Apr
29
2008

  Sometimes I Think It's Death BY Taxes

I've got the 2006 MFJ Federal and NY returns done, including all necessary attachments. They are printed and ready for filing. But man, the 2006 NJ return is killing me.

NJ doesn't allow S Corp income to flow-through the same way it does for Federal and most other states. So there are entire sets of schedules related to just the NJ portion. And of course it's based on the Fed & NY returns "as if" they were married-filing-separate, but at least I have those done for Terry now. I did manage to finish NJ tonight, but I don't trust it yet.

I'll read the instructions again tomorrow since although I understand S Corp losses don't carry forward from one year to the next (there were losses in 2005), they supposedly are considered when calculating the gain or loss from disposition of the S Corp stock (Terry disposed of his shares in 2006). But I'm not sure about whether those losses should go to capital loss, or against current S Corp income. So I'll look with fresh eyes tomorrow.

My advice to all--DON'T GO S CORP IF YOU HAVE TO FILE TAX RETURNS IN NEW JERSEY! What a headache. I'm undecided if I will blow off amending the VA returns. According to my estimates, it will result in a $50 refund, and it's not worth it for the effort I'd have to put in to calculate both Fed & NY MFS for me and complete the VA return. BUT on the other hand, I really don't want to deal with an audit (even if I would come out ahead) and I don't want to be flagged as a taxpayer who amended Federal without amending Virginia. . .Plus there is just my uptight accounting personal nature that is disturbed by having supposedly matched sets that don't match, totals that don't balance. Maybe if it turns out we get a fat refund from amending NJ (we do for Federal, and a slim refund for NY) I'll be reinvigorated to do VA just on principle.