D
Daze N. Knights
Apparently, MS's goal, now reached was 30,000 participants
http://news.com.com/2100-1012_3-6140100.html?part=rss&tag=2547-1_3-0-5&subj=news
http://news.com.com/2100-1012_3-6140100.html?part=rss&tag=2547-1_3-0-5&subj=news
is this real ? MS giving free Vista and Office for viewing webcasts ??
J
James Welch
Ok I already knew that, but how much am I looking at here that I'm gonna
have to pay. I had already completed both offers requirements a couple days
before they both sold out.
have to pay. I had already completed both offers requirements a couple days
before they both sold out.
D
Daze N. Knights
My guess is that, when filing your income tax forms in 2008 (for 2007),
you'll have to declare the declared (by MS) value of your gifts as
income earned during 2007 (which will be when you receive your gifts).
But since, as MS says, "IRS rules require that any gift over $600 is
taxable" (Colin evidently got the amount a bit wrong in his post), I
don't know if you'll have to declare the full combined value of around
$798 ($499 for Office plus $299 for Vista Business) or only the amount
exceeding $600 (which would be around $198), as I have never had to
declare a "gift" for income tax purposes before. (I'm going to have to
face this issue myself.) But the amount (whatever it is) will have to be
included by you (or your tax preparer) as additional income for 2007,
and you will be required by law to pay income taxes on that amount just
as if you'd earned that amount of money working for it.
Another question of interest to me on this subject is, what if you
intend to use your gifts in your business and (at least plausibly) would
have gone out and purchased Vista and Office anyway for your business
computer? In the latter case, the full retail cost (including sales tax)
could be deemed a business expense for income tax purposes. In this
case, however, the actual cost to someone such as myself will be the
cost of whatever additional income taxes I am required to pay as a
result of receiving these (otherwise free) gifts. I'm wondering if
there's some way to write off the additional tax expense against my
business income . . . ?
Unless there's a tax expert among us, we'll likely have to wait until
tax time in 2008 to see just how much our "free" gifts actually cost us,
but it is hard to see how, even after the tax expense, we will not be
able to see our gifts as a really good deal for the price.
you'll have to declare the declared (by MS) value of your gifts as
income earned during 2007 (which will be when you receive your gifts).
But since, as MS says, "IRS rules require that any gift over $600 is
taxable" (Colin evidently got the amount a bit wrong in his post), I
don't know if you'll have to declare the full combined value of around
$798 ($499 for Office plus $299 for Vista Business) or only the amount
exceeding $600 (which would be around $198), as I have never had to
declare a "gift" for income tax purposes before. (I'm going to have to
face this issue myself.) But the amount (whatever it is) will have to be
included by you (or your tax preparer) as additional income for 2007,
and you will be required by law to pay income taxes on that amount just
as if you'd earned that amount of money working for it.
Another question of interest to me on this subject is, what if you
intend to use your gifts in your business and (at least plausibly) would
have gone out and purchased Vista and Office anyway for your business
computer? In the latter case, the full retail cost (including sales tax)
could be deemed a business expense for income tax purposes. In this
case, however, the actual cost to someone such as myself will be the
cost of whatever additional income taxes I am required to pay as a
result of receiving these (otherwise free) gifts. I'm wondering if
there's some way to write off the additional tax expense against my
business income . . . ?
Unless there's a tax expert among us, we'll likely have to wait until
tax time in 2008 to see just how much our "free" gifts actually cost us,
but it is hard to see how, even after the tax expense, we will not be
able to see our gifts as a really good deal for the price.
D
DCR
As to declaring the value of your "gift"...
Two years ago I won a very nice trip to Australia, my tax preparer said I would have to declare the
"fair market value" as extra income.
If I could find an equal or better equivalent of the same trip I could use that amount for tax
purposes. The provider of the trip was required by law to report to the IRS my winnings, so there
was no way to avoid taxes, but I did find a legitimate equivalent at a lower price.
I also expect that business use will have different tax implications.
| My guess is that, when filing your income tax forms in 2008 (for 2007),
| you'll have to declare the declared (by MS) value of your gifts as
| income earned during 2007 (which will be when you receive your gifts).
| But since, as MS says, "IRS rules require that any gift over $600 is
| taxable" (Colin evidently got the amount a bit wrong in his post), I
| don't know if you'll have to declare the full combined value of around
| $798 ($499 for Office plus $299 for Vista Business) or only the amount
| exceeding $600 (which would be around $198), as I have never had to
| declare a "gift" for income tax purposes before. (I'm going to have to
| face this issue myself.) But the amount (whatever it is) will have to be
| included by you (or your tax preparer) as additional income for 2007,
| and you will be required by law to pay income taxes on that amount just
| as if you'd earned that amount of money working for it.
|
| Another question of interest to me on this subject is, what if you
| intend to use your gifts in your business and (at least plausibly) would
| have gone out and purchased Vista and Office anyway for your business
| computer? In the latter case, the full retail cost (including sales tax)
| could be deemed a business expense for income tax purposes. In this
| case, however, the actual cost to someone such as myself will be the
| cost of whatever additional income taxes I am required to pay as a
| result of receiving these (otherwise free) gifts. I'm wondering if
| there's some way to write off the additional tax expense against my
| business income . . . ?
