Tax Guide

Q&A: Tax questions roll in on WRAL Facebook page

Posted March 11, 2014

As tax season heats up, so too do the questions about how best to file both federal and state returns.

We took three days to solicit tax questions on the WRAL-TV Facebook page, and certified personal accountant Ben Micham has the answers.

Q: Kathryn Phipps: We had ESOP shares that were split into other companies and then were sold. Our only options were to take the cash out or pay for the new stocks. We couldn't afford the new stocks, so we had to take the cash out. We use TurboTax and have been extremely concerned entering this sensitive info because TurboTax and the 1099B don't appear to be in sync. How should I report this without raising a red flag?

Micham: An ESOP is an employee stock ownership plan. The 1099B reflects the total proceeds you received from the stock sale. You will want to make sure that is correct and that you understand how this amount was calculated. You will report that amount on Schedule D and you will also want to figure out your cost basis in that sale. This can be complicated, but hopefully someone within the company can help you understand your ESOP.

Q: Cathie O'Connor: If I work from home can I deduct some of my heating or cooling costs on my taxes? Or for that matter, anything else? The company I work for does have a building I could work at, but it's my choice to work from home.

Micham: I would say you don’t qualify for the home office deducting because employees must meet a “convenience of employer test.” Basically, this means that the home office is a condition of employment, necessary for the employers' business to properly function, and needed so employee can do his job. Since you have the company building to work at, I would say you can’t deduct the home office.

Q: Brian Owen Crocker: I'm waiting on a W2 from a job, but it hasn't gotten here. What do I do?

Micham: Print off an IRS Form 4852 (substitute for form W2) and attach it to your return.

Q: Grace Jayne McGettigan: A mother and two children lived with someone for seven and a half months. Can they be claimed by the person they lived with? The mother made over $3,900 in 2013 but provided no support in the household. They are not legally related. Mother is a US citizen and the two children are under 10.

Micham: No, they need to live with the person for all of 2013.

Q: Sylvia Williams: What is the standard deduction for North Carolina state tax when filing jointly?

Micham: In 2013, the amount is $6,000. In 2014, the amount will $15,000.

Q: Kim Hobin: How do we handle withdrawals from a ROTH, both initial investment and any amounts over?

Micham: Form 8606, and if there is a penalty to apply to any distribution, Form 5329.

Q: Becky Norwood: If a person made under $800 in a summer job, do they need to file?

Micham: Probably not, however, if they received that income on a 1099 MISC, then they may have to file.

Q: Sharon Caudle: What if you're audited and can't get all of the information? Do you sent what you have and just let it be from there?

Micham: Well, I presume we are talking about the IRS and if you don’t give them everything they need, they may create their own assessment and it may not be to your best benefit.

Q: Cheryl Handy: In 2005, my elderly mom's bank made a typo in my social security number on my 1099. Neither Wachovia nor its successor Wells Fargo have corrected error with IRS. I want to help now widowed mom correct the error with IRS as I am doing 2013 income tax. How?

Micham: Most of the time, the bank will ask you to fill out a new W9 (print off the web) to confirm their correct name and SS#. I would call the bank and ask what their requirements are to get the reporting of her SS# corrected.


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