posted
Waited to the last minute again...but anyway....
What tax software do you guys recommend?
TurboTax? H&R Blocks's TaxCut? I usually do my taxes by hand and was checking out H&R Block's site last night and realized that I don't think I had been deducting my state tax from my taxable federal income.
Plus, my tax situation is a little more complex this year, bought a house in December and want to deduct the nessasary monies, sold stocks, trading fees, student loan interest, charitable donations could be a bit stretched .
I think its time to use the software so I don't miss anything. Which one would be the best for me? Which one prompts for the most types of deductions? Or are they all basically the same?
posted
Turbo Tax is good, but you really just need to sitdown and read the tax code. It's really not difficult to dissect. It tells you right in one section on your Shedule A that you can deduct state income taxes (but don't forget to add in last year's state refund!)
posted
It's easy. You pay taxes with pre-tax money. Whatever you get back that the government "didn't use" is pre-tax income. Therefore, you need to pay taxes on it just like any other income. If you don't claim it, it's untaxed income... naughty naughty.
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posted
LOL, i payed income taxes on it last year.....it was still included in my 1099's as income... deductions aren't based on the withholdings, they are based on the actual payments...
they kept my money for a few months, and then gave it back to me...it's not INCOME...
-------------------- Don't envy the happiness of those who live in a fool's paradise.
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posted
The way I seee it, if you were being taxed state tax again on your state tax refund, yes, that would be double taxation. But you are lessening your FEDERAL taxable income by the ammount of state tax paid.
If you payed $100 in state tax and deducted that amount($100) from your federal taxable income, then get $20 of that back...you really should have got taxed on that $20 to begin with, and only deducted $80. Or are you saying you wrote off $80 in the first place? If that's the case, it would seem like double taxation if you have to include the $20 as next years income.
posted
What are you guys talking about? You deduct the state taxes you paid. So if the state withheld $100 in state taxes, you deduct THAT from your federal income tax. You never pay tax on that $100.
Now, you get $20 back... that's $20 tax free money out of the $100 you got back. Therefore, you have to claim that $20 as taxable income.
It's a different story if you have to pay state taxes. Obviously, if you have to pay, you're not getting a refund anyway!
You guys might need Jacoby and Meyers..
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posted
I use turbo tax. Its pretty good. They ask you all the questions. If you have alot of trading fees, and or self employment income and expenses, make sure you get the right version. And yes by the way you are getting double taxed. You make $100. The tax rate is say 10%. You pay $10. At the end of the year you find that you made $80. You overpaid by $2, tax that you never owed. Its not new income, only your own money back. How can it be anything else when you pay it out of the $80 (now net is $72).
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posted
As a matter of fact while we are on the subject. There is alot of double taxing that goes on. Its like this take the same $80. The state comes along and takes %10. The Feds come along and want %20. The locals come along and want %1. Just what amount do they all base there figures on. That right $80. So the state takes $8. The Feds take $16 (including that $8 in the taxing amount by the way). And here come the locals with there $.8 (taxing you on the $8 and $16). So your paying tax on tax.
Not to change the subject but here is any article that all stockholders need to read and pay attention to. These CEOs are ripping the stockholders money. IMO http://biz.yahoo.com/special/exec05.html
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quote:Originally posted by glassman: here we go again... the state WITHOLDS 100$ you only owe them 80$... you deduct 80$ from your federal income(AGI)
you don't deduct the 100$ withholding...
you only deduct the 80$ you paid...the extra 20$ comes back to you as a refund, and the IRS calls it income?
hows it goin' repo?
You guys are doing your taxes wrong. Go to IRS.gov and look at the Schedule A instructions, page 2. It clearly says you can deduct:
"State and local income taxes withheld from your salary during 2004"
It does not say what YOU paid. So Glassman, your example above is wrong. Let's work through it.
You earn $10K for 2004. The Federal Gov't withholds $1000 in taxes The State Gov't withholds $500 in taxes.
Now, April 14, 2005 is here. You complete your State 1099 first. Let's say, out of the $500 withheld, you are going to receive a refund of $100. The gov't is really only taxing you $400. That $100 is not taxed income (yet).
Now, you complete your Federal 1099. On your schedule A, you can deduct the $1000 withheld, as per the instructions. HOWEVER, on your 2005 Federal Income tax return, you will need to claim the $100 that you receive back from the state as income received.
Are we all following??
Now, a simpler(but INCORRECT) method would be to deduct only the $400 from your Federal 1099 and not claim the $100 at all. But for some reason, the Federal gov't likes to see the long way calculations.
So, in summary, if you guys are only deducting your NET state taxes (in the above example, $400), and then RECLAIMING the $100 as income, yes, you are being double taxed by your own merits.... so the gov't should take that money for failure to see an accountant..ahaaha.
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posted
thanx repo... BTW, i do my own taxes before the acct. does them just to keep him on his toes... he does get me better money, or i should say he used to before i learned his tricks. but i have to admit some of it i just fill in the blanks
-------------------- Don't envy the happiness of those who live in a fool's paradise.
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posted
And that's another thing... I'm not too high on accountants doing taxes unless you have complex medical / business / or alimony/dependent expenses. But if you don't own a business, own a home, and have investments on the side, your taxes are really easy to do if you just read the code. People go to these accountants expecting some type of money to be pulled out of the hat. About the only thing you can fudge (NOT SAYING I DO) is your charity contributions, unless you outright lie and say you have 5 kids when you only have a dog.
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