The IRS Deductions Blog

Posts Tagged ‘dependents’

Question: tax question for standard deduction?

Martin, a 50-year-old single taxpayer, paid the full cost of maintaining his dependent mother in a home for the aged for the entire year. What is the amount of Martin’s standard deduction for 2008?

a. $5,450

b. $8,000

c. $9,050

d. $10,400

e. None of the above

Answer: I think you should probably do your own homework. If you’re taking a test, you’re supposed to KNOW this stuff in order to pass your test.

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Question: Estimated tax: I am on a 1099 but my calculation shows I do not have to pay estd quarterly tax by 9/15/10?

I just filled in the 1040 ES (Estimated Tax for Individuals) form and Worksheet 2-2 (2010 Estimated Tax Worksheet) in Pub 505. My SE tax (@ 15.3% of income minus expenses) came out to be a positive number. One half of this is credit to reduce my family AGI (My wife is on a W2 and we are filing jointly). When I fill in 1040 ES, I reduce Income by standard deduction of 11.4K and 14.6K of dependent exemption and One-half of SE tax, and based on the 2010 tax rate, I get a tax number.

When I add my SE tax to this tax, I get a total estimated tax, say XX for 2010. However in 2009 my wife’s company withheld more than our 2009 tax and we got back money, though this withholding is less than XX (2010 estimated tax). This is resulting according to the rules in 1040 ES, in my not having to pay any quarterly tax, because my wife’s company withheld an amount greater than 2009 tax. Can this happen, despite the fact that I am on a 1099 and our 2010 estimated tax is greater than our 2009 tax paid?

Answer: Yes.

If you file jointly, the safe harbors are 2010 withholding MORE than 100 or 110% of 2009 liability; or 2010 withholding MORE than 90% of 2010 liability; or owing less than $1000.

Where you will go nuts is when your income drops.

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This is a Center for Data Analysis Report On Economy

Abstract: The number of Americans who pay taxes continues to shrink—and the United States is close to the point at which half of the population will not pay taxes for government benefits they receive.

Question: Dependent Care pre-tax deduction max 5k or 2.5k for divorced parent?

Curious, My “X” is primary custodian (big surprise in this legal system). Is my “X” able to deduct upto 5k or is it only 2.5k?

I thought married couple could do 5k, but solo parental units where 2.5k…which of course I’d do the same..and enjoy reducing my income by the 2.5k as well for our son

BTW. we have a good working relationship in his regards and he is the best thing ever..in my life

I’m just trying to maximize irs Tax Deductions. etc

Answer: You aren’t going to like the answer. To verify it, read chapter 32, child and dependent care credit, in IRS Publication 17. You can download it at irs.gov

Only the custodial parent can take the child care credit. There is no splitting of the credit between the parents, and the non-custodial parent can’t take the credit even if he (or she) is allowed to claim the child that year as a dependent.

But congratulations on putting the child first, and keeping up as good a relationship as possible for his sake.

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Taxpayers Will See Relief By Way of Inflation-Adjusted Indexing, But Total Tax Impact Remains Unclear, CCH Says

Taxpayers stuck in the current economic downturn will get at least some relief in 2011 thanks to the mandatory upward inflation-adjustments called for under the tax code, according to CCH, which today released estimated income ranges for each 2011 tax bracket.

How to Save Money With Frequently Missed Tax Deductions

Question: Why do I owe 2009 tax?

I just found out that I owe IRS $5K for year 2009. Last year I got refund $2K. My husband and I claim zero exemption. Why I still owe 2009 tax? How can I avoid and reduce owing tax FY 2010? For both Year 2008 and 2009, we have W-2, $200 interest income, no mortgage, no kids. Nothing changed. Below are tax info of year 2008 and 2009. Please help.

Year 2009
zero exemption
Status: MFJ
No dependent
Gross income 108,615
Standard deduction 11,400
exemption 7,300
taxable income 89,391
Total tax 14,719
Total payment 9,885
Amount owe 4,834

Year 2008
zero exemption
Status: MFJ
No dependent
Gross income 31,653
Standard deduction 10,900
exemption 7,000
taxable income 28,194
Total tax 0
Total payment 2,344
Federal refund 2,344

Thank you.

Answer: I would suspect it has something to do with Obama’s new tax laws but…..Seriously when you make 100k you can afford to hire a professional to do your taxes and answer your tax questions I would not rely on the info you get on yahoo answers..

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State releases details on 2010 tax brackets

The state Franchise Tax Board on Monday released its 2010 income tax brackets, adjusted to reflect recent changes in the California Consumer Price Index.

The Law Show With Brian Dailey – Tax Deductions, Dependents