Transcript: Q&A with IRS tax experts

Welcome to today's live chat with IRS tax experts. Joining us for today's 2 hour chat are:

by Debbie Kornmiller 2/7/2013 5:32:18 PM

• Olivia Wells, Revenue Agent, Tucson IRS Office. Olivia Wells began her career with the IRS in 2008 as a Revenue Agent in the Small Business/Self Employed Division. Prior to her work at the IRS, she worked as an accountant at a variety of Tucson-based businesses. Olivia has a bachelor's degree in Accounting from the University of Phoenix.

by Debbie Kornmiller 2/7/2013 5:32:22 PM

• Ted Spencer is a Supervisory Revenue Agent in Tucson. He has been with the IRS for 25 years, mostly in the Los Angeles area, and attended Pomona College in Claremont, CA.

by Debbie Kornmiller 2/7/2013 5:32:24 PM

• Ruth Richard-Mahoney, Senior Individual Tax Advisory Specialist. Ruth attended
New Hampshire College for business and accounting and has worked with the IRS for 25 years. She transplanted to the warmer weather of Arizona 12 years ago from New Hampshire.

by Debbie Kornmiller edited by Samantha Munsey, StarNet 2/7/2013 5:32:29 PM

• Hilda Howard has been with the IRS for 5 years. For the last three years, she has been a Revenue Agent in Tucson.

by Debbie Kornmiller 2/7/2013 5:32:32 PM

• Bill Brunson has worked for the IRS in Phoenix all of his IRS career, since 1986. His current position is media relations … and on occasion, he acts as the IRS spokesperson for Arizona, New Mexico and Utah. He is a graduate of ASU, College of Business, with a B.S. in Business Administration.

by Debbie Kornmiller 2/7/2013 5:32:33 PM

Return accepted 1/23/13. As of Sat the bar disapeared and now it says its is till being processed. Wondering if this is due to an error on my part and when I can expect an update?

by CaseySC 2/7/2013 5:51:53 PM

Casey, The e-file application did not start accepting returns until 1/30/2013. Your return may have been held in your software providers queue, pending the first acceptance of the returns for processing. You can check the status of the return at irs.gov "Where's my Refund" or with the 'App" IRS2Go. The information updates 1 time every 24 hours. If the return is not in 'processing' on the IRS application, then you should call your e-file provider to see if it is a software issue.

by Ruth Richard-Mahoney 2/7/2013 5:51:57 PM

MOVING EXPENSE QUESTION: 2012 NON RES IN STATE A, TOOK A JOB IN STATE B (OCT 2012). MOVED CLOTHES INTO TEMP APT. NO RES STATE B FOR 2012. PLANNING TO BEMOCE A RESIDENT IN STATE B THIS MONTH.

by GB 2/7/2013 5:52:39 PM

It appears that you are satisfied that you satisfy the Sec 217 deduction for moving expenses, but are concerned about the year deductible. The closest factor is your residence, which you say was not until 2013.

by Ted Spencer 2/7/2013 5:52:46 PM

I am 69.5 Y.O. Can I still take ira distribution for 2012 ?

by Dave Naas 2/7/2013 5:53:21 PM

Whenever you turn 70.5 years old in 2013, however, you can take a disribution now without a penalty.

by Hilda Howard 2/7/2013 5:53:24 PM

when when when will returns with form 8863 begin processing??

by Jacqueline D 2/7/2013 5:53:54 PM

Jacqueline, Form 8863 for Education Credits cannot be processed until after the middle of February due to revisions being made. Unfortunately we do not have a specific date but you may check www.irs.gov for updates.

by Olivia Wells 2/7/2013 5:53:58 PM

Are sales taxes deductible?

by zac 2/7/2013 5:54:53 PM

Hello Zac, sales taxes are deductible if you itemize on Form 1040, Schedule A. However, you have to take the income tax deduction or the sales tax deduction based on the tables available, not both.

by Hilda Howard 2/7/2013 5:54:56 PM

Hello, thanks for this service. My father died almost 30 years ago. My two sisters and I discovered at the beginning of 2012 he had stock worth $45,000. Mid 2012 I had a third of the stock taken out of my fathers name and put into mine ($15,00) my sisters did the same. Last year I filed a 1099_Div as the dividends of this stock have been reinvested over the life of the stock. I will continue claiming 1099 of course, my question is what is my liability when i withdraw from the account.

by Dean 2/7/2013 5:59:19 PM

Dean, who is the current owner of the stock? If your father passed 30 years ago, there would have been a transfer to either the estate or the beneficiary.

by Bill Brunson 2/7/2013 5:59:28 PM

Terry, we answered a question similar to yours just moments ago. Please see response to Jacqueline's question below.

by Olivia Wells 2/7/2013 6:00:52 PM

Is it okay to use only $1000. of my tax-loss carry forward instead of the stated $3000. which will eliminate my tax obligation?

by Elmer.H 2/7/2013 6:03:04 PM

Elmer, The capital gains loss carryover deduction is figured using the worksheet in the 1040 instructions. The worksheet will use the entire 3,000.00 loss carryover. You cannot limit the amount to 1,000.00 based on you tax liability.

by Ruth Richard-Mahoney 2/7/2013 6:03:12 PM

Dean, what is your tax question? Have you sold any of it?

