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furushotakeru posted:The 401(K) employee deferral contribution is actually $17,000 in 2012. SIMPLE is still $11,500 because no one ever uses those things anyhow so the IRS doesn't care enough to index the limit  (SIMPLEs go up to $12,000 next year.) Small White Dragon fucked around with this message at 12:56 on Oct 20, 2012 |
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Oct 20, 2012 12:47
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Worker's comp "schedule loss of use" benefits are not taxable in any way, correct? It seems pretty clear-cut but I've been horribly wrong about taxes before, so...
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Oct 20, 2012 20:02
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TortillaFactory posted:Worker's comp "schedule loss of use" benefits are not taxable in any way, correct? Workers comp payments are not taxable
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Oct 20, 2012 20:06
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I have a question about W-4s. For background info, I am married and my husband and I each have one job. At previous jobs, I put 0 allowances on my W-4 and didn't have any tax withheld. But at my new job, I did the same thing and I am having tax withheld (about 11% of my gross income). I want to continue to not have tax withheld from my pay, so who messed up, me or my company's payroll?
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Oct 22, 2012 23:48
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So my first student loan payments are about to come due, and I have enough money to make an over payment on my loans, enough to max out the $2,500 interest paid deduction. However, this site (http://www.irs.gov/taxtopics/tc456.html) says I must be "legally obligated to pay interest on a qualified student loan." Does this mean I can only deduct up to the amount of interest I was obligated to pay, or does it mean I can deduct any amount of interest paid (up to $2,500) that I actually pay, as long as I was legally obligated to pay some interest?
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Oct 23, 2012 04:57
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Napoleon I posted:So my first student loan payments are about to come due, and I have enough money to make an over payment on my loans, enough to max out the $2,500 interest paid deduction. However, this site (http://www.irs.gov/taxtopics/tc456.html) says I must be "legally obligated to pay interest on a qualified student loan." That said, the loan company will send a form to the IRS that says how much qualifying interest you paid.
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Oct 23, 2012 08:14
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I am currently unmarried and looking at buying a house in 2012. Next year I will get married and plan to convey my wife a 1/2 interest in the house in exchange for half of the down payment. I don't think this will cause a taxable gain as it is my primary residence. Other than a due on sale clause, do any of you see issues with this? Do I report it as a sale?
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Oct 23, 2012 17:16
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Spiro Agnew posted:I am currently unmarried and looking at buying a house in 2012. Next year I will get married and plan to convey my wife a 1/2 interest in the house in exchange for half of the down payment. Nothing to do in terms of taxes (there is unlimited spousal gifting). If you have a mortgage you might need to discuss it with the bank before they allow a title transfer.
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Oct 23, 2012 17:45
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Small White Dragon posted:I believe if you pay extra, it will come out of the principal of the loan. They just told me that if I pay extra, it comes out of interest first. Looks like I'm taking some deductions! Napoleon I fucked around with this message at 19:54 on Oct 23, 2012 |
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Oct 23, 2012 19:51
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Napoleon I posted:They just told me that if I pay extra, it comes out of interest first. Looks like I'm taking some deductions! They gave you wrong information. If you have a loan that has periodic payments that consist of both interest and principal and you pay more than that amount, the excess gets deducted from principal, shorterning your loan and reducing the cumulative interest you will need to pay over the remaining life of the loan. Tax works on what you actually paid, so you will get a deduction for the total interest you paid in the year, not any of the principal. The only way what the loan company told you could be true, is if you had an overdue balance that was accruing interest on the interest you didn't pay when you should have. In that case your payments would be applied as follows: 1. Current interest due 2. Prior period interest you didn't pay yet 3. Principal
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Oct 23, 2012 20:21
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Napoleon I posted:They just told me that if I pay extra, it comes out of interest first. Looks like I'm taking some deductions! Maybe. The phaseout on the student loan interest deduction is ridiculously low for the amount it takes to go to college, and if you're married and your spouse has a good job, you're screwed. MFJ phaseout starts at $120k AGI, single starts at $60k, MFS does not qualify.