|
| Unless there's a tax expert among us, we'll likely have to wait until
| tax time in 2008 to see just how much our "free" gifts actually cost us,
| but it is hard to see how, even after the tax expense, we will not be
| able to see our gifts as a really good deal for the price.
|
| James Welch wrote:
| > Ok I already knew that, but how much am I looking at here that I'm gonna
| > have to pay. I had already completed both offers requirements a couple
| > days before they both sold out.
| >
| >
| >
| > | >> If you receive $500 or more in gratuities in a year MS is required to
| >> report it to the IRS. You are responsible for any taxes. Vista
| >> Business + Office 2007 is valued at more than $500. If you chose only
| >> one of them the value would have been less than $500 and no form would
| >> be needed.
| >>
| >> | >>> I still don't fully understand the tax part. What exactly is a W9
| >>> form. Will I have to pay tax/money if I want to receive both Vista
| >>> and Office. Or is this tax information for Microsoft so they won't
| >>> have to pay tax on this. In short, am I going to have to end up
| >>> forking out any kind of money for receiving both products, and if
| >>> yes, what amount am I looking at. I live in Michigan btw.
| >>
| >>
Two years ago I won a very nice trip to Australia, my tax preparer said I would have to declare the
"fair market value" as extra income.
If I could find an equal or better equivalent of the same trip I could use that amount for tax
purposes. The provider of the trip was required by law to report to the IRS my winnings, so there
was no way to avoid taxes, but I did find a legitimate equivalent at a lower price.
I also expect that business use will have different tax implications.
| My guess is that, when filing your income tax forms in 2008 (for 2007),
| you'll have to declare the declared (by MS) value of your gifts as
| income earned during 2007 (which will be when you receive your gifts).
| But since, as MS says, "IRS rules require that any gift over $600 is
| taxable" (Colin evidently got the amount a bit wrong in his post), I
| don't know if you'll have to declare the full combined value of around
| $798 ($499 for Office plus $299 for Vista Business) or only the amount
| exceeding $600 (which would be around $198), as I have never had to
| declare a "gift" for income tax purposes before. (I'm going to have to
| face this issue myself.) But the amount (whatever it is) will have to be
| included by you (or your tax preparer) as additional income for 2007,
| and you will be required by law to pay income taxes on that amount just
| as if you'd earned that amount of money working for it.
|
| Another question of interest to me on this subject is, what if you
| intend to use your gifts in your business and (at least plausibly) would
| have gone out and purchased Vista and Office anyway for your business
| computer? In the latter case, the full retail cost (including sales tax)
| could be deemed a business expense for income tax purposes. In this
| case, however, the actual cost to someone such as myself will be the
| cost of whatever additional income taxes I am required to pay as a
| result of receiving these (otherwise free) gifts. I'm wondering if
| there's some way to write off the additional tax expense against my
| business income . . . ?
|
| Unless there's a tax expert among us, we'll likely have to wait until
| tax time in 2008 to see just how much our "free" gifts actually cost us,
| but it is hard to see how, even after the tax expense, we will not be
| able to see our gifts as a really good deal for the price.
|
| James Welch wrote:
| > Ok I already knew that, but how much am I looking at here that I'm gonna
| > have to pay. I had already completed both offers requirements a couple
| > days before they both sold out.
| >
| >
| >
| > | >> If you receive $500 or more in gratuities in a year MS is required to
| >> report it to the IRS. You are responsible for any taxes. Vista
| >> Business + Office 2007 is valued at more than $500. If you chose only
| >> one of them the value would have been less than $500 and no form would
| >> be needed.
| >>
| >> | >>> I still don't fully understand the tax part. What exactly is a W9
| >>> form. Will I have to pay tax/money if I want to receive both Vista
| >>> and Office. Or is this tax information for Microsoft so they won't
| >>> have to pay tax on this. In short, am I going to have to end up
| >>> forking out any kind of money for receiving both products, and if
| >>> yes, what amount am I looking at. I live in Michigan btw.
| >>
| >>
D
Daze N. Knights
DCR said:
So, if one can find Vista Business and/or Office Pro advertised on sale
somewhere for less than MS's declared value of them, one can save the ad
for one's records and declare the sale price as the value for income tax
purposes . . . ? And I wonder if one needs to factor in whatever sales
taxes and/or shipping costs would have been involved in getting the
products from the advertiser if one had obtained the products that way?
R
Roscoe
Daze N. Knights said:
Of course, this assumes that anyone will ever actually receive the software.
I see no reason why you couldn't claim lesser than retail. Nobody pays
retail anymore, for anything... (except the government which pays
exponentially over retail).
D
DCR
As I understand my tax preparer, yes, if you can find a legitimate advertised, or verifiably
quotable, lower price (good luck on MS products for that) and without other "strings attached" to
that offer, you can legally use that price for tax purposes.
Sales taxes AND income taxes must also be paid on that value to state and local governments (at
least here in NYC). In some cases and for some items, local taxes might not apply.
