Real tax questions from real readers, answered. Got a question of your own? This is where Taxgirl answers them.
Taxpayer asks: Hi Tax Girl QuestionIf someone pays my Credit line directly. i.e. they write a check directly to my bank to lower my credit line balance.with their after tax dollars. Is this taxable income to me. Taxgirl says: It depends on who that “someone” is… In most cases, this would be considered a gift…
Taxpayer asks: “Rude surprise for taxpayers Millions of people who are enjoying President Obama’s tax credit will need to return some of it.” http://finance.yahoo.com/news/INSIDE-WASHINGTON-Rude-apf-15091434.html?.v=1 Per the Yahoo News I read the article and not sure what to believe. Are their problems ? Should we withhold extra to get the same amount back assuming all household/Income…
Taxpayer asks: I missed the April 15 filing dead line, can I wait next year to file my taxes? Owe IRS from year 2007. IRS told me to respond by 15 of April but didn’t. Actually I was in jail for unpaid ticket during 15 of April, ply advise. Taxgirl says: There’s absolutely no reason…
Taxpayer asks: I filed an extension, but erroneously provided zero as an answer to all Part II Individual Income Tax questions 4-7. Can I amend the financial information provided on Form 4868 after it has been submitted? Thank you. Taxgirl says: The reason that the IRS asks you to complete the financial portion on the…
Taxpayer asks: Hi,I am currently retired, age of 60.I have pension income of $48K / yr and investment income of 20K/ yr.What are the tax consequences of converting a 401k of $120K to a Roth IRA?To limit taxes, should the conversion be structured over several years? Thanks, Taxgirl says: Retirement planning is so not my…
Taxpayer asks: We think we might need some tax advice, regarding the teen’s CD. Obviously we’re charging sales tax (.0655%) so that his $9.99 CD sells for $10.65… but that’s IL tax. Do we have to worry about other states’ taxes if someone from another state orders from him? Taxgirl says: The short answer is…
Taxpayer asks: 7 years ago when I divorced I spent alot of the money I received on my children. Now I read that maybe I could have used the money as a deduction on my taxes. One I bought a $16,000. mobile home, the other I paid off a $10,000 credit card bill. Can I…
Taxpayer asks: In addition to being a pastor, I’ve got $3300 worth of speaking honorariums from various churches and camps. How do I report that? Do I use schedule c (self-employment)? Or is there another form to use? Thank you. Taxgirl says: Hmm. This could go a couple of ways. I think that if the…
Taxpayer asks: I own a S-Corporation. If I receive a project from my client and want to subcontract a part of it to another company, where do I show that expense on my business tax return? In deductions, there is a place to show 1099 subcontractor expense. However, this is not really a 1099 sub….
Taxpayer asks: I run a hiking group online, and lead regular events with about $25 expense for each and an annual subscription to meetup and admin supplies.Can this be a hobby tax deduction? I don’t make a profit, but sometimes get a contribution. Taxgirl says: It sure sounds like a hobby at this point. Any…