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Evil Vin posted:I recently won a lawsuit and I am supposedly getting around $15,000, the money was originally supposed to be an inheritance (and triple that It is probably inheritance, which won't be taxable. But I suppose there are a few ways that it could be damages instead. Was the lawsuit about who should take the inheritance? Or was it about a claim for damages of some sort - breach of fiduciary duty, for example. Did the court make a determination as to who would receive the inheritance, or did you and the other parties reach a settlement agreement which provides that you will receive $15,000?
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Jun 27, 2012 18:04
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). My mother claims I don't have to pay tax on it since it's an inheritance, while I'm pretty sure technically it's something different because it's been through a lawsuit (damages?). So who is right here?
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entris posted:It is probably inheritance, which won't be taxable. But I suppose there are a few ways that it could be damages instead. It's a settlement agreement. I'm not exactly sure the exact details of the thing, but breach of fiduciary duty sounds about right.
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Jun 27, 2012 18:28
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You should really ask your lawyer about this. If he isn't aware of the tax implications of the settlement he helped negotiate, you should have gotten a better lawyer.
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Jun 27, 2012 18:53
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Haha sorry mobile app took me to the wrong bookmarked thread
BonerGhost fucked around with this message at 02:06 on Jun 28, 2012 |
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Jun 27, 2012 23:55
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Uh, we just talk about taxes here. Might want to head over to the legal questions thread.
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Jun 28, 2012 00:20
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Admiral101 posted:You may depreciate portion of the computer that you use for work. If the computer cost $1000 and she uses it 50% for work, she may depreciate $500 over 5 years. Or she can use special bonus depreciation and depreciate all $500 in one year (that is a temporary thing). Thanks for the response! All the info you gave me is hugely helpful and gives me some more to consider. The LLC itself cost 500 just to file. Additionally I would probably use legalzoom or one of its counter parts just to make sure I did it correctly (small price for peace of mind) which is another 100. I read on a few forums but could not find it on the state site that after the first year is up you owe the annual costs in addition to the start up costs, which is another 250. Then add in the smaller costs that are harder to tally like a more complex edition of turbotax or quicken and it is not far fetched that the first year will cost us $1000. I am assuming I could make up these costs in taxes based on my few rough estimates of end of year tax benefits. The reason I am deciding against the LLC is that we would rather see how long this employment really lasts, if it grows, and if we can predict better where it is going. I am now leaning more towards having her keep working until January 1 and then we can reassess her business venture and if it will stay strong enough to benefit the 2013 tax year. To answer your questions, she is essentially a 'junior designer' which means she is helping with sketches, autoCAD renderings/floor plans, fabric picking, and overall opinion giving. All decisions flow through the company owner (all these companies are independently owned). Really, she will be doing many different types of design. She is likely to pick up a new designer to work under who specializes in kitchens and bathrooms while she is currently working with a designer who is working on a few downtown condos and an business building's floor. Again, thanks for the help - and yeah, the software, I just looked up the cost of autocad...$4000 
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Jun 28, 2012 02:47
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When I left a recent job I cashed out a 401k and took the early cash out penalty, the check I received from them was my balance minus the 25% or whatever it is. I got a letter from the IRS stating "hey gently caress head pay us that 25%", so my question is when my employer held the 25% where did it go? Will this now have to come out of my pocket or is the money still floating around somewhere?
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Jun 28, 2012 20:57
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quote:When I left a recent job I cashed out a 401k and took the early cash out penalty, the check I received from them was my balance minus the 25% or whatever it is. I got a letter from the IRS stating "hey gently caress head pay us that 25%", so my question is when my employer held the 25% where did it go? Will this now have to come out of my pocket or is the money still floating around somewhere? It doesn't sound like you were fully vested in your 401k. Any matching contributions your employer makes to your 401k usually have a vesting period over the course of several years. If you leave your job, a portion of the matching contributions go back to the employer. What specifically the "early cash out penalty" is can vary with your 401k, but it's almost certainly not federal tax withholding. Did the 1099-R you receive list any federal withholding? I'm guessing not. Admiral101 fucked around with this message at 21:21 on Jun 28, 2012 |
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Jun 28, 2012 21:19
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Sounds more like you filed and didn't include the 1099-R that the custodian sent you.
