Author Topic: Documents I Need to File my Taxes  (Read 7871 times)

AmandaS1989

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Documents I Need to File my Taxes
« on: January 18, 2016, 01:46:12 PM »
Okay so I've gotten in a few things so far and waiting on the rest. Just wanted to check in with some tax experts and see if there are any other documents I need:

What I Have:
1) W2s from both my jobs for 2015
2) SL interest paid statements

Now I opened a Roth IRA and made contributions to that but I do not need to wait on a statement for that as I have taken no distributions from it correct?

My 22 year old, full-time student brother is my dependent and even though I did not personally pay for any of his tuition or education expenses my boss says I can claim them. Is this true?

I don't need to claim the .22 I earned in interest from my savings account right?

For my contributions to my 401k I can just use the amount from my W2 and not have to wait for some sort of statement from the plan admin right?

Thanks in advance


Gin1984

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Re: Documents I Need to File my Taxes
« Reply #1 on: January 18, 2016, 01:54:59 PM »
Did you pay for over 50% of his expenses, including his educational expenses?

DevoCPA

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Re: Documents I Need to File my Taxes
« Reply #2 on: January 18, 2016, 01:57:18 PM »
No need to wait for the Roth or 401k statements. Don't report the .22. Who paid your brother's expenses?

AmandaS1989

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Re: Documents I Need to File my Taxes
« Reply #3 on: January 18, 2016, 02:02:52 PM »
He had a combo of Pell Grant and student loans. And I pay around 50% of his expenses. We live with our parents but they don't file taxes as they only have SS of less than 15k so I claim him.

redcedar

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Re: Documents I Need to File my Taxes
« Reply #4 on: January 18, 2016, 02:17:58 PM »
You may be one of the first to file when it opens tomorrow. Congrats.

$0.22 income does not need reporting since you round on your tax forms and that rounds down to $0.

You are correct on your 401k contributions. Since they are included in your w2, the irs makes it easy with no other form needed - as long as you didn't make any withdrawal or have any unpaid loans that are now income.

You do not need to wait on your Roth IRA contribution forms. Technically, since you don't submit supporting docs other your tax forms, you don't need to wait on anything but you better be darn sure all of your numbers are right and that you didn't forget anything. I personally find it better to wait a few weeks for docs than to file an amended return. Check your provider's website since you can usually find tax docs there a few days to a week ahead of receiving them in the mail.

Brother - now this is a sticky one. I would highly recommend finding and following the rule for claiming a dependent to the letter of the law. You do know the 50+% rule but you need to know % of what. You also need to make sure that no one else claims him as a dependent.

As to what other forms you may need, that is very hard to say since it is sooooooo very subjective based on you actions throughout 2015. Look at page 1 and 2 of a blank 1040 and you will know right away if you are missing anything big. Here is my general list:

Income: W-2s, interest, dividends, capital gains, rental property (one via schedule E and one via a K1), previous year state tax refund

Expenses: hsa contributions, ira contributions, capital losses, mortgages interest, teacher expenses, donations, 529 plan constitutions,property taxes, tax prep expense (software).
We don't have tuition expenses, student loan interest, and childcare expense anymore but they are common deductions for many people.

DevoCPA

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Re: Documents I Need to File my Taxes
« Reply #5 on: January 18, 2016, 02:28:18 PM »
He had a combo of Pell Grant and student loans. .
So then there are no deductible education expenses.

AmandaS1989

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Re: Documents I Need to File my Taxes
« Reply #6 on: January 18, 2016, 02:35:29 PM »
Ah I figured that. Was hoping for a different answer but oh well. I can still claim the EIC and the Retirement Saver's Credit I believe. My gross income was around $29k for this year so I'm pretty sure I qualify for both.

