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» Nauvoo Forum » Nauvoo Classic Forum » General Discussions » U.S. Tax question

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Author Topic: U.S. Tax question
JennaDean
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A couple tax questions for the tax geniuses out there (I know we've got a few):

I just read that people who itemize deductions can deduct their state and local income and sales taxes. I have always figured that since I lived in a state with no income tax, there was nothing for me to deduct, but since FL gets all its money from sales taxes, could I deduct all the sales tax we paid (if I had saved the receipts)? Is that correct? That makes a big difference.

Also, looking at the requirements for dependents, I'm wondering whether parents can claim missionaries as dependents, since they earn no income and the parents pay over half of their support. However, the missionaries don't live with the parents for at least half the year. Can they be claimed?

I'm seeing the day coming (real soon) when I will be paying for children that I can't claim as dependents. Already the end of the child tax credit is in sight for my oldest.

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FlyByNight
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For the sales tax question: http://taxes.about.com/od/deductionscredits/qt/Sales-Tax-Deduction.htm
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pnr
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2011 is the last year for the sales tax credit that was created a few years ago. And yes your children for whom you pay half of their support (or even that you pay less if no one else pays more than 1/2) can be claimed as your dependents. Parents have different rules than others.

PS and if you haven't claimed the sales tax credit for the last 3 or so years it has been in existence, it is worth fiing an amended return to do so.

[ January 06, 2012, 04:40 PM: Message edited by: pnr ]

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JennaDean
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Oh man, I thought would have to have every receipt for the whole year to calculate that, but it looks like there's a way they can estimate it. It hasn't paid for years for us to itemize, but I'll have to see if it's worth it this year.
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jana at jade house
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OK I have a question and I have tried to read everything on the IRS website to get a definite answer.

I filed my last IRS return with paper forms and all for 1991. I was a resident of the Netherlands after that, had no personal income, file jointly with my spouse here in NL.

In 1992 I got paper forms to file, ended up at zero taxes owed and so did not send in forms. I haven't even seen a US tax form since.

The last couple of years, I have run into USAmerican expats here who are convinced I should be sending in forms even though I have zero income. They provoked me into reading more of the IRS web site than I ever desired, but STILL I cannot find anything that says I should be filing paper for no taxes.

THEN someone found a crazy article online that talks about IRS going after hapless folk who are US citizens by birth but do not live in country and are not employed by US companies- but the IRS is still going after taxes. AND another friend works for HP but on a Dutch contract- and he still has to pay some sort of taxes to the US even though he lives here and has a Dutch contract...

All of this makes me worried because THEY make me worry I won't get my US SS when the time comes..and I paid the bulk of it in as a self employed person so it is MINE. and worse, I worry that upon hearing of my death, the IRS will come after Andries and the kids against my estate (which by Dutch law is half of everything we own, even if I never had an income)

I really wish there was someone here I could ask at the consulate- but our tax services are run out of Frankfort.

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TheOne
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Can't see why you would need to file if you don't live in the US and don't have an income. But I wonder if you will be able to collect SS (and whether the amount will be worth the trouble). Do you have dual citizenship?
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jana at jade house
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I am pretty sure that I have rights to my social security since I am a citizen and I paid for it myself mostly. And the consulate offers SS assistance. Last time they ran a account report for me , it was several hundred a month- not to live on- but I like the idea of having "my own" disposable income after all these years. On the other hand, I will possibly have two medical students at the same time and have to help out there. [Dont Know]

No I probably will never have two passports. When I first got here I was too cheap to just go and get one; it used to be that American spouses of NL citizens were exempt from enforced integration: the tides have turned and then now they are talking about yanking all the dual passports, which makes me very upset. I love my ancestors; they made America great in every generation. There is no way this anti-foreign born government will yank my USAmerican passport out off me without a fight. The question comes up more and more though as anti- American sentiment comes and goes. I have to wait it out. By the time they stop having endless meetings about it, either the government will change or I will be dead:)
There have been a couple of times I wished I had a Dutch passport. Most people assume I am English. Often I let them. It saves a diatribe.

[ January 07, 2012, 03:13 AM: Message edited by: jana at jade house ]

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pnr
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You do not have to live in the US to get either social security or medicare. If you don't sign up for medicare though during your open enrollment when you turn 65, it can become too expensive to pay it up so you can do so later.

