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I got the letter explaining the proposed adjustment so I'm not late at this point. I did talk to someone at the general IRS phone number (For complex personal tax issues I think was the name of the group?) and they more or less said the 1099-C was all they cared about. I'll try the advocate group and see if they can help me get my bearings. Thanks for the advice. Edit: Upon reading more stuff from the IRS, I found this in the instructions for the 1099-C: "For debts incurred before 1995 and for debts of less than $10,000 incurred after 1994, you must file Form 1099-C only for the primary (or first-named) debtor." The debt in question was originally a car loan for more than $10K I believe, but the cancellation was only $5K or so. Does the quoted text apply? If so, all I think I'd need is the original loan showing the other party as the primary debtor and we're good. If not, I'll continue to pursue professional assistance. Mulloy fucked around with this message at 22:59 on Jul 28, 2013 |
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Jul 28, 2013 22:51
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Thanks for your input regarding the room-rental tax issues, I am going to hire an accountant.
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Jul 29, 2013 01:29
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Mulloy posted:I got the letter explaining the proposed adjustment so I'm not late at this point. I did talk to someone at the general IRS phone number (For complex personal tax issues I think was the name of the group?) and they more or less said the 1099-C was all they cared about. I'll try the advocate group and see if they can help me get my bearings. Here's what happened: Your wife co-signed, making her jointly and severally liable for the debt (meaning she doesn't own "half" of the debt if it's not paid, they can go after anyone for the full amount). As such, the collection agency tried to collect from the ex-boyfriend's sister, and when that didn't work, they went after your wife for the full amount. So they repo'd the car. When they took the car back, they probably sold the car at auction and applied that balance to the debt owed. It came up short, the collection company didn't collect the rest, and they issued your wife a 1099-C. Here's how that works: Say you borrow $20,000 to buy a $20,000 car and stop making payments. By the time the collection company takes the car back, it's worth $15k, but you still owe the $20k. They take the car back and for whatever reason stop attempting to collect the rest. As a result, you "made" $5k by borrowing $20k and giving an asset back worth only $15k. To "balance" their books they "write off" the other $5k, and from your wife's point of view, that's income and from the IRS' point of view, it's taxable income since you didn't satisfy the debt in full. So...... There's two parts to attempt to not claim the cancellation of debt (COD) income as taxable. The first is if it's home acquisition debt that qualifies for Form 982 treatment (no in your case). Second part is if, the day before the debt got cancelled, your wife was determined to be insolvent under Internal Revenue Code (IRC) 108. Probably not, but you never know, so just google "insolvency" and "IRC 108" and tons of stuff will come up for you to read through. If your wife isn't insolvent, than the COD goes on the front of the 1040 as "other income" and is taxable as ordinary income. If you live in a state that has income tax you'll need to cough up money for that as well. The CP2000 notice (matching notice) you got from the IRS is copied to the state you live in as well so they'll know about it. My first guess would be that your wife probably owes the back taxes and interest/penalties due, and be glad (if you can) that the taxes owed on the debt cancellation is far cheaper than having to pay the debt in full.
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Jul 29, 2013 16:41
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What constitutes a work-related expense that you can deduct on your taxes? I've never needed to do anything like that but now I'm wondering about it. For example, I work in IT, so would taking an IT certification test be considered a work-related expense, even if my company isn't strictly requiring it? Some of the stuff I'm reading after googling says stuff like that is ok if it "maintains or improves your qualifications in your current line of work." so is that ok to try to deduct? I'm not even sure if it's even nessicary, my total gross salary this year is going to be around $30k, this is the most I've ever made in my life, but it's not a lot and I think I might still be under some kind of threshold where it'd be worthwhile? 100 HOGS AGREE fucked around with this message at 16:55 on Jul 30, 2013 |
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Jul 30, 2013 16:52
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100 HOGS AGREE posted:What constitutes a work-related expense that you can deduct on your taxes? I've never needed to do anything like that but now I'm wondering about it. If you don't itemize (schedule A) it won't do you any good anyways. Now what the IRS and state are doing are going to your employee manual to see what your company requires. If you don't seek reimbursement from your company (in some cases) even if you know you're going to be denied you aren't eligible to take the deduction anyways.
