Income tax questions-deductions, mortgage interest, etc - Chicagoland Sportbikes
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post #1 of 13 (permalink) Old 10-19-2005, 01:04 PM Thread Starter
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Income tax questions-deductions, mortgage interest, etc

Ah, TAXES
Ok, so how do you file when you are married (spouse works) and have a kid?
-file separate and claim spouse and child as dependants
-file joint and the incomes will average out... or something???
-something else?
either way, does it make a big difference in what you get back compared to being single?

and what do you claim on W-4 as far as exemptions?

oh, and does deducting mortgage interest make a big difference in what you get back at the end of the year?

all this is new to me.
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post #2 of 13 (permalink) Old 10-19-2005, 01:15 PM
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Quote:
Originally Posted by ClevisR6
Ah, TAXES

oh, and does deducting mortgage interest make a big difference in what you get back at the end of the year?

all this is new to me.
Yes, HUGE difference
The rest is personal and you should work out in my opinion. Everyone does it different

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post #3 of 13 (permalink) Old 10-19-2005, 01:21 PM
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The Mortgage Interest and Property Tax deduction makes a HUGE difference!

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post #4 of 13 (permalink) Old 10-19-2005, 01:25 PM
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Quote:
Originally Posted by MrBusa
The Mortgage Interest and Property Tax deduction makes a HUGE difference!
let's put it like this...I claimed 0 for every year I rented. Every year, despite that, I STILL had to pay. As soon as I bought a place, I got money back. Even on my little house, it's a several thousand dollar deduction. It takes an extra 10 minutes to fill out that portion, but it's definately worth it.

You have two options, take the "standard" deduction or "itemize". With a house, it's definately worth itemizing, and any charity deductions can be claimed provided you have a receipt.

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post #5 of 13 (permalink) Old 10-19-2005, 01:27 PM
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Typically, you will get more back when married by filing jointly. Deduting mortgage interest and property is worth thousands! It's manditory and a major benefit of home ownership. I can make owning as cheap or cheaper than renting.

If in doubt, get a CPA. I don't touch my taxes.

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post #6 of 13 (permalink) Old 10-19-2005, 02:01 PM
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I'm not sure that you can claim your spouse as a dependent if they work.

Turbo Tax!!!!! It's easy and fast, you can file electronically and it's low on the radar.

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post #7 of 13 (permalink) Old 10-19-2005, 02:10 PM
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Married filing jointly is the best approach for almost all people. (It is better to file separately in a specific set of circumstances, such as if one spouse has medical bills over 7.5% of his/her income, and the other spouse does not)

Also, the mortgage income deduction is HUGE! Take how much you’re paying in interest for a year, and multiply it by your highest tax rate, and you’ll see how much you’ll save. (e.g. $15k interest * 31% tax bracket = $4650 less tax you have to pay!)
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post #8 of 13 (permalink) Old 10-19-2005, 02:33 PM
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I'm with Bruce, I wont go near my taxes, my account takes care of that. but yes homeownership is a huge deduction so is things you buy for work if they are non reimbursable. For example you have a company car that you have to pay toi get washed and the company doesnt reimburse you. thats all a write off. save your reciepts.




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post #9 of 13 (permalink) Old 10-19-2005, 02:34 PM
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Quote:
Originally Posted by Blade Runner
If in doubt, get a CPA. I don't touch my taxes.
It must be stated that Blade here owns his own business. His situation is WAY more complex than the average family's.

Can Turbo-Tax determine which method is best for filing? . I've never used it, it would save me some time but I can do all my taxes in a couple hours anyways..which means I'm probably missing out on some stuff. Big advantage to Turbo-Tax/other software is that it does the math for you. Biggest reason people get audited are math errors.

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post #10 of 13 (permalink) Old 10-19-2005, 02:52 PM
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Quick answers, but not tax advice... (see a professional)

Married filing jointly is almost always best. By the way, it is more expensive than being single. Standard child deductions are taken.

Mortgage Deduction - Be sure to itemize, it is HUGE, and the best place to get money back on the deductions for almost everyone. Married or Single.

W-4 - It all depends on your preference. If you are a saver, have them deduct less. If you are a spender, have them deduct more. That is the general rule of thumb. Tax witholding is significantly different for each person, the 0,1,2 options make a significant effect on what gets withheld. Unfortunately, the best solution is to see what happened last year and adjust up and down to see what keeps you closest to even money at filing time.

Turbo-Tax - Yes, you can do what ifs to see what is the best filing method in many personal tax applications.

Just my thoughts, I am NOT a CPA, so use this as more opinion than solution for yourself. It may help with some of the issues to be concerned with.

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post #11 of 13 (permalink) Old 10-19-2005, 02:55 PM
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Turbo tax is an option. Although its not perfect depending on how confusing your situation is. If you have a lot of business expenses it can miss some stuff. but for the average easy filing I hear its great. We tried it with turbo tax last year and then gave up and called the accountant.



BTW I need all of your social security numbers so I can claim all of you as dependants of the site




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Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.

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post #12 of 13 (permalink) Old 10-19-2005, 03:16 PM
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My partner is an ornery cheap cuss. He uses TurboTax too and is happy with it. It's more than powerful enough for 90% of the folks out there.

Grover is right, I have some odd business/personal stuff beyond my partner so I pretty much need a CPA. Plus I bury my personal tax return costs in with the corp stuff and write his fees off. A free CPA is the best option.

There is nothing firm, nothing balanced, nothing durable in all the universe. Nothing remains in its original state, each day, each hour, each moment, there is change. Change is the essence of life. Embrace change as you do life. To fight change is to live in the past.
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post #13 of 13 (permalink) Old 10-19-2005, 03:37 PM
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Dont forget, there are different versions of turbo tax. If you do side work, and have lots o business expenses, get the "premier" one.

As far as marrried filing jointly or seperately, it depends on the type of work your spouse does and if there are lots of other itemized duductions related to it.

Typically married filing jointly, and itemizing all your deductions will get you more dough back. Be careful claiming the home office, the depreciation is hard to keep track of over multiple years as the tax laws keep changing in regards to that deduction.

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