Tax Season is upon us! Ask me Whatever!

UberTaxPro

Well-Known Member
Sponsor
That was the root of my question. If I pay somebody to prepare my tax forms, how do I determine the percentage of that fee that is considered to be related to my business? That is the question that I am trying to figure out.

UberTaxPro suggested to use percentage of total income that derives from Schedule C and apply that percentage to the tax preparation fee. That seemed reasonable at first glance, but what if Schedule C shows a net loss?
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Last year I paid UberTaxPro to prepare them. This year I am preparing them myself.
To use the % of income with a loss I would just calculate as if the negative loss was a positive #. It's just as much work to calculate the loss vs income. Alternatively, you can always ask the tax preparer to itemize your invoice by personal & business.
 

Launchpad McQuack

Well-Known Member
To use the % of income with a loss I would just calculate as if the negative loss was a positive #. It's just as much work to calculate the loss vs income. Alternatively, you can always ask the tax preparer to itemize your invoice by personal & business.

Thanks for the advice.

I'm looking at the 1095-A that I got from the Health Insurance Marketplace. It seems straightforward enough, but the monthly premium that is listed in the table is slightly different from the monthly payment that I made to the insurance company. It is a small difference.......only about $1.50 per month, but it seems odd to me that the numbers would not be the same.

Is there a legitimate reason why the monthly premium reported on Form 1095-A would be a little less than the monthly payment made to the insurance company? Is there a portion of that payment that is not considered to be an insurance payment?
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Is there a portion of that payment that is not considered to be an insurance payment?

I looked at one my insurance bills to see if the bill is itemized and part of the payment is going toward something other than the insurance premium. There is only one item listed on the bill, though. It is called "Premium Amount" or "Member Premium Responsibility" (it is listed in two different places), and it is the same amount as the total bill.
 
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Launchpad McQuack

Well-Known Member
I found this.


It doesn't necessarily apply to me because I don't live in New York, but this section seems like it could be universally applicable.

Linked Web Site said:
6. Why does the monthly premium amount on Form 1095-A not match the premium amount I see in my account or the bill I received from my health plan?

Federal regulations permit (A)PTC to be used only for benefits that are considered Essential Health Benefits (EHB) and may not be usef or benefits that are not EHB. Because the Form 1095-A provides information needed to claim the PTC or reconcile the APTC, the form only includes the share of premiums that cover EHB, which may or may not reflect the monthly premium amount that you paid. Please also note that if you were enrolled in a stand-alone dental plan, the portion of your dental coverage premium that covers pediatric dental, which is considered EHB, not just the premium for your medical health plan will be included in your monthly premium amount.

Some health plans only include EHB and some plans have additional benefits (such as acupuncture).


So I am guessing that my health insurance includes some very minor benefit that is not considered EHB (maybe acupuncture, like the example in the quoted text), and that is why my 1095-A does not match the monthly premiums that I pay.

Question: It says that the reason this amount is reported on 1095-A is because this is the amount that is used to compute the amount of the Premium Tax Credit (PTC) if you are eligible for it. For the Self-Employed Health Insurance Deduction, though, do you also have to use the amount on the 1095-A, or can you use the actual premiums that you paid?

For my specific case, the difference is so minor ($18 for the year) that I am just going to use the amount on the 1095-A to avoid raising questions. The benefit of claiming the extra amount isn't worth the possible scrutiny that it brings, but I would like to know what is allowed going forward.
 

islanddriver

Well-Known Member
To use the % of income with a loss I would just calculate as if the negative loss was a positive #. It's just as much work to calculate the loss vs income. Alternatively, you can always ask the tax preparer to itemize your invoice by personal & business.
use the % of the gross income you put on your schedule C versus you other gross income example interest, w2 wages etc.
 

x100

Well-Known Member
Here's a tricky one and may be out of scope of your offer here. Driver's new wife and child are overseas, he has initiated paperwork to naturalize them recently so he doesn't have SSN for them yet. With IRS's deadline approaching for Pandemic benefits, can he still collect for them in time or buy time to do so? He's filed as head of household, mentioning the two dependents and mentioning N/A where it requests for SSN for them.

He's chosen to play it safe due to Corona and bring them over when it's all settled more or less.
 

Launchpad McQuack

Well-Known Member
Alternatively, you can always ask the tax preparer to itemize your invoice by personal & business.