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Jun 28, 2012 22:19
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If this has already been asked, I appologize but there's a lot of pages. Anyway, I e-filed my taxes in March and I still haven't received my federal refund. The irs website says it was received and is being processed. When I called, it says the same thing. My taxes are very simple and straight forward so I don't understand the delay. If there was an issue or audit possibility, would I get any sort of notice? I just don't get why its taking so long. I've never experienced this before.
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Jul 3, 2012 23:13
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Kung Fu Jesus posted:If this has already been asked, I appologize but there's a lot of pages. Anyway, I e-filed my taxes in March and I still haven't received my federal refund. The irs website says it was received and is being processed. When I called, it says the same thing. My taxes are very simple and straight forward so I don't understand the delay. If there was an issue or audit possibility, would I get any sort of notice? I just don't get why its taking so long. I've never experienced this before. You'll need to call the IRS and ask what is going on. 800-829-1040, and allow at least 30-40 minutes for hold time.
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Jul 3, 2012 23:35
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Looking ahead to next year when we file for 2012, can I claim both the American Opportunity Credit for college expenses and the Student Loan interest deduction? One would be a credit for college expenses I'll be paying this fall, and the other would be an income adjustment for interest I paid on student loans in 2012. Edit: The IRS website says the American Opportunity Credit can't be used on the "Same expenses used for any other tax deduction, credit or educational benefit." The Student Loan interest I'll be paying in 2012 was for loans I took a few years ago for a separate University than the one I'm enrolled in this fall. Would they be separate expenses? Avellon fucked around with this message at 19:41 on Jul 4, 2012 |
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Jul 4, 2012 19:36
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Avellon posted:Looking ahead to next year when we file for 2012, can I claim both the American Opportunity Credit for college expenses and the Student Loan interest deduction? You shouldn't have an issue claiming both as the American Opportunity Credit is mutually exclusive to the Tuition and Fees deduction and the Lifetime Learning Credit, not to the Student Loan Interest deduction. That IRS line is referring to the other Credits/Deductions that American Opportunity is mutually exclusive to, not interest on a loan. This assumes you meet the (M)AGI requirements applicable to the deduction and credit, of course.
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Jul 4, 2012 20:26
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ThirdPartyView posted:You shouldn't have an issue claiming both as the American Opportunity Credit is mutually exclusive to the Tuition and Fees deduction and the Lifetime Learning Credit, not to the Student Loan Interest deduction. That IRS line is referring to the other Credits/Deductions that American Opportunity is mutually exclusive to, not interest on a loan. This assumes you meet the (M)AGI requirements applicable to the deduction and credit, of course. Thanks, good to know. Going off of last year's income I should be under the (M)AGI requirements. I regret not going back to school sooner. College Tax credits are great.
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Jul 4, 2012 21:36
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I couldn't find a thread for international tax questions, but really my question also relates to US Income Tax. I am moving to Australia and looking for advice on how to minimize my tax burden abroad, as well as on the US Income Taxes I will still have to file. Can anyone point me to a good resource (or give some good advice) to learn more about common pitfalls and hidden expenses when earning income abroad, especially in Australia? The Facts:
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Jul 7, 2012 01:00
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I posted this in the legal advice thread and afterward thought that was dumb and it should actually go here. So, here goes: My friend and I started up a little side business where we do free lance programming and web design. We went down to the bank, got a tax id number and opened up a business account. Now, we just got our first client that is asking us to write a program for them and they are going to pay us 8k. The client sent me over a contract to sign and a W9. Now my partner is saying he can't do the job for whatever reason, so I got some other guy to help me with it and I told him I'd split the money with him 50/50. How does this work now? I have no idea how to fill out the W9. Should I fill it out with my companies info or with my own person info? Does the other guy I have helping me out have to fill out the W9 as well? If only I fill it out, does that mean I have to pay taxes on the entire 8k, even though I'd only be getting half of it?
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Jul 9, 2012 18:51
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idontcare posted:I posted this in the legal advice thread and afterward thought that was dumb and it should actually go here. So, here goes: Since this is a question about taxes and Form W-9, I'll answer here rather than the legal questions thread. What does "started up a side business" mean? Did you incorporate a corporation, or organize an LLC? (IE, did you file paperwork with your state's Corporation Commission or similar) Do you have a "doing business as" name (a DBA name)?
