US Income Tax Thread: Bank error in your favor! GO DIRECTLY TO JAIL.

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > US Income Tax Thread: Bank error in your favor! GO DIRECTLY TO JAIL.

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Xibanya: Sep 17, 2012; Clever Betty

I have a bizarre situation, but one that might come back to bite me in the rear end.

I am a US citizen who lived as a legal resident in Spain from September 2007 to May 2011. However, my immigration status permitted only study at approved institutions and approved on-campus work related to my area of study.

Starting in May of 2011, I was informally hired by a Spanish company. My job was to sell advertorials in the country of Tanzania. I was on their books as an independent contractor. I have no idea about Spanish law, but by US law I certainly was not, as they dictated my hours, I was not interchangeable, and I used the office supplies they provided, etc. During my (illegal) work in Tanzania (I was there on a tourist visa), I resided in a company apartment and weekly I was given cash money by my manager and I was told to spend it only on food/leisure items. The amount given was 400,000 Tanzanian shillings per week, which began with a value of around $300 and ended up having a value closer to $200. However, I did send a bit less than $1,000 by western union to my mom so she could pay my student loans. The company I worked for employed me illegally and the "food" money I was paid was likely counted as a business expense.

In January I quit my job and returned to Spain. As my student resident card had expired, I entered on a tourist visa. I had an illegal sublet agreement arranged solely by phone and made money by giving private tutoring sessions (English classes) in private homes. I was paid in cash at the end of every class (usually no more than an hour and a half in duration) and I would often turn right around and spend the money the same day. I have no idea how much income I had exactly, but I would estimate that I earned between 4 and 5 thousand euros before I returned to the USA in late June of last year, having overstayed my tourist visa but leaving essentially no paper trail.

In all honesty I have no idea just how much money I made as I kept no personal records and never held onto receipts.

My question is, how likely is it that someone could find all this out (with respect to my real identity) and force me to pay back taxes/interest/penalties etc on unreported overseas income? Should I try to figure out just how much I earned and report it? If so, what kind of ballpark figure should I try to construct? If I don't want to pay back taxes, should I keep all this a dead secret or is it OK to tell my friends? If it must be kept secret, are there any circumstances in which I'll be forced to explain how I supported myself abroad for such a long time?

Edit: To make things more complicated, upon my return to the USA I got a job and earned about $6,000, which I did report (and got a refund on) so my entire 2012 income was probably closer to $11,000 than $6,000.

Xibanya fucked around with this message at 05:31 on May 9, 2013

# ? May 9, 2013 05:27

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# ? May 14, 2024 10:44

shodanjr_gr: Nov 20, 2007

AbbiTheDog posted:

Here are the audit steps:

1) Return flagged by computer
2) Person spends 30 seconds flipping through the return and tosses it on the "audit" or "don't audit" pile.
3) If in audit pile, agent assigned and letter gets sent to last known address
4) The IRS agent will wait for a couple months. If you ignore them, then they simply disallow what they want and issue a draft finding report that gets mailed to you ("here are the anticipated changes....")
5) The IRS agent then issues a final report
6) You have (if I recall correctly) 60 days to challenge the report. I don't remember the specifics, but I do not believe at this time you can bring any new evidence to the table, since you missed that window, and it's more of a technical issue you can argue over.

You can send in an amended return after the IRS issues their final report, which will probably be audited again. I don't do a whole lot of audit representation (the ones we do we respond timely), but you might not want to just find a CPA but look for one of those "former IRS agent EAs" that float around. They tend to know they way around the bureaucracy better than the rest of us.

So we ended up sending amended returns for the years, correcting errors in the forms and clarifying my positions.

The cherry on top of everything is that these are non-resident returns so god knows how long they will take to figure things out.

Is there anything else that I should be doing?

# ? May 9, 2013 21:52

PatMarshall: Apr 6, 2009

Xibanya posted:

I have a bizarre situation, but one that might come back to bite me in the rear end.

I am a US citizen who lived as a legal resident in Spain from September 2007 to May 2011. However, my immigration status permitted only study at approved institutions and approved on-campus work related to my area of study.

Starting in May of 2011, I was informally hired by a Spanish company. My job was to sell advertorials in the country of Tanzania. I was on their books as an independent contractor. I have no idea about Spanish law, but by US law I certainly was not, as they dictated my hours, I was not interchangeable, and I used the office supplies they provided, etc. During my (illegal) work in Tanzania (I was there on a tourist visa), I resided in a company apartment and weekly I was given cash money by my manager and I was told to spend it only on food/leisure items. The amount given was 400,000 Tanzanian shillings per week, which began with a value of around $300 and ended up having a value closer to $200. However, I did send a bit less than $1,000 by western union to my mom so she could pay my student loans. The company I worked for employed me illegally and the "food" money I was paid was likely counted as a business expense.

