Pondering Schedule J - Questions on several categories

[SilverQT]

I am working on my Schedule J and have a few questions that a search here has not answered.

Accounting fees: Are the fees I pay to an accountant for tax prep each year an allowable expense? I file Head of Household and itemize and am not comfy with things like Turbo Tax. Last year I paid him $210, which included the online filing fees.

Transportation: I have two cars. A new Honda, and a 10 year old Toyota my dependant daughter uses. Oil changes, registration, and gas costs are easy to nail down. Do I get a really good idea of what tires will cost and divide that by 12? (The Honda is new so I won't need tires soon, but likely within 18-24 months. Do I determine their replacement costs and divide by 18 or 24? ) And potential repair on the old Toyota has me stumped. It has 120K miles on it and is in good shape, but to think it won’t need some repair is likely foolish. Would an estimate of $225/12 for potential repair be a reasonable amount? If not, what might be?

Communication costs: My home phone cost is $27 and the DSL is $33 – they are bundled. I do not have long distance on my home phone, but I do pay Skype $2.95 a month for domestic long distance because it is a more affordable way to go. I also have a cell phone for $76. I do use my cell and internet occasionally for work as I must be available to assist my boss when necessary. Would any of this seem unreasonable?

Thanks!

[daylate]

Maybe the accountant but 210/12 or 17 a month doesn't seem like a game breaker. I would think 20-25 month for the Toyota maintenance would be reasonable. As for the tires, I think this Schedule is a 12 month look so if you aren't going to spend in that period I don't think you can include. but for things you will spend I would divide by 12.

[tcreegan]

Hi SilverQT,

The accounting expense isn't unreasonable but it is unusual. To avoid attracting the trustees attention, I would roll this into personal misc.

Dont run expenses out past a year, again, reasonable but unusual, would attract the trustees attention. Tires for the Toyota, price and divide by 12, go to a mechanic and get estimates on what repairs can be anticipated for the Toyota (+ scheduled maintence on the Honda if you pay out-of-pocket for it) Mechanics estimate divided by 12. Having the estimate = trustee knows you aren't making stuff up, builds confidence.

Your combined telco package is very reasonable...very, very reasonable in fact. In the olden days, cell phones were considered luxuries and trustees grouched about high costs on telecommunication, but by now they should have gotten the idea that these are no longer luxuries. If you do draw the dinosaur trustee, state they are necessary for work, school, and safety.

Good luck to you on the paperwork...ugh...

Tom in Colo

[SilverQT]

Great – thanks a bunch! Info on some Schedule J lines as they relate to Fed allowances is pretty clear, but not others. While I understand the Federal allowances are used in means testing, it appears that it is wise to keep the actual expenses reasonably in line with these when estimating? Some expenses can only be estimated and they have me scratching my head a bit. I was wondering about the need to submit a detailed breakout of expenses that supports the lines that represent multiple items – is that done? Or only if asked? Do the TTs dig into the line by line details to disallow $15 here, $18 there, until they can tip a debtor into Ch 13? Right now my DMI is only slightly negative, but I haven’t thought of every expense yet I am sure. I thought it best to ask questions here regarding the individual expense lines in smaller piecemeal fashion.

Where does Personal Misc. go on Schedule J? The accountant expense was something I had planned to include on Line 17 Other. I printed out a listing of IRS National Standards for allowed expenses and under IRS Other Necessary Expenses for health and welfare the first item is “accounting and legal fees.” I just haven’t seen that listed on any of the posts here I’ve found. It’s a normal expense for a lot of people and not new to me. Like everyone, though, I don’t want to raise any flags.

Thus far for Line 17 I have:
Accountant $210/12=$17.50
Costco $40/12=$3.30
Pet food/care=$45 (honestly this is low, but any higher I thought would be a flag)
Gifts=$15 (another candidate for Personal Misc. perhaps?)
Skype=$3 – I do not have long distance on my home phone, this is much more cost effective
DirectTV=$73
Total = $156.
Hmm... maybe Line 17 Other includes ‘Personal Misc.’ plus the other demonstrable costs like DirectTV? If so, Personal Misc. is yet another expense concept for me to contemplate – what other sorts of things would be under that umbrella (besides the accountant)? I am now off to search on that term here!

If the projected Transportation costs on Line 8 of Schedule J, plus the car payment for the Honda at $292 (Line 13a), add up to slightly less than the Federal allowance for one vehicle ($492?), is that a better place to be? I called the Honda dealership and learned that the oil change/tire rotation for me is $65 (it’s an Insight hybrid hence the higher than normal cost). The car has some auto-magic way of knowing when I need this maintenance and alerts me. I was told two a year is reasonable. Do I get a written projected maintenance statement from the dealership (seems odd, but if needed I’m there with a silly grin on my face)? Or do I just make a list and note the source of the info? I will take the Toyota in for a well-baby checkup when my daughter comes home for spring break – it has been well maintained so if nothing wrong is apparent at the time do I forego including anything at all as a forward looking expense for repair? It is 10 years old and has high mileage so the chances that it won’t need anything other than an oil change or two is positive thinking at its best! Headlamps go out, etc.

And thanks for the “good luck” – with that and the good advice here I’ll be feeling more comfy!

[tcreegan]

Hi SilverQT,

Schedule J line 17 is "personal, misc" Keep DirectTV in telecommunications, try not to let stuff 'drift down' to line 17

I was wondering about the need to submit a detailed breakout of expenses that supports the lines that represent multiple items – is that done? Or only if asked? Do the TTs dig into the line by line details to disallow $15 here, $18 there

Only if asked. Hopefully you never need it. The detailed breakout is just in case you get the nit-picker trustee you described.

The IRS standards are a good starting point, but they are intended for the means test. You can be over/under on Schedule J

do I just make a list and note the source of the info? if you are under the IRS standards this should be fine.

it has been well maintained so if nothing wrong is apparent at the time do I forego including anything at all as a forward looking expense for repair? It is 10 years old and has high mileage so the chances that it won’t need anything other than an oil change or two is positive thinking at its best! Absolutely have repair $$ penciled in, timing belt, water pump, heater core, brake rotors, lots of parts w/ a finite life span no matter how good the maintaince. Ask a mechanic for a "worst case" scenario.

Keep slogging through it, keep that "frest start" in mind,

Tom in Colo