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Jul 9, 2012 19:25
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We didn't incorporate, but do have a DBA name. We went down to city hall and registered and got a certificate to do business in the city of Boston. Then, we went to the bank and opened up a business account and got a tax id#.
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Jul 9, 2012 19:44
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GuyWithCigar posted:I couldn't find a thread for international tax questions, but really my question also relates to US Income Tax. I am moving to Australia and looking for advice on how to minimize my tax burden abroad, as well as on the US Income Taxes I will still have to file. Can anyone point me to a good resource (or give some good advice) to learn more about common pitfalls and hidden expenses when earning income abroad, especially in Australia? What you want is to start with IRS Publication 54: Tax Guide for U.S. Citizens and Resident Aliens Abroad." Also, you mention the Foreign Earned Income Exclusion, which permits you to ignore up to ~$92k of foreign earned income for purposes of calculating your taxable income under the U.S. tax rules. Note that this exclusion only prevents the U.S. from taxing this income - Australian taxes will still apply. And for income above the 92k limit, you can always pay Australian tax on it and then claim a credit against your US taxes on the same income, so you will still be protected against double taxation on the same income. If you are going to stay in Australia for a while, I recommend finding an Australian tax accountant who regularly works with Americans. You don't want to miss out on things like Form 8939, the FBAR, and also whether you need to pay Social Security and other payroll taxes while you are over there.
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Jul 9, 2012 19:48
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idontcare posted:We didn't incorporate, but do have a DBA name. We went down to city hall and registered and got a certificate to do business in the city of Boston. Then, we went to the bank and opened up a business account and got a tax id#. PM me your DBA name, let me see if I can dig around the Massachusetts corporations database to see what kind of entity they are treating you as. The question, for federal tax purposes (and thus for the W-9), is whether you are a sole properietorship or disregarded entity, or a partnership. The simplest way to handle this is to say you are a sole proprietorship/disregarded entity, and just put your personal info and SSN on there. But because you agreed to 50/50 with your prior friend, and now you are 50/50 with the new guy, there is a possibility that under Mass law that you are a general partnership, and therefore should complete the W-9 in the partnership's name, which would be the DBA name using the TIN you opened the accout with. I assume you have no written agreement with either your prior friend or the new guy? edit: if you don't want to PM me any info, go here and put in the relevant info, and pull up your business if possible. (It may not come up, since it's a DBA registration only.)
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Jul 9, 2012 20:03
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entris posted:The question, for federal tax purposes (and thus for the W-9), is whether you are a sole properietorship or disregarded entity, or a partnership. The simplest way to handle this is to say you are a sole proprietorship/disregarded entity, and just put your personal info and SSN on there. I searched through that link and my DBA name didn't show. There is no written agreement with either person. I'm just using the new guy for this project only. The contract I was sent over by the client has both my name and the DBA name on it. The 'new partner' has no connection to the DBA, he is just some random guy I know. Is there any downside to filling out the form as a general partnership? Either way, does my 'new partner' have to fill out a W9 as well, or just me?
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Jul 9, 2012 20:21
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idontcare posted:I searched through that link and my DBA name didn't show. I think you should fill out the form as a sole proprietorship, and just use your name and SSN. Ignore your business's tax id. Then when you pay this dude, you pay him 50% of the contract price as though he were an independent contractor, which it sounds like he basically is. I also think you should just form a single-member LLC, which is pretty simple and makes life easier.
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Jul 9, 2012 20:28
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entris posted:I think you should fill out the form as a sole proprietorship, and just use your name and SSN. Ignore your business's tax id. Then when you pay this dude, you pay him 50% of the contract price as though he were an independent contractor, which it sounds like he basically is. Ok, I will do that then. Thanks for the advice.
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Jul 9, 2012 20:35
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Here's a simple test: When you applied for the EIN did you tell the IRS it was for a sole prop or a partnership? If you told them it was for a partnership then they will be looking for 1065's. If you told them sole prop you can put it on schedule C.
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Jul 9, 2012 21:37
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I'm pretty sure we filed as a partnership. I'm assuming this complicates things and I will have to fill out the W9 with the company info rather than my personal info? Does this have any effect on how I pay my 'new partner'?
