you are talking about are job related. If he has other employment related expenses that are reimbursed, such as business travel, then it gets dicey. If he goes to an office everyday and from there, travels to customers, the travel from his employer's office to the customer is deductible but if he goes straight from home to the customer it is handled differently. This is why I suggest going to an accountant for at least the first year so you know how to handle the expenses. I used to prepare tax returns so know a bit about this.
But he doesn't have a lot of expenses that are deductible. Just the depreciation on the vehicle, I think.
He has a company gas credit card which pays for his gas, so he can't deduct that. Company card pays for meals and hotels if he stays or eats anywhere.
I can't think of anything except the depreciation.
__________________
No matter how educated, talented, rich or cool you believe you are,
I've never felt that way, IKWTDS. Before I married G, they did mine a few times and I never had a problem with them...
But how many different forms did you have to file? They charge a lot per form. With Blankie's situation, she will have many.
I'm hoping Turbo Tax will work. Did all the preliminary figuring and document gathering, going to try it tonight.
The problem is all the car expenses you are talking about are job related. If he has other employment related expenses that are reimbursed, such as business travel, then it gets dicey. If he goes to an office everyday and from there, travels to customers, the travel from his employer's office to the customer is deductible but if he goes straight from home to the customer it is handled differently. This is why I suggest going to an accountant for at least the first year so you know how to handle the expenses. I used to prepare tax returns so know a bit about this.
But he doesn't have a lot of expenses that are deductible. Just the depreciation on the vehicle, I think.
He has a company gas credit card which pays for his gas, so he can't deduct that. Company card pays for meals and hotels if he stays or eats anywhere.
I can't think of anything except the depreciation.
So this is your issue. I would see an accountant and ask them what you can deduct. Because he has company paid expenses, if his expenses are not more you have a huge tax situation. I would just recommend the accountant for this year, then you will know what to do from here on out.
__________________
Sometimes you're the windshield, and sometimes you're the bug.
I've never felt that way, IKWTDS. Before I married G, they did mine a few times and I never had a problem with them...
But how many different forms did you have to file? They charge a lot per form. With Blankie's situation, she will have many.
I'm hoping Turbo Tax will work. Did all the preliminary figuring and document gathering, going to try it tonight.
The problem is all the car expenses you are talking about are job related. If he has other employment related expenses that are reimbursed, such as business travel, then it gets dicey. If he goes to an office everyday and from there, travels to customers, the travel from his employer's office to the customer is deductible but if he goes straight from home to the customer it is handled differently. This is why I suggest going to an accountant for at least the first year so you know how to handle the expenses. I used to prepare tax returns so know a bit about this.
But he doesn't have a lot of expenses that are deductible. Just the depreciation on the vehicle, I think.
He has a company gas credit card which pays for his gas, so he can't deduct that. Company card pays for meals and hotels if he stays or eats anywhere.
I can't think of anything except the depreciation.
So this is your issue. I would see an accountant and ask them what you can deduct. Because he has company paid expenses, if his expenses are not more you have a huge tax situation. I would just recommend the accountant for this year, then you will know what to do from here on out.
I don't think we have a huge tax situation. The only 1099 income is $5800 of a vehicle allowance. The rest of his salary is taxed. So the only thing we haven't paid taxes on already is the $5800, which could be reduced somewhat by claiming the depreciation. I just did the 1040 and listed the 1099 income on Line 21 (other income) and we ended up owing $1846. I wonder how much we could reduce that by depreciation alone.
__________________
No matter how educated, talented, rich or cool you believe you are,
I've never felt that way, IKWTDS. Before I married G, they did mine a few times and I never had a problem with them...
But how many different forms did you have to file? They charge a lot per form. With Blankie's situation, she will have many.
I'm hoping Turbo Tax will work. Did all the preliminary figuring and document gathering, going to try it tonight.
The problem is all the car expenses you are talking about are job related. If he has other employment related expenses that are reimbursed, such as business travel, then it gets dicey. If he goes to an office everyday and from there, travels to customers, the travel from his employer's office to the customer is deductible but if he goes straight from home to the customer it is handled differently. This is why I suggest going to an accountant for at least the first year so you know how to handle the expenses. I used to prepare tax returns so know a bit about this.
But he doesn't have a lot of expenses that are deductible. Just the depreciation on the vehicle, I think.
He has a company gas credit card which pays for his gas, so he can't deduct that. Company card pays for meals and hotels if he stays or eats anywhere.
I can't think of anything except the depreciation.
So this is your issue. I would see an accountant and ask them what you can deduct. Because he has company paid expenses, if his expenses are not more you have a huge tax situation. I would just recommend the accountant for this year, then you will know what to do from here on out.
I don't think we have a huge tax situation. The only 1099 income is $5800 of a vehicle allowance. The rest of his salary is taxed. So the only thing we haven't paid taxes on already is the $5800, which could be reduced somewhat by claiming the depreciation. I just did the 1040 and listed the 1099 income on Line 21 (other income) and we ended up owing $1846. I wonder how much we could reduce that by depreciation alone.
What I mean by huge tax issue is how to handle the expenses, not that you have a large tax liability. I would still see an accountant. DS receives a large stipend for his vehicle each month plus gets gas mileage. He does not get a 1099 on that. My guess that is similar to previous years for your DH. Please see an accountant.
__________________
Sometimes you're the windshield, and sometimes you're the bug.
I don't think we have a huge tax situation. The only 1099 income is $5800 of a vehicle allowance. The rest of his salary is taxed. So the only thing we haven't paid taxes on already is the $5800, which could be reduced somewhat by claiming the depreciation. I just did the 1040 and listed the 1099 income on Line 21 (other income) and we ended up owing $1846. I wonder how much we could reduce that by depreciation alone.
You will be using form 2106, unreimbursed employee business expenses, for either actual out of pocket expenses including depreciation, or actual business mileage at the IRS rate.
How many miles did he drive the vehicle for work?
There is a formula in the 2106 instructions (and built into TurboTax) to calculate depreciation.
__________________
The Principle of Least Interest: He who cares least about a relationship, controls it.
I don't think we have a huge tax situation. The only 1099 income is $5800 of a vehicle allowance. The rest of his salary is taxed. So the only thing we haven't paid taxes on already is the $5800, which could be reduced somewhat by claiming the depreciation. I just did the 1040 and listed the 1099 income on Line 21 (other income) and we ended up owing $1846. I wonder how much we could reduce that by depreciation alone.
You will be using form 2106, unreimbursed employee business expenses, for either actual out of pocket expenses including depreciation, or actual business mileage at the IRS rate.
How many miles did he drive the vehicle for work?
There is a formula in the 2106 instructions (and built into TurboTax) to calculate depreciation.
Ed his gas is company paid. Do the IRS rate doesn't work. Please, she needs to see an accountant this year.
__________________
Sometimes you're the windshield, and sometimes you're the bug.