I often find that I don't know when to ask for invoices to be itemized or how to ask for them to be itemized.

Another example, again concerning what I paid you for tax return preparation and filing. I am working on the portion of my state return where I have to figure up sales tax that I owe for Internet and out-of-state purchases where no sales tax was collected by the seller. I've been doing this long enough that I know to keep a list throughout the year any time I pay for something online. So I get to the line item on my list where I paid you for preparing my tax returns last year. Are tax preparation fees subject to sales tax? I don't know off the top of my head, but I suspect not. So I start going through the sales tax publications, and I find that tax preparation fees are exempt from sales tax.........but there is a catch. While the fee paid for preparation of a tax return is exempt from sales tax, any fees paid for electronic filing of the return are subject to sales tax. So I pull up your invoice, and it has one line item for "Preparation and filing of 2018 tax returns."

Any idea how to allocate the $160 that I paid you for "preparation and filing" between preparation and filing? I would prefer not to pay sales tax on the entire $160 if I can avoid it, but without a breakdown I'll probably have to bite the bullet and pay sales tax on the entire amount. I never would have thought to ask for that to be itemized on the invoice at the time.
 

UberTaxPro

Well-Known Member
Sponsor
I often find that I don't know when to ask for invoices to be itemized or how to ask for them to be itemized.

Another example, again concerning what I paid you for tax return preparation and filing. I am working on the portion of my state return where I have to figure up sales tax that I owe for Internet and out-of-state purchases where no sales tax was collected by the seller. I've been doing this long enough that I know to keep a list throughout the year any time I pay for something online. So I get to the line item on my list where I paid you for preparing my tax returns last year. Are tax preparation fees subject to sales tax? I don't know off the top of my head, but I suspect not. So I start going through the sales tax publications, and I find that tax preparation fees are exempt from sales tax.........but there is a catch. While the fee paid for preparation of a tax return is exempt from sales tax, any fees paid for electronic filing of the return are subject to sales tax. So I pull up your invoice, and it has one line item for "Preparation and filing of 2018 tax returns."

Any idea how to allocate the $160 that I paid you for "preparation and filing" between preparation and filing? I would prefer not to pay sales tax on the entire $160 if I can avoid it, but without a breakdown I'll probably have to bite the bullet and pay sales tax on the entire amount. I never would have thought to ask for that to be itemized on the invoice at the time.
I paid the electronic filing fee not you. I charged you for the service of preparing & filing the return. If you disagree and want to pay sales tax on the filing fee it was $72.
 

JD1

Active Member
Donald Trump deducted $70,000 worth of haircuts. He has proven to be quite a maverick when it comes to the tax code. I think we should all take note.

Though I don't spend nearly this amount, I kinda want the same deal. Nicely coiffed hair and skin are essential to my business success, so I should be able to deduct these as legitimate business expenses, no?

I also want this deal for clothing. My clothes are essential to my business success as a driver. Wearing professional attire is important for a quality product in my case.

Then also media. I watch a lot of tv. Movies too. Some of them feature amazing drivers. I actually learn a lot watching these movies and tv shows. How to drive, how to resolve conflicts. The Fast & Furious movies for example. Vin Diesel. He is actually quite the educator. Shouldn't I be able to deduct these media expenses as either reference material or educational media on my schedule C?

What is your opinion?
 

UberTaxPro

Well-Known Member
Sponsor
Donald Trump deducted $70,000 worth of haircuts. He has proven to be quite a maverick when it comes to the tax code. I think we should all take note.

Though I don't spend nearly this amount, I kinda want the same deal. Nicely coiffed hair and skin are essential to my business success, so I should be able to deduct these as legitimate business expenses, no?

I also want this deal for clothing. My clothes are essential to my business success as a driver. Wearing professional attire is important for a quality product in my case.

Then also media. I watch a lot of tv. Movies too. Some of them feature amazing drivers. I actually learn a lot watching these movies and tv shows. How to drive, how to resolve conflicts. The Fast & Furious movies for example. Vin Diesel. He is actually quite the educator. Shouldn't I be able to deduct these media expenses as either reference material or educational media on my schedule C?