As far as I know shipping costs are not a factor in taxable income. (I did not add the FED EX costs
of the tickets.)
|
|
| DCR wrote:
| > As to declaring the value of your "gift"...
| >
| > Two years ago I won a very nice trip to Australia, my tax preparer said I would have to declare
the
| > "fair market value" as extra income.
| > If I could find an equal or better equivalent of the same trip I could use that amount for tax
| > purposes. The provider of the trip was required by law to report to the IRS my winnings, so
there
| > was no way to avoid taxes, but I did find a legitimate equivalent at a lower price.
|
| So, if one can find Vista Business and/or Office Pro advertised on sale
| somewhere for less than MS's declared value of them, one can save the ad
| for one's records and declare the sale price as the value for income tax
| purposes . . . ? And I wonder if one needs to factor in whatever sales
| taxes and/or shipping costs would have been involved in getting the
| products from the advertiser if one had obtained the products that way?
|
| >
| > I also expect that business use will have different tax implications.
| >
| >
| > | > | My guess is that, when filing your income tax forms in 2008 (for 2007),
| > | you'll have to declare the declared (by MS) value of your gifts as
| > | income earned during 2007 (which will be when you receive your gifts).
| > | But since, as MS says, "IRS rules require that any gift over $600 is
| > | taxable" (Colin evidently got the amount a bit wrong in his post), I
| > | don't know if you'll have to declare the full combined value of around
| > | $798 ($499 for Office plus $299 for Vista Business) or only the amount
| > | exceeding $600 (which would be around $198), as I have never had to
| > | declare a "gift" for income tax purposes before. (I'm going to have to
| > | face this issue myself.) But the amount (whatever it is) will have to be
| > | included by you (or your tax preparer) as additional income for 2007,
| > | and you will be required by law to pay income taxes on that amount just
| > | as if you'd earned that amount of money working for it.
| > |
| > | Another question of interest to me on this subject is, what if you
| > | intend to use your gifts in your business and (at least plausibly) would
| > | have gone out and purchased Vista and Office anyway for your business
| > | computer? In the latter case, the full retail cost (including sales tax)
| > | could be deemed a business expense for income tax purposes. In this
| > | case, however, the actual cost to someone such as myself will be the
| > | cost of whatever additional income taxes I am required to pay as a
| > | result of receiving these (otherwise free) gifts. I'm wondering if
| > | there's some way to write off the additional tax expense against my
| > | business income . . . ?
| > |
| > | Unless there's a tax expert among us, we'll likely have to wait until
| > | tax time in 2008 to see just how much our "free" gifts actually cost us,
| > | but it is hard to see how, even after the tax expense, we will not be
| > | able to see our gifts as a really good deal for the price.
| > |
| > | James Welch wrote:
| > | > Ok I already knew that, but how much am I looking at here that I'm gonna
| > | > have to pay. I had already completed both offers requirements a couple
| > | > days before they both sold out.
| > | >
| > | >
| > | >
| > | > | > | >> If you receive $500 or more in gratuities in a year MS is required to
| > | >> report it to the IRS. You are responsible for any taxes. Vista
| > | >> Business + Office 2007 is valued at more than $500. If you chose only
| > | >> one of them the value would have been less than $500 and no form would
| > | >> be needed.
| > | >>
| > | >> | > | >>> I still don't fully understand the tax part. What exactly is a W9
| > | >>> form. Will I have to pay tax/money if I want to receive both Vista
| > | >>> and Office. Or is this tax information for Microsoft so they won't
| > | >>> have to pay tax on this. In short, am I going to have to end up
| > | >>> forking out any kind of money for receiving both products, and if
| > | >>> yes, what amount am I looking at. I live in Michigan btw.
| > | >>
| > | >>
| >
| >
quotable, lower price (good luck on MS products for that) and without other "strings attached" to
that offer, you can legally use that price for tax purposes.
Sales taxes AND income taxes must also be paid on that value to state and local governments (at
least here in NYC). In some cases and for some items, local taxes might not apply.
As far as I know shipping costs are not a factor in taxable income. (I did not add the FED EX costs
of the tickets.)
|
|
| DCR wrote:
| > As to declaring the value of your "gift"...
| >
| > Two years ago I won a very nice trip to Australia, my tax preparer said I would have to declare
the
| > "fair market value" as extra income.
| > If I could find an equal or better equivalent of the same trip I could use that amount for tax
| > purposes. The provider of the trip was required by law to report to the IRS my winnings, so
there
| > was no way to avoid taxes, but I did find a legitimate equivalent at a lower price.
|
| So, if one can find Vista Business and/or Office Pro advertised on sale
| somewhere for less than MS's declared value of them, one can save the ad
| for one's records and declare the sale price as the value for income tax
| purposes . . . ? And I wonder if one needs to factor in whatever sales
| taxes and/or shipping costs would have been involved in getting the
| products from the advertiser if one had obtained the products that way?
|
| >
| > I also expect that business use will have different tax implications.
| >
| >
| > | > | My guess is that, when filing your income tax forms in 2008 (for 2007),
| > | you'll have to declare the declared (by MS) value of your gifts as
| > | income earned during 2007 (which will be when you receive your gifts).
