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The Aphasian posted: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. From what you say there is little question that the preparer was trying to artificially inflate your refund to make himself look better. Unfortunately there is little recourse. If he has any integrity As for recourse, you can for sure report him to the IRS. If enough taxpayers complain about the same preparer they might eventually move against him. Or perhaps they will start a project of looking into other returns he prepared and seeing if other taxpayers had fake credits as well. If he is licensed you can report him to the authority to administrates his license.
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# ? Aug 8, 2013 18:40 |
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# ? May 28, 2024 16:28 |
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furushotakeru posted:From what you say there is little question that the preparer was trying to artificially inflate your refund to make himself look better. Unfortunately there is little recourse. If he has any integrity I've tried turning in preparers to the IRS. I was told "they were too small" even though they probably do around 1,000 returns a year. Interesting thing was the local IRS agents were also trying to turn in the same preparer internally to their own special agents are were blown off for the same reason. Rumor has it if you get three instances of "preparer penalties" from an audit the IRS opens a file on you, not sure if that's correct though.
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# ? Aug 8, 2013 20:21 |
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He's out until Monday, so I'll have to stew until then. I'll probably approach it as "How did this happen? What are you planning on doing to make this right? I suggest paying the interest and refunding the preparation cost, since the former is the result of you mishandling the latter." I can't find gently caress all about them online, other than a simple website. Which is fine at a glance, but if you actually look at it, appears created in an afternoon for a fake company. There are no email addresses for anyone anywhere. Most of the links just go to relevant pages at the IRS site. Also this nonsense: Clicking on 2, 3, or 4 does nothing. A friend referred them to us, but talking to them they stopped using him a couple years ago because he is "Shady as hell". So, my personal recommendation is don't use SWH Advisory Group out of Maryland. furushotakeru, how do I figure out how to adjust my withholding on my paycheck to minimize what I owe or get as a refund? Should I email you directly to figure the consulting fee?
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# ? Aug 8, 2013 20:30 |
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The Aphasian posted:
I can do a workup like that in about an hour. You can email me at russell@barnettaccounting.net if you want to look into this. Sorry you got burned by a jerk
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# ? Aug 8, 2013 21:01 |
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Admiral101 posted: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. So, technically, I think you'd lose money by going the S-corp route.
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# ? Aug 11, 2013 05:21 |
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I have a question about side jobs and their impact on deductions. I'm a full time doctoral student with a work stipend. This year, I took on a minor contracting job (about 70 hours for the year). From my understanding, this will be taxed both marginally at the federal income tax level and for an additional 15(?)% for the self-employment tax? My question is, what deductions can I take for this and most importantly, what kind of documentation should I have ready in case of an audit? We have a work office set up in the attic, I use home internet to communicate with my bosses, I use my phone to communicate with a local liaison, and I use my car and gas to meet up with this liaison. My understanding is, I can deduct the business portion of all of these expenses, but I guess I'm not sure what kind of documentation/proof I will need to keep. In addition, for the home office, can I deduct only utility expenses or does part of the mortgage payment count as well? I'm guessing the furniture and its depreciation does not count.
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# ? Aug 11, 2013 12:10 |
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I just recently had my front porch on my 2 family property rebuilt. The roof was fine but the foundation and stairs had rotted out from being about 60 years old. The contractors temporarily propped up the roof and ripped everything out, poured a new foundation and built a new porch underneath the roof. The new porch is exactly the same size of the old one. The old porch was beginning to be structurally unsafe. For tax purposes my house is being used 67% for rental and 33% for personal use. This is considered a repair, not an upgrade. Right?