In January I quit my job and returned to Spain. As my student resident card had expired, I entered on a tourist visa. I had an illegal sublet agreement arranged solely by phone and made money by giving private tutoring sessions (English classes) in private homes. I was paid in cash at the end of every class (usually no more than an hour and a half in duration) and I would often turn right around and spend the money the same day. I have no idea how much income I had exactly, but I would estimate that I earned between 4 and 5 thousand euros before I returned to the USA in late June of last year, having overstayed my tourist visa but leaving essentially no paper trail.

In all honesty I have no idea just how much money I made as I kept no personal records and never held onto receipts.

My question is, how likely is it that someone could find all this out (with respect to my real identity) and force me to pay back taxes/interest/penalties etc on unreported overseas income? Should I try to figure out just how much I earned and report it? If so, what kind of ballpark figure should I try to construct? If I don't want to pay back taxes, should I keep all this a dead secret or is it OK to tell my friends? If it must be kept secret, are there any circumstances in which I'll be forced to explain how I supported myself abroad for such a long time?

Edit: To make things more complicated, upon my return to the USA I got a job and earned about $6,000, which I did report (and got a refund on) so my entire 2012 income was probably closer to $11,000 than $6,000.

Um, unless your friends are snitches who would call the IRS on you, you can probably tell them. OTOH, as a fine, upstanding citizen you should amend your tax return and report the income: if you were abroad from 2007-2012, you probably qualify for the foreign earned income exclusion and would not have to pay tax on the income anyway. Read about it here: http://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-Income-Exclusion---Requirements

I kinda doubt you're going to get audited on a simple one W-2 $6,000 return, but what do I know.

# ? May 10, 2013 00:00

b2n: Dec 29, 2005

Would someone be so kind to tell me about taxes in the U.S.? I'll be moving from Germany to Phoenix, Arizona in a couple of months.

I'm expected to earn 65k annually (gross), and I want to know how much NET money I'll have in the end. Further

- What taxes do I have to pay and how much, percentage wise, of my income will I loose due to each tax?
- Do I have to pay for health insurance myself, or does my employer have to pay for that?

# ? May 15, 2013 11:34

shodanjr_gr: Nov 20, 2007

b2n posted:

Would someone be so kind to tell me about taxes in the U.S.? I'll be moving from Germany to Phoenix, Arizona in a couple of months.

I'm expected to earn 65k annually (gross), and I want to know how much NET money I'll have in the end. Further

- What taxes do I have to pay and how much, percentage wise, of my income will I loose due to each tax?

- Do I have to pay for health insurance myself, or does my employer have to pay for that?

e: I am not a CPA/Accountant/Money person

You could look at something like this: http://calculator2.taxpolicycenter.org/index.cfm for the Federal tax and find a similar calculator for the state tax (not even sure whether AZ has a state tax).

This assumes that you get taxed as a resident (which will depend on your immigration status when you come to the US).

The health care situation is employeer dependent. I am employeed at a University and I am enrolled in their insurance policy. It gets deducted out of my paycheck every month.

shodanjr_gr fucked around with this message at 16:53 on May 15, 2013

# ? May 15, 2013 16:48

AbbiTheDog: May 21, 2007

shodanjr_gr posted:

e: I am not a CPA/Accountant/Money person

You could look at something like this: http://calculator2.taxpolicycenter.org/index.cfm for the Federal tax and find a similar calculator for the state tax (not even sure whether AZ has a state tax).

This assumes that you get taxed as a resident (which will depend on your immigration status when you come to the US).

The health care situation is employeer dependent. I am employeed at a University and I am enrolled in their insurance policy. It gets deducted out of my paycheck every month.

His residency won't matter, he's earning funds in the US.

He'll lose 7.65% to social security/medicare on top of the federal and state tax burden.

# ? May 15, 2013 17:18

shodanjr_gr: Nov 20, 2007

AbbiTheDog posted:

His residency won't matter, he's earning funds in the US.

His immigration status matters in terms of being allowed the standard deduction or whatever credits he would potentially be entitled to as a resident afaik. Although probably if you are not on an F/J visa, you will hit the substantial presence test after half a year and will be taxed as a resident anyway...

# ? May 15, 2013 17:23

cwinkle: Mar 7, 2008

I had to file a 4868 back in April because I couldn't wrap my head around this problem. I thought I would take a shot here that someone might understand.

