2017 Tax Thread

[james.hendrickson]

Hey guys,

It is tax time again. Thought I would go ahead and post a thread to give the community a chance to ask basic tax-related questions in one spot. If you have tips, thoughts on saving money on your taxes, please feel free to share them here.

Note: Taxes can be very complex, the main point of this thread should be to share information, point people in the right direction, and answer basic questions.

Please also be aware that there is no legal protection when talking about matters in posts on a message board. You will also probably want to consult a reputable tax advisor in person if your circumstances demand it.

If you aren't seeing your question answered here, please don't hesitate to start a new thread.

[HundredK]

This is likely to be more of a 2018 tax question, but still, if anyone is familiar with trust accounting, would love any input, or thoughts on what to be careful of.

This is regarding a QTIP trust that was set up by my husband's mother. He is a remainder beneficiary on the trust which contains two homes. She is now deceased and her husband (not my husband's father) is requesting that we dissolve the QTIP and that we accept a payment in exchange for terminating our remainder interest in the trust, so that he can have full title of both homes. We are all in agreement about the amounts, but we are just trying to figure out how that will be treated for tax purposes. We have that question out to the attorney we have retained, but thought I'd see if any of you have trust tax knowledge?

[StormRichards]

This is likely to be more of a 2018 tax question,

Was thinking the same thing.

Our tax refund has been in our Roth for weeks now

[Outdoorsygal]

This is likely to be more of a 2018 tax question, but still, if anyone is familiar with trust accounting, would love any input, or thoughts on what to be careful of.

This is regarding a QTIP trust that was set up by my husband's mother. He is a remainder beneficiary on the trust which contains two homes. She is now deceased and her husband (not my husband's father) is requesting that we dissolve the QTIP and that we accept a payment in exchange for terminating our remainder interest in the trust, so that he can have full title of both homes. We are all in agreement about the amounts, but we are just trying to figure out how that will be treated for tax purposes. We have that question out to the attorney we have retained, but thought I'd see if any of you have trust tax knowledge?

Just a sidenote because I am the Trustee of a Trust but a beneficiary can legally refuse to accept their inheritance. Then the Trust will state how that is divied up.

As Trustee, you cannot go out on your own and decide to just "change" the terms of the trust agreement even if it seems logical.

You can later get sued and you personally, will owe back all of that money $$ on your own accord.

Hence why I believe unless you are an Attorney, no lay person should accept such job as a Trustee Or Executor of a Will

1% payment as Trustee of the Trust isn't enough money $$ for the legal liability involved.

Yes there are cases where you are paid more but it aint much for the liability involved. You need to do additional documentation and hope none of the beneficiaries

contest the trust if you want to be paid more. Worth it or not.

JMHO of course

[HundredK]

Just a sidenote because I am the Trustee of a Trust but a beneficiary can legally refuse to accept their inheritance. Then the Trust will state how that is divied up.

As Trustee, you cannot go out on your own and decide to just "change" the terms of the trust agreement even if it seems logical.

You can later get sued and you personally, will owe back all of that money $$ on your own accord.

Hence why I believe unless you are an Attorney, no lay person should accept such job as a Trustee Or Executor of a Will

1% payment as Trustee of the Trust isn't enough money $$ for the legal liability involved.

Yes there are cases where you are paid more but it aint much for the liability involved. You need to do additional documentation and hope none of the beneficiaries

contest the trust if you want to be paid more. Worth it or not.

JMHO of course

Considering that we are still in debt we would happily accept the settlement. The trust will actually be dissolved entirely, and everyone involved has lawyered up. So at this point I just want to be certain of taxability before we sign.

[annibe11e]

We are receiving advance tax credits for our health insurance premiums based on our projected income.

Well my husband just got a better job and will no longer be working seasonally. I went to the Kaiser Foundation website and used a calculator to estimate what we should be getting as far as tax credits with our new projected income. We may be receiving as much as $250 a month in excess.

Is there a way to have our tax credit readjusted, or will we be settling the difference when we file next year?

[HundredK]

This is likely to be more of a 2018 tax question, but still, if anyone is familiar with trust accounting, would love any input, or thoughts on what to be careful of.

This is regarding a QTIP trust that was set up by my husband's mother. He is a remainder beneficiary on the trust which contains two homes. She is now deceased and her husband (not my husband's father) is requesting that we dissolve the QTIP and that we accept a payment in exchange for terminating our remainder interest in the trust, so that he can have full title of both homes. We are all in agreement about the amounts, but we are just trying to figure out how that will be treated for tax purposes. We have that question out to the attorney we have retained, but thought I'd see if any of you have trust tax knowledge?

Just to follow up on this - the lawyer assures us the payment is tax free. Still trying to understand exactly why that is, but have no reason to believe the lawyer is incorrect.

[wjcalderon]

We are receiving advance tax credits for our health insurance premiums based on our projected income.

Well my husband just got a better job and will no longer be working seasonally. I went to the Kaiser Foundation website and used a calculator to estimate what we should be getting as far as tax credits with our new projected income. We may be receiving as much as $250 a month in excess.

Is there a way to have our tax credit readjusted, or will we be settling the difference when we file next year?

You can go to the Healthcare.gov website and choose "Income/Life Change" to update your income amount. This will change your tax credit amount.
Or you can call them at 1-800-318-2596 and they can walk you through the process.

[scfr]

Tip: If you know that you will be getting a refund, before you file your return, consider opening up a new bank account that offers new account bonuses with direct deposit requirements.

Caveat: Be sure to read the fine print of the bonus offer and confirm in advance that payments from the US Treasury will meet the bank's direct deposit requirements. Then follow through to make sure you meet the requirements to receive the offer, avoid monthly fees, and that the bonus is paid when it is supposed to be.