intern year taxes

[GoPistons]

I wanted some help with taxes this year from interns that went through it last year.

I graduated May 2005
I started working July 2005
My taxable income for the year 2005 will be a measly 20k

What credits do I qualify for? Do I qualify for the lifetime learning credit from paying my tuition or the Retirement Savings Contribution since I maximized my Roth-IRA? Any other credits, tax breaks, deductions that I am unaware of at present?

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[EctopicFetus]

Buy Turbotax man.. It goes through all this stuff. You should end up paying almost nothing in taxes.

 

[edinOH]

Learning credit if you paid your spring tuition after Jan 1.

Do you own a home? If so, you have mortgage interest to deduct.

Moving expenses? Deduct. Spouse job search in your new location? Deduct.

I'm not an accountant, but I did stay at a Holiday Inn Express last night.

Find a good accountant and ask them.

You wouldn't ask medical questions on an accountant message board would you?

 

[MM9]

Save yourself the headache and get yourself an accountant

Ask around for some names. Find one who charges by the form (almost all of them do) and who will handle things over mail and the phone.

I mail my documents (W2, education credit stuff) to my guy. We speak on the phone for 10-15 minutes and that's that. He direct deposits the refunds.....cost about 100$ or so. Yeah you could do it yourself, but:
A) Turbo Tax software isn't free, and I think you need one for Federal and one for State.
B) The CPA will find more deductions than you ever could.....and do it right.

 

[EctopicFetus]

After the rebates TurboTax fed and state comes out to like $15-20. I guess if you know enough about taxes then Turbotax will be fine. It might take an hour or 2 to do but IMO better than spending $100 on an accountant. I mean you make 40K so your taxes are like 6K or so. IMO there isnt a whole lotta fancy math that can be done. If you have a house TTax simply asks you to dump in info from the form your mortgage holder sends you. Now when I become an attending and my finances become more complex it makes a lot more sense to use an accountant but not right now. thats just my $0.02. Honestly Ttax is incredibly simple to use and you can direct deposit your refund for free after rebate.

 

[Winged Scapula]

Moving expenses? Deduct. Spouse job search in your new location? Deduct.

Did we finally decide that moving expenses were deductable? I recall a lengthy thread on this topic earlier but I thought they weren't deductable as you aren't changing jobs.

 

[toxic-megacolon]

Did we finally decide that moving expenses were deductable? I recall a lengthy thread on this topic earlier but I thought they weren't deductable as you aren't changing jobs.

What about residency interviews/flights/hotels, etc. If you can't claim it as a 'business expense' (since its a new job), could it still be claimed as an 'educational expense' ? After all, it is called Graduate Medical EDUCATION. Is that even a category for tax deductions??

 

[EctopicFetus]

I believe they are not deductable unless you have prior work in the health care field. As such if you did PAID research you could argue that this is "changing jobs" I dont know the exact rules on this but I would def hit up an accountant before I did that.

 

[edmadison]

I believe they are not deductable unless you have prior work in the health care field. As such if you did PAID research you could argue that this is "changing jobs" I dont know the exact rules on this but I would def hit up an accountant before I did that.

OK, review from previous threads -- I have posted this multiple times. Moving expenses are generally deductable. Job search expenses for a new job (e.g. residency) are not deductible.

Ed

 

[edinOH]

Did we finally decide that moving expenses were deductable? I recall a lengthy thread on this topic earlier but I thought they weren't deductable as you aren't changing jobs.

I believe they are for the resident. Not 100% sure though.

I'm married and my wife is in healthcare as well. She moved with me obviously. She didn't change fields. The IRS doesn't care why you moved, just that you moved. So we were o.k. either way.

 

[Idiopathic]

With that little income, deductions are meaningless.

 

[EctopicFetus]

With that little income, deductions are meaningless.

Yup!

 

[dodo2]

Not an accountant, but don't forget to take earned income credit.

 

[toxic-megacolon]

With that little income, deductions are meaningless.

Not really. I spent 6000 dollars interviewing/moving in 2005. I made 20,000 during that year (half of my 40,000 dollar paycheck). If I can get a 1/3 of that 6000 back, by not paying taxes on it, it equates to 2000.00. That's worth it for a poor resident.

 

[zinjanthropus]

Buy Turbotax man.. It goes through all this stuff. You should end up paying almost nothing in taxes.

don't buy it! it's free online through the IRS website as long as you nothing more complicated then 1040...you can put in deductions, state taxes, city taxes, etc...plus it's way smarter than you so you pay very little in taxes!

 

[mackie]

With that little income, deductions are meaningless.

Not at all true!

 

[KidDr]

Buy Turbotax man.. It goes through all this stuff. You should end up paying almost nothing in taxes.

Couldn't agree more. Link to Turbotax through the IRS website...it's either free (?if you only use the 1040) or very cheap (~$20) for all others. It's VERY easy to use and will identify every credit/deduction/etc you qualify for...well worth the small cost and time investment (took me about 2 hours total last year).

 

[southerndoc]

Not at all true!

Exactly. Play your cards right, and you'll pay no taxes at all.

It's basically credits -- or credit (the Lifetime Learning Credit) that serves you well.

 

[EctopicFetus]

Not really. I spent 6000 dollars interviewing/moving in 2005. I made 20,000 during that year (half of my 40,000 dollar paycheck). If I can get a 1/3 of that 6000 back, by not paying taxes on it, it equates to 2000.00. That's worth it for a poor resident.

Realistically.. you would only pay about 2600 in taxes on an income of 20,000 if you could write off ALL of the 6000 (which is questionable) your taxable income would be 14,000 and you would pay 1700. You would save $900. If you bought a house then your savings would be even greater. Now I know $900 is nothing to sneeze at but in reality it is even less when you take into account your personal exemption (~$4500 I believe) etc. I believe that moving expenses have to be itemized, so if you arent already itemizing then so in reality you would only slash your Adjusted Gross Income by 1500, and your tax burden would be ~2400 saving $200. Heck if you can afford $20 or free as others have mentioned its def worth it since you have to file anyhow and turbotax leads you to the proper conclusion.