In January of 1992 I purchased 90 shares of Sara Lee @ $53 1/8 totaling $4884. This stock split 4 times over the years so last year on 6/28 I had 360 shares. Then something happened. Sara Lee decided not to be Sara Lee anymore and became Hillshire Brands. In the process they dumped off all their coffee interest and created a stock call Coffee Co. As a shareholder I was given a) a one time cash dividend b) 72 shares Hillshire Brands and c) 360 shares Coffee Co.

The very next day some company in the Netherlands bought out Coffee Co. completely. In this exchange I received $0 and 360 shares DE Master Blenders. My broker is reporting this second transaction (the Dutch Company buy out) on 1099-B as a taxable event. My question is why? I didn't receive any cash and still hold the Dutch shares. If it is a taxable event how am I to determine the share price to compare against my original basis in Sara Lee? And what percent of that basis applies to the Coffee part when I still have shares in Hillshire Brands?

Appreciate any thoughts.

# ? May 15, 2013 22:05

shodanjr_gr: Nov 20, 2007

So I submitted amended returns a couple of weeks ago for three tax years (2009-2011). Last week, the 2010 and 2011 returns showed up on the online tool (http://www.irs.gov/Filing/Individuals/Amended-Returns-(Form-1040-X)/Wheres-My-Amended-Return-1). I've been checking regurarly to see if/when the 2009 return will show up. I checked today and none of the returns show up at all.

Is this the website just being finicky or could it be a sideeffect of the fact that the returns that I am ammending were audited so these ones are being routed differently?

# ? May 19, 2013 17:04

Jessi Bond: May 2, 2007; Daddy's girl's a fucking monster.

If I'm a sole proprietorship, do I need to file a Form 8822-B when I move? If so, which of the boxes do I check about "what this affects?" The first two don't seem to apply to me, but I'm not sure.

# ? May 21, 2013 22:42

Vote Republican: Jul 7, 2012

shodanjr_gr posted:

So I submitted amended returns a couple of weeks ago for three tax years (2009-2011). Last week, the 2010 and 2011 returns showed up on the online tool (http://www.irs.gov/Filing/Individuals/Amended-Returns-(Form-1040-X)/Wheres-My-Amended-Return-1). I've been checking regurarly to see if/when the 2009 return will show up. I checked today and none of the returns show up at all.

Is this the website just being finicky or could it be a sideeffect of the fact that the returns that I am ammending were audited so these ones are being routed differently?

amended returns are looked at by actual people instead of being read by a computer. it can take a couple of months for them to get posted into the IRS ledgers. Also the fact that the original returns were audited will also merit additional scrutiny. I'd forget about them and check in a couple of months tbh. There are at least three or four desks it goes through before someone finally does the posting.

Jessi Bond posted:

If I'm a sole proprietorship, do I need to file a Form 8822-B when I move? If so, which of the boxes do I check about "what this affects?" The first two don't seem to apply to me, but I'm not sure.

Not necessarily. If you're just filing a schedule C on your tax return at the end of every year (on a form 1040), I suppose you could file a form 8822 if you really wanted to. If you're doing quarterly payroll tax returns (form 941) then you definitely should file the form 8822-b. The IRS will change your address in its database when you file your 1040 tax return at the end of every year anyway.

E: I just realized you sell e-books for a living. Make sure that your payment processor knows about your address change, you're going to want to make sure your 1099-k forms get sent to you in a timely manner next tax season. That change of address form is unnecessary in your case.

Vote Republican fucked around with this message at 08:18 on May 23, 2013

# ? May 22, 2013 08:59

Vote Republican: Jul 7, 2012

cwinkle posted:

I had to file a 4868 back in April because I couldn't wrap my head around this problem. I thought I would take a shot here that someone might understand.

In January of 1992 I purchased 90 shares of Sara Lee @ $53 1/8 totaling $4884. This stock split 4 times over the years so last year on 6/28 I had 360 shares. Then something happened. Sara Lee decided not to be Sara Lee anymore and became Hillshire Brands. In the process they dumped off all their coffee interest and created a stock call Coffee Co. As a shareholder I was given a) a one time cash dividend b) 72 shares Hillshire Brands and c) 360 shares Coffee Co.

The very next day some company in the Netherlands bought out Coffee Co. completely. In this exchange I received $0 and 360 shares DE Master Blenders. My broker is reporting this second transaction (the Dutch Company buy out) on 1099-B as a taxable event. My question is why? I didn't receive any cash and still hold the Dutch shares. If it is a taxable event how am I to determine the share price to compare against my original basis in Sara Lee? And what percent of that basis applies to the Coffee part when I still have shares in Hillshire Brands?

