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Quick question about capital gains: I was awarded stock by my company a few years ago, which I paid taxes on when I received it. If I pull out the value of the original gift, leaving the gains in that stock, I will not have to pay taxes on that, correct?
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Nov 27, 2013 15:07
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thegreatcodfish posted:Quick question about capital gains: Are you asking if you can withdraw principal without withdrawing gain? edit: is this stock being held directly by you? Admiral101 fucked around with this message at 15:40 on Nov 27, 2013 |
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Nov 27, 2013 15:37
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Admiral101 posted:Are you asking if you can withdraw principal without withdrawing gain? Yes and yes. Well, by directly it is fully vested and in my name in a brokerage account. Basically, the stock is in my company and has done well, but it isn't smart to have all your eggs in one basket, so I want to move the original principle into an index fund or something and just let the gains stay. Just trying to avoid taxes while doing so if possible. thegreatcodfish fucked around with this message at 15:49 on Nov 27, 2013 |
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Nov 27, 2013 15:40
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thegreatcodfish posted:Yes and yes. Well, by directly it is fully vested and in my name in a brokerage account. You can't only cash out your principal while leaving the taxable gain. By cashing out, you're selling shares of stock. Each share has it's own principal portion and gain portion.
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Nov 27, 2013 15:57
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Admiral101 posted:You can't only cash out your principal while leaving the taxable gain. Ah well, that makes more sense than what I was hoping I could do. Glad I asked though. Thanks.
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Nov 27, 2013 15:59
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thegreatcodfish posted:Ah well, that makes more sense than what I was hoping I could do. Glad I asked though. Thanks. Assuming it was on your W-2 years ago? If so, the gain is long-term and as another poster listed is stock-by-stock. Be careful selling it - if your income is high enough and you cash it all in at once you can phase out of certain credits (child tax, education) deductions (student loan interest) or if it's really high you can lose deductions (itemized and exemption) or be subject to the Obamacare surtax.
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Nov 27, 2013 18:08
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AbbiTheDog posted:Assuming it was on your W-2 years ago? If so, the gain is long-term and as another poster listed is stock-by-stock. Thanks for the warnings. It is all long term now, been 3+ years. I don't have kids or student loans and my company pays for insurance, so I don't think I need to worry about ACA stuff. I'll wait until after January though because my income is going to reduce and will put me in a lower tax bracket, but not quite enough to make it 0% on the gains.
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Nov 27, 2013 23:30
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thegreatcodfish posted:Thanks for the warnings. It is all long term now, been 3+ years. I don't have kids or student loans and my company pays for insurance, so I don't think I need to worry about ACA stuff. I'll wait until after January though because my income is going to reduce and will put me in a lower tax bracket, but not quite enough to make it 0% on the gains. If your total AGI goes above $200ish K you have to pay the Thanks, Obama tax on any income above that amount - who pays for your insurance doesn't factor into that at all. That said, if your income is anywhere near low enough that the 0% capital gains is a possibility, you don't have to worry about that.
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Nov 28, 2013 00:46
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I just want to confirmed that I am hosed becuase I pushed back creating my S-Corp in California and have been working self-employed. Work got so busy that it just got away from me. If I form a S-Corp, let's say today, will I have any chance to credit my past 6 months of self-employed income to my S-Corp or am I just going to get raped on my taxes this year? Income is around ~$80,000 a year. Or should I get an accountant and hope he can work some magic?
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Dec 3, 2013 02:23
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Enigma89 posted:I just want to confirmed that I am hosed becuase I pushed back creating my S-Corp in California and have been working self-employed. Work got so busy that it just got away from me. If I form a S-Corp, let's say today, will I have any chance to credit my past 6 months of self-employed income to my S-Corp or am I just going to get raped on my taxes this year? There's no magic to work, you can't retroactively "push" income and expense activity to an entity that didn't exist. If you're an LLC, you can make a late S corp election on Form 2553 via rev proc. 2003-43. If you're just a sole proprietor, better luck next year. Note that your compensation needs to be "reasonable," so if you're a consultant with no employees or you don't sell anything, it might be a har argument to make that all of your profit shouldn't be on a W-2.
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Dec 3, 2013 18:34
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Cross-posting from the musician's thread cause this thread seems like a better place for my question: I have a new band that's landed a weekly gig at a local club for decent money. Up until this point the guitarist has simply deposited the check from the club every week into his account and written checks for the individual band members. He's concerned that he's going to run into tax issues (in the United States) with all this money flowing into and out of his personal account on a weekly basis. Is this something to be concerned about, and what should our next step be? The band isn't registered or incorporated in any way at this time.