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Jul 30, 2013 21:27
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That's what I figured, thanks.
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Jul 30, 2013 23:18
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The standard is "ordinary and necessary" but case law bears out that that phrase doesn't mean what it sounds like it means. With degrees/certifications, the essential point is whether it qualifies you for a new career, our enhances your current career. For instance a law degree is not deductible, but an MBA is (they made sure to teach this case early to keep us from getting ideas).
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Jul 31, 2013 01:16
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Is this a good place to ask this? We're incorporating as a non-profit, so I'm calling it tax-related. At the state level, there's a form: quote:6. For Nonprofit Corporation Only: What the heck does that even mean, and what on earth is supposed to go in that blank?  Here's the entire form if it helps.
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Jul 31, 2013 23:38
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Bad Munki posted:What the heck does that even mean, and what on earth is supposed to go in that blank?  but it seems to be the name of the organization."The incorporators constitute a majority of the members of the committee authorized to incorporate SomethingAwful.com by the requisite vote required by the organic law of the association for the amendment of such organic law." The organic law would be your charter, constititution, bylaws, and parliamentary authority. There should be an established voting requirement to amend any of those items. Most small organizations don't have a "committee authorized to incorporate", so it likely defaults to the entire voting membership, unless that membership has formed a committee with executive power for the purpose of incorporation. As it would be very, very unlikely that an amendment in your organization can occur with less than a majority vote, you will have an established majority if the vote is to incorporate. Note: I'm an amateur parliamentarian that drips Robert's Rules of Order. I am not a lawyer. I have never formed a non-profit.
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Aug 1, 2013 04:32
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PhantomOfTheCopier posted:Not really a good place to ask Forming a non-profit is a huge pain in the rear end, and they all want a fee discount for being a nonprofit. I'd suggest having a lawyer assist but it'll cost you. Side note - for federal purposes, donations to a nonprofit are deductible with proper documentation (see publication 1771). Make sure you're keeping track of who has donated funds to you until you get your nonprofit status approved by the IRS so you can issue proper receipts to them later.
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Aug 1, 2013 16:50
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AbbiTheDog posted:Forming a non-profit is a huge pain in the rear end, and they all want a fee discount for being a nonprofit. I'd suggest having a lawyer assist but it'll cost you. We're actually going with a 501c3 fiscal sponsor (via School Factory) so they'll handle the federal level for us, similar to how Boy Scouts of America work, which is really the only way being a non-profit is at all feasible for us at this time. We still have to incorporate ourselves at the state level, though, but that's a lot simpler: you're either for profit, or not. $190 in filing fees and two or three forms and that's it. We did consult with a lawyer, but frankly, it's way out of our budget for the foreseeable future. We're pretty happy with School Factory, though, I think that'll work just great. Just need to get these couple forms done and we should be golden. They handle all the heavy lifting at the federal level, and take a 10% cut of donations they process that are over $250, which basically means nothing right now. Bad Munki fucked around with this message at 17:02 on Aug 1, 2013 |
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Aug 1, 2013 16:53
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If my medical debt for 2013 exceeds 10% of my income and I itemize deductions, but the collective amount of the medical debt is still less than the standard deduction, I can only claim the standard deduction, right? Or can I somehow deduct both the medical debt and the standard deduction together? I'm trying to figure out if it's worth it to pay a medical bill in full now, but my medical expenses for the year thus far don't exceed the standard deduction.
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Aug 1, 2013 18:22
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EugeneJ posted:If my medical debt for 2013 exceeds 10% of my income and I itemize deductions, but the collective amount of the medical debt is still less than the standard deduction, I can only claim the standard deduction, right? Your medical bills exceeding 10% of your income also has to exceed the standard deduction or it provides no benefit to you. You cannot deduct medical bills and still take the standard deduction.
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Aug 1, 2013 19:54
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EugeneJ posted:If my medical debt for 2013 exceeds 10% of my income and I itemize deductions, but the collective amount of the medical debt is still less than the standard deduction, I can only claim the standard deduction, right? You COULD itemize in that case but I don't know why you would WANT to since it would result in a lower deduction. There is no law that I am aware of saying that you have to itemize or have to take the standard deduction, except in the case of a married couple filing separately (if one spouse itemizes the other is required to itemize as well).