| > | But since, as MS says, "IRS rules require that any gift over $600 is
| > | taxable" (Colin evidently got the amount a bit wrong in his post), I
| > | don't know if you'll have to declare the full combined value of around
| > | $798 ($499 for Office plus $299 for Vista Business) or only the amount
| > | exceeding $600 (which would be around $198), as I have never had to
| > | declare a "gift" for income tax purposes before. (I'm going to have to
| > | face this issue myself.) But the amount (whatever it is) will have to be
| > | included by you (or your tax preparer) as additional income for 2007,
| > | and you will be required by law to pay income taxes on that amount just
| > | as if you'd earned that amount of money working for it.
| > |
| > | Another question of interest to me on this subject is, what if you
| > | intend to use your gifts in your business and (at least plausibly) would
| > | have gone out and purchased Vista and Office anyway for your business
| > | computer? In the latter case, the full retail cost (including sales tax)
| > | could be deemed a business expense for income tax purposes. In this
| > | case, however, the actual cost to someone such as myself will be the
| > | cost of whatever additional income taxes I am required to pay as a
| > | result of receiving these (otherwise free) gifts. I'm wondering if
| > | there's some way to write off the additional tax expense against my
| > | business income . . . ?
| > |
| > | Unless there's a tax expert among us, we'll likely have to wait until
| > | tax time in 2008 to see just how much our "free" gifts actually cost us,
| > | but it is hard to see how, even after the tax expense, we will not be
| > | able to see our gifts as a really good deal for the price.
| > |
| > | James Welch wrote:
| > | > Ok I already knew that, but how much am I looking at here that I'm gonna
| > | > have to pay. I had already completed both offers requirements a couple
| > | > days before they both sold out.
| > | >
| > | >
| > | >
| > | > | > | >> If you receive $500 or more in gratuities in a year MS is required to
| > | >> report it to the IRS. You are responsible for any taxes. Vista
| > | >> Business + Office 2007 is valued at more than $500. If you chose only
| > | >> one of them the value would have been less than $500 and no form would
| > | >> be needed.
| > | >>
| > | >> | > | >>> I still don't fully understand the tax part. What exactly is a W9
| > | >>> form. Will I have to pay tax/money if I want to receive both Vista
| > | >>> and Office. Or is this tax information for Microsoft so they won't
| > | >>> have to pay tax on this. In short, am I going to have to end up
| > | >>> forking out any kind of money for receiving both products, and if
| > | >>> yes, what amount am I looking at. I live in Michigan btw.
| > | >>
| > | >>
| >
| >
D
Daze N. Knights
Well, of course one can claim less than retail. One can also not report
the gifts at all. The question is what could one expect to be
satisfactory to the IRS if one should be chosen for an audit?
the gifts at all. The question is what could one expect to be
satisfactory to the IRS if one should be chosen for an audit?
D
Daze N. Knights
DCR said:
Thanks for that info.
I don't see how paying sales taxes apply to gifts. For my gifts from MS,
I will not have to pay state or local sales taxes, because I didn't
purchase the items and MS didn't sell them to me. I'm only wondering if
the potential sales taxes would have to be included in the total
reported value to the IRS if I were using the advertised cost of the
item(s) from a retail outlet as the value I report for income tax
purposes to the IRS (instead of the value as declared by MS).
D
DCR
I would think that since it MUST and WILL be reported to the IRS, red flags would be raised, whether
or not one is being considered for an audit, and it could even trigger an audit.
| Well, of course one can claim less than retail. One can also not report
| the gifts at all. The question is what could one expect to be
| satisfactory to the IRS if one should be chosen for an audit?
|
| Roscoe wrote:
| >
| > | >>
| >>
| >> DCR wrote:
| >>> As to declaring the value of your "gift"...
| >>>
| >>> Two years ago I won a very nice trip to Australia, my tax preparer
| >>> said I would have to declare the "fair market value" as extra income.
| >>> If I could find an equal or better equivalent of the same trip I
| >>> could use that amount for tax purposes. The provider of the trip was
| >>> required by law to report to the IRS my winnings, so there was no way
| >>> to avoid taxes, but I did find a legitimate equivalent at a lower price.
| >>
| >> So, if one can find Vista Business and/or Office Pro advertised on
| >> sale somewhere for less than MS's declared value of them, one can save
| >> the ad for one's records and declare the sale price as the value for
| >> income tax purposes . . . ? And I wonder if one needs to factor in
| >> whatever sales taxes and/or shipping costs would have been involved in
| >> getting the products from the advertiser if one had obtained the
| >> products that way?
| >
| > Of course, this assumes that anyone will ever actually receive the
| > software.
| >
| > I see no reason why you couldn't claim lesser than retail. Nobody pays
| > retail anymore, for anything... (except the government which pays
| > exponentially over retail).
| >
| >
| >
or not one is being considered for an audit, and it could even trigger an audit.
| Well, of course one can claim less than retail. One can also not report
| the gifts at all. The question is what could one expect to be
| satisfactory to the IRS if one should be chosen for an audit?
|
| Roscoe wrote:
| >
| > | >>
| >>
| >> DCR wrote:
| >>> As to declaring the value of your "gift"...
