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So I'm just getting started doing some work as an independent contractor (a legitimate one, working part-time providing technical help to a startup until I start my PhD program in the fall) and I'm trying to make sure I have my tax situation squared away. I understand that I need to make quarterly payments and keep immaculate records of all the deductions I want to take (mileage is going to being tracked in a spreadsheet since I'll be traveling 100 miles one way once a week, also measured my home office). I'm just overwhelmed with the list of things I need to do; I've typically used TurboTax to submit my taxes when they were easy, and they have a contractor/self-employed software option I can use at the end of the year. But for these quarterly payments... well, I really don't know how to handle them because I'm in a bit of a weird situation. I found the 1040-ES for figuring out what I owe quarterly, but I'm going to have uneven income when I drop the contracting stuff in August. Do I factor that into my estimated payments and pay equal amounts? Make payments based on what I actually made for that period (I feel like paying nothing for the last quarter would send up a huge red flag)? On top of that, I have no idea how to handle the equity I'm recieving in this very new startup from a tax perspective. And that's just federal; I still need to navigate what I need to do for my state/local taxes. I've also seen some conflicting information on whether I even *need* to do quarterlies since this is my first calendar year doing it (will get my first check next week); that would be really nice since I'm only planning on doing this for 8 months and it'd be a lot less I need to deal with. I'm suspecting I need to hire an accountant to take care of the details for me, but I'm not making very much money doing this; it's a friend of a friend situation and I'm taking less money to get the experience and the resume bulletpoint. Probably just need to suck it up and pay someone. Apologies if I missed new contractor chat in the thread; I did a quick parse of the last 10 pages or so searching for "contractor" and "freelancer" and didn't turn up anything. Ellipson fucked around with this message at 06:04 on Jan 28, 2013 |
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Jan 28, 2013 05:59
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Ellipson posted:
Did you try reading the OP?
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Jan 28, 2013 14:32
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QuarkJets posted:I have a new employer, and they paid for relocation. These relocation expenses were included in Box 1 of my W-2, IE they're being included as income; my W-2 even has a section labeled "W-2 Box 1 Earning Analysis" showing the breakdown of Box 1 (salary+wages, relocation, deductions for pre-tax 401k and pre-tax medical). Yes you can deduct your qualified moving expenses since the assistance was taxed. Shipping your car is deductible, renting a car is not (other than for the move itself, if you used it to drive to your new home and/or transport your belongings).
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Jan 28, 2013 18:58
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I have a question about grad student stipends. Here's the situation (amounts are fake): School grants me gift aid of $20000. School takes out $15000 to pay tuition and fees, and cuts me a check for $5000 for personal expenses (and no W-2). According to the 1098-T they later give me, the total amount of qualified education expenses was actually $14500.* Q: Is my taxable income $5000 or $5500? *: The discrepancy came from two fees they didn't include in their amount: a fee for administrative document costs and a bus pass fee. From my reading of the instructions for form 8863, I can see why the bus pass doesn't count; on page 3 it says "fees for personal expenses are never qualified education expenses," then lists transportation as a personal expense type. The administrative fee, though, I would think would be a qualified educational expense since I was required to pay it to enroll.
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Jan 28, 2013 20:14
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I have a question about companies changing names. During 2012 my company changed names on 05/16/2012 so we got a W2 from them super early but it was listed as a 2011 W2 through ADP. And then we just now got the remainder of the years income with the new company name with the year 2012. Will it be a problem with me filing since the first W2 says 2011 even though it is indeed for 2012? They both have different amounts and add up to be what my salary should be for a year. Thanks in advance.
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Jan 28, 2013 23:13
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A follow up to my issue. It turns out I had selected too much to be witheld on my W-4. This means that I have only had $60 held on my paychecks for the past few months. This could result in me owing:( One goof when I got hired cost me some money. I am going to have a child in the next few weeks, and NOT in the last year so I can't claim that Child Care Deduction. I talked to the IRS dude and he said I should have a 0 because of how much we make. Which is a lot different than the 5 I claimed. Boo. Any idea on what I can do to help offset any amount I may owe?
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Jan 28, 2013 23:13
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dekrob posted:I have a question about companies changing names. During 2012 my company changed names on 05/16/2012 so we got a W2 from them super early but it was listed as a 2011 W2 through ADP. And then we just now got the remainder of the years income with the new company name with the year 2012. I would be less concerned about what the form says but quite concerned with how the company is reporting the wages (as 2011 or 2012 income). You might need to verify that with your payroll department.