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Oct 23, 2012 20:22
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Oliax posted:They gave you wrong information. If you have a loan that has periodic payments that consist of both interest and principal and you pay more than that amount, the excess gets deducted from principal, shorterning your loan and reducing the cumulative interest you will need to pay over the remaining life of the loan. STUDENT loan. They are probably telling him that the extra payments get applied first to deferred interest, which would make sense since you generally can't charge interest on interest so the bank would want to pay that down before applying payments to interest bearing principal.
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Oct 23, 2012 20:53
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Right, I have a bunch of deferred interest. I can deduct however much of that I pay off, as long as I had to make student loan payments, right? Or can I only deduct the amount of interest that was due this year? And this will be the last year I'll be able to take the deduction, so I wanted to get the most out of it.
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Oct 24, 2012 05:11
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Napoleon I posted:Right, I have a bunch of deferred interest. I can deduct however much of that I pay off, as long as I had to make student loan payments, right? Or can I only deduct the amount of interest that was due this year? You're cash basis, you deduct what you pay.
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Oct 24, 2012 16:51
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I work at a nonprofit, and one of our board members recently bought ~$100 of food for an official event. My instinct is to take this as an in-kind donation that my employer cannot value in our acknowledgment (even though I was standing there when he paid for it, and therefore I happen to know exactly how much he paid). However, he might also have made a donation of the same amount of money, for example via credit card on one of our smartphones, and I could have bought the food on a company card instead. I was right there; it's just a matter of which card got swiped. In that case, I would give him an acknowledgment for the exact amount of his donation. In the real-life case, I must not give a dollar value (IRS pub 526, IRC 170(f)(8)), but in the hypothetical case, I must give one. On the other hand, the substance-over-form rule established in Gregory v. Helvering seems to indicate that these two situations are different in their form but not their substance, and therefore they should be treated alike. Does anybody know how to handle this? The stuff in the IRS docs I've seen seems to refer to inventory donated from e.g. a restaurant or supermarket, and not food that an individual buys to donate. This must be a common situation (look at all those canned-food drives that people do), and so I'm a little frustrated that I'm having trouble finding a primary source for the answer.
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Oct 24, 2012 20:41
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ejstheman posted:I work at a nonprofit, and one of our board members recently bought ~$100 of food for an official event. My instinct is to take this as an in-kind donation that my employer cannot value in our acknowledgment (even though I was standing there when he paid for it, and therefore I happen to know exactly how much he paid). Why does the nonprofit need to give a value? If the board member is deducting it on his personal tax returns as a donation then the FMV is deductible, which is easy to prove with a receipt showing how much he paid for the food right before donating it.
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Oct 24, 2012 21:00
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It seems like a two-part question. For the donor's taxes, the receipt should be enough. From what I can tell, your organization tracks the value of in kind contributions -- a good idea for many reasons. Based on my experience in practice rather than tax code, the organization would have some maneuvering room to set a fair value for the donated goods if you didn't know their actual value as long as you could justify the valuation. But since you do know the actual value, and unless your organization has a policy about valuing in kind contributions that requires otherwise, I'd round up the actual amount of the purchase to the nearest dollar and log that as the value of the contribution.
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Oct 24, 2012 21:44
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Hey tax goons, a 501(c)(3) charity has a link to where you can make donations to them online, but a convenience fee is assessed. The charity didn't think this convenience fee is deductible -- what sayeth you? Also, I know that over-the-counter medications aren't generally not deductible and all that medical expenses are subject to a 7.5% AGI base, but what if a doctor tells you to, say, apply antibiotic ointment and gause for a week on a wound, are those items then deductible? Also, is travel to/from a doctor's office deductible, subject to the usual AGI limitations?