But if you have ever made the minimum required to have to file (or if you want to claim refundable tax credits), then you have to file a return for those year(s) And it doesn't matter where you earned the money (although you get full credit for taxes paid elsewhere on it) http://www.irs.gov/newsroom/article/0,,id=105097,00.html

See the chart for the amount on page 8 http://www.irs.gov/pub/irs-pdf/i1040gi.pdf

[ January 07, 2012, 03:24 PM: Message edited by: pnr ]

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jana at jade house
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Thanks PNR. I read through the thing and still don't think I need to file a return because I haven't had that amount of personal income for years.

However, there might be a day where I might have to look closer at the year when we moved from our little house to our big house nearly 20 years ago. The little house was bought by Hubby long before I arrived, and I had never owned property in the US so it never occurred to me that the sale of "his" house might have tax ramifications for me. To be honest in all my dealings, I should probably look more closely at the tax law for that year and time...if we even have all the pertinent documents... [Angst]

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yungmom
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I'm wondering about work credits with SS. I know because I haven't had enough work credits in the last 15-20 years I am not eligible for SS, according to the SS report I get each year. So is that going to be a problem with Jana? Or did I read something wrong on those papers?
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jana at jade house
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I have plenty of credits and have
a projected payment assessment done a couple of times at the SS office. So I know pretty much what to expect at 62 (if I want to) or 66 or older. The only thing I might not have is my last self employment tax return copy--where it might be in the attic and if the mice haven't eaten it is not something I want to contemplate right now [Frown]

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jana at jade house
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YM: remember I am a decade and some older than you are and was a single parent nearly 4 times longer than I was married. I started working in 1966 and worked at least part time nearly every year until 1991. Credits are no problem:)
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yungmom
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What I was talking about were recent credits. I don't remember the words, but it said something about having enough credits in the last 15 or so years to qualify, not in total credits. I'd have to look at it again to see what it meant if that wasn't it. I didn't pay a whole lot of attention because either way I wouldn't have enough credits.
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Tendril14
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Yungmom,

One has to have had 40 credits paid in to Social Security to receive retirement benefits. A credit is earned each quarter one is gainfully employed and paying into the system (not all jobs pay into Social Security). This is the equivalent of 10 years work.

In order to qualify for Disability Insurance benefits (SSDI), one has to have paid into the system during 20 of the immediately preceding 40 quarters. This may be what you are recalling.

I, like you, do not have enough quarters paid in to Social Security to receive either retirement or disability benefits. That is one of the massive financial risks associated with being a stay-at-home parent.

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pnr
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The sales of a home that was titled in your dh's name, doesn't affect you tax wise at all. If you made under those amounts on your own wages, interest, and/or assets, then you would need to have filed a return for those years. If not, then you didn't.
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pnr
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Correcting previous information.

When I said that there still is a sales tax credit, I only told you part the story --- it is only available in the states without income tax (otherwise it is the income tax that is deductible) and it is a deduction not a credit. (I happen to live in one of the states where it applies. I'm sorry for the misinformation.) And it did end last year 2011.

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jana at jade house
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* blink* pnr- I am sure that what you just said makes absolute sense...but not to me. My brain shut down *forehead slap*. I used to do all my own tax work as an independent contractor/ self employed person. i think the tax part of my brain has atrofied. and I LIKED doing taxes!
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JennaDean
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pnr, having read the details through, it looks like in the states with income tax, you can choose to deduct either your income tax or your sales tax but not both. But for most people it is more beneficial to deduct their income tax. For me, though, it doesn't matter as Florida has no income tax.
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scruffydog
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Having followed the discussion of US tax laws with difficulty, it occurs to me that tithing is much simpler. The Church is true, brothers and sisters!
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ketchupqueen
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I know I'm a bit late to this discussion, but if you guys ever have gnarly questions on U.S. income taxes, KetchupPrinceConsort is always happy to answer questions from my friends (online and otherwise. [Wink] ) You can always message me on Facebook (I'm there more than here) or email me, or contact him directly in the same ways, if you have questions. [Smile]
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ketchupqueen
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(And yes, the laws are complicated, and the rules change every year! KPC is an Enrolled Agent which means he had to pass comprehensive tests on the tax laws, code, and procedure- he would like eventually to get his Masters in Taxation, which involves basically memorizing the tax code. [Eek!] )
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