Are you haunted by taxes?

BUH! Topics covered in todays review: What do you want to know or struggle with? The mysteries of the Tax Return Transcript Who must file and what filing status should be used Are 1099’s possessed? Are they different, and how should they be read?

What’s new with tax return transcripts Most of the Social Security information has been masked. This includes the tax payer, spouse, and any dependents listed. Only the first 4 letters of the last name of the tax payer is displayed. Only the house number and direction is included

Important Line Items for Verification via the avg

Filing Status Mysteries

“My 2016 taxes were filed jointly because Joe and I renovated a property together. It was legal and practical for us to file this way. Joe and I are not married nor is he the father of my children”

Who Must File a Tax Return Exemption to the rule 1099-Misc box 7 and cash income over $400 after expenses

Head of Household Must be considered Unmarried You must have paid more than half the cost of keeping up a home for a qualifying person for the year If your spouse is a nonresident alien, and you are not considering them a resident alien for tax purposes

Considered Unmarried You or your partner cannot file Married Filing Jointly You and your legally wedded spouse did not live together for all of the last 6 months of the year (other than temporary absences) You must be eligible to claim the exemption for the qualifying person and it was their main home

Temporary Absences

Publication 501 Table 4 Chart on Who is a Qualifying Person Qualifying Persons Publication 501 Table 4 Chart on Who is a Qualifying Person

1099-misc and/or cash

Cash income Net income over $400 would need to be reported (total earned – expenses) This would include things like: Mowing lawns over the summer Working under the table Refereeing Receiving money for plasma or other donations Working independently for a business and you are paid less than $600 (the issuing requirement for a 1099-Misc box 7)

Cash income Exemptions Babysitting (pub 17) -Must follow the IRS rules for childcare providers. Most students will not meet them. Working directly for your parents (very rare) -in certain cases, if a child under the age of 18 is working for their parents and earned under $6,300 of income, they do not need to file taxes or in some cases, not even issued a W-2

1099-misc Exceptions Not all businesses or entities get it right Cash that is not income can be reported wrongly to box 7. In those cases, they should be reported on the tax return under the Other Income line. Race prize money Unique commission packages Certain tribal funds Etc (consult pub 17)

1099-misc Rule of Thumb If there is income listed in Box 7, it should be reported on the schedule C

Questions, Thoughts, Discussion? Cat Miller Senior Financial Aid Counselor catherineuphoff@boisestate.edu