What are the chances of getting audited by the I.R.S.? (Kentucky)

Discussion in 'Archived Threads 2001-2004' started by Dome Vongvises, Mar 19, 2002.

  1. Dome Vongvises

    Dome Vongvises Lead Actor

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    Well, I just did my very first two tax returns, one for state, and one for federal. I'm getting quite a bit of money back, about two-hundred dollars. Problem is, I don't know if I goofed anywhere or not, especially my state income tax. On my sheet, all the cents were filled in with zeros. So come time I had to put down an amount, I rounded up whenever they owed me money, and I rounded down whenever I had to pay taxes on online purchases (and people thought you didn't have to [​IMG] ).
    Help please? [​IMG]
     
  2. Peter Kline

    Peter Kline Cinematographer

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    Now you've done it. They scan this site. You're doomed![​IMG]
     
  3. Julie K

    Julie K Screenwriter

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    Hmmm...I don't believe you can claim sales tax on most purchases.

    In any event, the rule is to round to the nearest whole dollar amount. $100.49 is $100 and $100.50 si $101.
     
  4. AbelM

    AbelM Second Unit

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  5. MikeAlletto

    MikeAlletto Cinematographer

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  6. Dome Vongvises

    Dome Vongvises Lead Actor

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    Well, to be honest, I haven't been quite clear on what I mean by "rounding".
    On my Kentucky Individual Income Tax Return (form 740-EZ), all the cents have been filled in with 00, meaning if you have calculated a certain amount, say 31.49, and had to enter it on a certain line, you had to enter it as either 31.00 or 32.00
    What I've done is use the general rules of rounding where you went up when it was .5 and up, and went down on .49 and below.
    As for online purchases where I didn't pay taxes, evidently Kentucky has this stupid thing where you had to pay taxes on out-of-state purchases. On this form, it's called a "Kentucky Use Tax" and you had to enter in 6 percent of out-of-state purchases which counted against your tax return. In my case, I had to track down ALL my orders form the past year.
    I was simply making the joke that since I was so infuriated by having to pay taxes on out-of-state online purchases, I decided to round down on my estimation for taxes. [​IMG]
    Oh well, I hope I don't get audited.
     
  7. MikeAlletto

    MikeAlletto Cinematographer

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    So you have to keep track of everything you buy from out of state throughout the entire year and put that on your tax return? What a waste of time. I'm never moving to Kentucky. It would take me months to get all that together if I even bothered to do it at all. How would they prove that you did or did not anyways? Come into your house and try and figure out what stuff is new and what isn't then try and figure out where it was bought? Aren't the vendors that we buy stuff from online supposed to charge a sales tax at purchase time if they are shipping to certain states anyways?

    God Bless states with no income tax!
     
  8. Christoph

    Christoph Extra

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    Many states have a tax that is supposed to be paid in lieu of sales tax for items acquired out of state.
    For example, Washington state has a "use tax" ( http://search.leg.wa.gov/wslrcw/RCW%...012%20.010.htm ).
    Since we are not an income tax state, this is, AFAIK, only enforced when buying a vehicle or vessel out of state. When you register/transfer title, you have to pay the use tax.
    For internet or mail-order purchases, the seller is responsible for collecting the local sales tax if the seller has a business presence in the state in which the buyer resides. I have had many friends buy small, large-ticket items (say, an engagement ring) at local stores, and have the merchant ship them out of state to work around sales tax.
    I'm, um, impressed (astounded?) by the civic-mindedness of a taxpayer who would voluntarily declare such purchases to their state of residence.
    In my circles, no one would do something like that unless it was a car, truck, or boat that you had to register--and then they'd try to minimize the taxable value, or perhaps make it appear to be a gift from a relative in a neighboring state.
     
  9. Don Black

    Don Black Screenwriter

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    Guys, the majority of states out there have statutes that require residents to pay use tax. That's why it's generally called "sales and use tax." Check with your accountant of course.
     
  10. Keith Mickunas

    Keith Mickunas Cinematographer

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    Dome, while random audits do happen, I've heard that you are most likely to be audited when making a lot of deductions or if you have other strangeness on your returns. Seeing as how you actually paid the use tax, I doubt they're going to get picky over a few cents here and there.
     
  11. Gregory E

    Gregory E Second Unit

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    Ha Ha Ha! I actually work for the IRS in Kentucky. No lie! [​IMG] But I work for the IRS (Federal) and not the Kentucky Revenue Cabinet (State) which seems to be what you're concerned about. I'm gonna need your full name, address, phone number, and social security number immediately. We'll send a couple "agents" over to your house this week.
    Just kidding. Honestly, don't worry about it. You're not really supposed to "round" amounts the way you did, but the cents are usually rounded anyway. You might get a letter saying you owe them a dollar.[​IMG]
     
  12. Julie K

    Julie K Screenwriter

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    Forget my answer. I thought you were trying to claim sales tax as deductions, not pay it [​IMG]
    Anyway, as for "use tax" goes, California has all other states beat. It once tried very hard to find a way to tax satellites that flew overhead.
    I am not joking.
     
  13. Dome Vongvises

    Dome Vongvises Lead Actor

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  14. Eric Kahn

    Eric Kahn Guest

    Ohio also has a law that says you are supposed to pay them sales tax on anything you bought without sales tax, but they will give you credit for any sales tax paid in another state

    if you bought a car in TN (an example, i do not know if TN collects sales tax on cars) from a dealer and they collected tax on it and then you took it to OH, if you had the reciept show ing that you paid tax equal to or higher than the sales tax of the county you are trying to register it in, you would not have to pay anything, but if it was lower, you would pay the difference

    CA once tried to collect income tax on the entire earnings of a multinational corperation that was not even headquartered in CA, just had a branch there, the corp. had payed taxes on earnings of the branch in CA but CA said you have to pay us taxes on everything that the crop earned, they shut up the day the corp put out a mailing to its employees that the CA branch was shutting down at the end of the week to be moved out of state and that they were all layed off ( it was about 10,000 people) CA quickly called them and said that the tax division had made an error and they had paid the right amount of taxes, the company stay in CA after that

    A friend of my father from his airforce days retired while stationed in CA, CA took the stance that if you retired while in CA, you always owed them taxes on your Federal retirement no matter where you moved and used to sue people over it, the military caught wind of this and told CA no, but CA persisted in filing charges on anyone who did not pay them, the military then started to transfer anyone who put in retirement papers out of state and even paid for the moves 3 months before the retirement went into effect and this went on for years untill the military was finaly able to get the congress to put a law into a bill that said the federal retiree's are not liable for state income tax unless they live in the state that is collecting it, my dads friend then moved down into KY by kentucy lake and loves it because he now has a bigger place, and pays much less in taxes
     

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