What is your opinion?
Trump hasn't got the deal yet, he's under audit and a criminal investigation in NY involving his taxes. His "deal" might end up being with a sentencing judge. Besides all the haircuts, paying his kids as consultants and personal use of business property (same kind of issues the average real estate mogul might have) he's going to have to answer some questions about CONSERVATION EASEMENTS that might turn out to be his most valuable fraud.
https://www.ny1.com/nyc/all-borough...ump-s--21m-tax-break-for-westchester-property
 

JD1

Active Member
Trump hasn't got the deal yet, he's under audit and a criminal investigation in NY involving his taxes. His "deal" might end up being with a sentencing judge. Besides all the haircuts, paying his kids as consultants and personal use of business property (same kind of issues the average real estate mogul might have) he's going to have to answer some questions about CONSERVATION EASEMENTS that might turn out to be his most valuable fraud.
https://www.ny1.com/nyc/all-borough...ump-s--21m-tax-break-for-westchester-property

That conservation easement game is played all over NY, NJ and CT. Had clients in Colt's Neck, NJ who took a 400 acre property and turned the majority of it into a "Horse Farm", then parked their $130 million dollar mansion on the back, basically used thoroughbred business to shelter the majority of their assets. Having any kind of agriculture on your property was very helpful to avoid paying your fair share of the taxes, so all the big whigs in the area usually had some little side-hustle like that going on so they wouldn't have to pay the full monty.
 

UberTaxPro

Well-Known Member
Sponsor
That conservation easement game is played all over NY, NJ and CT. Had clients in Colt's Neck, NJ who took a 400 acre property and turned the majority of it into a "Horse Farm", then parked their $130 million dollar mansion on the back, basically used thoroughbred business to shelter the majority of their assets. Having any kind of agriculture on your property was very helpful to avoid paying your fair share of the taxes, so all the big whigs in the area usually had some little side-hustle like that going on so they wouldn't have to pay the full monty.
Also going on in other parts of the country I believe. The issue for the IRS is the "valuation" of the easements. Taxpayers arrive at the valuation on their own and it's up to the IRS to check in audits. That is part of what is going on with trump in NYS & I believe it involves more than just the one mentioned in the article here:
 

MUber26

New Member
I am a long-time member here and after last years extensive rideshare tax AMA I think it’s time to start anew. I'll do my best to help with your questions this year. Please be patient as I'll be working with one of the larger remote tax services this year and they are keeping me very busy. Thanks also to everyone else that pitches in with great answers!

If you need help preparing your taxes for 2019 please contact me here: UberTaxPro.com
IRS sent me an audit notice for 2018, drive for Uber in Texas and made 34k, drove 43k miles according to online miles and minus $11k Uber fees that Uber did not include on the 1099.
IRS rejected my mileage and Uber fees deductions and they proposes $8900 in tax plus penalties.
My CPA is responding to the audit by including detailed print out for 1800 rides which is 1800 print out because she said they do not accept the monthly or yearly summary on my Uber acoount.
In 2018 I did not use the miles app but in 2019 I started using Stride to log my miles.
I think there is a loophole for the required documents to show as proof of miles and the IRS is using it to audit the poor working people.
I made $23k after Uber fees, IRS wants $10k.
how is this fair? And I have to pay a $1000 to my CPA and her staff to help me.... My CPA thinks that they may accept the print outs or they may not.

If anyone went through the same thing please respond kindly, thanks 🙏
 

UberTaxPro

Well-Known Member
Sponsor
IRS sent me an audit notice for 2018, drive for Uber in Texas and made 34k, drove 43k miles according to online miles and minus $11k Uber fees that Uber did not include on the 1099.
IRS rejected my mileage and Uber fees deductions and they proposes $8900 in tax plus penalties.
My CPA is responding to the audit by including detailed print out for 1800 rides which is 1800 print out because she said they do not accept the monthly or yearly summary on my Uber acoount.
In 2018 I did not use the miles app but in 2019 I started using Stride to log my miles.
I think there is a loophole for the required documents to show as proof of miles and the IRS is using it to audit the poor working people.
I made $23k after Uber fees, IRS wants $10k.
how is this fair? And I have to pay a $1000 to my CPA and her staff to help me.... My CPA thinks that they may accept the print outs or they may not.

If anyone went through the same thing please respond kindly, thanks 🙏
you need a tax pro to represent or advice you with this, what is the 1K she's charging you for?
 
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