Eric

9 minutes ago, jklcpa said:

Agree with Terry's first post; I was typing at the same time. If the improvements are made after the home office has already been in service, only those that affect the business portion of the home are added as depreciable assets and depreciated over 39 year life.  Probably the only item you listed would be the electric service upgrade because it benefits the office as well as the rest of the home.  The chimney might be a possibility if it is used by the furnace, but not if used solely by a fireplace that isn't used as heat for the office.

That makes sense.  The chimney is for the furnace. 

But the confusing part for me is still determining what is a whole-house repair (expense), and what is a whole house improvement (depreciable). 

3 minutes ago, Terry D said:

Eric you mention a lot of repairs. Only those repair expenses directly related to the space used as your home office are deductible. These would be your direct expenses. The remaining repair are not for business use and cannot be deducted. The indirect expenses such as the mortgage interest, utilities, insurance; etc are indirect expenses and deductible by the percentage of the home used. Hope this helps.

As you stated, the expenses added to basis is useless unless of course the IRS changes the 121 exclusion rules.

General repairs are also listed as indirect expenses and Deductible based on the percentage of your home used for business.

10 minutes ago, BHoffman said:

I'll drink to that!  Seriously, unless the amounts eligible for expensing were able to be directly allocated I probably wouldn't try to list them for the home office.   Very hard to defend if questioned.

BTW:  I'm wondering how others are feeling about the Home Office Safe Harbor election?

 

I have receipts and totals for specific jobs, like the chimney, and materials and labor broken down by project. 

Alright, this is the last newbie tax question from me, I know you folks are busy.

This year, we spent a small fortune doing work to our 150-year-old home. I have a home office, it meets all of the requirements, and it's 13% of our house's square footage.

It seems to me that the bulk of the money we spent on the house isn't going to help out our tax situation, since things like a new roof, siding, insulation, plumbing, electrical, etc are considered home improvements, and not repairs.  And as I understand it, "improvements" add to the basis, which is basically worthless, while "repairs" are expenses.

• What if we replaced an old water softener?
• What if the brick chimney was rebuilt from the roof up, and then a stainless liner was added?
• What if the electrical service wasn't to code, and we moved it to the front of the house from the back?
• What if the stairs were all wonky and we shimmed them all to make them level and consistent in height?
• In some rooms we patched and painted existing drywall.  Sounds like a repair.  In other rooms we gutted down to the studs and put up new drywall.  Sounds like an improvement. 

Are any of these repairs, or are they all improvements?

Is it just me and my non-tax-person-noodle-brain, or is this whole thing incredibly wishy-washy and open to interpretation?  That's how it feels, and I don't like it.  Numbers are supposed to be easy, not nebulous and fluffy.  It's a perversion of mathematics.

Screw this, I'm doing shots.

On 3/5/2016 at 2:59 PM, Bart said:

Do not do anything with the $5000.  It is not taxable since she held up her end of the bargain by teaching for 5 years.

On 3/5/2016 at 3:21 PM, cbslee said:

Here is a link from the U S Dept of Education which explains that there are multiple but limited

programs which specifically allow forgiveness under specific circumstances:

 

https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation#public-service-loan

I think that the takeaway is that there isn't any broadbased forgiveness program.

There was a link from that page:
https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/teacher

That's where the $5000 came from, and she met all of the requirements (had to, in order to get the money to begin with).  So based on that, plus Bart's suggestion that it's not taxable, and the fact that there is no tax information related to it on the lender's site... I'm going with that, and it'll be one of the few times I am pleasantly surprised while I do my return.

Thank you both!

Please forgive my non-tax-person tax question.

My wife had $5000 knocked off her student loans in 2015, but we never received any tax information related to it.  I had assumed that it was taxable income, but even logging into the Navient site didn't produce any documents other than the usual 1098-E.