Appreciate any thoughts.

1. so after the renaming and the spinoff and splits and reverse splits your basis in the two groups of stock sum up to $4884 unchanged. you have to allocate this amount between hillshire brands and coffeeco stock first.
2. find out what the stock price was for a share of hillshire farms and a share of coffeeco on opening bell on june 29, 2012. these amounts i have found:

HSH: 5.70/share
Coffeeco: 12.8/share

3. the sum of these two numbers is 18.50. the percentage of basis to allocate to hillshire farms is $5.70/$18.50 = .3081 >>> .3081 x 4884 = $1505 roughly Hillshire Brands basis. $4884 - 1505 = $3379 basis in coffeeco stock.
4. if you didnt think this was loving retarded before youre going to think it is now. the dutch company "redomiciled" the shares to amsterdam. this is why it's a taxable event.
5. DE master blenders didn't list the stock in the netherlands until july 9. so we have to use the implied value of the coffeeco stock on the morning of june 29, 2012. this we get by subtracting the $3 dividend from each CoffeeCo share, so per share implied value is $9.80.

6. $9.80 x 360 = $3528 FMV of DEMB. because the coffeeco stocks were absorbed as a merger, the "redomicile" transaction works in tax law as an exchange, and in exchange for your coffeeco stock you got DEMB stock which had a fair market value higher than your coffeeco basis.

7. your gain on the coffeeco stock is $3528 - 3379 = $149. long-term, so it's taxed long term capital gain rates.

i hope that made sense. it's more than a little bit retarded. that's not the only way to compute the basis either. frankly if it were my own return i'd just enter the basis as a number fairly close to the proceeds of the merger.

# ? May 22, 2013 09:36

Vote Republican: Jul 7, 2012

polyfractal posted:

Last year, I worked for a California-based company while living in Massachusetts for about three months. I then moved to South Carolina, where I worked for the rest of the year. I split my taxes accordingly, such that MA was only eligible for the taxes while I was actually living there.

Alas, I just got a letter from the Massachusetts IRS. They rejected my tax return and want clarification on why I didn't pay MA taxes on my income (even though I did pay some taxes, just not my full income). They also want a letter from my company stating the same reason.

At this point, I should just go hire a CPA to help sort out the situation, right? The letter freaked me out...I've never had a problem with my taxes before and am unsure if this is just "routine" or "WTF where is our money?!".

The Massachusetts DoR rejected your return because someone (or their computer) thinks you were "domiciled" in Massachusetts in 2012. I'm guessing there was some data entry snafu - i've never used consumer tax prep software so I don't know if it allows you to enter part year/nonresident information. "domicile" in most states means you lived there more than half the year and as a result had a tax home there.

It's probably worth going to a CPA/EA over, but get a quote first. It takes 25 mins tops to write a fancy letter and get the necessary documentation to prove that you weren't domiciled in Massachusetts and send said fancy letter with enough paperwork to satiate the average revenue employee's hunger for inedible cellulose fiber and deal with the non-issue. there are a lot of dishonest idiot CPAs who think this sort of thing is a $300 job and get away with it.

# ? May 22, 2013 10:01

cwinkle: Mar 7, 2008

Vote Republican posted:

1. so after the renaming and the spinoff and splits and reverse splits your basis in the two groups of stock sum up to $4884 unchanged. you have to allocate this amount between hillshire brands and coffeeco stock first.
2. find out what the stock price was for a share of hillshire farms and a share of coffeeco on opening bell on june 29, 2012. these amounts i have found:

HSH: 5.70/share
Coffeeco: 12.8/share

3. the sum of these two numbers is 18.50. the percentage of basis to allocate to hillshire farms is $5.70/$18.50 = .3081 >>> .3081 x 4884 = $1505 roughly Hillshire Brands basis. $4884 - 1505 = $3379 basis in coffeeco stock.
4. if you didnt think this was loving retarded before youre going to think it is now. the dutch company "redomiciled" the shares to amsterdam. this is why it's a taxable event.
5. DE master blenders didn't list the stock in the netherlands until july 9. so we have to use the implied value of the coffeeco stock on the morning of june 29, 2012. this we get by subtracting the $3 dividend from each CoffeeCo share, so per share implied value is $9.80.

6. $9.80 x 360 = $3528 FMV of DEMB. because the coffeeco stocks were absorbed as a merger, the "redomicile" transaction works in tax law as an exchange, and in exchange for your coffeeco stock you got DEMB stock which had a fair market value higher than your coffeeco basis.