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Jul 9, 2012 22:15
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I respectfully disagree - applying for an EIN does not affect the tax classification of an entity. idontcare may have applied for the EIN as a partnership, but that doesn't make his business a partnership. The IRS will look at state law to see what the underlying business entity is, and of course the entity will use its first tax return to formally signal its intention to be treated as a corp, s corp, partnership, or sole proprietorship. If we want to be particularly technical, idontcare may have created a partnership when he and his friend agreed to perform joint work on a project in exchange for a split in the profits. That's (theoretically) a general partnership - which was then dissolved when his friend split (ie, left the partnership). I say that this partnership was dissolved because it sounds like idontcare's friend isn't going to get any of the proceeds of the contract - if he were a partner, he'd be entitled to 50% of the partnership's income, which would be half of the contract since idontcare has apparently hired a new guy to help with the project. So maybe idontcare has created a new partnership with his new buddy, but in my mind, the principal person in these transaction is idontcare, and he's just bringing this new guy on for one particular project. This doesn't sound like a general partnership to me, this sounds like idontcare has hired this new guy for a specific project, exactly like an independent contractor.
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Jul 9, 2012 22:24
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entris posted:I respectfully disagree - applying for an EIN does not affect the tax classification of an entity... That's true, but furushotakeru is simply giving the real-world situation. If you tell the IRS in the EIN application that it will be a partnership, and you file as a sole proprietorship, there will eventually be a letter from the IRS asking for the missing tax return.
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Jul 10, 2012 02:27
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Missing Donut posted:That's true, but furushotakeru is simply giving the real-world situation. If you tell the IRS in the EIN application that it will be a partnership, and you file as a sole proprietorship, there will eventually be a letter from the IRS asking for the missing tax return. I told the guy I'd return the forms to him tomorrow. If I file as a sole proprietorship there will be a hassle later on?
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Jul 10, 2012 02:39
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http://taxprof.typepad.com/taxprof_blog/2012/07/hr-block-.html H&R Block did a cute infographic where they did the taxes for Batman and Spider-man... and got Batman's wrong. They said that Batman had $102,000,000 in annual income, plus $43,000,000 in capital gains, but they said he would have zero income tax because he made charitable gifts totalling $279,000,000. Wow. That tax position would have Batman failing to pay a substantial amount of tax on approx. $72 million - whoops.
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Jul 13, 2012 20:46
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Sent in a response to the "pay back the education credits we gave you in 2010" letter I got from the IRS. I sent in a copy of my 1098 from that year that shows I paid $2945 to one school, and an invoice/receipt of payment from the other (school doesn't give out 1098s for some reason) Even if they don't count that second school, the $2945 should in theory drastically reduce the $2600 in credit repayments, penalties, and interest, right?
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Jul 13, 2012 20:48
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entris posted:http://taxprof.typepad.com/taxprof_blog/2012/07/hr-block-.html What the gently caress? That's hilarious. 
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Jul 13, 2012 21:07
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I bought a house with my partner 3.5 years ago and we've split up. She will be refinancing and taking over the mortgage, I'll be filling out a quit claim deed, and she'll be writing me a check for my share of the equity we've built up in the house. What kind of tax will I owe on this money? Is there anything I can do to reduce the amount that I'll be taxed on this?
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Jul 19, 2012 05:54
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DerbyTime!!! posted:I bought a house with my partner 3.5 years ago and we've split up. She will be refinancing and taking over the mortgage, I'll be filling out a quit claim deed, and she'll be writing me a check for my share of the equity we've built up in the house. What kind of tax will I owe on this money? Is there anything I can do to reduce the amount that I'll be taxed on this? Unless your gain on the sale is greater an $250k you won't pay any tax.
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Jul 19, 2012 06:14
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That's some incredibly great news, thanks Furushotakeru!
