Tax return prep...

als1982 · January 2016

We like to get our tax return done as quickly as possible - as typically we are due a refund. In preparation to do so, I thought I'd start with a list now of documents we'll need to compile. What else am I forgetting? And how do you approach your tax return?

W-2s
Receipts for charitable deductions and in-kind donations
Mileage from volunteering
Vehicle registration, tags and taxes
Property taxes
Mortgage interest and points
Interest income earned
Retirement contributions
Student loan interest (un/fortunately we make too much to deduct)

Also, I could, but don't, receive mileage reimbursement for most of my work travel. Can I deduct that? Also, considering I have a typical professional role, are there any other work deductions I could report? I'm sure there are things we may not even know about that could help us get back more.

hoffse · January 2016

als1982 said:

We like to get our tax return done as quickly as possible - as typically we are due a refund. In preparation to do so, I thought I'd start with a list now of documents we'll need to compile. What else am I forgetting? And how do you approach your tax return?
W-2s
Receipts for charitable deductions and in-kind donations
Mileage from volunteering
Vehicle registration, tags and taxes
Property taxes
Mortgage interest and points
Interest income earned
Retirement contributions
Student loan interest (un/fortunately we make too much to deduct)
Also, I could, but don't, receive mileage reimbursement for most of my work travel. Can I deduct that? Also, considering I have a typical professional role, are there any other work deductions I could report? I'm sure there are things we may not even know about that could help us get back more.

You can, but I believe it's limited to the 2% AGI floor. In the future, you will be money ahead if you turn in your mileage for reimbursement. Most unreimbursed business expenses fall within this rule, and private employers generally get the full value of the deduction, while employees lose a little due to the AGI floor. Also, when you turn in reimbursements, you are getting a dollar-for-dollar value, rather than the value of your marginal tax rate.

I have found that for longer trips, it's often most cost effective to rent a car and then turn in your mileage. The mileage rates are pretty high (though they just dropped a little because of gas prices), and usually I end up being able to pay for the rental and my gas, I have a little extra in my pocket, and no extra miles on my car. I know a lot of people who do this.

Obviously you can't deduct things like professional clothing, etc. (I wish!). But you can typically deduct things like seminars, training, books, etc. that are for your professional development. It just depends on your role in the company, what those expenses actually were, and whether they would be considered "ordinary and necessary" for your current job. For example, if my employer wasn't reimbursing my LLM tuition, I would be able to deduct those expenses. And in fact, I could still deduct my textbooks since those are unreimbursed, but I will just barely exceed the 2% floor with them, so I'm probably not going to bother finding all the receipts. If you have specific things in mind, the IRS guidance on their website is very comprehensive.

As for the rest of your list, it looks good to me. TBH I just sort of add things into TurboTax as I get them in the mail. Then when I think everything is done, I do one last pass-through where the program takes me through the entire questionnaire to make sure I haven't missed anything.

**Obviously, not legal advice.

dragonstarjk · January 2016

I also like to get ours done as quickly as possible. I've used H&R Block online for the past several years and am very satisfied with it. I've actually already started ours; I had a baking business up until this past June so I've already got all the business items entered. Now I'm just waiting on W-2s, 1099s, etc.

I can't think of anything other than what you have mentioned. I'm sure others on here have more experience thinking of deductions, so I'll be interested in following the thread. We used to take a credit during the years when they were offering credits for energy-efficient home improvements, but I don't think that's offered any more?

hoffse · January 2016

Actually, I did think of one other thing - don't forget state tax refunds that you got in 2015 (if applicable). If you itemized last year, that's probably income to you for 2015, and most states do a better job reporting it to the feds than reporting it to you. It's an annoying thing to be audited over.

als1982 · January 2016

hoffse said:

als1982 said:

We like to get our tax return done as quickly as possible - as typically we are due a refund. In preparation to do so, I thought I'd start with a list now of documents we'll need to compile. What else am I forgetting? And how do you approach your tax return?
W-2s
Receipts for charitable deductions and in-kind donations
Mileage from volunteering
Vehicle registration, tags and taxes
Property taxes
Mortgage interest and points
Interest income earned
Retirement contributions
Student loan interest (un/fortunately we make too much to deduct)
Also, I could, but don't, receive mileage reimbursement for most of my work travel. Can I deduct that? Also, considering I have a typical professional role, are there any other work deductions I could report? I'm sure there are things we may not even know about that could help us get back more.

You can, but I believe it's limited to the 2% AGI floor. In the future, you will be money ahead if you turn in your mileage for reimbursement. Most unreimbursed business expenses fall within this rule, and private employers generally get the full value of the deduction, while employees lose a little due to the AGI floor. Also, when you turn in reimbursements, you are getting a dollar-for-dollar value, rather than the value of your marginal tax rate.

