2014 Federal Income Tax guidance

I've been using TurboTax for longer than we've been fulltiming. It makes it easy to do from year to year because it carries over last years information. Tried others and they weren't as user friendly.

We ran into a problem one year because they only allowed 3-state income Taxes. So had to buy an additional one in CD version at Target. But last year, they increased it, so no problems doing 5 states. Employer had us jumping around a lot last year.

TTx did shut down all state Taxes for a brief period concerned about Tax Fraud. I also had a problem with Indiana state tax. It wouldn't carry over the correct IN only Income as a non-resident. So I had to print copies of forms from IN Gov't site and hand write it. Next year, will have to fix taxes paid or refunded, but that's minor.

I have to say we use TaxAct and have for years. TurboTax got in trouble with their products this year. Might be time to try something else.

4X4Dodger wrote:

jrp wrote:
Hard to guide you to the right forms or give you advice, without more specific questions.
Did you change your state of domicile when you started fulltiming?
If you still work fulltime, did you track your earnings/wages by the states you worked in?

As far as the house sale, read Publication 523, You'll be happy to learn that unless you made more than $500,000 (married)/$250,000 (single), your capital gain from the home sale is tax exempt, provided this home was your principal residence for at least 2 of the last 5 yrs.

As far as using a tax "Pro" most are over rated in my experience, especially those at H&R Block. Unless you failed high school math, TurboTax leads you through it step by step. In any case its up to you to have the receipts or backup docs for whatever deductions and/or exemptions you claim.

If I am not mistaken isnt that tax exemption for capital gains ONLY if you re-invest the money from the sale in another house you will occupy?? I'd check that out.

Used to be. THey changed it.

4X4Dodger wrote:

If I am not mistaken isnt that tax exemption for capital gains ONLY if you re-invest the money from the sale in another house you will occupy?? I'd check that out.

You're about 10 yrs behind. the tax law was changed many yrs ago to remove the previous requirements about reinvesting the gains in a new house, and the one time only restriction.
For many yrs you have been entitled to this tax exemption on your principal home, up to 500,000/250,000 as long as you owned & used the home as your principal residence for at least 2 of the last 5 yrs. There is no requirement that you do anything specific with the proceeds, you don't need to buy a new house to qualify, and you are entitled to repeat this as many times as you qualify. So, theoretically if you buy low & sell high, you can make $250,000 as a single, tax free every 2 yrs, continually flipping your primary residence. It's one of the best deals in the whole tax code for those in the right market, that don't mind taking the risk and changing homes.

Edit: it was actually the Taxpayer Relief Act of 1997 that made those changes

Go to a tax service.

jrp wrote:
Hard to guide you to the right forms or give you advice, without more specific questions.
Did you change your state of domicile when you started fulltiming?
If you still work fulltime, did you track your earnings/wages by the states you worked in?

As far as the house sale, read Publication 523, You'll be happy to learn that unless you made more than $500,000 (married)/$250,000 (single), your capital gain from the home sale is tax exempt, provided this home was your principal residence for at least 2 of the last 5 yrs.

As far as using a tax "Pro" most are over rated in my experience, especially those at H&R Block. Unless you failed high school math, TurboTax leads you through it step by step. In any case its up to you to have the receipts or backup docs for whatever deductions and/or exemptions you claim.

If I am not mistaken isnt that tax exemption for capital gains ONLY if you re-invest the money from the sale in another house you will occupy?? I'd check that out.

paulcardoza wrote:
Are you really going to follow Income Tax advice from a FREE Internet Forum? Go see an CPA! Especially with the sale of your home to deal with.

WandaWagon wrote:
Any help out there would be appreciated. I am currently traveling full time with my family for a year now. We sold our house LAST year and bought a fifth wheel and truck to start our adventure. We are living in it full time. I am still working full time and this will be the first year for tax time to fill out without owning a home. If anyone would mind steering me to the appropriate forms or even giving me some advice I would greatly appreciate your time. Thank you.

Actually, I used Turbo Tax when I sold my home. Turbo Tax handles the sale of the home easily and applies the tax-exempt law properly.
I paid no tax on the sale of my home.

paulcardoza wrote:
Are you really going to follow Income Tax advice from a FREE Internet Forum? Go see an CPA! Especially with the sale of your home to deal with.

There is nothing complicated about selling an house and reporting it. I have done it several times and never, ever had a problem. Since the gain on a home - not a flip house - is not taxed up to $250K for single ($500K - married) the house is just a yes we did, check here, nothing do, move on to the next form. Turbo Tax is an easy walk through and if you have all of the W-2s from the different states that you worked in, will let you know what state taxes you will need to file and how to do it.

Barb

Mike NW wrote:

jrp wrote:
Hard to guide you to the right forms or give you advice, without more specific questions.
Did you change your state of domicile when you started fulltiming?
If you still work fulltime, did you track your earnings/wages by the states you worked in?

As far as the house sale, read Publication 523, You'll be happy to learn that unless you made more than $500,000 (married)/$250,000 (single), your capital gain from the home sale is tax exempt, provided this home was your principal residence for at least 2 of the last 5 yrs.

Excellent points to consider. One other one may be that if you have any interest on your RV it would be considered deductible. I would think the biggest concern, based solely on what you have mentioned, is that you are continuing to work. Depending on which state you worked in you may have state income tax issues. In addition, the handling of the sale on your house may be different at the state level than the federal level. Check your state for specific reporting and tax implications of the sale of the house.

Also, if you're itemizing deductions in order to take advantage of the loan interest, also check the sales tax & personal property tax deductions. The sales tax paid on both purchases (5er & TV) can be added on top of the generic table amount generated by your tax software, and the new title, licensing and registration fees are also deductible.

{DISCLAIMER:} I am not a practicing CPA, but I have done all the above for years on our taxes without audit on these issues. Good luck!

Are you really going to follow Income Tax advice from a FREE Internet Forum? Go see an CPA! Especially with the sale of your home to deal with.

WandaWagon wrote:
Any help out there would be appreciated. I am currently traveling full time with my family for a year now. We sold our house LAST year and bought a fifth wheel and truck to start our adventure. We are living in it full time. I am still working full time and this will be the first year for tax time to fill out without owning a home. If anyone would mind steering me to the appropriate forms or even giving me some advice I would greatly appreciate your time. Thank you.