By By Jim Wilhelm and Stuart Rudo and Greg Horning
Special to Baltimoresun.com|
Mar 17, 2008 at 3:00 AM
Baltimoresun.com's tax-advice column features three experts from the Sparks accounting firm SC&H Group answering questions about preparing your return every Monday until April 15.
Leigh, Timonium: Is it true that stock and money market investments on 1099's can be modified through late March? I've heard that investors should not file their taxes until late March or early April to avoid having to file an amended return should they receive a revised 1099 late in March.
SC&H Group: In today's complex investment environment, brokerage houses and other investment advisors often need to issue corrected 1099 forms. Typically we see corrected 1099s when clients have direct or indirect investments in REMICs, REITs, certain derivative instruments and other related investments. Our advice is to turn over your tax data to your preparer now, then have them wait to finalize your returns until you believe the final numbers have been received.
Thomas, Pasadena: My wife works full-time and I work part-time (two days a week). I am on Social Security Disability, which is supposed to be tax free. I am paying social security taxes on my job. My question is why do I have to pay taxes on my Social Security when I file my taxes?
SC&H Group: Social Security benefits are taxable, even if they are for disability. Depending upon your income levels, 0%, 50% or 85% of the net benefits you received are taxable on your federal return. In Maryland, and many other states, Social Security benefits are not taxable.
Bernie, Reisterstown: Can a self employed individual who receives a 1099 -MISC deduct commuting expenses on his Schedule C?
SC&H Group: Commuting expenses are generally not deductible. However, taxpayers may be eligible to deduct some or all of the travel costs they incur when traveling to their place of business. Examples in which commuting expenses may be deductible include situations in which the taxpayer has a home office; has multiple temporary work locations away from home; or is hauling work tools or other equipment to job sites. Refer to IRS publications 463 and 535 for more information.
Answers to selected questions are published in The Sun's Money & Life section on Sundays and online on Mondays.