7. your gain on the coffeeco stock is $3528 - 3379 = $149. long-term, so it's taxed long term capital gain rates.

i hope that made sense. it's more than a little bit retarded. that's not the only way to compute the basis either. frankly if it were my own return i'd just enter the basis as a number fairly close to the proceeds of the merger.

Thank you so much.

# ? May 22, 2013 17:01

PoorUser: Oct 12, 2008

Can I claim my own 1099-T if I am claimed as a dependent?

# ? May 24, 2013 00:28

Horseshoe theory: Mar 7, 2005

PoorUser posted:

Can I claim my own 1099-T if I am claimed as a dependent?

No, only your parent/guardian can claim the education credits/deduction.

# ? May 24, 2013 02:21

ForkPat: Aug 5, 2003; All the food is poison

How much in average monthly realized short term capital gains can someone make before having to make quarterly estimated taxes? Is it based on total combined income with my job? A total amount above my regular income? Can it be done by simply decreasing exemptions or paying extra tax on my W4 or do I have to go through an accountant?

# ? May 24, 2013 03:19

PoorUser: Oct 12, 2008

ThirdPartyView posted:

No, only your parent/guardian can claim the education credits/deduction.

That really sucks because while they provide most of my support hence their claiming me as a dependent (I live with them, eat their food, etc.) I am paying for my own school and would like that deduction.

# ? May 24, 2013 18:52

Vargo: Dec 27, 2008; 'Cuz it's KILLIN' ME!

Next month, I have to move from Oregon to Philadelphia for a job. I know that I'm allowed to deduct moving expenses, including a plane ticket over there. However, I was thinking about taking a flight out to Grand Rapids to see my girlfriend on the way there, staying a week, and flying to Philly from there. Is there any way I can still count it as a deduction if I do this? Or at least deduct part of it?

# ? May 25, 2013 02:25

sheri: Dec 30, 2002

PoorUser posted:

That really sucks because while they provide most of my support hence their claiming me as a dependent (I live with them, eat their food, etc.) I am paying for my own school and would like that deduction.

Have them claim it and then give the money they get for it to you after they receive their refund?

# ? May 25, 2013 04:21

Vote Republican: Jul 7, 2012

Vargo posted:

Next month, I have to move from Oregon to Philadelphia for a job. I know that I'm allowed to deduct moving expenses, including a plane ticket over there. However, I was thinking about taking a flight out to Grand Rapids to see my girlfriend on the way there, staying a week, and flying to Philly from there. Is there any way I can still count it as a deduction if I do this? Or at least deduct part of it?

The plane ticket isn't going to be the bulk of your moving expenses; keep track of all of your spending on moving your furniture and personal effects. That amount will matter a great deal more. As for the plane ticket itself, you can only deduct the amount that would constitute the shortest, most reasonable route to philadelphia.

# ? May 25, 2013 08:54

Mandalay: Mar 16, 2007; WoW Forums Refugee

PoorUser posted:

That really sucks because while they provide most of my support hence their claiming me as a dependent (I live with them, eat their food, etc.) I am paying for my own school and would like that deduction.

I suspect that they are saving a lot more money with that deduction than you would if you took it, assuming they make significantly more money than you.

# ? May 26, 2013 07:11

kefkafloyd: Jun 8, 2006; What really knocked me out
Was her cheap sunglasses

Travel question.

I've been doing some private jet shoots for a company in Long Island, which is a pretty far drive from where i live in Boston. I've done the drive a few times and it's a real drag, even though the mileage, tolls, etc. is deductible, as well as my overnight hotel stay. However, I have a friend who has a Cessna, and flying to there would be much less time�about an hour's worth one way instead of four-five hours. I would pick up the tab for everything (fuel, landing fees). It would cost me about $90 worth of avgas (at $6.50/gallon) and ten dollars for the landing fee at the airport. Would this count under normal travel expenses, or as other expenses?

The actual deduction would be much less than if I drove (the mileage deductions for the last two trips were somewhere around $270 each) and stayed overnight (the hotel's usually $150/night), but I'm OK with that because I just hate the drive.

# ? May 26, 2013 23:26

Vote Republican: Jul 7, 2012

kefkafloyd posted:

Travel question.

I've been doing some private jet shoots for a company in Long Island, which is a pretty far drive from where i live in Boston. I've done the drive a few times and it's a real drag, even though the mileage, tolls, etc. is deductible, as well as my overnight hotel stay. However, I have a friend who has a Cessna, and flying to there would be much less time�about an hour's worth one way instead of four-five hours. I would pick up the tab for everything (fuel, landing fees). It would cost me about $90 worth of avgas (at $6.50/gallon) and ten dollars for the landing fee at the airport. Would this count under normal travel expenses, or as other expenses?

