I should probably finally pay a professional

[Eric]

As most of you probably understand, I don't know anything about taxes.

I've used ATX software in the past, and now use TurboTax Home & Business (gasp) for my fairly simple return with a Sch C for the little bit of freelance work I do every year.

This is our first year with kids in daycare, and my wife is taking classes toward her master's degree, but still, I can't help but feel like the refund amount is just way too much.

Should I talk to someone about whether it really is far off, or should I just give in and let a professional take care of it?

[Argo]

Education credits and daycare make a huge difference in a refund. If you take what you got back last year and add those two credits does your return make sense?

[JohnH]

Eric: Do you happen to know anyone who might be good at tax preparation whom you could get to look it over for you?

Seriously, I'd be happy to review it for you, as would most of us on this forum.

On a confidential basis, of course.

Ignore our whining about people asking us to check their work - especially given all that you do for us on this forum, those types of compaints don't apply in your case.

[Eric]

Hey John, I'll send you a quick PM. I know where the difference is coming from, I just don't understand why. Normally I wouldn't bother you folks with this stuff. I probably bringing my return to a professional, because I'm surely missing a lot. For example, I have a home office, but it's too much of a bother for me to keep track of everything to take advantage of it. Which means I'll have to be less lazy about my bookkeeping. Blugh.

When something like this comes up, I have to know WHY. I'm not content in handing it off for someone else to fix it for me without understanding the reason behind the problem.

I should really find a local preparer to hire who doesn't mind sitting down and explaining stuff when I have questions.

[Janitor Bob]

I (and I'm sure most others here) would be more than happy to help you out...no charge, of course. If interested just PM me.

[Jack from Ohio]

I (and I'm sure most others here) would be more than happy to help you out...no charge, of course. If interested just PM me.

Ditto

[Bart]

You really should find a local tax professional. They not only could look over or prepare your return, they could help you tax planning, let you know of tax law changes and probaly help you with any financial decisions yu have to make.

[Eric]

Instead of sending PMs to everyone, here's where I'm at:

I'm inclined to think it's a problem with TurboTax's calculations.

I think I've narrowed it down to the education expenses. My wife got a 1098-T in 2011 and 2012. In 2011, TurboTax subtracted box 5 (scholarships or grants) from box 2 (Amounts billed for qualified tuition and related expenses) to arrive at the total for educational expenses. In 2012, that's not the case. Instead, TurboTax 2012 simply took the number in box 2 as the educational expenses.

And Bart, I think you're absolutely right. I'm going to start looking for someone on Monday.

[Lion EA]

Tell us where you live. Maybe you have someone you already know close enough.

[BulldogTom]

Eric,

Remember that your records for education expenses are more accurate than the 1099T. All they know about is the tuition and fees? And yes, the amount of scholarships and grants should be deducted from the tuition and fees on the 1099T.

Be careful that TT is not giving you the American Opportunity Credit, as that is only for the first 4 years of education. She will only qualify for the lifetime Learning Credit or the Tuition and Fees deduction.

Depending on what else you have on your return, the Tuition and Fees deduction may be better for you if reducing your AGI is going to bring in another credit (like the retirement saving credit) that is AGI sensitive. ATX has the neat little button that allows you to check 1 box, look at the refund, uncheck that box and check the other one and see which one gives you a better number.

You probably should find a tax pro that you can meet with. But if you can't find anyone, I would be more than happy to do it electronically if you will teach me how to use my camera on my laptop to conference with you. My services to you would of course be gratis.

Tom

Hollister, CA

[Guest Taxed]

Eric, after subtracting box 5 from box 2 is the result more than 4000. If yes yo have maxed out. Since you mentioned your wife is in a masters program the AOC would not apply so the 2 choices you have is Lifetime Learning credits or flat tuition deduction. If you have Turbotax you can run it 2 ways to see which gives you the most refund. I have a feeling that the Lifetime learning credit may be better. If you do freelance work, you should look at Home Office deduction. It is NOT too difficult to keep track of expenses such as RE tax, Mortgage Interest, Insurance, Utilities, Repairs. If you are using a room in your house exclusively for your business purpose, divide the sq. footage of that room by the total sq footage of your house and use that ratio to prorate the expenses above. In addition you can get depreciation expense (prorated) for your home. One thing to keep in mind is that you can NOT use the HO expenses to create a sch C loss. If it does it will carry forward.

[Eric]

Tell us where you live. Maybe you have someone you already know close enough.

I live one town over from Caribou Maine. There aren't many people up here

Eric,

Remember that your records for education expenses are more accurate than the 1099T. All they know about is the tuition and fees? And yes, the amount of scholarships and grants should be deducted from the tuition and fees on the 1099T.

Be careful that TT is not giving you the American Opportunity Credit, as that is only for the first 4 years of education. She will only qualify for the lifetime Learning Credit or the Tuition and Fees deduction.

Depending on what else you have on your return, the Tuition and Fees deduction may be better for you if reducing your AGI is going to bring in another credit (like the retirement saving credit) that is AGI sensitive. ATX has the neat little button that allows you to check 1 box, look at the refund, uncheck that box and check the other one and see which one gives you a better number.

You probably should find a tax pro that you can meet with. But if you can't find anyone, I would be more than happy to do it electronically if you will teach me how to use my camera on my laptop to conference with you. My services to you would of course be gratis.