Gin1984

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Re: Documents I Need to File my Taxes
« Reply #7 on: January 18, 2016, 02:37:54 PM »
Ah I figured that. Was hoping for a different answer but oh well. I can still claim the EIC and the Retirement Saver's Credit I believe. My gross income was around $29k for this year so I'm pretty sure I qualify for both.
I do not believe you are eligible for EITC nor claiming your brother, tbh.  It does not sound like you are paying 50% of his expenses including education (giving that he is getting student loans and the pell grant).

redcedar

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Re: Documents I Need to File my Taxes
« Reply #8 on: January 18, 2016, 02:38:39 PM »
He had a combo of Pell Grant and student loans. .
So then there are no deductible education expenses.

Great point here. Your brother has a tremendous opportunity to make some income at a very low tax rate, zero if you ignore fica. Personal exemption ( yes, this would impact your plans to claim him), student loan expenses, college tuition expense credits (if he would allow some to be incurred and paid by him), and Ira contributions would all go towards him having a decent full time student income at an extremely low tax rate. It may not seem like much but it is something that he is letting slip by.

AmandaS1989

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Re: Documents I Need to File my Taxes
« Reply #9 on: January 18, 2016, 02:47:17 PM »
Actually I am paying 50% of his expenses. He goes to a very low-cost school and I pay a good chunk of the household costs as well as purchase other items for him. He is trying to look for a job right now but hasn't had any luck. Also, I kind of want him to focus on just school right now since he has a learning disability and I'm a little worried he couldn't handle school and a job at the same time.

It'd be nice if he could get one though. Redcedar has a good point about him being able to sock away some money. I wish I'd known about Roth IRAs when I was in school.

Thanks for the advice everyone. I think I will wait until I get the statement from my Roth IRA even though I didn't have any distributions.

One more question though. I have a small (less than $50) taxable investment account that is currently at a loss. I didn't take anything out but I did receive dividends that were automatically re-invested. Will I need to claim them on my taxes or no?

skuzuker28

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Re: Documents I Need to File my Taxes
« Reply #10 on: January 18, 2016, 02:51:37 PM »
Actually I am paying 50% of his expenses. He goes to a very low-cost school and I pay a good chunk of the household costs as well as purchase other items for him. He is trying to look for a job right now but hasn't had any luck. Also, I kind of want him to focus on just school right now since he has a learning disability and I'm a little worried he couldn't handle school and a job at the same time.

It'd be nice if he could get one though. Redcedar has a good point about him being able to sock away some money. I wish I'd known about Roth IRAs when I was in school.

Thanks for the advice everyone. I think I will wait until I get the statement from my Roth IRA even though I didn't have any distributions.

One more question though. I have a small (less than $50) taxable investment account that is currently at a loss. I didn't take anything out but I did receive dividends that were automatically re-invested. Will I need to claim them on my taxes or no?
Yes, you will receive a 1099 for the dividends that will need to be reported.

Personally, I think claiming your brother would be quite aggressive since you are living in your parent's home.  You would need to consider the imputed rent your parents are providing by letting him live in their home.

Even if you claim him, he would not be a Qualifying Child for EIC purposes.  Now, you may get the credit anyway depending on your income but claiming him will not help you or hurt you in that regard.

AmandaS1989

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Re: Documents I Need to File my Taxes
« Reply #11 on: January 18, 2016, 03:03:26 PM »
Why wouldn't he be? He's younger than me, has no income, is under 24 and a full-time student.  I looked on the IRS website and he fits all the rules.

skuzuker28

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Re: Documents I Need to File my Taxes
« Reply #12 on: January 18, 2016, 03:23:12 PM »
Why wouldn't he be? He's younger than me, has no income, is under 24 and a full-time student.  I looked on the IRS website and he fits all the rules.

I think you would have a tough time arguing that your brother lived with you, since you are both living with your parents.  If I were the IRS, I'd argue that he lives with your parents (since it is their house) and is therefore ineligible to be considered a Qualifying Child for EIC purposes.

Of course that could also throw a wrench in his dependency in general, but when you take out the EIC component the audit risk goes down significantly.

MDM

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Re: Documents I Need to File my Taxes
« Reply #13 on: January 18, 2016, 03:25:07 PM »
Might as well go to the source: https://www.irs.gov/pub/irs-pdf/p501.pdf.

If your answers to all the questions in there (with special attention to Worksheet 2) are favorable, then file your return with a clear conscience.

