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DrP Gives Tax Advice

Started by DrP, January 16, 2015, 05:30:19 PM

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DrP

DISCLAIMER: Do not post personal data protected by HIPAA or Social Security Numbers. I may be bound by Federal and State law to protect this information, but others may not.

Since tax season is coming up and a lot of you have jobs, I can provide some helpful tips and hints to avoid paying tax when you don't have to.

For example if you make/plan to make less than $6,300 and still are dependent on your parents for financial support, you can claim an exemption from federal and state income taxes. This means you don't have to give the government an interest-free loan so you have to file some papers and get money back a year later.

Let me know if you have questions! I am here to help (and because I LOVE talking about this).

Advice #1: Withholding - If you get more than a $100 refund before any special deductions, then you should change your withholding allowances
Advice #2: Education Credit - You can get up to $1,000 back from the federal government just for paying college tuition. Some states also have credits.
Advice #3: The Earned Income Credit - COMING SOON
Advice #4: Student Loan Interest - COMING SOON
Advice #5:

mikey

unmotivated

DrP

#2
Advice #1

Sometimes, be careful about state taxes. Those are the ones that everyone seems to overlook!



EDIT: The amounts in the red boxes may not necessarily entitle you to a refund, but given the fact that no one here really has any crazy tax related issues, it's safe to assume that what I wrote will be the case.

KefkaticFanatic

kefkas tax advice is to use the free turbotax until you have something complicated enough to need drps help



me irl
[close]

Ruto

My sister would probably like to get a big refund this year. She said something about almost going into "the next bracket" which she was was more than 30% of her income in taxes.

Now if she's short on cash, I have to eat spam and noodles for lunch everyday so maybe you should talk to her. If she has enough cash to throw around, I can buy myself a present.

I seem to be missing a piece of my ear.

DrP

Quote from: KefkaticFanatic on January 16, 2015, 10:49:06 PMkefkas tax advice is to use the free turbotax until you have something complicated enough to need drps help
I honestly hate using turbotax, but it does the job.

I only use it because I can eFile returns for free. When you have multiple states (like I do this year), it can kind of get tricky.

Quote from: Ruto on January 16, 2015, 11:49:25 PMMy sister would probably like to get a big refund this year. She said something about almost going into "the next bracket" which she was was more than 30% of her income in taxes.

Now if she's short on cash, I have to eat spam and noodles for lunch everyday so maybe you should talk to her. If she has enough cash to throw around, I can buy myself a present.
For Federal, I'm in the 25% bracket and for California, I'm in the 8% bracket (I am literally $200 off from being in the 9.30% bracket!)

KefkaticFanatic

It makes it easy to just copy the info for states into the online system for said states to do the free efile, since Turbotax will only file federal for free.... I install a copy on both my laptop and desktop and use the 'free state' for two different states, one on each machine ;)

The actual info you need to fill in on the tax forms is simple ya, but having a fancy wizard just makes it so much easier.



me irl
[close]

braix

My head doesn't understand a single word in this thread.
DrP you make Tax 101 4 Noobs thread
Quote from: MaestroUGC on August 19, 2015, 12:22:27 PM
Braixen is a wonderful [insert gender] with beautiful [corresponding gender trait] and is just the darlingest at [stereotypical activity typically associated with said gender] you ever saw.

SuperFireKirby

Florida doesn't have any income tax, so yay me. I only have to worry about stealing my monies back from those filthy federal swine

Quote from: Mashi on March 26, 2013, 05:54:37 PMAfter viewing both FMA:Brotherhood and Naruto Shippuden, it would be frivolous to even consider watching an anime as unbearably mediocre as Melancholy. NARUTOxHINATA 4 LYFE!!!

DrP

I wish I can claim a tax residency in Florida (because I can), but since I charge my time based on where I performed the work, I still have taxes withheld from California. :(

Quote from: braixen1264 on January 17, 2015, 08:57:28 AMMy head doesn't understand a single word in this thread.
DrP you make Tax 101 4 Noobs thread
Let me make it a little more simple.

You have a job, therefore you pay money to the government. Some of that you can get back. All it requires is a form.

Quote from: KefkaticFanatic on January 17, 2015, 02:55:03 AMIt makes it easy to just copy the info for states into the online system for said states to do the free efile, since Turbotax will only file federal for free.... I install a copy on both my laptop and desktop and use the 'free state' for two different states, one on each machine ;)

The actual info you need to fill in on the tax forms is simple ya, but having a fancy wizard just makes it so much easier.
I can give you the states. My firm releases them out, so you don't need to go through all the other stuff.

braix

Quote from: DrP on January 17, 2015, 11:41:31 AMLet me make it a little more simple.

You have a job, therefore you pay money to the government. Some of that you can get back. All it requires is a form.
Makes a lot more sense
Quote from: MaestroUGC on August 19, 2015, 12:22:27 PM
Braixen is a wonderful [insert gender] with beautiful [corresponding gender trait] and is just the darlingest at [stereotypical activity typically associated with said gender] you ever saw.

DrP

#11
Advice #2

Do you currently go to college? Do you pay for tuition? You may be eligible for the American Opportunity Credit and up to $1,000 refunded back to you!

Deductible expenses: Tuition and Fees, Books, Supplies, extra fees for education. You CANNOT deduct expenses for Room and Board.

Other criteria you must meet: You have to be working towards a 4 year degree and haven't graduated, you are NOT being claimed as a dependent on your parent/guardian's tax return, the deductible fees are greater than your scholarship money (loans do not count towards the scholarship amount unless it was refunded to you by your university) -- you'll be able to figure amount out from Form 1098-T, which your school should issue you by now.

To claim this credit, fill out form 8863 when filing your return (or seek further advice from a tax professional).

Quote from: SuperFireKirby on January 17, 2015, 11:37:28 AMFlorida doesn't have any income tax, so yay me. I only have to worry about stealing my monies back from those filthy federal swine
If you notice you are refunded more than $100 and all you have is your standard deduction and personal exemption, I suggest looking over your exemptions and perhaps upping the amount by 1. More money in your pocket every paycheck and less back when you file your return.

mikey

So I finally got my W2 form
wat do
(they didn't even mail it to me I had to go to work to pick it up)
unmotivated

DrP

#13
Are there amounts in Box 2 or Box 17?

If yes, you need to determine your tax liability first. You take your income, plus any other sources of income (interest, dividends, capital gains, other income) and then subtract adjustments (which I don't think you'd have. Adjustments are moving expenses, student loan interest, alimony, etc...). That brings you to Adjusted Gross Income (AGI - this number is VERY important because it determines limitations on deductions and credits).

You then subtract a standard deduction of $6,950 (for 2014) and since you're dependent you do not get the personal exemption. If you the amount is positive, then you need to calculate tax (multiply the amount by 10% if so, because I don't expect that you made more than $10,000 after that).

You can PM me if you'd like to discuss specifics.

DrP

Someone here on NSM has just used my tax services and I just filed their return.

And they have a fairly decent refund coming to them!

Also, I get an email from a partner at my firm in our Chicago office asking if I was the one who downloaded 38 states for our tax software.
I replied saying I did it for educational purposes because I was pretending to be a partner and A&A income to non-resident returns. I spent 5 hours on the return, all for fun!