So I started looking around, and have found this chunk of text often copied and re-posted on different sites:

Quote

Section 61(a)(12) of the Internal Revenue Code of 1986 (IRC) specifies that gross income includes income from the discharge of indebtedness of $600 or more in any calendar year. However, IRC Section 108(f) specifies conditions under which student loan forgiveness is excluded from income. Specifically, IRC section 108(f)(1) states that

In the case of an individual, gross income does not include any amount which (but for this subsection) would be includible in gross income by reason of the discharge (in whole or in part) of any student loan if such discharge was pursuant to a provision of such loan under which all or part of the indebtedness of the individual would be discharged if the individual worked for a certain period of time in certain professions for any of a broad class of employers.

That seems awfully vague to me, but alright. 

It was a teacher loan forgiveness program, and she is a teacher.  She has been a teacher since she graduated more than 10 years ago.  One of the stipulations for the program was that she had to have been teaching for 5 years or more. Should I do anything with this $5000 on our tax return?

Also, my apologies to Rita.  I believe I deleted her post from the thread earlier.  You can still see it quoted in mine though!  (sorry)

I'm terrible at multi tasking.  Nobody this scattered should have this much control over a website.  Good thing I don't run a cloud storage service.

1 hour ago, Roberts said:

Even with it being on your computer - what if it is destroyed via an update?

The client and relative weren't worried about it being hacked and your password stolen, they were worried about the software being literally made unusable. I'm certainly no expert on the subject. (My cloud storage story wasn't password storage - it was his documents and programs. He didn't store anything on his computer and it was all in the cloud if at all possible.)

My password data (a single encrypted file, in my case) is part of my backups.  In the unlikely event that the software breaks and ruins the data file, I can pull it from a backup and open it with a previous version off the software... or a new version after the bug has been corrected.  

But to extend your question further, theoretically, an update to your tax software could destroy all of your tax data.  An update to Windows could destroy everything on your computer.  It'd really suck if it happened, but it's not very likely.

Every time some high profile website gets their (unencrypted, tsk tsk) user/pass/account database hacked/stolen, it's interesting to see just how bad the passwords are.

http://arstechnica.com/security/2015/09/new-stats-show-ashley-madison-passwords-are-just-as-weak-as-all-the-rest/

17 minutes ago, RitaB said:

"incorrect" is the best one.

OMG and what about the stupid things people do for their email address.  We don't need to know you are [email protected]

Those email addresses are always great to see on a resume

There are two types of passwords I recommend that all of my clients use for the admin panel for their website.

1. A hand full of random common words separated by underscores/hyphens/special characters.  See this XKCD comic for an explanation.  These are the default passwords I create for new accounts.  They're somewhat possible to remember, they're perfectly secure, and fun to come up with.  Like rambunctious-jellyfish_pineapple-eater! or travelmug-handicapped-platypus-ransom
2. An 18 character string of gibberish, random numbers, special characters, and mixed case letters. I recommend an encrypted password database for anyone going this route, because they're impossible to remember.  Lots of good applications out there to help you manage your secure passwords, varying in price and features (autofill browser extensions, multi-device sync, etc)  
   • Keepass
   • 1Password
   • Dashlane
   • LastPass

I've got more than 300 unique passwords to keep track of, I can't imagine trying to keep them straight without some kind of software to organize and remember them for me. 

I think it's still considered somewhat experimental, and only officially supported on their Nexus line of phones, as far as I know.  I think that's why you have to request an invite, because it's still kind of in "beta".  

54 minutes ago, Abby Normal said:

Yes I was an early adopter of Project Fi, July 2015. And I have the Nexus 6, which I love.

I bought a Nexus 6 the day they went on sale, and would really like to give Project Fi a try, but I live in the middle of nowhere, with almost no TMobile service and zero Sprint service.  And the latency on my home internet is terrible.  I wish I could have the internet connectivity that comes along with being near civilization, but without all of the people.

43 minutes ago, Margaret CPA in OH said:

Okay, I'll bite.  I have no idea what this means but think I am not too old to learn.  If it isn't too complicated, would you kind folks explain Project Fi and Nexus 6 in simple language?  Maybe I could impress my son by throwing out a couple of relevant comments!