MDM

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Re: Documents I Need to File my Taxes
« Reply #14 on: January 18, 2016, 03:33:59 PM »
I think you would have a tough time arguing that your brother lived with you, since you are both living with your parents.  If I were the IRS, I'd argue that he lives with your parents (since it is their house) and is therefore ineligible to be considered a Qualifying Child for EIC purposes.

The IRS language seems straightforward enough for the OP's situation: "... must have lived with you for more than half the year."  It doesn't say anything (as far as the residency test goes) about who owns the living quarters, who else lives there, etc.  Don't see any problem at all with the OP passing the residency test portion of "is her brother her dependent child?"

The question of the parents providing "fair rental value" and how that affects support is a separate and needs-to-be-answered question.

johnny847

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Re: Documents I Need to File my Taxes
« Reply #15 on: January 18, 2016, 03:48:37 PM »
Why wouldn't he be? He's younger than me, has no income, is under 24 and a full-time student.  I looked on the IRS website and he fits all the rules.

You cannot claim your brother as a dependent. To claim him he'd have to be a qualifying relative.
EDIT: This reasoning is incorrect.

Test #1 to be a qualifying relative
Quote
The person can't be your qualifying child or the qualifying child of any other taxpayer.

[Emphasis added]
Notice how whether or not your parents claim your brother as an independent has no bearing on this test.

Your brother is a qualifying child for your parents. You say that he is younger than you, under 24, a full time student, and lives with your parents (and you).
Tests to be a qualifying child:

Quote
  • The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them.
  • The child must be (a) under age 19 at the end of the year and younger than you (or your spouse if filing jointly), (b) under age 24 at the end of the year, a student, and younger than you (or your spouse if filing jointly), or (c) any age if permanently and totally disabled. 
  • The child must have lived with you for more than half of the year.
  • The child must not have provided more than half of his or her own support for the year.
  • The child must not be filing a joint return for the year (unless that joint return is filed only to claim a refund of withheld income tax or estimated tax paid).
« Last Edit: January 18, 2016, 04:07:24 PM by johnny847 »

johnny847

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Re: Documents I Need to File my Taxes
« Reply #16 on: January 18, 2016, 03:54:51 PM »
Might as well go to the source: https://www.irs.gov/pub/irs-pdf/p501.pdf.

The IRS language seems straightforward enough for the OP's situation:

If Cathy were she'd say that the IRS publications are not "the source." The IRS publications are not the law. They are the IRS's interpretation of the law. Ultimately we are held accountable to what the law says. Not what a IRS publication says.

seattlecyclone

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Re: Documents I Need to File my Taxes
« Reply #17 on: January 18, 2016, 04:02:00 PM »
Why can't Amanda claim her brother under the qualifying child test?

She meets requirement 1 (child is her brother).
She meets requirement 2 (child is under age 24 and a student and younger than her).
She meets requirement 3 (child lives with her).
It sounds like she likely meets requirement 4 (child provided less than half of his own support).
She meets requirement 5 (child is not filing a joint return).

Her parents also could claim Amanda's brother.

What happens when more than one person can claim the same child? There's a page on the IRS website answering this very question: https://www.irs.gov/Credits-&-Deductions/Individuals/Earned-Income-Tax-Credit/Qualifying-Child-of-More-Than-One-Person.

My reading of the page tells me that if the people who potentially could claim the child agree amongst themselves about who shall claim the child, then that person can do so. If there is no such agreement, and more than one person attempts to claim the child, the parents would have priority. Seems like Amanda could claim the child if her parents don't.

johnny847

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Re: Documents I Need to File my Taxes
« Reply #18 on: January 18, 2016, 04:08:29 PM »
Why can't Amanda claim her brother under the qualifying child test?

She meets requirement 1 (child is her brother).
She meets requirement 2 (child is under age 24 and a student and younger than her).
She meets requirement 3 (child lives with her).
It sounds like she likely meets requirement 4 (child provided less than half of his own support).
She meets requirement 5 (child is not filing a joint return).

