Friendly reminder regarding your next tax return

[Bert McMahan]

I hope this is the right forum for this.

If you have heard of it, the credit monitoring company Equifax was hacked recently, and the attackers got nearly half the US. I'm no expert here, but I have read that one of the attack vectors for identity theft is that someone will file a fake tax return in your name, attempting to get a refund.

One simple way to help with this (not a cure, but it helps) is to file your tax return as early as you can. Being as many people here run hobby businesses and/or are self employed, I thought I'd throw out a reminder- get started early on your tax return for 2017.

If you're like me, you wind up putting it off until March or April, where you panic and do it at the last minute :)

I know Christmas is a busy season for everyone, but it might not be a bad idea to start digging out your receipts and invoices for this year, then in January you can add December without too much trouble, and you can get your return in soon.

Good luck everyone, and have a great Christmas!

[Jim Koepke]

Fat chance for this year.

My taxes will be started early, but there is not much chance of a refund. We sold our house in California this year and there is likely to be a big Cap Gains hit due.

The hardest part is determining if there was a step up in value when my father gave us the property or if we will owe cap gains based on his purchase price. He and my mom bought the house in 1946. The house was about $8,000 back then and we sold for $225K.

Our other problem with doing taxes early is part of our income comes from a trust and the tax information doesn't have to be sent until sometime in February.

jtk

[George Bokros]

Fat chance for this year.

My taxes will be started early, but there is not much chance of a refund. We sold our house in California this year and there is likely to be a big Cap Gains hit due.

The hardest part is determining if there was a step up in value when my father gave us the property or if we will owe cap gains based on his purchase price. He and my mom bought the house in 1946. The house was about $8,000 back then and we sold for $225K.

Our other problem with doing taxes early is part of our income comes from a trust and the tax information doesn't have to be sent until sometime in February.

jtk

Per my search:

When you sell your primary residence, you can make up to $250,000 in profit if you're a single owner, twice that if you're married, and not owe any capital gains taxes. “Most people are not going to have a tax obligation unless their gain is huge,” says Robert Trinz, senior analyst with Thomson Reuters Checkpoint.

Also you need to have lived in the residence at least two of the last five years.

[Mark Bolton]

This is one of the benefits of being self employed. When they try to file a bogus claim on my behalf they will get hit with a huge bill LOL.

[Mark Bolton]

Fat chance for this year.

My taxes will be started early, but there is not much chance of a refund. We sold our house in California this year and there is likely to be a big Cap Gains hit due.

The hardest part is determining if there was a step up in value when my father gave us the property or if we will owe cap gains based on his purchase price. He and my mom bought the house in 1946. The house was about $8,000 back then and we sold for $225K.

Our other problem with doing taxes early is part of our income comes from a trust and the tax information doesn't have to be sent until sometime in February.

jtk

I think George hit the nail on the head. 225K regardless of when the property was assessed is going to leave you with zero cap gains. As I recall the assessed value is based on the value at the time of transfer not the original purchase price. Additionally I believe its something like 650K plus before you will even have to think about claiming an inheritance. Consult your accountant but I went through this several years ago with similar numbers (slightly higher) and zip.

[Jim Becker]

It sounds like the CA house isn't their primary residence; hence, the capital gains situation.
----

I tend to "prepare" our taxes reasonably early, but don't necessarily file until near the end. We never get refunds (on purpose...I'm not about to lend overwithheld income at zero percent interest) so filing early just isn't something I do. (yea, I could wait on the check, but...) Since Professor Dr. SWMBO and I both were affected by the OPM breach a few years ago, we have some pretty good monitoring of our credit situation and other PII. I'll do my girls taxes as soon as their W2s are issued since they both get refunds.

Taxes for 2018 will start to be different for me since I'll have to deal with my own "withholding" for any funds I withdraw from my retirement account now that I'm retired from full time work.

[Bruce Wrenn]

Being self employed, if my tax return comes in without a big check attached, the IRS will know it's a FAKE. Somebody explain to me exactly what a "refund" is, and how it works.

[glenn bradley]

I always file as soon as possible. They've had my money all year and haven't paid me a dime for the use of it. Why anyone would wait, even a day longer than they have to is beyond me. It kills me that give some institutions so long after Jan 1 to provide their info to you.

[Mark Bolton]

I always file as soon as possible. They've had my money all year and haven't paid me a dime for the use of it. Why anyone would wait, even a day longer than they have to is beyond me. It kills me that give some institutions so long after Jan 1 to provide their info to you.

If your paying in more than you should you should be adjusting your deductions and not give them the money in the first place. Its better to owe a small amount at year end as opposed to letting the have interest free money all year. The fault is on the taxpayer.

[Clint Baxter]

Fat chance for this year.

My taxes will be started early, but there is not much chance of a refund. We sold our house in California this year and there is likely to be a big Cap Gains hit due.

The hardest part is determining if there was a step up in value when my father gave us the property or if we will owe cap gains based on his purchase price. He and my mom bought the house in 1946. The house was about $8,000 back then and we sold for $225K.

Our other problem with doing taxes early is part of our income comes from a trust and the tax information doesn't have to be sent until sometime in February.

jtk

Your capital gain is figured by your selling price minus the basis. Basis on inherited items are the value of the property when it was inherited. i.e. if it was worth $200K when you inherited it, capital gain of only $25K.

Clint

[Andrew Kertesz]

Bruce: A refund is when you live on the government dole, ie: Medicaid, food stamps and all the other free programs when you don't want to work, have about 10 kids and then get 15K back from the government when you didn't pay one thin dime in taxes....LOL:D

[Myk Rian]

It sounds like the CA house isn't their primary residence; hence, the capital gains situation.
I was wondering why the "Primary residence" part got injected into the discussion.

[Jim Becker]

I was wondering why the "Primary residence" part got injected into the discussion.

Yup...it matters for tax purposes because the "exemption" is only for primary residence...

[Stephen Tashiro]

I hope this is the right forum for this.

If you have heard of it, the credit monitoring company Equifax was hacked recently, and the attackers got nearly half the US. I'm no expert here, but I have read that one of the attack vectors for identity theft is that someone will file a fake tax return in your name, attempting to get a refund.


While in the waiting room at the local HR Block office, I've twice overheard an exasperated customer being told that their tax return could not be filed because someone already filed a return in their name.

I don't recall what HR Block advised them to do about it. It was nothing that HR Block could help with.

[Clint Baxter]

While in the waiting room at the local HR Block office, I've twice overheard an exasperated customer being told that their tax return could not be filed because someone already filed a return in their name.

I don't recall what HR Block advised them to do about it. It was nothing that HR Block could help with.

You can always file your own return, just can’t e-file it. Refunds may be delayed as well. If a person wants to stop this before it can happen, you can get an Identity Protection PIN from the IRS. the IP PIN has to be provided with an e-filed return. However, once you get that PIN, from that point forward you’ll always have to use one. And you have to receive it each year from the IRS.

Clint

[John Cole]

Take heed folks, this is good advice. This happened to me 3 years ago and it took almost a year to resolve. It doesn't matter if you normally have to pay taxes they are filing a fraudulent return claiming a refund. The government sends out a check without any verification.
You are left to prove it was fraudulent.
File as early as possible!