Tom

Hollister, CA

Tuition is pretty much all she has for expenses. I was almost certain that was the case about the scholarships, but I was too chicken to simply override the number to what I thought it should be. My employer and her employer both pay part of her tuition, so I'll just have to deduct that stuff and fudge the number. There are a few books, but they're all ebooks and amount to less than $50 so I didn't mention them here. The Lifetime Learning credit is the one that TT picked out.

Thank you for the advice, and also for the generous offer, but I can't accept free tax preparation. I'm sure after some hunting, I'll find someone locally.

[Eric]

Eric, after subtracting box 5 from box 2 is the result more than 4000. If yes yo have maxed out. Since you mentioned your wife is in a masters program the AOC would not apply so the 2 choices you have is Lifetime Learning credits or flat tuition deduction. If you have Turbotax you can run it 2 ways to see which gives you the most refund. I have a feeling that the Lifetime learning credit may be better. If you do freelance work, you should look at Home Office deduction. It is NOT too difficult to keep track of expenses such as RE tax, Mortgage Interest, Insurance, Utilities, Repairs. If you are using a room in your house exclusively for your business purpose, divide the sq. footage of that room by the total sq footage of your house and use that ratio to prorate the expenses above. In addition you can get depreciation expense (prorated) for your home. One thing to keep in mind is that you can NOT use the HO expenses to create a sch C loss. If it does it will carry forward.

No, not maxed out. In fact, it's the number form Box 2 that is showing up in TT as my actual expenses.. it didn't do the subtraction at all. In 2011 it showed tuition minus box 5.

Yes, getting the Lifetime Learning Credit, not AOC

Home office deduction isn't bad, but depreciation is where I draw the line. When I started at ATX (tech support for the first couple years) any call involving form 4562 was terrifying. Definitely a job for someone better at this stuff than me.

[BulldogTom]

Thank you for the advice, and also for the generous offer, but I can't accept free tax preparation.

Well, that is just silly...

I do things for my friends and family that I don't do for the public, and I don't charge them for it.

I consider you a friend.

My offer is always open, any your money is no good to me.

Tom

Hollister, CA

[Mike D]

Eric,

I would be honored to prepare your taxes for you an no charge.

Just say the word.

Mike Dubin CPA

[Gail in Virginia]

Eric, I think most of us feel that by setting up this forum and sticking with us, we owe you more than we could repay by doing your tax return for you. Just say the word.

Also, be sure that you look at the state taxes in considering lifetime learning vs tuition and fees. I know that in Virginia, if you take lifetime learning you get no benefit on the state return, but since VA starts with federal AGI, there is a benefit to tuition and fees. Sometimes enough to change the way to go with this.

[Lion EA]

Eric, any of us would prepare your taxes, discuss your returns with you, whatever you need. You take good care of us. If you see a Maine address in the profiles, contact that person. Or, work with any of us electronically.

TT should do the heavy lifting, the biz % of house expenses, the right amount for depreciation, even comparing education benefits. What it can't do is know what you really paid for education, so you will have to provide that amount. But, call one of us.

[Jack from Ohio]

Eric,

Get off the "I can't accept a gift from a friend" bandwagon, and just say YES!! Your situation is so very mildly complicated compared to what most of us deal with.

Receiving a gift allows one of us to get a blessing for giving. Don't rob a friend of a blessing!!!

[kcjenkins]

Yeah, Eric please let one of us help you. We all appreciate you so much, and being able to "give back" would make any of us feel good. Why would you deprive us of that? And frankly, we LOVE any client who actually wants to understand why something is the way it is.

[Eric]

Now there are too many people offering to do the return, and I can't possibly choose. And then what would I do next year? I can't ask for anyone to do my return every year for nothing. Please know that the sentiment is very much appreciated. Don't make me delete this thread!

[Jack from Ohio]

Now there are too many people offering to do the return, and I can't possibly choose. And then what would I do next year? I can't ask for anyone to do my return every year for nothing. Please know that the sentiment is very much appreciated. Don't make me delete this thread!

Pick one and no one else will be offended at all!! I am glad to be part of the group and know you will get excellent care whomever you choose. So pick someone and say YES.

Your efforts keeping this board going have saved me far more money and helped me earn far more money in my practice that your return would pay. I call it "return on investment" for you.

I also think everyone on the board will agree with me too.

[Eric]

How does one generally share all of these documents long distance? I can scan paperwork, but email doesn't seem very efficient.

Google Drive? Dropbox? Something else?

[Margaret CPA in OH]

My clients from as far as Switzerland and Australia fax to my dedicated fax where I 'print' them to pdf so paperless. Others in MN, MA, and NC also fax but one does send as pdf encrypted email attachments. Most folks don't have encryption capabilities on their home computers and/or don't know how to use but that is how I send virtually all my returns back to clients to review and return Form 8879 to efile.

[Jack from Ohio]

Scan to .pdf. 200X200 is high enough resolution. With reasonable compression files will not be too large to e-mail. I prefer e-mail to fax because you get better copy. Fax always deteriorates the document. Here at the firm we will do over 100 with no actual paper being transmitted.

[Margaret CPA in OH]

Just note the risk of scanning and emailing that any document with SSN and other identifying info without encryption is fodder for id theft. I have personally had very little deterioration with faxed documents perhaps in part because I don't print them on paper, they go directly to pdf. If there is a document with an issue I either ask for a resend or clarification of whatever is the issue. Obviously Jack's experience is different from mine and our preferences for client sent documents is different. His over 100 clients may have encryption capability readily available along with the knowledge to use it. Most of mine don't but do have access to a fax machine. Diff'rent strokes but room for all!