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Aug 2, 2013 19:15
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furushotakeru posted:You COULD itemize in that case but I don't know why you would WANT to since it would result in a lower deduction. There is no law that I am aware of saying that you have to itemize or have to take the standard deduction, except in the case of a married couple filing separately (if one spouse itemizes the other is required to itemize as well). Some states (Oregon, for example) has a waaaay lower standard deduction than the US so in some instances you can itemize for state purposes but not for federal.
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Aug 5, 2013 16:55
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I'm a resident in Texas, working for a large company based in Chicago, at a facility here in Houston for about 15 years now. I'm moving back to New York, and will be working from home. We'll be selling our house, staying with my parents for a couple of months, and buying a house in the Albany area. MFJ, 2 kids. Firstly, it looks like, from the OP, I would need to make sure my employer starts paying me as if I'm working in NY once we move, so that what I imagine would be prorated NY State income taxes would be coming out of my checks, and I'll be liable for NY taxes for the remainder of the year, but not on the work I did in TX. Is that correct? Does working from home change things such that I have some kind of liability in Chicago since I'm not at a local facility? Secondly, the "I had to buy xx for my job" section states that you need to hit 2% of your AGI. However, does this work differently when you work from home? How much of things like a desk, computer accessories, etc. should I be able to claim, and a fool for not doing? Is there some type of tax break related to keeping a portion of my house as an office for work? If it works like that 2% breakpoint for desk/etc. would that be 2% of my income, or 2% of combined income with my wife? Thirdly, regarding the "why pay a professional" section, we've had someone prepare our taxes for a number of years, mostly at H&R Block, and often feeling like I understood their software better than they did, but most recently that I understood things like taxes better than they did.. I mean the lady was confused about deduction limits as they related to AGI and it was painful to try to gently explain the numbers she was looking at. I get the feeling that the people that come in to an H&R Block to work just for tax season are no better than being mildly intelligent and having their software. So with that being said.. how would you recommend finding an actually competent tax professional that still charges a reasonable rate for people that aren't rich, and do you think there is a real benefit to working with someone in person and local vs. some brilliant goon on the internets? I think that's it for now but between selling our first home, working from home, etc. I'm sure I'll end up with more questions in the coming months 
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Aug 5, 2013 20:14
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glug posted:I'm a resident in Texas, working for a large company based in Chicago, at a facility here in Houston for about 15 years now. I'm moving back to New York, and will be working from home. We'll be selling our house, staying with my parents for a couple of months, and buying a house in the Albany area. MFJ, 2 kids. You will be a part year resident of NY, so you will only owe NY tax on the income earned in NY. If you maintain a portion of your home for regular and exclusive work use, for the convenience of your employer (as opposed to your own convenience), and are not eligible for reimbursement from your company then you might be eligible to claim a pro rata portion of your rent (or mortgage interest/property taxes/HOA dues, etc.), utilities, repairs, insurance, etc. as an employee expense. Any furniture or equipment used in the home office is deductible as well, to the extent that the items are used for work. 2% is 2% of the income showing on the return. If that is a joint return, then it is 2% of your joint income. H&R Block/Jackson Hewitt/Liberty Tax/etc, based on my limited experience as well as anecdotal evidence, have a very high rate of turnover from season to season. It seems that if you just walk in without an appointment you will be shuffled off to whomever is available. Well, most of the experienced preparers spend most of their time keeping appointments with repeat customers, so the person you end up seeing if you come in off the street will probably be a rookie. I personally think that working with brilliant goons on the internet is a great way to go  . If you prefer an in person meeting, then I would ask local friends and family for a recommendation. Absent that you can look around the web, etc. for advertisements but that can be a crap shoot.