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# ? Aug 11, 2013 21:05 |
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Rurutia posted:I have a question about side jobs and their impact on deductions. I'm a full time doctoral student with a work stipend. This year, I took on a minor contracting job (about 70 hours for the year). From my understanding, this will be taxed both marginally at the federal income tax level and for an additional 15(?)% for the self-employment tax? You can deduct all legitimate expenses that were necessary to generate this income. Auto related expenses would very much count. Most people find it easiest to track the mileage and take the IRS standard mileage rate of 56.5 cents per mile driven. If you do that, you can't deduct your gas too. A log book or a spreadsheet keeping track of it is fine. I'm not sure about anything else though. To take a home office deduction, the area must be used regularly and exclusively in your self employment venture. Meaning the area is both used quite often for your contracting work and and you don't use it for anything else, you don't use it to study for your tests or write your thesis. I'm guessing a 70 hour contracting gig won't qualify you for the home office deduction. Likewise with the internet. I understand you communicate with the bosses, but how do you separate that part of the internet from looking at the forums? It's not like your contracting work made your internet bill more expensive. Same with your phone. I guess you could figure out the percentage you used it personally vs. contracting, but for a 70 hour thing, again, you are probably better off not counting it. Did you need to buy special software for this project, hardware or equipment? If so, the same concept applies. If you bought a new laptop at the start of it, you will have a hard time proving that you only used it for this 70 hour project, buy maybe you did have to rent a high capacity printer for a month and you burned through a $50 ink cartridge, in which case you just need your receipt.
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# ? Aug 11, 2013 21:25 |
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Zeta Taskforce posted:I just recently had my front porch on my 2 family property rebuilt. The roof was fine but the foundation and stairs had rotted out from being about 60 years old. The contractors temporarily propped up the roof and ripped everything out, poured a new foundation and built a new porch underneath the roof. The new porch is exactly the same size of the old one. The old porch was beginning to be structurally unsafe. Yup.
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# ? Aug 11, 2013 23:21 |
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scribe jones posted:Yup. I figured, wanted a second opinion, especially since I get to wait 27.5 years to write off my furnace.
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# ? Aug 12, 2013 01:32 |
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I've had a few websites for the past three years that have never made any money. But earlier this year I started making a bit of money from them. It isn't a huge sum but I've probably made about $8,000 since February. Should I be doing anything special about taxes? Do I just report the income at the end of the year? I've read somewhere that I should be setting aside 30% for taxes (which I am doing). The amount I get each month does vary —it can be anywhere from $500-$3500. Additionally, I don't have another job at the moment and I'll be a full-time student starting this month. I just want to make sure I'm doing everything by the book. Any other tips about reducing my tax burden would be great, too. Omits-Bagels fucked around with this message at 16:55 on Aug 12, 2013 |
# ? Aug 12, 2013 16:48 |
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Zeta Taskforce posted:I figured, wanted a second opinion, especially since I get to wait 27.5 years to write off my furnace. A furnace doesn't have an expected life of 27.5 years though. I would have used 10 at most.
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# ? Aug 12, 2013 17:43 |
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furushotakeru posted:A furnace doesn't have an expected life of 27.5 years though. I would have used 10 at most. Furnace is a "structural component" so he's on the hook for the full 27.5, per Pub 527.
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# ? Aug 12, 2013 17:52 |
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furushotakeru posted:A furnace doesn't have an expected life of 27.5 years though. I would have used 10 at most. I figured that a replacement furnace, being a capital improvment, became the same class of property that it was installed in. That said, the furnace it replaced was about 70 years old, no joke.
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# ? Aug 12, 2013 17:52 |
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Zeta Taskforce posted:I guess you could figure out the percentage you used it personally vs. contracting, but for a 70 hour thing, again, you are probably better off not counting it. Thanks for all the information. I was mostly asking because I'm looking into expanding my contracting to be a more substantial side business so all of this information is important. I did read most of what you've said elsewhere, but a lot of it seems odd to me and there are so many potential holes. For example, the car log is really just based on an honor system? And what should be in the log? Purpose of the trip, date, odometer readings for the trip? The last thing I want is to be audited and told that I need X documentation for Y deduction that I don't have, or that my X documentation isn't detailed enough.