I have found that for longer trips, it's often most cost effective to rent a car and then turn in your mileage. The mileage rates are pretty high (though they just dropped a little because of gas prices), and usually I end up being able to pay for the rental and my gas, I have a little extra in my pocket, and no extra miles on my car. I know a lot of people who do this.

Obviously you can't deduct things like professional clothing, etc. (I wish!). But you can typically deduct things like seminars, training, books, etc. that are for your professional development. It just depends on your role in the company, what those expenses actually were, and whether they would be considered "ordinary and necessary" for your current job. For example, if my employer wasn't reimbursing my LLM tuition, I would be able to deduct those expenses. And in fact, I could still deduct my textbooks since those are unreimbursed, but I will just barely exceed the 2% floor with them, so I'm probably not going to bother finding all the receipts. If you have specific things in mind, the IRS guidance on their website is very comprehensive.

As for the rest of your list, it looks good to me. TBH I just sort of add things into TurboTax as I get them in the mail. Then when I think everything is done, I do one last pass-through where the program takes me through the entire questionnaire to make sure I haven't missed anything.

**Obviously, not legal advice.

Thanks @hoffse! I do report any long trips (which would just be one or two a year at approximately 300 miles round trip), but anything less than 20 miles or so (most of the work driving I do) is just too big of a hassle and time suck to report. Even my assistant's time is much better spent on other things! And my car already has 205,000 miles on it, so I'm not exactly worried about adding a few hundred more!!

als1982 · January 2016

hoffse said:
Actually, I did think of one other thing - don't forget state tax refunds that you got in 2015 (if applicable). If you itemized last year, that's probably income to you for 2015, and most states do a better job reporting it to the feds than reporting it to you. It's an annoying thing to be audited over.

Good call. I always forget this!! And an extra pain because we have two states to report.

smerka · January 2016

Form 1095 A, B, or C. This is the proof of medical coverage for Obamacare. If you get your insurance through the marketplace you have to wait for the 1095A. If through your employer or the state, 1095B or C. They don't have to have them out until March 31 so you can file without them, but if you have it, put the info in the software

smerka · January 2016

Other things that typically go on that 2% threshold line... Union dues, uniforms or boots, tools, licenses, subscriptions, safe deposit boxes of used for investments, prior year tax prep fees. Ask your tax pro or check IRS website. Pub 17 is pretty helpful

als1982 · January 2016

Also, FYI for you points and mile collectors, the last two years, Southwest has offered 1,000 mile bonus for filing via Turbo Tax online through their portal. We've been able to redeem it even using a coupon code not listed on the portal home page. Other airlines may offer this as well, and I wouldn't be surprised if you could find something similar for H&R Block. Just a little bonus for something you have to do anyways!!

jtmh2012 · January 2016

I'm jealous of those who can file early. Due to all of our various investments, we're always into March before I have all the forms we need.

hoffse · January 2016

jtmh2012 said:

I'm jealous of those who can file early. Due to all of our various investments, we're always into March before I have all the forms we need.

We're probably going to be filing in March this year too. We had to do a Roth conversion for the first time this year, and I need certain info on the form just for reporting purposes. I figured out how to do the financial reporting of it on TurboTax already, but they ask for some codes, etc. that I don't have yet.

I'm going to have the income/deductions entered before then though, just to make sure we don't owe.

hoffse · January 2016

als1982 said:

Also, FYI for you points and mile collectors, the last two years, Southwest has offered 1,000 mile bonus for filing via Turbo Tax online through their portal. We've been able to redeem it even using a coupon code not listed on the portal home page. Other airlines may offer this as well, and I wouldn't be surprised if you could find something similar for H&R Block. Just a little bonus for something you have to do anyways!!

Good tip! We're probably going to move some points from Chase to SW later on this year, so I will check this out.

brij2006 · January 2016

Another item, if you have had medical expenses that are more than 10% of your AGI, you can write those off as well.

So for us, we had DD this year. So I went through and added up all of the expenses from her birth. I also have to pay for her health insurance after taxes, so we are able to deduct that as well. The number is sickening.

vlagrl29 · January 2016

We will be doing ours in Feb. I've dedicated this month for deep cleaning and organizing the house. I still need to get my 1099s out to my string players.

Xstatic3333 · January 2016

jtmh2012 said:
I'm jealous of those who can file early. Due to all of our various investments, we're always into March before I have all the forms we need.

Same. I sold some stock at the beginning of the year so we are definitely looking at March.

@als1982, for what it's worth, with a fuel efficient car I find I come out way ahead with the federal mileage reimbursements, even accounting for wear and tear. A few miles here and there really adds up quickly.

hoffse · January 2016

Side note... I just got my W2, and my LLM reimbursements were indeed tax free! I'm so excited. That's how they should have treated them, but I wasn't positive they would do it correctly.

That just saved me 1) fighting with them about it and/or 2) $4,000 in taxes.

Win.

