Tax Time With Connie Grimes

The State of MO has a Teacher Retirement Fund which my mom has been receiving for awhile.   She passed away in 2009 and I need to do her final return.  Her returns are real simple.   I looked at her last year return which someone else prepared for her.  On her MO return they calculated her  teacher retirement pension on Form MO-A on section B Private Pension Calculation.  Is this correct  -  as I thought this was a public pension and should be calculated on Section A?   It will make a difference.   Mo started the Public Pension calculation where a certain percentage of public retirement is exempt from State Tax  in 2007 and this increases each year until 2012 when it is 100% – if indeed this should have been calculated as a Public Pension can I amend  her Mo State 2007 and 2008?    Thank you very much.
 
Sharon

The Answer:

No, it is a public retirement and you can amend MO.  Always look to the bottom line to see if it really makes a difference in the refund amount.  You can also amend 2006 up until April 15, 2010.

I temporarily moved from Missouri to Massachusetts from late 2008 to late 2009. I had no job lined up when I moved, and unfortunately didn’t have employment during that time.

Many thanks
Ryan

The Answer:

Your income will go on schedule C, as well as any expenses you have.  If you have a profit of more than $400, you will have to do a schedule SE.  You will have to do a 1040 instead of 1040-A or 1040-EZ.  If you have income from both states in any given year, you have to pay taxes in both states, as well.

Hope this helps!

If you received no dividends from GM stock put in zero.  If it will not accept that, you will have to try to delete the entry.  If you can’t do that, put in a 1, but you will have to pay tax on the $1.  If you put in the $1, you will have to deal with it again last year.

One other note – hopefully you will know what you originally purchased (the dollar amount) plus the reinvested dividends over the years, so that you will be able to deduct your total losses.  The only way to recover these is either to sell your entire stake in the stock, or wait until the stock is declared worthless.  I don’t think that has yet happened.

Hope this helps!

Here is a question: We sold a house in FL in June 09, short sale. We received 2 1099C forms for cancellation of debt related to the sale of our primary residence for an amount of $70,000. There is supposedly an up to 2 million dollar exemption for this kind of debt. Our problem is we can’t get the form 982 filled out correctly so that it doesn’t look like taxable income. Any advise? He currently use H&R Block online.

Aaron

The Answer:

I guess you haven’t seen our TV commercial about how boxes don’t come with people. They also don’t come with answers, as you can tell!

On form 982, you check line 1e, put the amount of the 1099-c’s on line 2 and also on line 10b. That should make the form calculate correctly. Now, remember, I haven’t reviewed your situation to see whether the 1099-c’s qualify for this exclusion, I am only telling you how to work the form. If that doesn’t work, then something is wrong in the data entry – or with the program itself. You could try to see if they have any sort of tech support.

And remember our name . . . GRIMES TAX!!!!

My fiancee moved from Illinois to Missouri in June of 2009 for a new job. How do we split the moving expenses adjustment to her federal income on the MO and IL partial resident 1040s?

Brian

The Answer:

The states refer to AGI which is already after the moving expense adjustment. AGI is your income less some deductions – and moving expense is one of these. She should actually do two partyear returns. One for MO and one for IL, as she had a residence in each one of them.

Well, if anyone has some questions about tax, feel free to post them, and I will answer. Today (Friday) has been kind of crazy. Michelle is just now having lunch at 5:44 p.m. The reason for her late lunch is because her mother left to eat lunch out of the office today, and all heck broke loose. If it was McDonalds, she would throw it in the trash, but it was Culver’s, so she is eating it anyway.

I was devastated to find out that the two things I like the most at Red Robin have over 1,000 calories in them! But you can get the Whiskey Creek BBQ chicken wrap without cheese or ranch dressing and it is 550. THAT’S STILL AN OUCH, but not so painful as to feel like an amputation.

Right now, the only time we get out of the office is to go eat lunch – I guess you can tell by the posts. Otherwise we have our noses buried in the tax manuals, IRS website, and the computer. See ya’ tomorrow!

If you watched Pres. Obama last night, you probably wondered what does that mean for me??? He is talking about doubling the child tax credit ($1,000 per child under age 17). He is talking about forgiving any balance of student loans after 20 years – but aren’t those usually paid back in about 10? He mentioned tying student loan payments to the income you earn (now that could make it run to 20 years if they give enough adjustment).

There was no mention of extending the Bush tax cuts – hopefully he will, or we will all pay higher taxes on dividends, sales of stocks, etc.

He is going to put a surtax on big banks (they deserve it after what they’ve done to the economy the last couple years).

If they do pass health care, no one has a clue as to how it will work, who will pay what . . . so stay tuned on this one!

My favorite puppy is Starla Cupcake (my miniature Yorkie I got for Thanksgiving).

And . . . I still love doing taxes!!!

Has anyone been watching New York City and their snowstorm? Even though it’s cold here in St. Louis (and I know this is evil), I am glad that they got it instead of us!

Hey, remember that all partnerships, S-corps, C-corps, and LLC’s are due March 15, 2010. Most people think that they are due April 15, just like personal returns, but they are due a month earlier. Mark your calendar, so you don’t forget!

If anyone is having audit problems, give me a call. Audits are my specialty . . . as well as offers in compromise. If you haven’t filed your returns for years, and don’t have all the documentation, give me a call . . . I can usually get all your documents from E-services (one of the great IRS services ever invented)!

My little Starla (Yorkie puppy) is growing – she loves the dried sweet potato sticks with the chicken jerky wrapped around it. When she has one of these, I get about 30 minutes of peace! The really good part is that our older dog is becoming more and more active, and getting mobility back and losing weight herself.

If you ever get out Route 66 near the old Diamonds (Tri-County Truck Stop), go by the old Sunset Motel. We bought it a couple of years ago, and are bringing it back to its former glory. We have completely re-done the exterior – including the neon sign and neon gable bars and are in the process of re-doing each room in the art-deco style. We have two rooms restored – including the terrazzo floors – and are working on the rest. The sign is lit nightly. Hopefully this year we will get the exit and entrance signs restored (someone stole the exit sign and we will have to replace it).

Ta-Ta. Have a great weekend!

The Grimes Tax Blog is now online. We are very excited about this new development, as it will give us an easier way to talk about the new tax changes for this year.

For example, you can now claim up to 3 dependents for the Earned Income Tax Credit, for a maximum credit of $5,657.

Good to know eh?