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Aug 5, 2013 20:42
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OK, I'm still having a horribly stressful time trying to figure out how to deal with all my income from youtube, seriously, I need to get this sorted because it's giving me sleepless nights. The simple heads up - I'm the main breadwinner in the family, I have a day job as a software developer, and a secondary hobby making videos on youtube which is making me several thousand dollars a month. Now, people have told me I really need to incorporate in some form to protect my home and other assets from "scary legal consequences" (which may be unlikely, I honestly can't say how common this kind of stuff is) and with all the form filling and crap I can do this for a few hundred dollars, or about a thousand if I get a lawyer to do it. Then as an LLC I gather there's a minimum $800 tax I'd have to pay within 90 days. So cash goes out to make this entity, and the same people telling me to incorporate are saying I can easily make that back in terms of tax savings, but when I actually ask how they go all quiet or mumble or say something about deducting expenses. Now deducting expenses is something I can already do, and honestly I have practically zero expenditures, I mean I bought a new computer last year, and some software, but expenses alone aren't going to offset the extra state taxes, I could certainly come up with things that I could do (buy more hardware & software, which I don't really need). So I've come to this thread in the hope that maybe I can get a non-mumbled answer, or a least an answer that isn't trying to sell me some premium service from some company that I don't trust because they use legalese and disclaimers in every other service. "Is there a chance in hell that I can cover all these fees if I incorporate, and if so, how can I maximise the chance of this"
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Aug 6, 2013 01:55
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ROCKET SCIENCE
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illectro posted:OK, I'm still having a horribly stressful time trying to figure out how to deal with all my income from youtube, seriously, I need to get this sorted because it's giving me sleepless nights. For someone at your scale, the main purpose of incorporating (with an s-election) is to reduce self-employment taxes. Corporate income is not subject to self employment tax, while schedule C income is (although you will need to draw a salary as a shareholder/officer, so it's not entirely eliminated). Depending on your net income from the business, it could be worth it. But keep in mind it will also up your record-keeping requirements and professional fees.
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Aug 6, 2013 02:05
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Admiral101 posted:For someone at your scale, the main purpose of incorporating (with an s-election) is to reduce self-employment taxes. Corporate income is not subject to self employment tax, while schedule C income is (although you will need to draw a salary as a shareholder/officer, so it's not entirely eliminated). Depending on your net income from the business, it could be worth it. But keep in mind it will also up your record-keeping requirements and professional fees. OK that raises more questions than it answers. Firstly my day job is already well pass the ceiling for Social security payments how does that affect this extra income. And then I don't get the point about the corporate income, since surely that's going to have to come to me since I'm the only person involved in the business.
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Aug 6, 2013 02:12
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illectro posted:OK that raises more questions than it answers. Firstly my day job is already well pass the ceiling for Social security payments how does that affect this extra income. And then I don't get the point about the corporate income, since surely that's going to have to come to me since I'm the only person involved in the business. You'll still be liable for medicare through Schedule C, which is 1.45% You (mostly) wouldn't be if the income was passing through an S-Corporation. Obviously most of the payroll-tax advantages of incorporating are lost to you at this point. Yes, the corporate income will pass to you, assuming you make an S-Election. The main advantage of incorporating doesn't come from reducing your income tax (since itll be passing through to you regardless). The main advantages to incorporating with an S-election are: 1). reduction in payroll taxes to the active shareholder, 2). possible tax advantages if you choose to sell your business (stock is sold at the capital gain rate), 3). liability shielding. A lot of people recommend "oh, you should form an LLC/Incorporate, I read about things called 'loopholes' in this Forbes article...let me tell you all about it..." without knowing what they're talking about. With what information you've provided so far, I really can't imagine it being worth you incorporating. Admiral101 fucked around with this message at 02:37 on Aug 6, 2013 |
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Aug 6, 2013 02:33