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# ? Aug 12, 2013 17:53 |
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Rurutia posted:Thanks for all the information. I was mostly asking because I'm looking into expanding my contracting to be a more substantial side business so all of this information is important. I haven't prepared taxes for paying clients for about 4 years, but pretty much everyone who came in had a box of random recipts, their bank statements with 5 months missing, half of them were from the wrong year, no mileage records about anything, and we were just guessing. When you do contracting/self employment stuff, a surprising amount is based on the honor system. Chances you will never be audited, especially if your expenses are in line with what other contractors in the same line of busines take. If this gets to be a regular thing, you can open up a seperate bank account and run all the business transactions through it.
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# ? Aug 12, 2013 18:25 |
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Zeta Taskforce posted:If this gets to be a regular thing, you can open up a seperate bank account and run all the business transactions through it. Not a tax professional, but do this right away. It just makes things a lot easier. I keep track of my mileage using Quicken (its tracker is pretty good) but it's not that great for keeping track of my books. It's good for expense tracking, but it's geared heavily towards invoicing, which I don't really do since most of my non-photo income is from a cash business. I use Excel to keep track of my per-show expenses and income as well as inventory. I keep all my receipts organized in envelopes for each trip/show/gig that I do. I learned my lesson last year. I wasn't audited but I did my own schedule C and it was very tough without someone to bounce questions off. This year I'm having someone do it for me and I figured I would make their life as easy as possible.
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# ? Aug 12, 2013 18:32 |
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kefkafloyd posted:This year I'm having someone do it for me and I figured I would make their life as easy as possible. Bless you, kind soul
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# ? Aug 12, 2013 18:44 |
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furushotakeru posted:Bless you, kind soul I saw that episode of It's Always Sunny where Frank gets back at someone by filing their taxes so they get audited.
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# ? Aug 12, 2013 18:49 |
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Small White Dragon posted:Actually, if you go the S corp route, you will have to pay FICA up to the cap, and then you can personally get refunded for the employee half. It's hard to tell without seeing the OP's numbers. That's the problem with random, anonymous internet forums, they aren't the best places for detailed tax advice.
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# ? Aug 14, 2013 00:11 |
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Guys, I just got an unexpected tax bill for $15,000 that I'm not sure is correct. The particulars touch upon a promissory note that I signed with a former employer to the tune of approximately $48,000. I left the firm that I was working with and arbitration years later resulted in that amount be rewarded to the firm, which I later discharged in bankruptcy (in 2011). Today I got a letter imputing that $48,000 as taxable. I am freaking out right now for a lot of reasons that I would prefer to discuss over PMs. It's 9pm here and I can't call an attorney and I don't know how I'm going to make it through the night. Please help.
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# ? Aug 15, 2013 02:02 |
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There's nothing you can do about it tonight, so it's pointless to stress out about something you can't change. You'll be OK. Not a lawyer, not a tax expert, but usually debts discharged in bankruptcy are not taxed as income by the IRS. This can all probably be straightened out with some paperwork. http://taxes.about.com/b/2007/02/13/canceled-debts-are-not-taxable-income-in-bankruptcy.htm
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# ? Aug 15, 2013 03:23 |
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SixtySix posted:Guys, I just got an unexpected tax bill for $15,000 that I'm not sure is correct. The particulars touch upon a promissory note that I signed with a former employer to the tune of approximately $48,000. I left the firm that I was working with and arbitration years later resulted in that amount be rewarded to the firm, which I later discharged in bankruptcy (in 2011). I have little experience with this but my research tells me that debt that was discharged in bankruptcy is non-taxable. If you read the following IRS publication, it talks about excluding debt that is canceled in a bankruptcy case under Title 11. Source: http://www.irs.gov/publications/p525/ar02.html#d0e4790 Gather up the documentation supporting your claim that it was discharged in bankruptcy. You will probably end up drafting up a quick letter explaining what the situation is, letting them know the full story. They're usually pretty good about abating penalties, too.
