Sam Serio

• Tax Time: Tools and Resources • Personal Finance Section • Business Section • Talk: Business message boards • Live Online Transcripts • NEW! Subscribe to the weekly Live Online E-Mail Newsletter and receive the weekly schedule, highlights and breaking news event alerts in your mailbox.

With the April 15th deadline approaching, last minute filers are scrambling to get their taxes in under the wire. If you are one of millions of Americans haunted by the crush of tax day, we'd like to offer support.

Sam Serio, IRS Media Relations Specialist for the Washington Metropolitan area, will be available to impart valuable tax tips by answering your last minute filing questions Friday, April 11, at 2:00 pm.

Sam Serio began his career with the IRS in 1977. For the last 16 years he has worked in Media Relations, Communications, and Public Affairs, and has held several positions that include, Manager in the Taxpayer Service Division, Revenue Representative in the Collection Division, and Auditor in the Examination Division. In his current role as Media Relations Specialist, Sam operates from the IRS Baltimore Field Office.

Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.

washingtonpost.com: Good afternoon All. Sam Serio will be available to take your question momentarily.

Confusion: I have submitted my taxes (early) and have gotten the refund, but now I have received a K-1 (in draft but pretty accurate) and am not sure how to handle it. The income received does not constitute hiring a tax advisor since the amount is so small. What do I do?

Sam Serio: Hi there! Sorry we're late -- technical difficulties....

Income expenses from K-1 usually go on Schedule E. Since you've already submitted your return, wait until you've received your refund, and file an ammended return, Form 1040X. If not due a refund originally, you can file the 1040X now...

Bowie, Md.: I'm a student who spent last summer working for a company that did not deduct taxes from my meager paycheck. My supervisor said that he was paying me from an expense account (the same way he paid his vendors), rather than from his payroll budget. Essentially, he treated me as a contractor (I think). I worked there for three months doing approximately 20 hours a week, and I haven't received anything that shows my cumulative earnings-- like a W-2 or 1099. Should I have been expecting one? And, as I mentioned earlier, the pay was nominal and the earnings meager-- do I even need to file a return? It was my only job.

Sam Serio: It's hard to tell... If you received over $600 the employer should have sent you a Form 1099. Since you were treated as self-employed, the filing requirement is significantly lower for you, i.e. over $400, than for most folks. Therefore, you probably do have to file, not only for income tax, but for the self-employment tax you may owe. Contact 1-800-829-1040 and give the employer information to the IRS, if in fact it was over $600, and we will attempt to secure your Form 1099.

Washington, D.C.: How exactly does e-file work? Is it something I can do on my own and submit from my home computer? Will I need to purchase additional software? Or, do I need to pay a tax preparer?

washingtonpost.com:

For further info see: IRS to Let Some File Online Free (Post, Jan. 17), and Taxpayers' Online Data Protected (Post, March 27)

Sam Serio: Go to IRS.GOV, click on FREE-File to see if you're eligible to file electronically for FREE. No software needed. These software companies provide you with web-based tax preparation and electronic filing software to your home computer.

Annapolis, Md.: In your view, is Mike Golden simply the most outstanding state tax department contacts around, or is he simply a plague on the tax administrator community?

Sam Serio: In my opinion, Mike Golden is a STAR!

Midlothian, Va.: My wife does contract work as a hearing recorder and is also a real estate agent. Since both of these are self-employment do we just combine the two incomes/expenses, etc. and file one schedule C/SE? Thanks.

Sam Serio: NIce try... Sorry two Schedule C's then the net income goes to Schedule SE.

Rockville, Md.: Hello. Thanks for doing this discussion. My friend and I are hoping you can settle an argument. Is it true, or has it ever been true, that if you are due a refund and file for an extension, the IRS will allow up to two years to receive your paperwork? Also, is the 15th the deadline for filing extensions as well?

Sam Serio: Automatic four-month extensions, to August 15th, must be filed by midnight April 15th. You can call 1-888-796-1074 After August 15th you can file a form 2688 if additional time is needed. However, we review these requests and only grant additional time if it appears necessary.

Arlington, Va.: My father, aged 83, died in 2002 and left me an IRA. The company holding the IRA issued me a check, and then sent me a 1099-R. Is the amount I received as a distribution taxable?

Sam Serio: IRAs inherited are treated by the beneficiary essentially the same as the deceased would have treated them...

Arlington, Va.: What are my options if I cannot fully pay my taxes on April 15th?

Sam Serio: 1. Borrow.
2. Pay by credit card.
3. Direct debit from savings or checking account.
4. File Form 9465 with your 1040 and make your own installment agreement.
5. BUT, by all means file to avoid the failure to file penalty whether you can pay right away or not.

Washington, D.C.: Hi Sam. I need your attention more than I need your comment on this one.
I am not an eleventh hour filer... usually. I have been working on my taxes for weeks. My life changed drastically over the past year (new house, adoption, small business, multiple jobs/W-2s), and my taxes have never been more complicated. I have contacted IRS agents for assistance, via the 800 number, several times over the past few weeks. Kudos to them, as they have been very good in getting back to me with mostly right information. My issue is this: Millions dread this time of year. Why? Because for the common person understanding all the forms and schedules and publications associated with filing taxes is impossible! And if there are more people out there like me, we just can't trust all the tax preparers out there that will file the return, but take from it a ridiculous amount as payment for their service. We need a better, simplified way, Sam. Revamp the system. I beg you.

washingtonpost.com:

See: Inside the IRS, an Advocate for Change (Post, Jan. 26)

Sam Serio: I hear ya! However, only Congress can change the Tax Laws. You need to contact your Congressional Representative. We at IRS merely administer those laws.