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Jan 29, 2013 00:40
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I opened up a savings account at a new bank towards the end of 2012, which earned less than $.50 interest. The tax prep software I'm using rounds this down to $0, then gives me an error saying it won't let me input a 1099-INT from an institution where there's no reported interest. Is that correct and I just shouldn't report anything from that bank?
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Jan 29, 2013 05:08
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Craptacular posted:I opened up a savings account at a new bank towards the end of 2012, which earned less than $.50 interest. The tax prep software I'm using rounds this down to $0, then gives me an error saying it won't let me input a 1099-INT from an institution where there's no reported interest. Is that correct and I just shouldn't report anything from that bank? correct.
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Jan 29, 2013 05:29
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My fiance and I moved from North Dakota to Washington, transferring from Amazon field to Corporate on June 1st. When filing my return using Turbotax, it only had my ND state income tax liability for the amount I made in ND. For her, after filling out the exact same information, it is saying her state tax liability is double her actual ND income. Any idea why this is happening? It wants her to pay in to ND for roughly 14k she didn't make there. If it's a tax bracket issue, here's our numbers. Me - 34k ND, 53k WA Her - 15k ND, 25K WA Thanks!
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Jan 29, 2013 05:44
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Probably a bit late to ask now but I guess better late then never. I did my wives tax return last year, I filed her as single, but she was married. The thing is, I'm actually a non resident alien (no investments or money made in the US.) Will this come back and bite us in the rear end?? Her return was pretty basic, just two W2 forms, no purchases or anything else. Next up, how much can we expect to pay for her tax return done properly this year? Basically a W-2, would like to file as Married Filing Separate. Also get myself a Individual Taxpayer Identification Number (ITIN) ? Wife lives in WA state, so she only needs to file federal. edit: we have no kids. Only asset wife has is a car she purchased probably 5 years ago. Should be a pretty straight forward basic return. edit2: If we choose to skip filing for this year, will my wife be penalized? and can she just file next year for the missed year? She will be getting money back and not owing. lol internet. fucked around with this message at 07:44 on Jan 29, 2013 |
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Jan 29, 2013 05:46
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furushotakeru posted:Yes you can deduct your qualified moving expenses since the assistance was taxed. Shipping your car is deductible, renting a car is not (other than for the move itself, if you used it to drive to your new home and/or transport your belongings). Thanks. Since my W-2 didn't actually show a breakdown of relocation expenses (just the total), this led me to inquire with the relocation company directly, and they sent me a form indicating that all of the expenses included on my W-2 were non-deductible expenses only. They break things down something like this: $3000 "miscellaneous" (this was a check that they sent to me and was meant to cover incidentals; definitely taxable income) $1000 "rental car" (definitely taxable income) $3006 "tax assistance" The last one confounded me. The document explains that the "tax assistance" value is common for relocation expenses and is meant to be an employee reimbursement to cover the additional taxes that are incurred due to non-deductible expenses such as rental car. The "tax assistance" money was paid directly to <relevant tax authorities> and is included in the W-2 as withheld income. But since tax assistance is itself income (that the relocation company paid to the government on my behalf), I still have to pay additional taxes on it (which is why it gets included in W-2 box 1). So everything is in order I think, I need to place a phone call to double-check, but here is my understanding: only the non-deductible relocation expenses were included in W-2 Box 1, and the "tax assistance" portion of the relocation income ended up in the various W-2 withholding boxes (fed, state, SS, Medicare). So there's nothing for me to deduct here Thanks again!
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Jan 29, 2013 08:11
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QuarkJets posted:Thanks. Since my W-2 didn't actually show a breakdown of relocation expenses (just the total), this led me to inquire with the relocation company directly, and they sent me a form indicating that all of the expenses included on my W-2 were non-deductible expenses only. They break things down something like this: The "tax assistance" is commonly referred to as a "gross up". You shouldn't owe any extra taxes above what was withheld if they did the math right.
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Jan 29, 2013 15:56
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I've also got some questions about moving expenses. I was not reimbursed by company for a coast-to-coast move. Here is I am sure that I can deduct: 1. Checked bag fee: $35 Here is what I am not sure if I can deduct: 2. Installation cost of internet at new apartment (is internet considered a utility? leaning yes): $250 3. Security deposit for hooking up water (can I deduct a deposit? leaning no): $225 4. Flight on United: 12.5K miles (valued conservatively at $125 - can I put a value on my miles? leaning yes) + $3 = $128 And here is the part of the rules that I don't understand: 5. What does this mean: "Lodging expenses for the day of arrival at your new residence." After I moved and before I moved into my new place, I had to stay in one hotel for 4 nights ($727.47), then another one for 5 nights (80,000 points - valued conservatively at $800). Assuming that I can deduct value of points and that my deduction is "only for the day of arrival," does that mean that my deduction is 80,000 points/5 days = $160? Or can I deduct the entire value of the hotel stays ($1,527.47)? If someone could give me a 1-5 yes/no rundown, I'd greatly appreciate it 
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Jan 29, 2013 19:30
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Pissingintowind posted:I've also got some questions about moving expenses. I was not reimbursed by company for a coast-to-coast move. 1) Yes, if it is incidental to your move 2) No 3) No 4) Yes 5) Only the first night is deductible.