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# ? Aug 15, 2013 03:27 |
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Thanks guys. I panicked, and feel somewhat better now. I'll get with the IRS first thing in the morning.
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# ? Aug 15, 2013 10:46 |
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Omits-Bagels posted:I've had a few websites for the past three years that have never made any money. But earlier this year I started making a bit of money from them. It isn't a huge sum but I've probably made about $8,000 since February. Should I be doing anything special about taxes? Do I just report the income at the end of the year? I've read somewhere that I should be setting aside 30% for taxes (which I am doing). The amount I get each month does vary —it can be anywhere from $500-$3500. You are going to owe Self Employment ( SE ) tax on your net earnings at a 15.3 % rate . Also, depending upon your total income for the entire year you may owe income tax. We would have to know both your prior year's tax situation as well as this year's complete facts but you possibly should be making estimated tax payments on a quarterly basis. At the very least set aside enough cash for your SE tax. Setting aside 30 % may be prudent.
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# ? Aug 18, 2013 20:48 |
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So i had a number of returns audited and I missed the original audit report because I had moved. I filed amended returns (most/all of which went through audit reconsideration) after receiving CP22e notices showing a balance due + penalties. One of amended returns just posted (the rest are still in reconsideration) as an adjustment to my account but apparently the penalty associated with the original audit is still there (even though my liability was zeroed out). Is this something that I have to suck up and pay or will it get cleared out automagically? I'll give em a call on Monday to sort this out, but I figured maybe some of the tax-goons here could chime in.
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# ? Aug 19, 2013 02:56 |
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shodanjr_gr posted:So i had a number of returns audited and I missed the original audit report because I had moved. I filed amended returns (most/all of which went through audit reconsideration) after receiving CP22e notices showing a balance due + penalties. All accuracy related penalties (as well as non payment penalties of course) are based on the amount of tax due. If there is zero tax due, there should be zero penalties.
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# ? Aug 19, 2013 17:18 |
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Sorry if this is a really obvious question. I have a few hundred bucks in an IRA from an old job. It's losing more than its making because of fees, so I'm trying to decide what to do with it. My husband is in school half time, and I know I can withdraw it for his tuition and books without the 10% penalty. My question is what kind of proof do I need of how it was spent? I'm a little confused by the IRS website and don't want to end up owing more than I thought over such a small amount.
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# ? Aug 19, 2013 18:51 |
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furushotakeru posted:All accuracy related penalties (as well as non payment penalties of course) are based on the amount of tax due. If there is zero tax due, there should be zero penalties. So they said that I might have to file a "Request for penalty abatement" when I get the notice that my case is closed. What's interesting is that the 2011 tax year didn't go through recosinderation and that 2010 and 2009 are still stuck in reconsideration limbo...
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# ? Aug 20, 2013 00:11 |
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shodanjr_gr posted:So they said that I might have to file a "Request for penalty abatement" when I get the notice that my case is closed. What's interesting is that the 2011 tax year didn't go through recosinderation and that 2010 and 2009 are still stuck in reconsideration limbo... It's random. I've sent in three-four amended returns at a time for people, and some will get picked, some will sail on through.
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# ? Aug 20, 2013 16:49 |
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I have a waged-employee day job which, including bonuses, makes me just a hair over the SS/Medicare wage cap. I have two self-employed night jobs which will likely produce a combined total of about $55K extra this year. Starting in 2014, I'll be making estimated quarterlies. My question is this: How on earth do I handle the self-employed SS / Medicare taxes now that I'm exceeding the cap on the waged-employee day job? Do I send payments as if I'm paying said taxes for the side jobs and then try to get the money back at the end? Do I adjust downward for non-payment? (That seems dangerous, since depending on how you treat the earnings, it changes the total percentage I'd owe. If it's treated as primary income, it'd be subject to the 15.3% versus the 7.65% rate I'd have if the day job was the primary income.) I have no idea how the income gets handled now. How can I expect that to be handled? I'm having trouble figuring out how the income is treated.