Nexus phones are an Android line of cell phones that runs plain vanilla Android without any carrier or manufacturer garbage on them, and are supported by Google.  Google partners with different manufacturers to make a new phone or two every year.  Project Fi is a cell phone service and a Google initiative that allows your phone to switch seamlessly between T-Mobile and Sprint networks as well as Wifi.  The price is decent too... 

Unfortunately where I live, if you want reliable service, Verizon Wireless is the only option.

https://fi.google.com

https://store.google.com/category/phones

1 hour ago, Abby Normal said:

I'm one of the moderators at /r/tax

Are you a fellow Nexus fan?  

Edit: I only ask because after some brief stalking, it looks like you're a Project Fi user.  I'm envious.

I think this has more to do with the announcements Microsoft made at CES about the work they've done to improve efficiency and performance with new generations of Intel processors.  It sounds to me that they're saying that they won't back port those advancements to Windows 7 from Windows 10,  but that shouldn't be a surprise.  My guess is that Windows 7 will continue to work on the new chipsets, but you won't get all of the fancy optimization that come baked into the latest version.

Intel provides the drivers for their chipsets, and it's up to Intel which operating systems they want to support, not Microsoft.

On 1/21/2016 at 11:10 AM, ILLMAS said:

I have notice after I installed ATX2015 or the payroll 2015 my computer is sporadically crashes and then restarts, anyone else having this problem? 

If your computer is sporadically rebooting, chances are you're getting a blue screen.  

Here's how to keep your computer from automatically rebooting, so that you can write down the information in the error, and then google it, hopefully pointing you toward a possible solution

http://www.howtogeek.com/howto/windows-vista/help-troubleshoot-the-blue-screen-of-death-by-preventing-automatic-reboot/

Double check that the post you think you made is actually there in that original thread.  If you typed out a reply but then didn't post it, the forum sometimes attempts to remember what you had been typing so it doesn't get lost in the case that you navigate away from the page without posting.

Once you verify that the post is there, go ahead and make your new thread in the main forum.  Nothing you do at that point will affect an unrelated reply to a different thread.

If I misunderstood the problem, let me know.

2 hours ago, Medlin Software said:

Slight tangent, all the white background is harder on battery life with a current mobile device.  The more you can get your mobile device to not have to light up pixels, the longer your batt lasts between charges.  For mobile, I try to control the background, if the site does not already options for a dark background.  For mobile, the display is the one batt eater you have some control over.

To go further out on that tangent... it depends somewhat on the display technology used for the panel.  On an OLED / AMOLED / Super AMOLED display, every pixel generates its own light.  Black pixels aren't lit at all, which saves a little bit of battery power.

On LCD screens, the entire screen is always backlit, and black pixels must block the backlight from coming through.

Some fancier LED backlit LCD TVs/Monitors have a matrix of LEDs for the backlight, and can individually darken/lighten regions (not pixels) of the screen making them somewhat more power efficient when large areas of the screen are dark.  Contrast ratio does suffer within those darkened areas, however, since if a region's backlight is darkened, it can't display as bright a pixel in that region.

Apple uses LCD (IPS) only.  Samsung is the biggest innovator when it comes to AMOLED technology, and uses them almost exclusively in their phones/tablets.  Other manufacturers have their own preferences, and some mix it up from device to device.

Disclaimer: I didn't design this site, I just manage the software that is purchased from a vendor.  Most of the colors you see are the defaults, although I can tweak (and have tweaked) the style sheets to make minor changes.

On this site, post text is all nearly black on white... it's not black, but it's very very dark.  There are other bits of data that aren't as dark, which I assume are what you're referring to.

The reason is that the forum is very information dense, and while none of the content is unimportant, some of of the it is definitely MORE important than the rest.