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Oct 26, 2012 10:13
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This is likely a dumb question and I'm not really sure this is the right place for it, but here we go. My wife and I both work for separate companies and each offers a High Deductible Health Plan with a Health Savings Account option. Both companies offer "free" money into their respective HSA and increase the amount they give if you do the "employee and spouse" instead of just individual far past the amount of the premium increase you pay by doing so. My question is if it is kosher for each of us to do the "employee and spouse" option, so we are each covered by the other's insurance? It seems like the downside is a higher deductible for each of us, but since we don't expect to hit that we are thinking it is worth the risk for the free HSA money. It looks like the HSA account itself is something the IRS sets the rules on (hence looking at this thread), so I've been digging around but haven't had any luck coming up with an answer to this question. Near as I have found are statements saying that and individual can't be covered by anything but an HDHP, but I haven't found anything saying you can't be covered by two HDHP plans... Am I just an idiot and this is all a horrible idea?
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Oct 30, 2012 18:22
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Small White Dragon posted:Hey tax goons, a 501(c)(3) charity has a link to where you can make donations to them online, but a convenience fee is assessed. The charity didn't think this convenience fee is deductible -- what sayeth you? It is a cost of making the donation, so at worst I would treat it as an out of pocket volunteer expense  If your doctor provides a prescription then yes they would be includable. Medical mileage is deductible as well, subject to the same 7.5% AGI floor.
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Oct 30, 2012 21:31
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Fancy_Lad posted:This is likely a dumb question and I'm not really sure this is the right place for it, but here we go. I am not aware of any rules against what you propose, at least from the IRS side of things.
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Oct 30, 2012 21:33
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Furu do you do any audit representation work?
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Oct 30, 2012 22:26
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scribe jones posted:Furu do you do any audit representation work? Not too much. My office mate does a lot of that stuff so I tend to refer audits to him, I mostly do collection representation and tax prep. Why?
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Oct 30, 2012 22:30
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furushotakeru posted:Not too much. My office mate does a lot of that stuff so I tend to refer audits to him, I mostly do collection representation and tax prep. Why? 
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Oct 30, 2012 22:34
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scribe jones posted:I'm going in (with my boss) for my first one in a couple weeks, and wanted to know if you have any tips because I'm a-scared True story: Auditors are trained to smell fear like a shark smells blood in the water. Nah, just kidding. 1) Be professional and almost all auditors will return the favor. They are just people doing a job for the most part, same as you. 2) Don't talk too much. Don't answer questions that aren't being asked. Be polite and answer the questions that ARE asked, but remember that auditors are trained to ask leading and open-ended questions. That doesn't mean you have to fall for it. 3) Don't lie. If you don't know the answer to a question or don't have a specific piece of information with you, let the auditor know that you will get back to them. And follow up later to keep your promise. 4) Don't let the auditor make you do their job for them. I am generally familiar with what documents I am turning over but I very rarely run a tape or anything like that. They will likely sample the source documents anyhow and aren't going to be combing over every statement. 5) Ask your client before you go in if there are any errors that they are aware of. Ask the auditor before your appointment if there is anything that you should be aware of going in. Sometimes they will share information that will allow you to be better prepared for the audit appointment and make things resolve more quickly/smoothly. 6) On that same vein, ask the auditor for an IRP report before your appointment so that you will be aware ahead of time of any discrepancies between the return and what has been reported to the IRS by third parties. 7) Ask your client to go through their bank statements and identify any deposits that aren't income items. The auditor will be doing a bank deposit analysis to look for unreported income, so you should be prepared as much as you can to answer any questions ahead of time.
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Oct 30, 2012 23:15
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Is there anywhere I can plug in my numbers and get an estimate of my 2012 tax return? I would use last year as a basis but I'm in a completely different situation now.
abelwingnut fucked around with this message at 15:14 on Oct 31, 2012 |
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Oct 31, 2012 05:59
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I was working as a consultant, paid as an independent contractor. I bought a new smartphone so I could stay in touch with the client while traveling and intended to depreciate it. It was destroyed by an accident after only a few weeks. Can I deduct the full value of the phone in this year?