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Admiral101 posted:You'll still be liable for medicare through Schedule C, which is 1.45% You (mostly) wouldn't be if the income was passing through an S-Corporation. Obviously most of the payroll-tax advantages of incorporating are lost to you at this point. quote:Yes, the corporate income will pass to you, assuming you make an S-Election. The main advantage of incorporating doesn't come from reducing your income tax (since itll be passing through to you regardless). The main advantages to incorporating with an S-election are: 1). reduction in payroll taxes to the active shareholder, 2). possible tax advantages if you choose to sell your business (stock is sold at the capital gain rate), 3). liability shielding. #2 probably won't ever be relevant because I am the business, believe me I've tried to get co-hosts but can't find them. #3 is one of these things that is incredibly difficult to quantify. I heard somewhere there's some trick about employing my children through the company as a way to put cash into college funds and stuff tax free, that might be relevant in a couple of years. (the kids do contribute content on occasion)
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Aug 6, 2013 05:27
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illectro posted:I guess I'm not clear on the 'mostly' part. You're only saving 2.9% (roughly) on your income by incorporating with an S-election versus 15.3%, since you're at the social security wage cap. illectro posted:#2 probably won't ever be relevant because I am the business, believe me I've tried to get co-hosts but can't find them. There's no particularly unique advantages to doing this while incorporated. I'm not sure what you're referring to with "employing my children through the company as a way to put cash into college funds and stuff tax free." People do employ their children in the business, and there's tax advantages to this (earned income isn't subject to kiddie tax, children's income is subject to lower tax brackets, child could contribute to an IRA since he then has earned income). Additionally, the child's wages MAY be exempt from payroll taxes (but NOT if the child is employed through a corporation). Additionally, these wages are only deductible by you if the child actually renders services and the wages are reasonable. But now I'm going off on a tangent.
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Aug 6, 2013 14:49
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And let's be clear: there are no deductions that are available as an LLC that would not also be deductible as a sole proprietorship. Anyone advising you to form an LLC for tax savings purposes is either full of poo poo or has absolutely no idea what they are talking about. You will be out the $800+ annually to CA ($1,700 if your gross revenue before expenses exceeds $250K, but that doesn't seem like it will be an issue). Focus on the liability protection side of things. Do you have assets to protect? Do your youtube videos expose you to potential legal action? Can a liability and/or umbrella insurance policy be purchased for less than $800 per year that will let you sleep at night knowing that you are sufficiently protected?
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Aug 6, 2013 18:51
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furushotakeru posted:And let's be clear: there are no deductions that are available as an LLC that would not also be deductible as a sole proprietorship. Anyone advising you to form an LLC for tax savings purposes is either full of poo poo or has absolutely no idea what they are talking about. You will be out the $800+ annually to CA ($1,700 if your gross revenue before expenses exceeds $250K, but that doesn't seem like it will be an issue). You can't get office in home as an employee of the S corp [IRC 280A(c)(6)]. LLC/self eomployed allows that. I'd guess his W-2 wages might already max out his FICA so the SE tax hit wouldn't be too high.
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Aug 6, 2013 19:46
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AbbiTheDog posted:You can't get office in home as an employee of the S corp [IRC 280A(c)(6)]. LLC/self eomployed allows that. You can, but the old way of having the S-Corp pay rent to the shareholder and deducting the home office expenses on Schedule E is over. You're permitted to have the S-Corp reimburse the shareholder for home office expenses, assuming the S-Corp setup an "accountable plan" - resulting in the same difference as before.
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Aug 6, 2013 20:07
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Admiral101 posted:You can, but the old way of having the S-Corp pay rent to the shareholder and deducting the home office expenses on Schedule E is over. You're permitted to have the S-Corp reimburse the shareholder for home office expenses, assuming the S-Corp setup an "accountable plan" - resulting in the same difference as before. Source? I hadn't heard of this but am very interested if it is legal.
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Aug 6, 2013 21:42
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I recently got a big-boy job and have entered the wondrous and terrifying world of "having assets." Part of this is having access to an employee stock purchase plan through my job (standard 85% of lowest price for a six month period, bought every six months from what's deducted from a payroll deduction pre-tax). From what I understand about capital gains, if I'm in the 15% bracket and hold on to it for a year and a day after purchase, my tax liability is 0%, correct? Is there anything to stop me from buying the first chunk of stock, waiting six months, buying a second chunk, waiting another six months (and a day), and then selling the first chunk and investing that into my (already extant) IRA, assuming I remain in the 15% bracket? (And then continuing like that, selling each chunk once it become long-term.) Or does that whole profit from the sale become taxable once the stock is sold? It feels either like Baby's First Tax Loophole or like I am cheating somehow.