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# ? Aug 20, 2013 17:38 |
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Wow, Abbi and Furu are still at it.
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# ? Aug 20, 2013 19:58 |
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Kinson posted:Wow, Abbi and Furu are still at it. We can't all spend our time plowing the garden and still pay our bills
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# ? Aug 20, 2013 22:38 |
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I'm not sure if this should go here, or the investing thread - but since the question is more about the tax implications than anything... I've got a fair amount of money sitting in my S-Corp (in excess of $35,000) due to having a better year than typical. What I'd like to do is take out whatever the maximum tax-deferred amount is for married couples this year $12,000-something. What's the 'proper' way to take this money and put it into a retirement account, without causing myself any headaches with the IRS at the end of the year? If it matters, my wife and I are the only directors, and I'm the sole shareholder of the S-Corp - what I'm trying to accomplish is to a) actually do a decent job funding my retirement finally and b) reduce my tax burden at the end of the year.
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# ? Aug 21, 2013 00:03 |
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cstine posted:I'm not sure if this should go here, or the investing thread - but since the question is more about the tax implications than anything... You can put up to 25% of your W-2 wages from the S-corp into a SEP IRA. Same for your wife. Or, you can defer up to $17K of your salary into a solo 401(K) and then the corp can contribute up to 25% of your W-2 wages from the S-corp, up to a maximum total of $50K. Same for your wife.
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# ? Aug 21, 2013 00:11 |
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furushotakeru posted:You can put up to 25% of your W-2 wages from the S-corp into a SEP IRA. Same for your wife. Or, you can defer up to $17K of your salary into a solo 401(K) and then the corp can contribute up to 25% of your W-2 wages from the S-corp, up to a maximum total of $50K. Same for your wife. I'd make sure he doesn't have any other employees before he sets up something like that. If he starts company matching for himself he might need to cover the other employees too.
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# ? Aug 21, 2013 16:58 |
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Kinson posted:Wow, Abbi and Furu are still at it. I leave the estimate questions for Furu. Those just drive me crazy and have been asked at least once on every page.
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# ? Aug 21, 2013 17:01 |
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AbbiTheDog posted:I'd make sure he doesn't have any other employees before he sets up something like that. If he starts company matching for himself he might need to cover the other employees too. I don't - and the wife isn't actually being paid anything. She's a director because that was required to ensure she'd have easy access to corporate funds if something should happen to me.
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# ? Aug 21, 2013 17:03 |
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Ignoring the fact that this is the US tax thread, does anyone know anything about UK taxes? I am trying to figure out the tax band system. As far as I can tell, it works the same as US tax brackets. If you make less than 32,010, all of your income is taxed 20%. If you make 35,000 pounds, say, the first 32,010 is taxed at 20% and the remainder (2990 pounds) is taxed at 40%. Just making 32,011 pounds doesn't cause the entire amount to be taxed at 40% right? I'm fairly sure I have it right but once they start driving on the wrong side, all bets are off.
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# ? Aug 23, 2013 16:46 |
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# ? May 28, 2024 16:28 |
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kaishek posted:Ignoring the fact that this is the US tax thread, does anyone know anything about UK taxes? I am trying to figure out the tax band system. As far as I can tell, it works the same as US tax brackets. If you make less than 32,010, all of your income is taxed 20%. If you make 35,000 pounds, say, the first 32,010 is taxed at 20% and the remainder (2990 pounds) is taxed at 40%. Just making 32,011 pounds doesn't cause the entire amount to be taxed at 40% right? I'm fairly sure I have it right but once they start driving on the wrong side, all bets are off. Don't forget national insurance, which has different brackets and rates on top if income. Other than that, yes they use marginal rates like us. http://www.scopulus.co.uk/taxsheets/
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# ? Aug 23, 2013 18:49 |