The actual deduction would be much less than if I drove (the mileage deductions for the last two trips were somewhere around $270 each) and stayed overnight (the hotel's usually $150/night), but I'm OK with that because I just hate the drive.

Those sound like travel expenses to me and if it were my own tax return I'd write them down as travel expenses. There are some distinctions between deductible travel expenses and commuting(nondeductible) but those depend on a few factors I can't discern in your situation. If you put them in travel expenses as opposed to other expenses on your tax return, it won't make a difference, they will still reduce your schedule C income.

"Other expenses" vary a great deal, from certain medical expenses for professional athletes (surfboards are deductible for some people...) to depreciation on breast implants for strippers (read "Chesty Love V Commissioner" if you're curious) to Richard "Lowtax" Kyanka's deduction for web hosting fees. The most beneficial thing for you to do is keep a log of these expenses. Bank statements can be incomprehensible. Putting them on a Form 2106 (unreimbursed employee business expenses) is a red flag, but it sounds like you're running your own business. If you get a notice from the IRS, just hire a CPA or an EA and they will solve the issue. With the amounts your talking about, it's not going to be a big deal either way if you deduct them or not.

As a person and not a tax-fixated retard, do the cessna flights anyway. Taxes are not real life and making business decisions based on reducing tax liabilities is rarely a good idea.

The bigger thing I'd be concerned about is your "domicile" status in New York State vs. Massachusetts. I have brought this up repeatedly because I spent a lot of time unwinding a New York State domicile audit for a client who had moved to California. The original assessed tax bill + penalties was $100k and my boss got it down to about 2.5k, but it was still two years of nonstop bullshit and unnecessary stress for the clients.

Everything points to you deriving your income from NY state. New York has enough international and out-of-state US citizens making money there that the state has a large office dedicated to going after taxpayers who earned money in New York and don't pay the tax there. It's important that you consult with a professional who can guide you through this, because NY is a minefield and you'll probably need to report and pay tax on your income in NY state.

# ? May 27, 2013 02:50

kefkafloyd: Jun 8, 2006; What really knocked me out
Was her cheap sunglasses

I live in Massachusetts and run my business there. My day job is also here in Massachusetts as well (I derive about 90% of my income from my salaried job). I'm an artist and photographer, and I've been shooting private jets, airshows, etc for a few years. I have never lived in New York state for any period of time. In terms of "travel" vs. "commuting," once I wrap up this last shoot for this customer (the third and final one), I will probably not have any more jobs to do with them.

For some background info, this isn't the first time i've done schedule C, I have a registered sole proprietorship and in fact this year I've started getting much more serious about things (separate bank accounts, Quicken Home & Business for my expenses) and I've been traveling for doing business for over a year now. It wasn't the jets that made me do this, it was my traveling to conventions to sell my artwork that made things much more complicated. I had to keep track of inventories and the travel related expenes for those conventions for the first time. I'm familiar with the airfare rules, but I couldn't find anything on something like this... hence my asking!

I've made a profit on my last three years (last year much more so) and this year is looking to be another profitable one as well.

quote:

"Other expenses" vary a great deal, from certain medical expenses for professional athletes (surfboards are deductible for some people...) to depreciation on breast implants for strippers (read "Chesty Love V Commissioner" if you're curious) to Richard "Lowtax" Kyanka's deduction for web hosting fees. The most beneficial thing for you to do is keep a log of these expenses. Bank statements can be incomprehensible. Putting them on a Form 2106 (unreimbursed employee business expenses) is a red flag, but it sounds like you're running your own business. If you get a notice from the IRS, just hire a CPA or an EA and they will solve the issue. With the amounts your talking about, it's not going to be a big deal either way if you deduct them or not.

Yeah, this is the kind of thing I would put my deviantart, SmugMug photo hosting, batteries and cards for my cameras, and stuff that can't be depreciated. I was just wondering if I had to put avgas, etc into there or into travel. It's sounding like it's travel, which makes sense. I just wanted to make sure. Thanks very much for the advice.

quote:

Everything points to you deriving your income from NY state. New York has enough international and out-of-state US citizens making money there that the state has a large office dedicated to going after taxpayers who earned money in New York and don't pay the tax there. It's important that you consult with a professional who can guide you through this, because NY is a minefield and you'll probably need to report and pay tax on your income in NY state.