Her parents also could claim Amanda's brother.

What happens when more than one person can claim the same child? There's a page on the IRS website answering this very question: https://www.irs.gov/Credits-&-Deductions/Individuals/Earned-Income-Tax-Credit/Qualifying-Child-of-More-Than-One-Person.

My reading of the page tells me that if the people who potentially could claim the child agree amongst themselves about who shall claim the child, then that person can do so. If there is no such agreement, and more than one person attempts to claim the child, the parents would have priority. Seems like Amanda could claim the child if her parents don't.

That was my bad. I agree with your assessment seattlecyclone.

EDIT: OP, but is the optimal outcome really for you to claim your brother? The best outcome for you and your parents as a whole is for whoever is in the highest tax bracket to claim your brother.
« Last Edit: January 18, 2016, 04:10:11 PM by johnny847 »

DevoCPA

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Re: Documents I Need to File my Taxes
« Reply #19 on: January 18, 2016, 04:23:19 PM »
Interesting. My initial thought was she could not claim him because they both live with their parents but the law (code section 152) states "who has the same principal place of abode as the taxpayer for more than one-half of such taxable year" It does not say anything about who owns/rents the house.

code section 152(c)(4)(C) goes on to say "If the parents of an individual may claim such individual as a qualifying child but no parent so claims the individual, such individual may be claimed as the qualifying child of another taxpayer but only if the adjusted gross income of such taxpayer is higher than the highest adjusted gross income of any parent of the individual."

So as long as she makes more money than her parents she can claim him.

AmandaS1989

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Re: Documents I Need to File my Taxes
« Reply #20 on: January 18, 2016, 04:33:04 PM »
Well I make the most. I had around 29k in gross wages this past year and my Dad only has ~14.5k in SS disability. Mom doesn't work so that's their only income. My parents and I made the agreement that since I worked and contributed to the household then I would claim my brother. Its my parents way of paying me back for the financial help I provide them.

DevoCPA

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Re: Documents I Need to File my Taxes
« Reply #21 on: January 18, 2016, 04:40:39 PM »
They don't have a filing requirement so they wouldn't claim him anyway.

MDM

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Re: Documents I Need to File my Taxes
« Reply #22 on: January 18, 2016, 04:44:46 PM »
The IRS publications are not the law. They are the IRS's interpretation of the law. Ultimately we are held accountable to what the law says. Not what a IRS publication says.
Yes, all true.  I'm still comfortable suggesting that people read IRS publications.  If the language seems straightforward, follow it.

skuzuker28

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Re: Documents I Need to File my Taxes
« Reply #23 on: January 18, 2016, 04:53:07 PM »
Interesting. My initial thought was she could not claim him because they both live with their parents but the law (code section 152) states "who has the same principal place of abode as the taxpayer for more than one-half of such taxable year" It does not say anything about who owns/rents the house.

code section 152(c)(4)(C) goes on to say "If the parents of an individual may claim such individual as a qualifying child but no parent so claims the individual, such individual may be claimed as the qualifying child of another taxpayer but only if the adjusted gross income of such taxpayer is higher than the highest adjusted gross income of any parent of the individual."

So as long as she makes more money than her parents she can claim him.

I'd be interested in any court rulings on that, just for my own personal edification.  This is something that has never really come up for me due to the clientele I work will, but would be fun to know. 

Looks like we are looking at about $1,500 of potential credit.

Gin1984

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Re: Documents I Need to File my Taxes
« Reply #24 on: January 18, 2016, 04:58:35 PM »
Well I make the most. I had around 29k in gross wages this past year and my Dad only has ~14.5k in SS disability. Mom doesn't work so that's their only income. My parents and I made the agreement that since I worked and contributed to the household then I would claim my brother. Its my parents way of paying me back for the financial help I provide them.
That very well may be true, but you may not (and frankly is truly does not sound like) you are paying 50% of his expenses.  This is because the college costs that are covered via pell grant and student loan are counted as part of his expenses. 
This is the form you need to fill out to determine it:http://www.bussvc.wisc.edu/ecbs/Tax_Dependent_Status_Worksheet.pdf
« Last Edit: January 18, 2016, 05:02:09 PM by Gin1984 »

DevoCPA

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Re: Documents I Need to File my Taxes
« Reply #25 on: January 18, 2016, 05:25:09 PM »
Actually I am paying 50% of his expenses. He goes to a very low-cost school and I pay a good chunk of the household costs as well as purchase other items for him.

