Tax Time finally comes home.
Yesterday was Do-My-Daughter's-Income-Tax Day. Well, I planned on it being Do-Her-Taxes-In-2-Hours-And-Do-A-Bunch-Of-Other-Stuff-Too Day, but that didn't quite work out.
I knew her taxes were gonna be a bitch. She had a 1099 for her research work from this summer, with nothing withheld, not even Social Security and Medicare. AND she had international income. I figured ol' trusty TurboTax would come to my rescue and lead me through the mess. Hahahahaha! As they say, software is only as good as the knowledge of the persons designing AND using it.
This particular tax "expert" missed the fact that her research income was in box 3 of her 1099 ("Other income") rather than box 7 ("Nonemployee compensation"). I have received so many with box 7 entries, and typed so many with box 7 entries, I didn't SEE that my daughter's 1099 was different. She was the one to get on Google and figure out that this should be handled as scholarship income rather than as self-employment income or even as "other income". These distinctions make a huge difference when it comes to tax liability for a dependant student.
We had our most fun with the international income. This was TurboTax's bad, not mine. It would seem that wages earned in Canada should be entered in the W-2 area, checking the box for income earned in another country. However, that triggered Dreaded Form 2555 for exclusion of international income, for which my daughter did not qualify. The program could delete Form 2555, however, only by unchecking the box on the income entry that defined it as international. Check the international income box, and FAIL review because Form 2555 had not been completed. Delete Form 2555, and FAIL review because there was no US tax identification number for the employer. Well, d'oh, the employer was a Canadian university, of course it has no TIN!
We went around this circle several times, and then somehow, by a miracle, the return passed review. So I quick tried to file it electronically. TurboTax was happy about this, and very eager to take my money to e-file the NY state return. Then TT reviewed the return again. FAIL!
At this point, we decided to send the darn returns in the mail. I did call TurboTax, and I did get a refund of that electronic filing fee.
I'll be doing our personal taxes this week. Here's hoping that the only bad news at the end of that story will be how much money we owe.
I knew her taxes were gonna be a bitch. She had a 1099 for her research work from this summer, with nothing withheld, not even Social Security and Medicare. AND she had international income. I figured ol' trusty TurboTax would come to my rescue and lead me through the mess. Hahahahaha! As they say, software is only as good as the knowledge of the persons designing AND using it.
This particular tax "expert" missed the fact that her research income was in box 3 of her 1099 ("Other income") rather than box 7 ("Nonemployee compensation"). I have received so many with box 7 entries, and typed so many with box 7 entries, I didn't SEE that my daughter's 1099 was different. She was the one to get on Google and figure out that this should be handled as scholarship income rather than as self-employment income or even as "other income". These distinctions make a huge difference when it comes to tax liability for a dependant student.
We had our most fun with the international income. This was TurboTax's bad, not mine. It would seem that wages earned in Canada should be entered in the W-2 area, checking the box for income earned in another country. However, that triggered Dreaded Form 2555 for exclusion of international income, for which my daughter did not qualify. The program could delete Form 2555, however, only by unchecking the box on the income entry that defined it as international. Check the international income box, and FAIL review because Form 2555 had not been completed. Delete Form 2555, and FAIL review because there was no US tax identification number for the employer. Well, d'oh, the employer was a Canadian university, of course it has no TIN!
We went around this circle several times, and then somehow, by a miracle, the return passed review. So I quick tried to file it electronically. TurboTax was happy about this, and very eager to take my money to e-file the NY state return. Then TT reviewed the return again. FAIL!
At this point, we decided to send the darn returns in the mail. I did call TurboTax, and I did get a refund of that electronic filing fee.
I'll be doing our personal taxes this week. Here's hoping that the only bad news at the end of that story will be how much money we owe.
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