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Jul 19, 2012 16:35
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I worked for just under two years for a small, privately owned daycare back in 2004-2005. Upon receiving my Social Security Earnings Record, I notice that I have less than $2500 income in 2004 (from a job I left early that year) and $0 income in 2005. For both years I received a W-2 and filed my tax return. My boss was really shady and horrible, which is why I left the job, and I'm 100% positive she took the money out of my checks and never paid it over to SS. The problem is that we had a house flood at the end of 2009 and I lost all of my tax returns/pay stubs/W-2s because they were in a small filing box and not in a waterproof container. I did my own taxes, so those were the only copies. Hence, I have to somehow get some kind of proof to give the Social Security Office (they say they need returns or W-2s). There's absolutely no way I can get W-2s from the owner of the daycare, it's since out of business and I have no way of contacting the woman who owned it. I've looked on the IRS' webpage and I can't order free transcripts of my tax return because they only go back three years. For $57/each I can get copies of my full return, but in some places on their site it says for 6 years past and on others it says 7 years past. Either way, it seems like I'm screwed for 2004 and maybe 2005. I filled out form 4506-T requesting W-2 transcripts because it says those can potentially go back 10 years and also they're free so I thought I might as well attempt it. I don't know if that will work or if the SS Administration will accept them, though. Has anyone been through this before? Is there something I'm not thinking of?
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Jul 19, 2012 21:09
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Unfortunately the IRS typically only has W-2's that the SSA has. One copy of the W-2 gets filed with the IRS, one to the SSA, and one to the client. If she didn't file a W-2 the IRS won't have a copy of anything either. However, it does not hurt to ask. One thing to consider is that a $2500-5000 (or whatever) difference over the course of your lifetime earnings when it comes to determining your benefits. I understand that you want the record to accurately reflect what you earned, but it might not be worth stressing out too much.
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Jul 19, 2012 21:31
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This is probably a dumb question, but in relation to the stuff I posted above, if I'm filling out a W9 and I am filing as 'Partnership', I'm assuming I put my real name on line 1 and my DBA/Partnership name on line 2. Where it asks for address, do I put down my personal address or the address of the company? I've been searching online just to make sure I've gotten this correct and I'm finding a lot of different answers, like putting my business name on line 1 and 2, instead of my real name on line 1. Thanks.
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Jul 20, 2012 15:58
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idontcare posted:This is probably a dumb question, but in relation to the stuff I posted above, if I'm filling out a W9 and I am filing as 'Partnership', I'm assuming I put my real name on line 1 and my DBA/Partnership name on line 2. Where it asks for address, do I put down my personal address or the address of the company? From the IRS W-9 Instructions (page 2): quote:Partnership, C-Corporation or S-Corporation. So you put the legal name of the partnership (like KPMG LLP) on Line 1, any DBA or other operating name ('forward facing' name to the public) on Line 2 (if applicable) and you put down the business address. Remember, the W-9 is used by the receiving firm(s) to prepare Form 1099s using the relevant legal entity you are operating through, not the underlying partners/shareholders (since it will ultimately pass-through on the applicable tax returns/forms as necessary) as the IRS will get a copy of the Form 1099 to confirm with the legal entity's returns (Form 1065 and the Schedule K-1 in your case) that you are ultimately declaring the relevant income. Horseshoe theory fucked around with this message at 18:12 on Jul 20, 2012 |
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Jul 20, 2012 17:54
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I travel a lot for work. So far I have been away from home 170 nights this year. I will likely add another 100 before I finish. I work for a company that has me on W2s and withholds tax. My company then sends me out of town to work with another company which provides my flights, hotels and gives me cash per diem, something like $40 a day. I have asked people I work with, my tax prep person and I have scoured the IRS website and I haven't been able to get a clear picture of how to handle this situation. 1.) The per diem will not be reported by the company as taxes, they don't have my SS or any interest in adding me to their payroll. 2.) We spent alot of time outside of the USA, where the M&IE rate was close to triple the PD received for the day. 3.) I have kept track of what the difference PD received and M&IE is. It seems that I should be able to fill out a 2106 and enter in the difference between amount paid and the standard M&IE rate and then deduct half of that number. For example if at the end of the year the standard M&IE rate was $20,000 and I received $8,000 in cash I would be able to deduct 50% of $12,000. Last year when I tried to have this conversation with my tax person I got this response "Do you know if your per diem is going to be included in your 1099 income? If it is, we do have to pick it up, and then we will deduct half of what you actually got for per diem. That’s kind of a lovely rule, but it is the rule. If it isn’t included in your income, we don’t really have to do anything with it, and it just becomes a wash." I just felt that it seemed like I was leaving alot of money on the table.
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Jul 29, 2012 20:57
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Per diem rates are guidelines for companies to use when reimbursing their employees. I am pretty sure that you can't deduct per diem as an unreimbursed employee expense,
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Jul 29, 2012 21:50
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