Author Topic: any accountants out there that i can ask a question?  (Read 257288 times)

Offline aryeh1

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Re: any accountants out there that i can ask a question?
« Reply #20 on: December 29, 2013, 04:56:11 PM »
Please state what type of 1099 and what type of eduction credit you are talking about.
She worked as a tutor,  it was 1099 misc. Other was 1098-t that they rejected, she went to college for masters and payed about 8k but only amount billed was listed not amount paid so they rejected it.

Offline yitzf

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Re: any accountants out there that i can ask a question?
« Reply #21 on: December 29, 2013, 05:23:53 PM »
She worked as a tutor,  it was 1099 misc. Other was 1098-t that they rejected, she went to college for masters and payed about 8k but only amount billed was listed not amount paid so they rejected it.

Q' for the accountants here,
I wonder if her college expenses are fully deductible for AGI as a business expense because she was working in education.
(up to the $ amount of her 1099 as a tutor).

If so, she would avoid any payment because she never owed the IRS anything...

Offline ckmk47

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Re: any accountants out there that i can ask a question?
« Reply #22 on: December 29, 2013, 05:25:45 PM »
There are all sorts of college tax credits.  But many are only for undergrad, so it may not apply here.

Offline yitzf

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Re: any accountants out there that i can ask a question?
« Reply #23 on: December 29, 2013, 05:29:00 PM »
There are all sorts of college tax credits.  But many are only for undergrad, so it may not apply here.

What I'm referring to is not an education credit per se.
It most definitely applies to post secondary education, it doesn't even have to be accredited. The only caveat is that you have to have an existing job in that field.

Offline churnbabychurn

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Re: any accountants out there that i can ask a question?
« Reply #24 on: December 29, 2013, 07:04:30 PM »
There are all sorts of college tax credits.  But many are only for undergrad, so it may not apply here.
American opportunity is for undergrad but the Lifetime learning credit is also for graduate. up to 2k credit per year.

Here the question was about the tuition and fees deduction for AGI of 4k available for both undergrad and grad. Not the above mentioned credits.
« Last Edit: December 29, 2013, 07:15:07 PM by churnbabychurn »

Offline avrumy

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Re: any accountants out there that i can ask a question?
« Reply #25 on: December 29, 2013, 07:17:29 PM »
Q' for the accountants here,
I wonder if her college expenses are fully deductible for AGI as a business expense because she was working in education.
(up to the $ amount of her 1099 as a tutor).

If so, she would avoid any payment because she never owed the IRS anything...
At this point the person would have to prove to the irs that the expense of going to school was directly related to the income she earned on that 1099. was it? If yes then there MAY be what to talk about but i assume if the irs already flagged this return then it may be difficult and costly (meaning u may have to hire someone who knows what they're talking about) to prove that to the irs.

Offline churnbabychurn

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Re: any accountants out there that i can ask a question?
« Reply #26 on: December 29, 2013, 07:19:41 PM »
What I'm referring to is not an education credit per se.
It most definitely applies to post secondary education, it doesn't even have to be accredited. The only caveat is that you have to have an existing job in that field.
To answer this question, it has to meet the following requirements to qualify as a business expense:
Quote
The education is required by your employer or the law to keep your present salary, status, or job. The required education must serve a bona fide business purpose of your employer.

The education maintains or improves skills needed in your present work.

However, even if the education meets one or both of the above tests, it is not qualifying work-related education if it:

Is needed to meet the minimum educational requirements of your present trade or business, or

Is part of a program of study that will qualify you for a new trade or business.

Offline churnbabychurn

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Re: any accountants out there that i can ask a question?
« Reply #27 on: December 29, 2013, 07:21:23 PM »

Offline yitzf

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Re: any accountants out there that i can ask a question?
« Reply #28 on: December 29, 2013, 07:23:43 PM »
At this point the person would have to prove to the irs that the expense of going to school was directly related to the income she earned on that 1099. was it? If yes then there MAY be what to talk about but i assume if the irs already flagged this return then it may be difficult and costly (meaning u may have to hire someone who knows what they're talking about) to prove that to the irs.

Agreed, but will it be so hard to prove that getting a degree in education is "maintaining or improving existing skills" vis--vis tutoring?

Offline churnbabychurn

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Re: any accountants out there that i can ask a question?
« Reply #29 on: December 29, 2013, 07:25:21 PM »
Agreed, but will it be so hard to prove that getting a degree in education is "maintaining or improving existing skills" vis--vis tutoring?
PUTPAC  :)

Offline avrumy

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Re: any accountants out there that i can ask a question?
« Reply #30 on: December 29, 2013, 07:26:57 PM »
Agreed, but will it be so hard to prove that getting a degree in education is "maintaining or improving existing skills" vis--vis tutoring?
At this point it is difficult! if it is done before being flagged then it stands a better chance. In my personal opinion it probably wont be worth the time, aggravation and money (if you hire someone) and just pay the dif.

Offline aryeh1

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Re: any accountants out there that i can ask a question?
« Reply #31 on: December 30, 2013, 12:26:06 AM »
So back to my question,  do i need to go to an accountant now?  Or i can take care of it myself?