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Aug 7, 2013 01:11
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furushotakeru posted:Source? I hadn't heard of this but am very interested if it is legal. Here's a brief blog post summarizing the logic, as well as a court case: http://www.hhcpa.com/blogs/income-tax-accountants-cpa/office-in-the-home-deduction-limitations-for-s-corporation-shareholder-employees I should also note that, while it's not mentioned in the blog post, reimbursement for depreciation on the residence isn't permitted.
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Aug 7, 2013 01:51
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CaptainRat posted:I recently got a big-boy job and have entered the wondrous and terrifying world of "having assets." Part of this is having access to an employee stock purchase plan through my job (standard 85% of lowest price for a six month period, bought every six months from what's deducted from a payroll deduction pre-tax). If your total income (including that from your capital gains, and the bargain element of your ESPP shares, which is counted as income) keeps you in the 15% bracket (under $36,250) then yes, you have 0% liability for the gains for the ESPP shares you hold 366+ days. However, the "bargain element" of the ESPP transaction (the 15% discount + the difference between your look-back price and the market value at purchase, in this case -- it is just the discount if you hold the shares for more than 2 years, creating a 'qualifying disposition') is always taxable as ordinary income, so all you're saving by holding the shares for a year is the tax on any gain the stock makes in the year you're holding it. Assuming you've held a particular share for a year, you can dispose of it however you want and still get the 0% capital gains rate. Bisty Q. fucked around with this message at 01:57 on Aug 7, 2013 |
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Aug 7, 2013 01:54
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I have an interesting situation here. Tonight I won entry into a tournament at the end of the month which has a grand prize of a brand-new Nissan 370Z, a ~$30,000 car. I have a realistic shot at winning this car. However, I'm already driving a decent Honda Civic, and I'm transferring from community college to a 4-year school next year, so I would like to immediately turn around and sell this car for $27,000 (because it'll depreciate 10% as I drive it off the lot) to pay for tuition. So, 2 questions: 1. What would be added to my taxable income this year by doing this? Would I incur double taxation and be taxed on $57,000 I don't really have? 2. Is there any sort of tax-advantaged account for education expenses I can stick $27,000 (or at least a lot of it) into this year and withdraw from next year? edit: Additional info: I am a single Minnesota resident who will have about $21,500 earned income this year. Kilty Monroe fucked around with this message at 08:28 on Aug 7, 2013 |
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Aug 7, 2013 08:09
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Kilty Monroe posted:1. What would be added to my taxable income this year by doing this? Would I incur double taxation and be taxed on $57,000 I don't really have? You will have to recognize the ~$30,000 Fair Market Value of the car prize as other (gambling) income. The selling price won't be considered taxable given the aforementioned fact set (as your ~$30,000 basis in the car will be greater than the $27,000 selling price and therefore would technically be a loss, although you can't claim a personal loss on your return so there merely is no tax consequences to selling the car below its basis). Horseshoe theory fucked around with this message at 13:46 on Aug 7, 2013 |
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Aug 7, 2013 11:38
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furushotakeru posted:Source? I hadn't heard of this but am very interested if it is legal. You can do an accountable plan and reimburse yourself an applicable percentage of allocated "office" expenses. My main problem is my clients are not interested in doing a monthly calculation, turn in an expense report with attached copies of invoices, and cut themselves a reimbursement check monthly. For the (usually) small deduction associated with it they say "screw it" and just pass.
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Aug 7, 2013 16:40
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CaptainRat posted:I recently got a big-boy job and have entered the wondrous and terrifying world of "having assets." Part of this is having access to an employee stock purchase plan through my job (standard 85% of lowest price for a six month period, bought every six months from what's deducted from a payroll deduction pre-tax). Just FYI, ESPP deductions are NOT pre-tax.
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Aug 7, 2013 18:30
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furushotakeru posted:Just FYI, ESPP deductions are NOT pre-tax. They are until you get caught.