Now I can finally buy a couch, lol.

smerka · January 2016

brij2006 said:
Another item, if you have had medical expenses that are more than 10% of your AGI, you can write those off as well.
So for us, we had DD this year. So I went through and added up all of the expenses from her birth. I also have to pay for her health insurance after taxes, so we are able to deduct that as well. The number is sickening.

Don't forget to include medical miles, parking, and tolls

brij2006 · January 2016

smerka said:

Another item, if you have had medical expenses that are more than 10% of your AGI, you can write those off as well.
So for us, we had DD this year. So I went through and added up all of the expenses from her birth. I also have to pay for her health insurance after taxes, so we are able to deduct that as well. The number is sickening.
Don't forget to include medical miles, parking, and tolls

Seriously? I didn't know you could do that. Our OB and hospital are an hour away, and so is DD's pediatrician.

smerka · January 2016

Yep. It is only 23 cents a mile though not the 57.5 for business miles

Xstatic3333 · January 2016

smerka said:
Yep. It is only 23 cents a mile though not the 57.5 for business miles

Now $0.54

Good to know about the medical miles. That hadn't occurred to me at all.

als1982 · January 2016

Xstatic3333 said:

jtmh2012 said:
I'm jealous of those who can file early. Due to all of our various investments, we're always into March before I have all the forms we need.
Same. I sold some stock at the beginning of the year so we are definitely looking at March.

@als1982, for what it's worth, with a fuel efficient car I find I come out way ahead with the federal mileage reimbursements, even accounting for wear and tear. A few miles here and there really adds up quickly.

Yeah, it's more the PITA online entry process, the travel details required and the multiple layers of approval that deter me from requesting small amounts. Working for a big organization has lots of great benefits but things like this are a nightmare - don't even get me started on the craziness related to the actual booking of flights, hotels or paying for conference fees. It's insanity!

Xstatic3333 · January 2016

als1982 said:

Xstatic3333 said:

jtmh2012 said:
I'm jealous of those who can file early. Due to all of our various investments, we're always into March before I have all the forms we need.
Same. I sold some stock at the beginning of the year so we are definitely looking at March.

@als1982, for what it's worth, with a fuel efficient car I find I come out way ahead with the federal mileage reimbursements, even accounting for wear and tear. A few miles here and there really adds up quickly.
Yeah, it's more the PITA online entry process, the travel details required and the multiple layers of approval that deter me from requesting small amounts. Working for a big organization has lots of great benefits but things like this are a nightmare - don't even get me started on the craziness related to the actual booking of flights, hotels or paying for conference fees. It's insanity!

Ugh, that sounds like a pain. Very understandable. It's nice when there's no HR and your boss is a good delegator.

short+sassy · January 2016

als1982 said:

I'm jealous of those who can file early. Due to all of our various investments, we're always into March before I have all the forms we need.
Same. I sold some stock at the beginning of the year so we are definitely looking at March. @als1982, for what it's worth, with a fuel efficient car I find I come out way ahead with the federal mileage reimbursements, even accounting for wear and tear. A few miles here and there really adds up quickly.
Yeah, it's more the PITA online entry process, the travel details required and the multiple layers of approval that deter me from requesting small amounts. Working for a big organization has lots of great benefits but things like this are a nightmare - don't even get me started on the craziness related to the actual booking of flights, hotels or paying for conference fees. It's insanity!

Lame! There is no excuse for that. I have filled out more expense reports than I could ever count, for both myself and other people, for a variety of companies. None of them were complicated at all for just mileage (or even most things). Though, typically, there was only one layer of approval.

The most complicated thing I ever ran into was how to treat per diems when I had employees who traveled over the international dateline. Oh yeah. And that was the same company that required me to manually calculate the person's expenses on each day, for that specific date's exchange rate. Nothing like looking up three weeks of historical exchange rate data. Good times, good times, lol.

brij2006 · January 2016

smerka said:

Yep. It is only 23 cents a mile though not the 57.5 for business miles

Wish I would have known about that during all of our fertility appointments. Our expenses never added up to 10% of our AGI but were always close. That probably would have bumped us to the threshold. Oh well.

smerka · January 2016

brij2006 said:

smerka said:

Yep. It is only 23 cents a mile though not the 57.5 for business miles

Wish I would have known about that during all of our fertility appointments. Our expenses never added up to 10% of our AGI but were always close. That probably would have bumped us to the threshold. Oh well.

You could run the numbers and see if it makes sense to file an amendment

brij2006 · January 2016

smerka said:

smerka said:

Yep. It is only 23 cents a mile though not the 57.5 for business miles

Wish I would have known about that during all of our fertility appointments. Our expenses never added up to 10% of our AGI but were always close. That probably would have bumped us to the threshold. Oh well.
You could run the numbers and see if it makes sense to file an amendment

*********************
I'm thinking 2013 would have been the only year it would have helped, but we were already at the max amount of deductions would could take anyways.
May have to look and double check when I get home.

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