Offline churnbabychurn

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Re: any accountants out there that i can ask a question?
« Reply #32 on: December 30, 2013, 07:08:47 AM »
So back to my question,  do i need to go to an accountant now?  Or i can take care of it myself?
You applied for the lifetime learning tax credit. The credit is for %20 of the first 10k spent on education in 2012. A credit reduces tax due.
If this is what you are going for and all they need is a corrected 1098t, why not just send it in? Its probably not worth fighting about the interest and fees that you owe.

The other option that you may have had was to take the Tuition and fees deduction. This would have reduced your taxable income by up to 4k. (You cannot take the deduction and the credit)
If this would have been more beneficial  to you, possibly because of an increase in the EIC combined with lower income, you should ask someone whether its still possible to claim this for last year...

#myadvise is worth what you paid for it;)


Offline Bostener

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Re: any accountants out there that i can ask a question?
« Reply #33 on: December 30, 2013, 07:53:38 AM »
So back to my question,  do i need to go to an accountant now?  Or i can take care of it myself?
It depends how good you are at it. Is it worth for you to save the few hundred dollars? Can you do yourself the expanses against the 1099? Can you figure out yourself which education credit/deduction is best for you?
Airlines sending me "We're in this together" emails.

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Offline aryeh1

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Re: any accountants out there that i can ask a question?
« Reply #34 on: December 30, 2013, 08:41:16 AM »
You applied for the lifetime learning tax credit. The credit is for %20 of the first 10k spent on education in 2012. A credit reduces tax due.
If this is what you are going for and all they need is a corrected 1098t, why not just send it in? Its probably not worth fighting about the interest and fees that you owe.

The other option that you may have had was to take the Tuition and fees deduction. This would have reduced your taxable income by up to 4k. (You cannot take the deduction and the credit)
If this would have been more beneficial  to you, possibly because of an increase in the EIC combined with lower income, you should ask someone whether its still possible to claim this for last year...

#myadvise is worth what you paid for it;)

I could redo my tax return,  I think at the time $1500 credit was the better outcome,  there's only an additional $2500 of income from the new 1099, which added about $260 in tax.  Eic went down from $500 to less than $200.  I could pm you my income,  to know the better outcome.  Also i could Also send in scheduled C for 1099, I never really did this before.

Offline churnbabychurn

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Re: any accountants out there that i can ask a question?
« Reply #35 on: December 30, 2013, 09:26:06 AM »
I could redo my tax return,  I think at the time $1500 credit was the better outcome,  there's only an additional $2500 of income from the new 1099, which added about $260 in tax.  Eic went down from $500 to less than $200.  I could pm you my income,  to know the better outcome.  Also i could Also send in scheduled C for 1099, I never really did this before.
Iv given you all iv got. (Just happened to be studying the tax credit section of the REGS yesterday! :))Your probably better of with the credit, (that you already requested on your return). Just send in the amended tuition form. I dont know about submitting an amended return now for sched C deductions. For that ask someone els...Good luck

Offline avrumy

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Re: any accountants out there that i can ask a question?
« Reply #36 on: December 30, 2013, 09:36:02 AM »
I could redo my tax return,  I think at the time $1500 credit was the better outcome,  there's only an additional $2500 of income from the new 1099, which added about $260 in tax.  Eic went down from $500 to less than $200.  I could pm you my income,  to know the better outcome.  Also i could Also send in scheduled C for 1099, I never really did this before.
you originally said you owe 3000 $ from this. Here u r saying a lot less then that. If all you are missing is 2500 $ of a 1099 then the numbers u r saying here makes more sense. In my opinion pay what u originally would of paid and negotiate with them the intrest and penalties.  Unless those themself are $2500 which in my expiernce dosent sound right.

Offline ckmk47

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Re: any accountants out there that i can ask a question?
« Reply #37 on: December 30, 2013, 11:27:33 AM »
If you still have the TurboTax from that year, plug in the corrected numbers and see if you're better off with a credit or a deduction.
I don't think you need an accountant.  You're not lying or finagaling. 
TT will give you the better way to file.   Then send in the new 1040 to the IRS. 
You should definitely include a letter of explanation with a request to wave the fines.  Hey, you  never know!

Offline avrumy

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Re: any accountants out there that i can ask a question?
« Reply #38 on: December 30, 2013, 11:31:01 AM »
If you still have the TurboTax from that year, plug in the corrected numbers and see if you're better off with a credit or a deduction.
I don't think you need an accountant.  You're not lying or finagaling. 
TT will give you the better way to file.   Then send in the new 1040 to the IRS. 
You should definitely include a letter of explanation with a request to wave the fines.  Hey, you  never know!
+1

Offline aryeh1

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Re: any accountants out there that i can ask a question?
« Reply #39 on: December 30, 2013, 04:11:42 PM »
If you still have the TurboTax from that year, plug in the corrected numbers and see if you're better off with a credit or a deduction.
I don't think you need an accountant.  You're not lying or finagaling. 
TT will give you the better way to file.   Then send in the new 1040 to the IRS. 
You should definitely include a letter of explanation with a request to wave the fines.  Hey, you  never know!
Turbo tax was online,  they let you plug in numbers for a few years ago?  I couldn't find old edition online, only turbo tax 2013