| >>>
| >>> Two years ago I won a very nice trip to Australia, my tax preparer
| >>> said I would have to declare the "fair market value" as extra income.
| >>> If I could find an equal or better equivalent of the same trip I
| >>> could use that amount for tax purposes. The provider of the trip was
| >>> required by law to report to the IRS my winnings, so there was no way
| >>> to avoid taxes, but I did find a legitimate equivalent at a lower price.
| >>
| >> So, if one can find Vista Business and/or Office Pro advertised on
| >> sale somewhere for less than MS's declared value of them, one can save
| >> the ad for one's records and declare the sale price as the value for
| >> income tax purposes . . . ? And I wonder if one needs to factor in
| >> whatever sales taxes and/or shipping costs would have been involved in
| >> getting the products from the advertiser if one had obtained the
| >> products that way?
| >
| > Of course, this assumes that anyone will ever actually receive the
| > software.
| >
| > I see no reason why you couldn't claim lesser than retail. Nobody pays
| > retail anymore, for anything... (except the government which pays
| > exponentially over retail).
| >
| >
| >
D
DCR
| I don't see how paying sales taxes apply to gifts. For my gifts from MS,
| I will not have to pay state or local sales taxes, because I didn't
| purchase the items and MS didn't sell them to me.
Not really a "gift" -- you viewed presentations in order to receive the item.
I did not purchase my vacation, nor did anyone sell it to me, but I DID have to pay state income,
local income AND state sales and local sales tax.
Just my experience though.
| I will not have to pay state or local sales taxes, because I didn't
| purchase the items and MS didn't sell them to me.
Not really a "gift" -- you viewed presentations in order to receive the item.
I did not purchase my vacation, nor did anyone sell it to me, but I DID have to pay state income,
local income AND state sales and local sales tax.
Just my experience though.
C
Colin Barnhorst
It is a promo.
J
James Welch
So I would be paying income tax on $798-$600 = $198 (total retail price -
gift max),
or would I be paying tax on the whole $798? I will ask my tax preparer for
more information.
gift max),
or would I be paying tax on the whole $798? I will ask my tax preparer for
more information.
D
DCR
If you can get it for $600, then $600 would be the taxable amount.
| So I would be paying income tax on $798-$600 = $198 (total retail price -
| gift max),
|
| or would I be paying tax on the whole $798? I will ask my tax preparer for
| more information.
|
|
|
|
|
|
| | > As I understand my tax preparer, yes, if you can find a legitimate
| > advertised, or verifiably
| > quotable, lower price (good luck on MS products for that) and without
| > other "strings attached" to
| > that offer, you can legally use that price for tax purposes.
| >
| > Sales taxes AND income taxes must also be paid on that value to state and
| > local governments (at
| > least here in NYC). In some cases and for some items, local taxes might
| > not apply.
| >
| > As far as I know shipping costs are not a factor in taxable income. (I did
| > not add the FED EX costs
| > of the tickets.)
| >
| >
| > | > |
| > |
| > | DCR wrote:
| > | > As to declaring the value of your "gift"...
| > | >
| > | > Two years ago I won a very nice trip to Australia, my tax preparer
| > said I would have to declare
| > the
| > | > "fair market value" as extra income.
| > | > If I could find an equal or better equivalent of the same trip I
| > could use that amount for tax
| > | > purposes. The provider of the trip was required by law to report to
| > the IRS my winnings, so
| > there
| > | > was no way to avoid taxes, but I did find a legitimate equivalent at a
| > lower price.
| > |
| > | So, if one can find Vista Business and/or Office Pro advertised on sale
| > | somewhere for less than MS's declared value of them, one can save the ad
| > | for one's records and declare the sale price as the value for income tax
| > | purposes . . . ? And I wonder if one needs to factor in whatever sales
| > | taxes and/or shipping costs would have been involved in getting the
| > | products from the advertiser if one had obtained the products that way?
| > |
| > | >
| > | > I also expect that business use will have different tax implications.
| > | >
| > | >
| > | > | > | > | My guess is that, when filing your income tax forms in 2008 (for
| > 2007),
| > | > | you'll have to declare the declared (by MS) value of your gifts as
| > | > | income earned during 2007 (which will be when you receive your
| > gifts).
| > | > | But since, as MS says, "IRS rules require that any gift over $600 is
| > | > | taxable" (Colin evidently got the amount a bit wrong in his post), I
| > | > | don't know if you'll have to declare the full combined value of
| > around
| > | > | $798 ($499 for Office plus $299 for Vista Business) or only the
| > amount
| > | > | exceeding $600 (which would be around $198), as I have never had to
| > | > | declare a "gift" for income tax purposes before. (I'm going to have
| > to
| > | > | face this issue myself.) But the amount (whatever it is) will have
| > to be
| > | > | included by you (or your tax preparer) as additional income for
| > 2007,
| > | > | and you will be required by law to pay income taxes on that amount
| > just
| > | > | as if you'd earned that amount of money working for it.