by Bill Brunson 2/7/2013 6:03:49 PM

It was transferred in each of our names last year. We had no idea about the stock until then. My uncle discovered it on a fluke.

by Dean 2/7/2013 6:03:56 PM

Hello. I have been the head of household for years. My girlfriend and I have 3 boys, my wife began working this past year. Friends are recommending we file jointly. I'm clueless as to how to file this year. Any info would be appreciated.

by Antonio 2/7/2013 6:04:10 PM

Antonio, you situation may best require an analysis of both options side by side. You may elect to file jointly with your wife which, if you also qualify for the dependent deductions of your children, will most likely yield the lowest overall tax.

by Ted Spencer 2/7/2013 6:04:16 PM

For those of us who filed with education credits, is it safe to say that processing should begin next week since it will be mid-February?

by Cassandra 2/7/2013 6:08:04 PM

Cassandra, the American Opportunity Tax Credit and the Lifetime Learning Credit are the only two educational credits affected by this delay. No specific date has been designated. Updated information will be posted on IRS.gov. We apologize for the delay.

by Bill Brunson 2/7/2013 6:08:16 PM

If I itemize can I write off the cost for my Humana drug coverage?

by Steve 2/7/2013 6:08:26 PM

Steve, You should only itemize if your Sch A total exceeds the standard deduction for your filing status and age. Medical Deductions on the Sch A are limited to 7.5% of your adjusted gross income. Although the premiums you pay for your drug coverage are an allowable medical expense the total of all your medical expenses would need to exceed 7.5% of your adjusted gross income before you would receive a tax benefit.

by Ruth Richard-Mahoney 2/7/2013 6:08:31 PM

Re: Deduction for vehicle expense, employer pays what they call a vehicle allowance that is included in biweekly paychecks it is taxed income and is included in box 1 on the W-2 form they have the employee use a gas card for fuel expense which the employer pays. When taken the deduction for vehicle expense using form 2106 states not to include any amount reported in box 1 of W-2 so is only the total they paid for gas considered a covered expense?

by Lynette 2/7/2013 6:08:46 PM

Lynette, Vehicle allowances included in your wages are generally based on the type of arrangement you have with your employer. Reimbursements are generally not included in your income and also not deductible (this is an accountable plan). If you are receiving a general allowance which does not reimburse you for your expenses (non-accountable plan), these expenses are generally deductible as an itemized deduction using Form 2106

by Olivia Wells 2/7/2013 6:08:59 PM

Dave, thank you for your patience, there is no penalty to take the distribution, but yes, the distribution would be taxable unless there was tax paid on a portion of that pool.

by Hilda Howard 2/7/2013 6:10:20 PM

Bill we must be having connection issues. My question is...Do I owe taxes on the dividends earned while the stock was in my fathers name.

by Dean 2/7/2013 6:12:11 PM

Dean, any growth on the account is reportable and potentially taxable.

by Bill Brunson 2/7/2013 6:12:17 PM

My wife has an income of about $50,000. I have an income of about $40,000. How do I decide if it is better to file individually or jointly?

by Allen Rubiner 2/7/2013 6:12:21 PM

Allen, tax rates are generally more favorable to married taxpayers filing a joint return. You may consider filing separate returns if you want to be responsible for your own tax liabilities you may file separately. Arizona is a community property state so there are additional rules when considering filing separately. Check www.irs.gov for Publication 555 for a worksheet to help you determine which filing status is more advantageous for you

by Olivia Wells 2/7/2013 6:12:28 PM

Daniel, please refer to Pub 4681. You reference several possible issues that need consideration.

by Ted Spencer 2/7/2013 6:13:07 PM

what if i get a 1099 misc and i have no expenses?

by tucson 2/7/2013 6:14:35 PM

Tucson, you can use the Sch C-EZ with the 1040. If you use the cash method of accounting, do not have inventory and do not have a loss. The income you earned on the 1099-Misc will be subject to income tax and social security and medicare tax if the amount was reported in box 7.

by Ruth Richard-Mahoney 2/7/2013 6:14:45 PM

I ve been claiming my son using his tax ID # for years before he got his social security #, how far back in years should I go back to plug in my son's social security # in order to get proper refund?

by judy 2/7/2013 6:14:56 PM

Judy, the time to amend a return within 3 years from the time the return was filed or 2 years from the time tax was paid if that was the case.

by Olivia Wells 2/7/2013 6:15:24 PM

I received a 1099G from the Arizona Dept of Revenue for 2011 which was for the 2012 return. We received the refund last March and then, of course, got this 1099G. We have always received a refund from the state but have never received a 1099G before. In the explanation it says " It may be taxablw ro you if you deducted the state or local income tax paid in 2012 on Schedule A (form 1040). How do I proceed when I file for 2012 taxes?

by Elaine Gleason 2/7/2013 6:18:32 PM

Elaine, The 1099-G from the state of Arizona is only going to be reported on your income tax if you took a deduction for income state taxes paid on your sch A in 2011. If you did not itemize you do not need to report the refund, if you took a deduction for AZ sales tax or income tax on the Sch A last year there is a worksheet for you to complete in the instructions to determine if a part of the refund would be considered taxable.

by Ruth Richard-Mahoney 2/7/2013 6:18:46 PM

I am executor of an small value estate not requiring probate. Do I need to apply for an EIN for the estate and submit Form 56 to the IRS?

by Dwight Baum 2/7/2013 6:23:00 PM

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