This year I am going to have my taxes done by an accountant. Last year's schedule C was much more complicated than years' past, when I just got one 1099 for the one or two jet shoots. Now, I have lots of traveling and other expenses as well as production and I'd rather pay someone to take a box of my paperwork and just do it. I don't trust myself do it by myself anymore.

kefkafloyd fucked around with this message at 04:46 on May 27, 2013

# ? May 27, 2013 03:23

C-Euro: Mar 20, 2010; Soiled Meat

I filed my state taxes (Indiana) online on April 7th and haven't gotten my refund yet. I've had no indication that my taxes didn't go through or that there were any problems with it, should I be worried? I'm admittedly a little impatient because I'm moving in a few weeks, and could really use the money to help pay for that.

# ? May 28, 2013 20:39

Guy Axlerod: Dec 29, 2008

C-Euro posted:

I filed my state taxes (Indiana) online on April 7th and haven't gotten my refund yet. I've had no indication that my taxes didn't go through or that there were any problems with it, should I be worried? I'm admittedly a little impatient because I'm moving in a few weeks, and could really use the money to help pay for that.

http://www.in.gov/dor/4339.htm
Check the status of your refund online!
It only took me two clicks to find that, and I don't even live in Indiana

# ? May 28, 2013 22:21

Bad Munki: Nov 4, 2008; We're all mad here.

Question about when sales tax is appropriate:

A group I'm a member of is about to incorporate. We are currently planning on 501c7 (non profit social club) but may go LLC instead. We charge monthly dues to members. Are we supposed to charge sales tax on those? This is in Pennsylvania, Erie County to be exact. PA has a 6% statewide sales tax (although some locales are allowed slightly different amounts for a little while longer yet, but we aren't in one of those locales to the best of my knowledge.)

# ? May 29, 2013 17:30

Vote Republican: Jul 7, 2012

Bad Munki posted:

Question about when sales tax is appropriate:

A group I'm a member of is about to incorporate. We are currently planning on 501c7 (non profit social club) but may go LLC instead. We charge monthly dues to members. Are we supposed to charge sales tax on those? This is in Pennsylvania, Erie County to be exact. PA has a 6% statewide sales tax (although some locales are allowed slightly different amounts for a little while longer yet, but we aren't in one of those locales to the best of my knowledge.)

As far as I can tell PA charges sales tax only on tangible goods and health club memberships. If you're going to be selling items, then you need a sales tax license. The membership dues you're talking about aren't taxable.

# ? May 30, 2013 02:18

Clever Gamma: Mar 23, 2008

AbbiTheDog posted:

He'll lose 7.65% to social security/medicare on top of the federal and state tax burden.

As a full-time, single, dependent student who'll make less than $4500 this year across three jobs this summer and one part-time past September, should I arrange to have this amount deducted from my paycheck? Thank you so much for the 7.65% figure, by the way, I've been unable to find it elsewhere.

Since I had no tax burden last year and don't expect to this year, I requested exempt status on my W2s, but I noticed SS/medicare weren't being deducted. I don't want a nasty letter from the IRS come next year. My state tax burden is also zero, FWIW.

# ? Jun 5, 2013 14:24

Mandalay: Mar 16, 2007; WoW Forums Refugee

As an employer, I didn't know you could even opt out of Social Security and Medicare on the W-4 form.

fake edit: ADP definitely does not like this idea

# ? Jun 5, 2013 17:53

Clever Gamma: Mar 23, 2008

Maybe I could ask them to reinstate those only? My earnings statement says:

code:

Exemptions/allowances:
    Federal: 0, Tax Blocked
    MA:      0, Tax Blocked

On previous checks there have been separate entries for SS/Medicare deductions.

# ? Jun 5, 2013 18:15

Mandalay: Mar 16, 2007; WoW Forums Refugee

Federal and state income taxes are separate from SS and Medicare--are you sure you're not conflating them?

# ? Jun 5, 2013 18:18

Clever Gamma: Mar 23, 2008

I'm aware that they're separate, but unsure if filing as exempt had caused my employer to not withhold them for some reason. What I wrote is all that's printed on the check besides my marital status and earnings.

# ? Jun 5, 2013 18:40

Guy Axlerod: Dec 29, 2008

Clever Gamma posted:

As a full-time, single, dependent student who'll make less than $4500 this year across three jobs this summer and one part-time past September, should I arrange to have this amount deducted from my paycheck? Thank you so much for the 7.65% figure, by the way, I've been unable to find it elsewhere.

Since I had no tax burden last year and don't expect to this year, I requested exempt status on my W2s, but I noticed SS/medicare weren't being deducted. I don't want a nasty letter from the IRS come next year. My state tax burden is also zero, FWIW.

Are you a half-time or better student working for your school? There is a FICA exemption there.

