Free Tax Help for Scubaboarder Members!!!!

[Ana]

thanks!!!

 

[Dive-aholic]

You can't just include Alabama income and take the full itemized/standard deduction and full personal exemptions.
Here is an example
Federal Return W2 income all sources $139,079 Total Itemized Deductions $17,967 and Personal Exemption $3,000.
Alabama Return W2 income is $23,224. The % of Alabama to Total Income is 16.70%. Therefore, you can only take 16.70% of your itemized deductions which leaves you $3000 and you can only take 16.70% of your personal exemption which is $501.
Although they are not taxing your Florida income, they are using it to allocate your Alabama deductions. If you took the full itemized deductions or standard deduction and personal exemption that is where the problem is.
Now if you did all of this correctly then they made a mistake and you need to write them about it. The IRS and state taxing agencies do make errors. I have written them many times for clients when the error was there's. I even discovered a form one time years ago that was not calculating the numbers properly and they corrected it.

Thanks, Denise! I'll have to dig out those forms. I can't remember which way it was calculated and whether it was an AL issue or one on my part. I did just fill out the online AL form and print that, though, so it could be an issue with their program. Let's hope!

 

[DiverLS]

First - thank you for offering this service. Here's my question.

My Mother died on 2/12/10. (She was end stage Alzheimer's so it was a relief to all but my Father.) My Father is a qualifying widower this year (tax year 2010). But I believe this is the only year he can claim that. Is that true?

And if that is true - does his income tax liability cover him next year (2011 tax year) for withholding and estimated tax payments? If not, and I think not, I can do "what if" with my tax program to plan his estimate payments next year.

 

[denisegg]

First Question:

Qualifying Widow(er) With Dependent Child

If your spouse died in 2010, you can use married filing jointly as your filing status for 2010 if you otherwise qualify to use that status. The year of death is the last year for which you can file jointly with your deceased spouse.
You may be eligible to use qualifying widow(er) with dependent child as your filing status for 2 years following the year your spouse died. For example, if your spouse died in 2009 and you have not remarried, you may be able to use this filing status for 2010 and 2011.

Second Question:

Definitely use your software program to change his status to single (it doesn't sound like he has a dependent child) and recalculate estimates based on that. Take into account income he may not be receiving anymore, such as her social security, etc.

 

[Hockeynut]

Are you in the scuba tank industry as a profession? Do you manufacture, distribute or do research and develop on tanks? If so, the tank could be considered a deduction, but blowing up the wife's car is strictly hobby or entertainment related and therefore not deductible.

Nope, just the "scientific experiment" profession. Damn.

 

[denisegg]

ONESPEED had a "delicate" question that he was shy about broaching ...SO, I will do it for him.
As to dependents that might or might not be out there somewhere, I cannot help you on the physiological aspects. I would suggest DNA testing for this. "IF" you indeed find there are kiddies out there, here are the qualifications for getting that nice tax break on them:

In general, to be a taxpayer’s qualifying child, a person must satisfy four tests:

• Relationship — the taxpayer’s child or stepchild (whether by blood or adoption), foster child, sibling or step sibling, or a descendant of one of these.
• Residence — has the same principal residence as the taxpayer for more than half the tax year. Exceptions apply, in certain cases, for children of divorced or separated parents, kidnapped children, temporary absences, and for children who were born or died during the year.
• Age — must be under the age of 19 at the end of the tax year, or under the age of 24 if a full-time student for at least five months of the year, or be permanently and totally disabled at any time during the year.
• Support — did not provide more than one-half of his/her own support for the year

 

[Poggus]

I have a W2 that says I made zero dollars with zero withholding. All it has is a $2000 entry with the code of Q on line 12. (Combat Pay) Whether or not I add this to my return does not seem to effect my taxes whatsoever. Is there any way I can enter this money to benefit my refund? Thanks in advance!

 

[denisegg]

I have a W2 that says I made zero dollars with zero withholding. All it has is a $2000 entry with the code of Q on line 12. (Combat Pay) Whether or not I add this to my return does not seem to effect my taxes whatsoever. Is there any way I can enter this money to benefit my refund? Thanks in advance!

Nontaxable combat pay election. You can elect to include your nontaxable combat pay in earned income for the earned income credit. If you make the election, you must include in earned income all nontaxable combat pay you received. If you are filing a joint return and both you and your spouse received nontaxable combat pay, you can each make your own election. The amount of your nontaxable combat pay should be shown on your Form W-2 in box 12 with code Q. Electing to include nontaxable combat pay in earned income may increase or decrease your EIC.

Figure the credit with and without your nontaxable combat pay before making the election. Whether the election increases or decreases your EIC depends on your total earned income, filing status, and number of qualifying children. If your earned income without your combat pay is less than the amount shown below for your number of children, you may benefit from electing to include your nontaxable combat pay in earned income and you should figure the credit both ways. If your earned income without your combat pay is equal to or more than these amounts, you will not benefit from including your combat pay in your earned income.

• $5,950 if you have no qualifying children.
• $8,950 if you have one qualifying child.
• $12,550 if you have two or more qualifying children.

 

[ONESPEED]

 

[Dive-aholic]

More questions.

A business that is owned by a couple and that couple has to file separately. Is it allowable to split the business revenues and costs between the 2 filings?

It appears that the schedule 179 items can be split in any percentage among the 2. Is this true?

Does there have to be any kind of justification for splitting things between the 2 filings or can it just be done in the most advantageous way for the filer?