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Aug 7, 2013 18:56
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furushotakeru posted:Just FYI, ESPP deductions are NOT pre-tax. Oops. Yeah. The deductions are almost always calculated on your pre-tax salary but are always paid for with post-tax dollars. (i.e. pretax you make $1,000; you have your ESPP deduct 10%; the ESPP deduction will be $100, post-tax.)
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Aug 7, 2013 23:25
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Just got my second AUR from the IRS this year; the first was for tax year 2010 and was due to the preparer we hired putting my SSN instead of my wife's for her grad school. Annoying and scary, but fixed after working with the IRS. This one is a different issue. Same preparer (both issues after we filed this year, so we didn't know not to work with him). This one enrages me. He claimed an American Opportunity Credit for me in 2011, which is interesting because as far as I can tell it's only for undergrad and I graduated with a bachelors in 2003. My wife also graduated grad school in 2010, so there were no tuition papers to confuse them. We owe ~$2,600 in unpaid and interest. Why didn't we catch this? Because we have no idea about taxes and paid the man to do it for us; my wife is a teacher and we just bought a house, so we didn't know what the hell. And, as I said before, the IRS is apparently catching all the mistakes this year. Looking online, I have no real legal recourse or hope that the preparer will pay this; it is simply money I would have owed if he had filled it out correctly. It only sucks because we just remodeled our bathroom and are trading in our car this weekend (due to boring reasons, it's not something we can delay). We will probably pay half what we owe and do a payment plan for the rest so monthly budget isn't totally destroyed. So I owe the money, I understand that. It is unlikely (i.e. not gonna happen) that the preparer will cover the difference, even though this is the second gently caress up of his we've dealt with in five months. He loses a customer, I tell everyone I know that he is incompetent. What I'd like to know is how the gently caress he messed this up? Did he just try to inflate our return? We just got the letter tonight, so I'm going to call in the morning and try to get his take on it. How should I approach this? What can I do or say to minimize my unhappiness here? I don't want to try to blackmail the guy with the "Form 14157, Complaint: Tax Return Preparer", but there anything I can or should do? I'll probably file a complaint anyway since this seems shady as gently caress to me. And, slightly related, how do I figure out how much I should be having taxed out of each paycheck in order to come closest to owing $0 at the end of the year? Is that something I pay an accountant a consultant fee for, and what would that be? EDIT: Whelp, the other AUR was last year, not this year, got broken brain. Guess we went with them again because it got fixed and/or we are morons. The Aphasian fucked around with this message at 03:03 on Aug 8, 2013 |
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Aug 8, 2013 02:53
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ThirdPartyView posted:You will have to recognize the ~$30,000 Fair Market Value of the car prize as other (gambling) income. The selling price won't be considered taxable given the aforementioned fact set (as your ~$30,000 basis in the car will be greater than the $27,000 selling price and therefore would technically be a loss, although you can't claim a personal loss on your return so there merely is no tax consequences to selling the car below its basis). Good to know, thanks. I've never really sold anything of value before and had no idea how it would be calculated as income. I think I've figured out how to make the taxes work if I win the car. I've been making about $5000 in Roth contributions to my workplace's 403b a year, so I'll stop contributions for next year and instead open a Traditional IRA now and put the $5500 max in it for the deduction. Then I take everything I would have contributed next year and put it towards school so it balances out, and roll over the Traditional IRA to a Roth. With the standard deduction and a self-exemption, everything should just stay within the 15% bracket.
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Aug 8, 2013 10:28
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edit: edited
703 fucked around with this message at 18:40 on Aug 12, 2013 |
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Aug 8, 2013 13:59
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I am married, and considering forming a business under a DBA. Its not going to be a huge money maker, and if I make 1000$ profit a year with it, I'll be shocked. This will not be my primary form of income. The questions I have are a) This business is focused around a hobby I participate in. I will be primarily selling via in person discussions with people as well as internet sales. Is this enough for me to deduct milage to and from events where hobbyists congregate? Will this be considered "Business as a hobby". b) Given such a low amount of profit, do I even have to file taxes? Do I have to do quarterly taxes? Or just one filing at the end of the year using TurboTax should be enough when I file my 1040? I live in MA, in case that matters.
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Aug 8, 2013 14:55
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