I still think she is good. Remember she doesn't have to provide the full 50% herself under qualifying child. Let's take it farther, have the parents gift her $14k then she can file head of household, too!

teen persuasion

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Re: Documents I Need to File my Taxes
« Reply #26 on: January 18, 2016, 05:42:39 PM »
He had a combo of Pell Grant and student loans. .
So then there are no deductible education expenses.

Education expenses paid by student loans should be eligible.  PELL grant funds may be eligible if they are claimed as taxable income.  If brother has no other income, he may owe no tax claiming the PELL as taxable income.

Education money is fungible - you can use your cash for paying tuition bills, and grants for living expenses.  This is more obvious when allocating financial aid to tuition and fees (deductible) vs room and board (non-deductible).  Assuming the numbers work, you only need $4k worth of tuition/fees paid with non-tax exempt money to claim the full AOC, and you could claim partial with less than $4k.

If you cannot claim your brother (do not provide more than 50% of his expenses), he can claim the AOC for the refundable portion.

Look into your state's tax education credits, too.  The rules for my state are different (different things are eligible).

seattlecyclone

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Re: Documents I Need to File my Taxes
« Reply #27 on: January 18, 2016, 06:35:05 PM »
Note that the requirement is for the dependent to provide less than half of his own support, not that the person claiming him must provide more than 50% of his support. Those are two different things.

AmandaS1989

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Re: Documents I Need to File my Taxes
« Reply #28 on: January 19, 2016, 10:43:01 AM »
I just remembered. I helped him get a laptop for college since his old one kept randomly shutting down. It was on my credit card and it was a little over $1k. I should be able to claim that correct?

seattlecyclone

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Re: Documents I Need to File my Taxes
« Reply #29 on: January 19, 2016, 10:50:41 AM »
In what context would you be claiming it? I seem to remember many of the education deductions and credits require that supplies be specifically required for a course. If the school doesn't specifically require that the student own a laptop, and provides computer labs for students who don't own one, you may not be able to claim a deduction for the laptop. However it all depends on the specifics of his situation and which of the many education tax breaks you're planning to claim it for.

AmandaS1989

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Re: Documents I Need to File my Taxes
« Reply #30 on: January 19, 2016, 10:53:51 AM »
The school is completely online so he has to have a laptop.

Gin1984

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Re: Documents I Need to File my Taxes
« Reply #31 on: January 19, 2016, 02:33:17 PM »
The school is completely online so he has to have a laptop.
But does the school include it in required supplies (most schools do not and the ones that do are often medical/dental schools). 

seattlecyclone

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Re: Documents I Need to File my Taxes
« Reply #32 on: January 19, 2016, 02:48:00 PM »
Yeah, there's a difference between being required to have access to a computer and being required to personally purchase a computer. Keep that in mind when you evaluate your situation.

AmandaS1989

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Re: Documents I Need to File my Taxes
« Reply #33 on: January 19, 2016, 02:49:21 PM »
I'll just leave that off then.

Sibley

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Re: Documents I Need to File my Taxes
« Reply #34 on: January 28, 2016, 07:34:07 PM »
Didn't see this anywhere... if you have health insurance through the marketplace/obamacare/ACA (whatever term you know) then you'll need  form 1095A, or whatever the number is...

Also, whether or not your parents need to file their taxes isn't simply a matter of their income. If their health insurance is through the marketplace, they'll probably need to file.

Getting certain forms of aid, etc require filing.

AmandaS1989

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Re: Documents I Need to File my Taxes
« Reply #35 on: January 28, 2016, 08:21:13 PM »
I got my 1095 forms. My folks don't have marketplace insurance.

 

Wow, a phone plan for fifteen bucks!