Washington, D.C.: Do U.S. military servicemen need to file a form with the IRS in order to receive the tax deadline extension accounced yesterday?

Sam Serio: No... Simply put "Combat-Zone" and date of deployment on the return when it is filed. Remember, these extensions are only for those in combat zones.

Bethesda, Md.: I have a friend who claims if he makes some phone calls back to the office or calls on a client while on his vacation, he can write off the vacation as a business deduction. I know this can't be true, but he insists that it's true and he does it. What's the official answer (other than I don't want to pay for his vacation)?
Thanks.

Sam Serio: When considering business expenses, we look at whether this "business trip" was primarily for business before "to and from" expenses are deductible. And if primarily business, "to and from"" may be deductible, however, personal days expenses are not. Get Publication 535.

Austin, Texas: I would like to pay my taxes in the several monthly payments. How can I request this type of arrangement?

Sam Serio: Get Form 9465, from IRS.GOV... If less than $25,000.00 owed and you can pay in 5 years, we'll grant the agreement - just attach the 9465 to your 1040...

Va.: Whatever happened to the first-time buying a house tax credit?

Sam Serio: There is a federal first-time home buyer's tax credit of up to $5000 for the purchase of a home in the District of Columbia.

Northern Virginia: How does the IRS generally treat honest mistakes, for relatively small sums of money?

Sam Serio: As exactly that... An honest mistake.

Fairfax, Va.: Is VA's car registration fee/license fee deductible on the federal tax return as an itemized deduction item?

Sam Serio: I'd say NO if it is however considered personal property tax it would... Check with VA State.

Vienna, Va.: Once I started digging into my taxes this year, I noticed that my W2 earnings and tax contributions are wrong. I was laid off from a company in May 2002 and they were subsequently bought by another company. I can't get anyone at the new company to return my calls. What recourse or options do I have?

Sam Serio: Contact the IRS and give your employer's information. We'll attempt to secure your correct W-2's... In the meantime, you'll need to file an extension by April 15th. Call 1-888-796-1074...

San Francisco Calif.: Hi,

This year, I received a distribution from a profit sharing plan from a company where I had worked 4 years ago. Can I still roll that over into a Roth IRA and not pay taxes on it? Anyway, I can avoid paying the 10% penalty for early distribution.

Thanks.

Sam Serio: Unfortunately rollovers must be done within 60 days of receipt... If you're still within the 60 days, you're fine.

Gainesville, Fla.: My daughter's spouse died in October 2002 and they were living in Maryland. He had been sick for 10 months prior to his death and my daughter quit her job in June to take care of him at home. In spite of that, she now owes about $6,000 in income tax to the IRS. Can my daughter deduct any of the expenses she had in taking her husband back and forth to the doctor, to the hospital and for tests? Can you advise of any ancilliary deductions she could claim that she may have missed regarding a death of a spouse in a tax year and allowable deductions when the other spouse loses their income due to the sickness and death?

Sam Serio: Yes. Transportation to and from doctors and hospitals is deductible at 36.5 cents per mile for 2002... For other possible relief get Publication 559, Survivors, Executors, and Administrators from IRS.GOV...

Silver Spring, Md.: I was receiving unemployment benefits for 10 months of the year, is either Federal or State of MD tax waived? Does it only relate to the income level? Thanks for your response.

Sam Serio: Unemployment compensation is fully taxable, for Federal purposes... Contact the State at 1-800-MD-TAXES for their treatment...

Germantown, Md.: I bought an alternative fuel vehicle last year (2003 Ford Ranger). How can I find out what the tax credit is?

Sam Serio: Check with the manufacturer to see if they have received approval from IRS that they qualify for the $2000 Hybrid Vehicle Credit. I am not aware of us having ruled on this vehicle...

College Park, Md.: I'm an MBA student, and we've been told that if we plan to "carry on" in our profession (as opposed to switching professions) after school, we can deduct most costs associated with the degree as business-related expenses. This would involve filing form 2106, which in turn would be placed on Schedule A. Is this accurate? And is it a big advantage as opposed to claiming the lifetime learning credit?

Sam Serio: Education expenses are only deductible if qualifying you in your current trade or business... If I were you, I would try it both ways -- to see which is the most beneficial to you -- deduction or credit.

Herndon, Va.: I am confused about the Alternative Minimum Tax (AMT). If you are married filing jointly, what is it that has to add up to $48,000 - your AGI or your itermized deductions? Also, if you use Turbo Tax, and enter in everything they prompt for correctly, and there is no AMT triggered, are you fairly safe to assume that there is no AMT liability?

Sam Serio: YES... I would rely on Turbo Tax.

Washington, D.C.: I heard there is a new tax credit for people 25 and under who contribute to a 401k. Is this true and if so, how does one take advantage of that?

Sam Serio: Not that I know of!

Washington, D.C.: What red flags do the IRS have that would make my individual tax return be marked for an audit?

Sam Serio: There are no real "red flags"... Our computerized selection process looks at all facets of the tax return and whether the income and expenses make sense.

Sorry Folks, but I've got to go... THANKS for your questions. I hope we helped a few folks!

washingtonpost.com:

That wraps up today's show. Thanks to everyone who joined the discussion.

Keep up with the best Live Online has to offer and special breaking news discussions. Sign up for the NEW Live Online e-mail newsletter.

   |      |