| > | > |
| > | > | Another question of interest to me on this subject is, what if you
| > | > | intend to use your gifts in your business and (at least plausibly)
| > would
| > | > | have gone out and purchased Vista and Office anyway for your
| > business
| > | > | computer? In the latter case, the full retail cost (including sales
| > tax)
| > | > | could be deemed a business expense for income tax purposes. In this
| > | > | case, however, the actual cost to someone such as myself will be the
| > | > | cost of whatever additional income taxes I am required to pay as a
| > | > | result of receiving these (otherwise free) gifts. I'm wondering if
| > | > | there's some way to write off the additional tax expense against my
| > | > | business income . . . ?
| > | > |
| > | > | Unless there's a tax expert among us, we'll likely have to wait
| > until
| > | > | tax time in 2008 to see just how much our "free" gifts actually cost
| > us,
| > | > | but it is hard to see how, even after the tax expense, we will not
| > be
| > | > | able to see our gifts as a really good deal for the price.
| > | > |
| > | > | James Welch wrote:
| > | > | > Ok I already knew that, but how much am I looking at here that I'm
| > gonna
| > | > | > have to pay. I had already completed both offers requirements a
| > couple
| > | > | > days before they both sold out.
| > | > | >
| > | > | >
| > | > | >
| > | > | > | > | > | >> If you receive $500 or more in gratuities in a year MS is
| > required to
| > | > | >> report it to the IRS. You are responsible for any taxes. Vista
| > | > | >> Business + Office 2007 is valued at more than $500. If you chose
| > only
| > | > | >> one of them the value would have been less than $500 and no form
| > would
| > | > | >> be needed.
| > | > | >>
| > | > | >> | > | > | >>> I still don't fully understand the tax part. What exactly is a
| > W9
| > | > | >>> form. Will I have to pay tax/money if I want to receive both
| > Vista
| > | > | >>> and Office. Or is this tax information for Microsoft so they
| > won't
| > | > | >>> have to pay tax on this. In short, am I going to have to end up
| > | > | >>> forking out any kind of money for receiving both products, and
| > if
| > | > | >>> yes, what amount am I looking at. I live in Michigan btw.
| > | > | >>
| > | > | >>
| > | >
| > | >
| >
| >
| So I would be paying income tax on $798-$600 = $198 (total retail price -
| gift max),
|
| or would I be paying tax on the whole $798? I will ask my tax preparer for
| more information.
|
|
|
|
|
|
| | > As I understand my tax preparer, yes, if you can find a legitimate
| > advertised, or verifiably
| > quotable, lower price (good luck on MS products for that) and without
| > other "strings attached" to
| > that offer, you can legally use that price for tax purposes.
| >
| > Sales taxes AND income taxes must also be paid on that value to state and
| > local governments (at
| > least here in NYC). In some cases and for some items, local taxes might
| > not apply.
| >
| > As far as I know shipping costs are not a factor in taxable income. (I did
| > not add the FED EX costs
| > of the tickets.)
| >
| >
| > | > |
| > |
| > | DCR wrote:
| > | > As to declaring the value of your "gift"...
| > | >
| > | > Two years ago I won a very nice trip to Australia, my tax preparer
| > said I would have to declare
| > the
| > | > "fair market value" as extra income.
| > | > If I could find an equal or better equivalent of the same trip I
| > could use that amount for tax
| > | > purposes. The provider of the trip was required by law to report to
| > the IRS my winnings, so
| > there
| > | > was no way to avoid taxes, but I did find a legitimate equivalent at a
| > lower price.
| > |
| > | So, if one can find Vista Business and/or Office Pro advertised on sale
| > | somewhere for less than MS's declared value of them, one can save the ad
| > | for one's records and declare the sale price as the value for income tax
| > | purposes . . . ? And I wonder if one needs to factor in whatever sales
| > | taxes and/or shipping costs would have been involved in getting the
| > | products from the advertiser if one had obtained the products that way?
| > |
| > | >
| > | > I also expect that business use will have different tax implications.
| > | >
| > | >
| > | > | > | > | My guess is that, when filing your income tax forms in 2008 (for
| > 2007),
| > | > | you'll have to declare the declared (by MS) value of your gifts as
| > | > | income earned during 2007 (which will be when you receive your
| > gifts).
| > | > | But since, as MS says, "IRS rules require that any gift over $600 is
| > | > | taxable" (Colin evidently got the amount a bit wrong in his post), I
| > | > | don't know if you'll have to declare the full combined value of
| > around
| > | > | $798 ($499 for Office plus $299 for Vista Business) or only the
| > amount
| > | > | exceeding $600 (which would be around $198), as I have never had to
| > | > | declare a "gift" for income tax purposes before. (I'm going to have
| > to
| > | > | face this issue myself.) But the amount (whatever it is) will have
| > to be
| > | > | included by you (or your tax preparer) as additional income for
| > 2007,
| > | > | and you will be required by law to pay income taxes on that amount
| > just
| > | > | as if you'd earned that amount of money working for it.
| > | > |
| > | > | Another question of interest to me on this subject is, what if you
| > | > | intend to use your gifts in your business and (at least plausibly)
| > would
| > | > | have gone out and purchased Vista and Office anyway for your
| > business
| > | > | computer? In the latter case, the full retail cost (including sales
| > tax)
| > | > | could be deemed a business expense for income tax purposes. In this
| > | > | case, however, the actual cost to someone such as myself will be the
| > | > | cost of whatever additional income taxes I am required to pay as a
| > | > | result of receiving these (otherwise free) gifts. I'm wondering if
| > | > | there's some way to write off the additional tax expense against my
| > | > | business income . . . ?