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Jan 29, 2013 19:39
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furushotakeru posted:1) Yes, if it is incidental to your move 1. It is, thanks. 2. Wonder when internet will start being considered a utility! That sucks. 3. Makes sense. 4. Sweet! Is there a standard value I should be using for miles? Or should I just stick with the $0.01 = 1 mile 5. First night? So $727.47/4 = $181.87? I thought it would be the last night ($160), because that's where I stayed the day of my move into my new apartment. Confusing wording  Thanks for the quick answer!
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Jan 29, 2013 19:54
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I would like a clarification of the circumstances regarding the underpayment penalty. In the hypothetical situation below, I convert my pre-tax 401k into a post tax Roth IRA and must pay ~$4000 more in tax because of it. I don't want to take withholding out of the transfer so there is more tax free growth in the long term. In the short term I don't want to burn my emergency fund if I don't need to, but I do set my exemptions to zero so I withhold more from my paycheck. 2012 tax: $3500 2012 withholding: $3600 2013 tax: $7500 2013 withholding: $4500 The form 2210 instructions say the below. Point 2) makes me think that I would be clear of extra fees in this case. code:
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Jan 29, 2013 20:36
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Xenoborg posted:I would like a clarification of the circumstances regarding the underpayment penalty. In the hypothetical situation below, I convert my pre-tax 401k into a post tax Roth IRA and must pay ~$4000 more in tax because of it. I don't want to take withholding out of the transfer so there is more tax free growth in the long term. In the short term I don't want to burn my emergency fund if I don't need to, but I do set my exemptions to zero so I withhold more from my paycheck. Yes you should be fine based on that scenario Pissingintowind posted:1. It is, thanks. Not sure what miles are worth. Whatever the FMV of the miles redeemed for the move is should be deductible. If you can find out what an equivalent ticket would have cost at that time if you had to buy it, that would be hard to argue with. Not sure if you can look up historic prices though (perhaps the airline can, not sure if they would though).
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Jan 29, 2013 21:11
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I have used TaxACT for the last few years, but this year, I moved due to my job into a different state. TaxACT is only allowing me to file in one state. Is there an online source that allows me to file in multiple states? My taxes are relatively simple - no real big issues that I noticed popping up. Just normal wages and everything on my W-2. I'd really rather not shell out a whole bunch of dollars at H&R Block. If I file my federal and State 1 taxes through TaxACT, how do I go about filing state 2's taxes?
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Jan 29, 2013 21:23
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Capsaicin posted:I have used TaxACT for the last few years, but this year, I moved due to my job into a different state. TaxACT is only allowing me to file in one state. Is there an online source that allows me to file in multiple states? There should not be any reason TaxAct can't handle multi state, it just might cost a bit more.
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Jan 29, 2013 21:34
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furushotakeru posted:There should not be any reason TaxAct can't handle multi state, it just might cost a bit more. Okay. What's the rules on moving more than X miles for a new job? If my employer reimbursed me, I don't claim that on taxes, right?
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Jan 29, 2013 21:43
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furushotakeru posted:There should not be any reason TaxAct can't handle multi state, it just might cost a bit more. I had tried this too. Taxact can't do non-resident returns yet. I think it does allow multi-state though.
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Jan 29, 2013 21:59
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Dragyn posted:I had tried this too. Taxact can't do non-resident returns yet. I think it does allow multi-state though. Yeah, my specific state that I moved from doesn't allow part-year residents to do e-files. I'll just have to print it off and send it in, I guess.
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Jan 29, 2013 22:02
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I've read that you can't deduct a traditional IRA contribution if you were covered under your employer's 401(k) plan...does that apply if you were only covered under your employer's 401(k) for like a week in 2012?
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Jan 30, 2013 00:53
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I lived in State A for the last few months of 2012 and in State B before that. I earned unemployment benefits from State A while living in State B. The way that TurboTax is wording the description of allocated income, I'm supposed to report the benefits that I earned while living in State B as part of my Non-State A income. This feels wrong to me because State A was the benefits payer and the issuer of my 1099-G. Can someone sanity check me and confirm that I am supposed to report allocated income for the time I spent in State B? albedoa fucked around with this message at 04:36 on Jan 30, 2013 |
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Jan 30, 2013 04:19
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When does a former employer need to send me my 1099? I thought it was Jan 31st but they're claiming its been extended to Feb 15th.