# ? Jun 5, 2013 22:29

Clever Gamma: Mar 23, 2008

Currently off for the summer May-September, but otherwise a full-time student working for my school, yes. Does this mean I don't need to update my W4? Because that would be pretty awesome.

I also talked to the payroll guy, and he suggested taking out an extra $5-10 because of some kind of IRS tax fraud suspicion involved with my three jobs that he wasn't clear about.

# ? Jun 6, 2013 05:01

scribe jones: Sep 17, 2008; One of the key problems in the analysis of this puzzling book is to be able to differentiate a real language from meaningless writing.

You'd be exempt from FICA, so no need to update the W-4.

Clever Gamma posted:

I also talked to the payroll guy, and he suggested taking out an extra $5-10 because of some kind of IRS tax fraud suspicion involved with my three jobs that he wasn't clear about.

If it were me, I'd be at least a little curious about this part, though.

# ? Jun 6, 2013 07:15

Defenestration: Aug 10, 2006; "It wasn't my fault that my first unconscious thought turned out to be-"
"Jesus, kid, what?"
"That something smelled delicious!"; Grimey Drawer

I quit my job and got a better one in May.

I got paid for my remaining vacation hours (at a lovely prorated rate but whatever), on a single paycheck that came the period after my last "real work hours" paycheck. This check was ~$200 more than my regular work hours check.

On the vacation hours check, they taxed my income WAY above what they did for the regular. For example, on a regular check, the Federal income withholding would be 8.8% of the wages and on the vacation check it was 23%. The tax rate was inflated for everything: SS, medicare, state. The result was I only saw an extra $16 out of that whole $200, even without paying for health/dental.

I am solidly into my tax bracket and even if they assumed that I was getting paid at the Vacation Rate for the whole year, that would not dump me into the next bracket. Even if it did, marginal tax rates, duh.

I tried to figure out if there was a reason these vacation wages would be taxed at such a ridiculous rate, and I found this, which seems to indicate 25%?
http://www.epayyes.com/news/read.asp?name=news&number=1&page=6&startpage=1

My questions are: are wages paid for unused vacation days at the end of my employment really taxable at 23%? And if not, what rate should they be? Is it worth trying to get the money back from a completely worthless Payroll department at my old job who seriously did not understand marginal tax rates last time they hosed up my check? Or should I just wait until I file and sort it out?

# ? Jun 6, 2013 17:24

Admiral101: Feb 20, 2006; RMU: Where using the internet is like living in 1995.

Defenestration posted:

I quit my job and got a better one in May.

I got paid for my remaining vacation hours (at a lovely prorated rate but whatever), on a single paycheck that came the period after my last "real work hours" paycheck. This check was ~$200 more than my regular work hours check.

On the vacation hours check, they taxed my income WAY above what they did for the regular. For example, on a regular check, the Federal income withholding would be 8.8% of the wages and on the vacation check it was 23%. The tax rate was inflated for everything: SS, medicare, state. The result was I only saw an extra $16 out of that whole $200, even without paying for health/dental.

I am solidly into my tax bracket and even if they assumed that I was getting paid at the Vacation Rate for the whole year, that would not dump me into the next bracket. Even if it did, marginal tax rates, duh.

I tried to figure out if there was a reason these vacation wages would be taxed at such a ridiculous rate, and I found this, which seems to indicate 25%?
http://www.epayyes.com/news/read.asp?name=news&number=1&page=6&startpage=1

My questions are: are wages paid for unused vacation days at the end of my employment really taxable at 23%? And if not, what rate should they be? Is it worth trying to get the money back from a completely worthless Payroll department at my old job who seriously did not understand marginal tax rates last time they hosed up my check? Or should I just wait until I file and sort it out?

The percent they withheld federal income tax is irrelevant. Any difference will come through with your annual federal tax return. It's $200 of wages, who gives a poo poo.

At what rate were they withholding social security and medicare? If it's at 7.65% combined, then your paycheck was handled correctly.

There's no difference in the tax treatment for vacation wages vs regular wages. Some employers handle federal withholding on paychecks differently depending on whether the paycheck is regular wage, vacation wage, a bonus, etc. In all likelihood, this is all that is happening here. You're not getting shortchanged.

Admiral101 fucked around with this message at 17:43 on Jun 6, 2013

# ? Jun 6, 2013 17:38

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# ? May 14, 2024 10:44

Mandalay: Mar 16, 2007; WoW Forums Refugee

You'll get your $16 back if you file properly. I've seen ADP bug me to do bonus payments at higher marginal tax rates so maybe this is related (or not).

# ? Jun 6, 2013 17:47

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > US Income Tax Thread: Bank error in your favor! GO DIRECTLY TO JAIL.

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