| > | > |
| > | > | Unless there's a tax expert among us, we'll likely have to wait
| > until
| > | > | tax time in 2008 to see just how much our "free" gifts actually cost
| > us,
| > | > | but it is hard to see how, even after the tax expense, we will not
| > be
| > | > | able to see our gifts as a really good deal for the price.
| > | > |
| > | > | James Welch wrote:
| > | > | > Ok I already knew that, but how much am I looking at here that I'm
| > gonna
| > | > | > have to pay. I had already completed both offers requirements a
| > couple
| > | > | > days before they both sold out.
| > | > | >
| > | > | >
| > | > | >
| > | > | > | > | > | >> If you receive $500 or more in gratuities in a year MS is
| > required to
| > | > | >> report it to the IRS. You are responsible for any taxes. Vista
| > | > | >> Business + Office 2007 is valued at more than $500. If you chose
| > only
| > | > | >> one of them the value would have been less than $500 and no form
| > would
| > | > | >> be needed.
| > | > | >>
| > | > | >> | > | > | >>> I still don't fully understand the tax part. What exactly is a
| > W9
| > | > | >>> form. Will I have to pay tax/money if I want to receive both
| > Vista
| > | > | >>> and Office. Or is this tax information for Microsoft so they
| > won't
| > | > | >>> have to pay tax on this. In short, am I going to have to end up
| > | > | >>> forking out any kind of money for receiving both products, and
| > if
| > | > | >>> yes, what amount am I looking at. I live in Michigan btw.
| > | > | >>
| > | > | >>
| > | >
| > | >
| >
| >
C
Colin Barnhorst
Correct. MS's reporting requirement has nothing to do with what one adds to
gross income on the return.
Once the reporting threshhold is reached the whole thing is reported, not a
net amount.
gross income on the return.
Once the reporting threshhold is reached the whole thing is reported, not a
net amount.
D
Daze N. Knights
Naturally. So I, for one, would certainly want to handle it in a way
that would be deemed satisfactory to the IRS *if* I happened to be (God
forbid) audited.
that would be deemed satisfactory to the IRS *if* I happened to be (God
forbid) audited.
D
Daze N. Knights
I'm calling it a "gift," because Microsoft is calling it a "gift." What
else the IRS might call it, I don't know, but it's kind of hard to
imagine describing it as anything other than what the giver of the
product describes it as. I'm not employed by MS, so I can't describe it
as income derived from employment. Nor am I self-employed as a webcast
viewer
As to the sales tax business. If you were given a free vacation, *who*
asked for and collected sales taxes from you? It wasn't the IRS, because
they don't deal with sales taxes. Sales taxes, whether state or local,
are normally requested and collected by the seller of the goods at the
time of purchase. Did the giver of your free vacation assign their own
value to the vacation and charge you sales taxes on it, or what? I can't
imagine how that would work: Getting charged for, and having to pay,
sales taxes on something that hasn't been purchased.
else the IRS might call it, I don't know, but it's kind of hard to
imagine describing it as anything other than what the giver of the
product describes it as. I'm not employed by MS, so I can't describe it
as income derived from employment. Nor am I self-employed as a webcast
viewer
As to the sales tax business. If you were given a free vacation, *who*
asked for and collected sales taxes from you? It wasn't the IRS, because
they don't deal with sales taxes. Sales taxes, whether state or local,
are normally requested and collected by the seller of the goods at the
time of purchase. Did the giver of your free vacation assign their own
value to the vacation and charge you sales taxes on it, or what? I can't
imagine how that would work: Getting charged for, and having to pay,
sales taxes on something that hasn't been purchased.
T
Tom Lake
Daze N. Knights said:I'm calling it a "gift," because Microsoft is calling it a "gift." What
else the IRS might call it, I don't know, but it's kind of hard to imagine
describing it as anything other than what the giver of the product
describes it as. I'm not employed by MS, so I can't describe it as income
derived from employment. Nor am I self-employed as a webcast viewer
I was always told the IRS would allow tax-free gifts of up to $10,000.00
but maybe that's within a family.
Tom Lake
D
Daze N. Knights
My assumption is that one would have to report the entire value to the
IRS. But I wonder if--since the threshold is $600--one is able to
subtract that first $600 of value on the form? That is, for instance:
Does one report the full value of the gift on one line of the form as
$798, and then proceed--in following the form's instructions--to
subtract $600 and enter the remaining amount on the following line,
which then becomes the actual taxable amount? Or is it that *all*
gifts--even those under $600--are actually required to be declared by
the receiver to the IRS, and the $600 threshold only applies to the
*giver's* requirement to report the gift(s) to the IRS (via the W-9). I
suspect the latter is actually the case. People receiving gifts valued
under $600 are still supposed to report the gift as income to the IRS,
but can probably get away with not doing so simply because Microsoft
will not be reporting to the IRS the fact that those people received
their gifts.
