Tax Help???

[WendyZ]

We had an accountant do our taxes this year b/c it was our first year with DD in college. So they are all done and have been e-filed. Yesterday in the mail I receive a 1099-MISC for a computer she won.(that I never even thought about) Agh! I know how to do an amendment, so that's no problem. Here is my questions:
1. Everything for college was filed under our tax return (DH&myself), even though the paper work was in her name. The accountant said that we had to do it that way because we still claim her (no problem there). So I am assuming the amendment would also go under our taxes even though the 1099-Misc is in her name? Right or wrong?

2. I noticed this morning that the accountant filed us a 1040A (I have always filed a 1040-even though we don't itemize). I have read a few places on the internet if you have a 1099-MISC, you have to file a 1040. What would I have to do here? Or is this not important as long as I amend the form? It also said if you have a 1099Q to use 1040, but he still used 1040A. So I am confused.

Thanks for any help you can offer. I really don't want to call him again. I already had to go twice because I didn't know to look for some forms I was missing for DD with college. I feel like fool not even thinking about the computer. I know how to do an amendment, so that's no problem. Just want to make sure it goes under our return and I was wondering about the 1040A situation. If worse comes to worse I can call the IRS, I'm afraid they'll confuse me more. Thanks again!

 

[msmayor]

If its in her name and under her SS number, I don't believe it needs to go on your return at all. Its her 'income', not yours...and depending on the amount she may not need to do anything about it at all.

Does she work and file a return?

 

[WendyZ]

Yes, she does work and filed a return this year. But her 1098T was under her name and SOS number. The accountant said we had to file under ours b/c we claimed her.

 

[msmayor]

Yes, she does work and filed a return this year. But her 1098T was under her name and SOS number. The accountant said we had to file under ours b/c we claimed her.

Huh? I've never heard of that one. Your child can indeed file her own tax return on income she has earned...all that is different is that YOU take the personal exemption and she doesn't, which means that the $3,500 'exclusion' doesn't benefit her, it benefits you.

Would she owe taxes? Maybe...but your own taxes are much lower because you take her exemption.

I have never heard of a situation where the parents have to claim their child's income on their own return because they take the personal exemption.

 

[CarolA]

Yes, she does work and filed a return this year. But her 1098T was under her name and SOS number. The accountant said we had to file under ours b/c we claimed her.

I think the 1098-T is competely different from the 1099 for the computer.

It's just a statement of tuition. In this case the OP paid and does get to claim the expense if my understanding is right.

Income would still be under HER filing and I think the computer would be her income.

 

[msmayor]

WHAT?

Does your accountant do a lot of taxes? Is he/she a registered agent with the IRS?

Sounds fishy to me.

If your DD makes money (and that includes this) then she can't take a deduction if YOU claimed her, but you don't have to claim her income!

My thoughts exactly.

 

[WendyZ]

Yes, the 1098T is a statement from the college with her tuition and scholarships only. That's all that's on it.

 

[WendyZ]

The accountant we go to is one of the best in town. He was recommended by alot of people to us. Including our financial rep and DH's boss. So I believe everything is on the up and up.
She does not claim her self as a deduction, we only claim her. She only files b/c she as a part time job. Last yr she got back everything she paid in, but this year she made enough that she had to pay a bit in taxes and received the rest back in a refund.

 

[wii fit mama]

The other posters are correct, the 1099 misc income from the computer needs to be filed on her tax return and you are allowed to take the 1098 tuition deduction/credit on your return since you take the exemption for her. Since you have already efiled her return, you will need to amend it. Your return doesn't need to change.

 

[WendyZ]

Thanks! That what I've figured out. I was getting confused b/c it was from the college. I wasn't look at it as income. Once someone pointed that out, the light bulb went off! Now I'm all set, the rest I have done before.

Thanks so much for the help!