Less important information like how long ago a post was made or a signature line for example is lighter in color so that it doesn't compete visually with the more important text. Deciding what is important and giving it the appropriate visual weight is a basic design principle.  If everything stood out, then you would be left with a lot of noise and overall readability (and usability) would suffer.

In Web Accessibility terms, the WCAG 2.0 specification (Level AA) says that a contrast ratio (foreground to background) of 4.5:1 is required to pass.  Some of the lighter greys fall just shy of that ratio here, so I'll darken them up a bit.  If after darkening the light grey text (I'll get to it in a few minutes) you still have trouble seeing it, I might recommend either calibrating your monitor, or using your browser's built in accessibility features to help out, such as magnifying the page. (CTRL + (plus) to zoom in, CTRL - (minus) to zoom out.

Something is wrong when a software vendor can't make their web-based software work in browsers that have the best standards compliance.  

34 minutes ago, Randall said:

I was wondering if there is a separate thing going on, a distinction between encryption and just adding a password.  In Acrobat 11 Pro, it appears to be doing both.

I don't think there is a distinction.  Password protection without encryption would be too easily circumvented.

6 hours ago, NECPA in NEBRASKA said:

Eric,

Are you talking about phishing emails directly from their accounts or emails that look like they might be from their account, but if you hover over the account, it's totally incorrect. I ask because I have had people receive emails that they think are from me, but are not from my account and have my business name backward or completely screwed up. I've had an IT guy check my computer and I run Malwarebytes and AVG constantly. I get this crap from my friends and clients, but normally I can see that it's a spoof. I'm still trying to figure out if my email account has been hacked or if it is from an old AOL hack. I've changed my passwords a lot, but my brother just chewed me out because of one that he received months ago. I guess he's not smart enough to know my name. 

How do you stop these things, besides a strong password? 

 

Thanks!

 

A strong password that is unique to the account is incredibly effective.  Be careful to not provide it to some look-alike site at www.outlook.fakesite.com for example. If you use an email client like Outlook or Mail or Thunderbird and your ISP / email provider supports SSL, then configure your client to use it.  Other than that, it's up to your provider to keep their systems secure.

Encryption is important, which is why every single online retailer in the world utilizes it when they take your credit card information, and why many sites use it when taking your username and password.  With the latest round of donations, I'm going to buy a 3 year SSL certificate for atxommunity.com. 

Yes, I did check the email headers to see where they came from.  The actual addresses were registered to this forum.   They get into the account and send emails to everyone in the contact list.  The same thing happened to my mom a few years ago, and once they were done extracting everything they wanted from the account, they deleted every email and contact so she couldn't easily warn everyone of the intrusion. 

On 11/16/2015, 10:09:54, Jack from Ohio said:

Please cite for me one instance of an individual's e-mail being "hacked" and the document attached being stolen.

Encryption of e-mail has the same basis in concern as man-made global warming, and Y2K.

I won't name names, but It's happened to members of this forum--I've received phishing emails from their hacked accounts.  Granted, it was most likely due to a weak password or a phishing scam.  The attack vector is irrelevant though; once they have your password, they have your emails and attachments.

On 11/16/2015, 12:18:54, ETax847 said:

I just got back from a Tax Updates seminar and they explained that password protecting a pdf can be easily cracked.  There is software out there that can break a password "protected" pdf within minutes.

I would stay away from emailing tax returns if at all possible.

I believe that depends on the version of Acrobat used to protect the file.  Acrobat version 9+ uses 256 bit AES encryption, which is plenty secure, but Acrobat 9 has a weakness in password handling.  Anything Acrobat X and above is quite secure as far as I know.

I didn't see a notification, but as soon as I closed the tab, I promptly forgot about it, haha.  I do believe that it should work without the tab open, though, and it should work in Chrome on Desktop and Android devices.  I imagine Firefox's implementation is similar. 

I was wondering the same thing.  I'm going to close my forum tab... feel free to mention me and I'll let you know if I get it.

I definitely wouldn't enable it on many websites, because I can definitely see how it could get obnoxious.