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Oct 31, 2012 12:51
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Thanks, Furu and Mark.
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Oct 31, 2012 14:09
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Tyro posted:I was working as a consultant, paid as an independent contractor. I bought a new smartphone so I could stay in touch with the client while traveling and intended to depreciate it. It was destroyed by an accident after only a few weeks. Can I deduct the full value of the phone in this year? Yes
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Oct 31, 2012 16:50
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Thank you 
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Oct 31, 2012 19:28
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Abel Wingnut posted:Is there anywhere I can plug in my numbers and get an estimate of my 2012 tax return? I would use last year as a basis but I'm in a completely different situation now.
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Oct 31, 2012 23:32
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How is everyone handling the new 263A regulations? Been reading a CCH briefing, and according to the report "most businesses" will be required to file a Form 3115. Any opinions?
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Nov 1, 2012 21:34
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Could someone offer a rough estimate on how much my mom will have to pay on a $70,000 inheritance from her father? Her income is about $60,000 per year, and she took the inheritance check from the bank in cash. edit: Her taxable income is 50K. Lee Harvey Oswald fucked around with this message at 23:39 on Nov 1, 2012 |
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Nov 1, 2012 23:33
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Lee Harvey Oswald posted:Could someone offer a rough estimate on how much my mom will have to pay on a $70,000 inheritance from her father? Her income is about $60,000 per year, and she took the inheritance check from the bank in cash. None. At least at the federal level. Estate taxes are handled in the estate.
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Nov 2, 2012 00:08
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http://www.irs.gov/uac/Newsroom/IRS-Gives-Additional-Time-to-Taxpayers-and-Preparers-Affected-by-Hurricane-Sandy;-File-and-Pay-by-Nov.-7 Posting from a phone but I thought this would be relevant. The Internal Revenue Service today announced it is granting taxpayers and tax preparers affected by Hurricane Sandy until Nov. 7 to file returns and accompanying payments normally due today. Additionally, http://www.tax.ny.gov/bus/multi/sandy_relief.htm The MCTMT protective claim deadline has also been extended.
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Nov 3, 2012 01:13
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Admiral101 posted:None. At least at the federal level. Estate taxes are handled in the estate. I clarify that with "it depends." If she's inheriting an annuity/retirement account distribution, it would be taxable.
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Nov 5, 2012 17:52
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Quick question about a hypothetical someone who was formerly an employee and is now an independent contractor. Assuming this someone's income is exactly the same while he's an independent contractor as it was while he was an employee, would his income tax burden remain the same? Or does being an IC by its very nature change the way income tax is computed (and, if so, why?)? (FWIW, I am aware that the Soc Sec and Medicare tax burdens would increase, from 4.2% and 1.45%, respectively, to 10.4% and 2.9%.) EDIT: Fixed per below. Thanks! Actie fucked around with this message at 02:19 on Nov 7, 2012 |
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Nov 6, 2012 23:55
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Actie posted:Quick question about a hypothetical someone who was formerly an employee and is now an independent contractor. You can deduct business related expenses and part of your self-employment tax, but your overall bill will likely increase notably.
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Nov 7, 2012 01:44
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Small White Dragon posted:You're correct about Medicare, but Social Security would increase to 10.4%. Fixed the Soc Sec tax rate. I realize the overall tax bill will likely be higher (simply due to the increased medicare and soc sec taxes); what I'm wondering is whether income taxes in particular would remain the same, assuming income doesn't change.
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Nov 7, 2012 02:21
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Actie posted:Fixed the Soc Sec tax rate. I realize the overall tax bill will likely be higher (simply due to the increased medicare and soc sec taxes); what I'm wondering is whether income taxes in particular would remain the same, assuming income doesn't change.
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Nov 7, 2012 14:36
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