Author Topic: any accountants out there that i can ask a question?  (Read 58624 times)

Offline henche

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Re: any accountants out there that i can ask a question?
« Reply #75 on: March 10, 2014, 12:27:09 PM »
but then wouldnt it allow u to double count?

right, so this is a weird situation set up by these regs, and it's confusing me. (I looked into it recently for my personal taxes)

It looks like the schools get to choose between a billing cycle and a payment cycle, but the students have to do everything on a payment cycle. Which is highly confusing for the students, and I'm betting missed by most accountants doing this stuff.

Yireh li that if you counted it last year accidentally, you'd want to amend last years and put it in this year. This will often be better for you anyway, since there are annual limitations on the credits/deductions.

But like I say, I don't really get this 100% because it seems to weird.

Offline EJB

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Re: any accountants out there that i can ask a question?
« Reply #76 on: March 10, 2014, 12:35:09 PM »
Aha, so in that case I didn't "pay" any tuition in 2013 but I received a scholarship in 2013? So, I WOULD have to pay taxes on it?

I was in your situation when I went to college and I was told by an accountant to adjust the amounts to make the scholarship and tuition "payments" on the same periods. Obviously you will need to keep records documenting everything, but as long as you're consistent with your accounting, you should be fine.

Offline myb821

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Re: any accountants out there that i can ask a question?
« Reply #77 on: March 10, 2014, 12:41:11 PM »
right, so this is a weird situation set up by these regs, and it's confusing me. (I looked into it recently for my personal taxes)

It looks like the schools get to choose between a billing cycle and a payment cycle, but the students have to do everything on a payment cycle. Which is highly confusing for the students, and I'm betting missed by most accountants doing this stuff.

Yireh li that if you counted it last year accidentally, you'd want to amend last years and put it in this year. This will often be better for you anyway, since there are annual limitations on the credits/deductions.

But like I say, I don't really get this 100% because it seems to weird.
Thats really strange, I knew schools could choose which they wanted. However, I assumed that a student could just follow the 1098-t. Which is what I did for me and my wife's taxes. She is currently in school and though technically we paid for the spring semester in January the school used billing cycle so the whole bill was technically in 2013. You are correct it probably would be better to do it as payment date bc then we would be able to claim it for an extra year. hmmmmmmmm

Offline henche

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Re: any accountants out there that i can ask a question?
« Reply #78 on: March 10, 2014, 12:43:39 PM »
Thats really strange, I knew schools could choose which they wanted. However, I assumed that a student could just follow the 1098-t. Which is what I did for me and my wife's taxes. She is currently in school and though technically we paid for the spring semester in January the school used billing cycle so the whole bill was technically in 2013. You are correct it probably would be better to do it as payment date bc then we would be able to claim it for an extra year. hmmmmmmmm

Right? It's weird.


Online @Yehuda

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Re: any accountants out there that i can ask a question?
« Reply #79 on: March 10, 2014, 12:43:50 PM »
He is a dependent. Credits are out.

Right, so then does it even need to be reported? I should give it to my parents to report since they can get the credit.
if anything it is a benefit

you really better be getting an accountant to do your taxes. you're looking at the whole system from the wrong angle
Yeah, I'm just trying it myself before going to my accountant.


I was in your situation when I went to college and I was told by an accountant to adjust the amounts to make the scholarship and tuition "payments" on the same periods. Obviously you will need to keep records documenting everything, but as long as you're consistent with your accounting, you should be fine.

Gotcha. Thanks for the info.

Offline henche

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Re: any accountants out there that i can ask a question?
« Reply #80 on: March 10, 2014, 12:45:41 PM »
Your parents pay US taxes? But you aren't a citizen?

Offline myb821

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Re: any accountants out there that i can ask a question?
« Reply #81 on: March 10, 2014, 12:52:04 PM »
Right? It's weird.
Very. Now I need to debate if i should amend my taxes from this year so in 4 years I can get an extra year of credit. Im not worried about an audit or anything as the amount of tuition just from half a year is still enough for the entire credit. Maybe just starting next year I will only claim half the tuition and continue from there. Decisions Decisions

Offline MC

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Re: any accountants out there that i can ask a question?
« Reply #82 on: March 10, 2014, 02:25:44 PM »
You should also figure out whether you would end up getting back more if you filed as independent and get the tuition credit than what your parents get for claiming you. Might be worth it to do that and then pay your parent back what they lost. (That's what I did when I started school)

Online @Yehuda

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Re: any accountants out there that i can ask a question?
« Reply #83 on: March 10, 2014, 02:38:25 PM »
Your parents pay US taxes? But you aren't a citizen?
Was that to me? I never said I'm not a citizen...

Offline henche

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Re: any accountants out there that i can ask a question?
« Reply #84 on: March 10, 2014, 02:43:57 PM »
Was that to me? I never said I'm not a citizen...

lol, seems I've been responding to 2 people thinking it was the same one.