IRS. But I wonder if--since the threshold is $600--one is able to
subtract that first $600 of value on the form? That is, for instance:
Does one report the full value of the gift on one line of the form as
$798, and then proceed--in following the form's instructions--to
subtract $600 and enter the remaining amount on the following line,
which then becomes the actual taxable amount? Or is it that *all*
gifts--even those under $600--are actually required to be declared by
the receiver to the IRS, and the $600 threshold only applies to the
*giver's* requirement to report the gift(s) to the IRS (via the W-9). I
suspect the latter is actually the case. People receiving gifts valued
under $600 are still supposed to report the gift as income to the IRS,
but can probably get away with not doing so simply because Microsoft
will not be reporting to the IRS the fact that those people received
their gifts.
D
DCR
Quantas also mailed me a copy of the IRS reporting form (I don't remember the form number) so I know
it WAS reported to the IRS.
The "estimated retail value" on the form was much, much less than I claimed, but so far at least the
IRS seems to have accepted my estimate
$798 seems trivial in comparison, but I, for one, want as little to do with the IRS as possible.
| Naturally. So I, for one, would certainly want to handle it in a way
| that would be deemed satisfactory to the IRS *if* I happened to be (God
| forbid) audited.
|
| DCR wrote:
| > I would think that since it MUST and WILL be reported to the IRS, red flags would be raised,
whether
| > or not one is being considered for an audit, and it could even trigger an audit.
| >
| > | > | Well, of course one can claim less than retail. One can also not report
| > | the gifts at all. The question is what could one expect to be
| > | satisfactory to the IRS if one should be chosen for an audit?
| > |
| > | Roscoe wrote:
| > | >
| > | > | > | >>
| > | >>
| > | >> DCR wrote:
| > | >>> As to declaring the value of your "gift"...
| > | >>>
| > | >>> Two years ago I won a very nice trip to Australia, my tax preparer
| > | >>> said I would have to declare the "fair market value" as extra income.
| > | >>> If I could find an equal or better equivalent of the same trip I
| > | >>> could use that amount for tax purposes. The provider of the trip was
| > | >>> required by law to report to the IRS my winnings, so there was no way
| > | >>> to avoid taxes, but I did find a legitimate equivalent at a lower price.
| > | >>
| > | >> So, if one can find Vista Business and/or Office Pro advertised on
| > | >> sale somewhere for less than MS's declared value of them, one can save
| > | >> the ad for one's records and declare the sale price as the value for
| > | >> income tax purposes . . . ? And I wonder if one needs to factor in
| > | >> whatever sales taxes and/or shipping costs would have been involved in
| > | >> getting the products from the advertiser if one had obtained the
| > | >> products that way?
| > | >
| > | > Of course, this assumes that anyone will ever actually receive the
| > | > software.
| > | >
| > | > I see no reason why you couldn't claim lesser than retail. Nobody pays
| > | > retail anymore, for anything... (except the government which pays
| > | > exponentially over retail).
| > | >
| > | >
| > | >
| >
| >
it WAS reported to the IRS.
The "estimated retail value" on the form was much, much less than I claimed, but so far at least the
IRS seems to have accepted my estimate
$798 seems trivial in comparison, but I, for one, want as little to do with the IRS as possible.
| Naturally. So I, for one, would certainly want to handle it in a way
| that would be deemed satisfactory to the IRS *if* I happened to be (God
| forbid) audited.
|
| DCR wrote:
| > I would think that since it MUST and WILL be reported to the IRS, red flags would be raised,
whether
| > or not one is being considered for an audit, and it could even trigger an audit.
| >
| > | > | Well, of course one can claim less than retail. One can also not report
| > | the gifts at all. The question is what could one expect to be
| > | satisfactory to the IRS if one should be chosen for an audit?
| > |
| > | Roscoe wrote:
| > | >
| > | > | > | >>
| > | >>
| > | >> DCR wrote:
| > | >>> As to declaring the value of your "gift"...
| > | >>>
| > | >>> Two years ago I won a very nice trip to Australia, my tax preparer
| > | >>> said I would have to declare the "fair market value" as extra income.
| > | >>> If I could find an equal or better equivalent of the same trip I
| > | >>> could use that amount for tax purposes. The provider of the trip was
| > | >>> required by law to report to the IRS my winnings, so there was no way
| > | >>> to avoid taxes, but I did find a legitimate equivalent at a lower price.
| > | >>
| > | >> So, if one can find Vista Business and/or Office Pro advertised on
| > | >> sale somewhere for less than MS's declared value of them, one can save
| > | >> the ad for one's records and declare the sale price as the value for
| > | >> income tax purposes . . . ? And I wonder if one needs to factor in
| > | >> whatever sales taxes and/or shipping costs would have been involved in
| > | >> getting the products from the advertiser if one had obtained the
| > | >> products that way?
| > | >
| > | > Of course, this assumes that anyone will ever actually receive the
| > | > software.
| > | >
| > | > I see no reason why you couldn't claim lesser than retail. Nobody pays
| > | > retail anymore, for anything... (except the government which pays
| > | > exponentially over retail).
| > | >
| > | >
| > | >
| >
| >