Money Forward

This blog is about money and trying to keep my money from flying out the window.

Friday, January 26, 2007

Tax Preparation

I really should find some time some year to take tax preparation classes. I don't want to pay others to do my taxes, especially because right now they're generally simple. I just occasionally don't always know exactly what I can and can't do, or what I should do.

I started my taxes last night just to get an idea of things. I'm still waiting for two more forms, but I generally know what each thing is. My only two confusions come with my Sharebuilder account and tuition stuff. For my Sharebuilder account I got the $50 promotion money, plus about $1 in dividends. They said I didn't make enough to get a 1099, so I have no idea what that $50 falls under. I'm assuming right now that it is bank interest, but I'm not really sure about that. I'm also assuming that the $1 is an ordinary dividend. I hope that's right.

For tuition, both my wife and I were in school last year. I was a little confused about the wording on the Lifetime Learning Credit. My wife received over $10k for tuition in student loans. As far as I can tell, student loans count as money borrowed from others to pay for qualified expenses. So my thought is to use that for the Lifetime Learning Credit since the cap for that is $10k per return. I paid over $4000 for my own tuition, so I was thinking I could use the education deduction for myself since the cap is $4000 per return. This maximizes our benefit, and should be ok since I'm using only money for my wife's education for the LLC, and only money for my own education for the deduction.

The state return is a whole other beast. Schedule B for MA state taxes is weird and annoying. I didn't do any stock selling or anything last year so I don't have to deal with capital gains and losses. Next year may be different though. Hopefully this all seems ok and will be fine. They really need to make this easier, but then again that would put a lot of tax preparers out of a job (or at least extra income).


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