Online @Yehuda

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Re: any accountants out there that i can ask a question?
« Reply #85 on: March 10, 2014, 03:43:51 PM »
lol, seems I've been responding to 2 people thinking it was the same one.
Lol

Online churnbabychurn

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Re: any accountants out there that i can ask a question?
« Reply #86 on: March 11, 2014, 07:34:02 PM »
Need to bump this cuz I didnt get a clear answer: Turbo tax is not giving an EIC because passive losses from partnership activities are reducing w2 income to zero.

I know that generally passive losses are not netted against regular income. Can someone at least explain this paragraph from the Regs to me:
Quote
(2) Earned income.  Earned income is reduced by any net loss in earnings from self-employment.
Are passive partnership losses called "net loss from self employment"?

Also, here is worksheet 1 from pub 596 Can someone please confirm that passive losses reduce the EIC?!
Quote
Investment Income If You Are Filing Form
1040 Keep for Your Records
Use this worksheet to figure investment income for the earned income credit when you file Form 1040.
Interest and Dividends
1. Enter any amount from Form 1040, line 8a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Enter any amount from Form 1040, line 8b, plus any amount on Form 8814, line 1b . . . . . . . . . . . . . . . . 2.
3. Enter any amount from Form 1040, line 9a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Enter the amount from Form 1040, line 21, that is from Form 8814 if you are filing that form to report
your child's interest and dividend income on your return. (If your child received an Alaska Permanent
Fund dividend, use Worksheet 2 in this chapter to figure the amount to enter on this line.) . . . . . . . . . . . 4.
Capital Gain Net Income
5. Enter the amount from Form 1040, line 13. If the amount on that line is a loss,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Enter any gain from Form 4797, Sales of Business Property, line 7. If the
amount on that line is a loss, enter -0-. (But, if you completed lines 8 and 9 of
Form 4797, enter the amount from line 9 instead.) . . . . . . . . . . . . . . . . . . . . 6.
7. Substract line 6 of this worksheet from line 5 of this worksheet. (If the result is less than zero,
enter -0-.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
Royalties and Rental Income From Personal Property
8. Enter any royalty income from Schedule E, line 23b, plus any income from the
rental of personal property shown on Form 1040, line 21 . . . . . . . . . . . . . . . 8.
9. Enter any expenses from Schedule E, line 20, related to royalty income, plus
any expenses from the rental of personal property deducted on Form 1040,
line 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
10. Subtract the amount on line 9 of this worksheet from the amount on line 8. (If the result is less than
zero, enter -0-.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
Passive Activities
11. Enter the total of any net income from passive activities (such as income
included on Schedule E, line 26, 29a (col. (g)), 34a (col. (d)), or 40). (See
instructions below for lines 11 and 12.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
12. Enter the total of any losses from passive activities (such as losses included
on Schedule E, line 26, 29b (col. (f)), 34b (col. (c)), or 40). (See instructions
below for lines 11 and 12.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
13. Combine the amounts on lines 11 and 12 of this worksheet. (If the result is less than zero,
enter -0-.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . 13.
14. Add the amounts on lines 1, 2, 3, 4, 7, 10, and 13. Enter the total. This is your
investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
15. Is the amount on line 14 more than $3,300?
Yes. You cannot take the credit.
No. Go to Step 3 of the Form 1040 instructions for lines 64a and 64b to find out if you can take the
credit (unless you are using this publication to find out if you can take the credit; in that case, go to Rule
7, next).
Instructions for lines 11 and 12. In figuring the amount to enter on lines 11 and 12, do not take into account any royalty income (or loss)
included on line 26 of Schedule E or any amount included in your earned income. To find out if the income on line 26 or line 40 of
Schedule E is from a passive activity, see the Schedule E instructions. If any of the rental real estate income (or loss) included on
Schedule E, line 26, is not from a passive activity, print “NPA” and the amount of that income (or loss) on the dotted line next to line 26.
Worksheet
[/glow]

Thank you!

Offline Bostener

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Re: any accountants out there that i can ask a question?
« Reply #87 on: March 11, 2014, 11:32:57 PM »
I don't want to sound self serving but it's time to go to a paid preparer.

Offline avrumy

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Re: any accountants out there that i can ask a question?
« Reply #88 on: March 12, 2014, 12:12:49 AM »
Need to bump this cuz I didnt get a clear answer: Turbo tax is not giving an EIC because passive losses from partnership activities are reducing w2 income to zero.

I know that generally passive losses are not netted against regular income. Can someone at least explain this paragraph from the Regs to me:  Are passive partnership losses called "net loss from self employment"?

Also, here is worksheet 1 from pub 596 Can someone please confirm that passive losses reduce the EIC?! [/glow]

Thank you!
isn't google copyright?  Anyways u must of selected something u should not have or visa versa as that shou ld not have a effect on ur eic.
The answer to ur other question, u can have a negative number on self employment if ur expenses exceeded ur income.

Offline henche

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Re: any accountants out there that i can ask a question?
« Reply #89 on: March 12, 2014, 12:15:12 AM »
I don't want to sound self serving but it's time to go to a paid preparer.