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Jan 30, 2013 06:57
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Oxford Comma posted:When does a former employer need to send me my 1099? I thought it was Jan 31st but they're claiming its been extended to Feb 15th. Pretty sure they're right and it's the 15th.
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Jan 30, 2013 07:35
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mongeese posted:I've read that you can't deduct a traditional IRA contribution if you were covered under your employer's 401(k) plan...does that apply if you were only covered under your employer's 401(k) for like a week in 2012? Check out http://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits
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Jan 30, 2013 09:15
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I live in NYC and work full-time (as a free lancer) for a company. I basically work on salary but without any taxes being taken out, or being listed as an employee. I received my 1099 form, and it has a higher income than what I actually earned for this year. They give me some money a month to pay for my work cell phone, and sometimes I've had to pay for stuff out of pocket which they repaid me. All that is listed as income. I also got a year end Bonus that is listed as income. Is that all supposed to be on my 1099? They told me that Im supposed to inform whoever does my taxes, that those were expenses etc. and not income so I shouldn't pay taxes on it, but that seems fishy to me. Any help would be appreciated!
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Jan 30, 2013 15:50
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Since you're 1099, you just claim your expenses when you file, yeah. Then you don't pay tax on that part. Gotta pay tax on the bonus, though!
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Jan 30, 2013 17:28
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I'm familiar with writing off a new PC as a school expense when it's used for classwork. Am I able to do the same with my tablet? I literally use it every single class for taking notes and have proof of such, I'm just wondering if this is allowable as a deduction.
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Jan 30, 2013 17:44
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nickhimself posted:I'm familiar with writing off a new PC as a school expense when it's used for classwork. Am I able to do the same with my tablet? I literally use it every single class for taking notes and have proof of such, I'm just wondering if this is allowable as a deduction. As far as I am aware, computers and tablets are only qualified education expenses if your class(es) explicitly require that you buy one. Otherwise, they are for your convenience only. Oxford Comma posted:When does a former employer need to send me my 1099? I thought it was Jan 31st but they're claiming its been extended to Feb 15th. 1099's are for the government to keep track of what you are being paid. You don't need to wait for it, you should know how much you were paid.
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Jan 30, 2013 18:14
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I have an old bank account that carried a low balance all of last year, but I haven't gotten the interest documents from them. Is there a certain threshold where they won't send you anything? I figured I would have gotten it by now..
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Jan 30, 2013 19:20
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TShields posted:I have an old bank account that carried a low balance all of last year, but I haven't gotten the interest documents from them. Is there a certain threshold where they won't send you anything? I figured I would have gotten it by now.. Most banks won't send one if it's next to nothing, and the IRS doesn't care if it's less than $50, I believe.
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Jan 30, 2013 19:23
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TShields posted:I have an old bank account that carried a low balance all of last year, but I haven't gotten the interest documents from them. Is there a certain threshold where they won't send you anything? I figured I would have gotten it by now.. The limit I've always seen for banks to send you a form is $10. I'm 99% sure you're still supposed to add the amount on your interest income.
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Jan 30, 2013 19:32
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Shear Modulus posted:The limit I've always seen for banks to send you a form is $10. You are required to report your income, regardless of whether you receive a 1099 or not.
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Jan 30, 2013 19:38
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furushotakeru posted:You are required to report your income, regardless of whether you receive a 1099 or not. I'm sure you hear the same thing I do. "I didn't get a 1099, that means I don't need to report it, right?"
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Jan 30, 2013 19:50
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furushotakeru posted:As far as I am aware, computers and tablets are only qualified education expenses if your class(es) explicitly require that you buy one. Uh oh. I wrote my computer off last year because I was using it for my online classes. What are the chances that will come back on me?
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Jan 30, 2013 19:50
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nickhimself posted:Uh oh. I wrote my computer off last year because I was using it for my online classes. What are the chances that will come back on me? The IRS doesn't really disclose the audit rates. Here are the number of inquiries (not even audits, but just inquiries) I've seen in the last 15 years of practice from the IRS in regards to education credits: 0
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Jan 30, 2013 20:44
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AbbiTheDog posted:The IRS doesn't really disclose the audit rates. In a similar vein, what sort of thing do you see get inquired/audited often? I always claim a few hundred in non-cash donations, but I never get receipts. I'm always afraid I'm gonna get a letter one day.
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Jan 30, 2013 21:08
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