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Dec 4, 2013 04:04
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St. John Coltrane posted:Cross-posting from the musician's thread cause this thread seems like a better place for my question: His band doesn't need to be registered, he can do this all as an individual. He's going to be the one getting a 1099 (if whomever is paying him is bothering to) and he's going to need to report it on his taxes, with the payments to his bandmates being an expense against that income. If he pays any one of you more than $600 as your cut, he needs to issue you a 1099 form and complete form 1096 to mail to the IRS as well. Note that this small business will increase your audit risk dramatically (but you're still better off than not doing anything on your taxes, which will eventually lead to trouble) so you guys all need to keep good records for things such as miles driven for gigs, amounts paid for equipment and supplies, costume expenses, etc. If you aren't ever expecting to show a profit on this and it looks like you're doing it more for shits and giggles than to make real money, you also might fall under the hobby loss rules as well.
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Dec 4, 2013 18:12
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AbbiTheDog posted:There's no magic to work, you can't retroactively "push" income and expense activity to an entity that didn't exist. Thanks
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Dec 4, 2013 23:35
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AbbiTheDog posted:His band doesn't need to be registered, he can do this all as an individual. He's going to be the one getting a 1099 (if whomever is paying him is bothering to) and he's going to need to report it on his taxes, with the payments to his bandmates being an expense against that income. Is the $600 limit applicable only to one-time payments (i.e., pay from a single gig), or a cumulative thing? Are there any benefits to registering the band as a business?
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Dec 5, 2013 01:00
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St. John Coltrane posted:Is the $600 limit applicable only to one-time payments (i.e., pay from a single gig), or a cumulative thing? Are there any benefits to registering the band as a business?
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Dec 5, 2013 04:08
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My stepfather is a semi-truck driver, and recently formed a single-member LLC and asked me to look for information on how to file taxes for the LLC. I did some research, and by the look of it the IRS considers such LLCs "disregarded entities" for tax purposes (unless incorporated, which his LLC is not), and individuals should file as though those profits were through a sole proprietorship instead. So the Forms he'll need to fill out are: 1040, 1040 Schedule C, 1040 Schedule SE Form 4562, Depreciation and Amortization (for vehicle depreciation on the truck he owns) Form 2290, Heavy Highway Vehicle Use Tax Return (?) Form 720, Federal Excise Tax Return (?) Form 8849, Claim for Refund of Excise Taxes First, am I missing any obvious forms here? Second, I'm unsure on the question marked forms; IRS.gov's "Trucking Tax Center" states "If you operate a truck or other vehicle categorized as a heavy highway motor vehicle on public highways, you must file Form 2290, Heavy Highway Vehicle Use Tax Return, and pay excise tax." Form 720 is the form for individuals to fill out for Excise Taxes and is required for him, correct? Form 8849 looks like the refund claims are primarily for non-highway usage (so if you buy fuel for agriculture) or government owned vehicles, but I'm unsure there as well. Lastly, I'm going to strongly recommend he seek out a professional tax preparer, because I'm nowhere near confident that my advice on the forms is going to be sufficient to cover all his bases on this. Are there any well regarded companies that specifically handle semi-truck drivers for tax preparation in the Midwest, or should a general purpose tax preparation company be more than capable?
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Dec 7, 2013 18:48
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Mo_Steel posted:My stepfather is a semi-truck driver, and recently formed a single-member LLC and asked me to look for information on how to file taxes for the LLC. I did some research, and by the look of it the IRS considers such LLCs "disregarded entities" for tax purposes (unless incorporated, which his LLC is not), and individuals should file as though those profits were through a sole proprietorship instead. This is presuming he doesn't want the business treated as a C-Corporation under the 'Check the box' election of Form 8832 (as the default classification for single-member LLCs would be a disregarded entity/sole proprietorship, so if he wants to file that way, he doesn't have to do anything with Form 8832). He's allowed to elect C-Corp status for tax purposes if he wants even without being incorporated.
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Dec 7, 2013 23:02
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Mo_Steel posted:My stepfather is a semi-truck driver, and recently formed a single-member LLC and asked me to look for information on how to file taxes for the LLC. I did some research, and by the look of it the IRS considers such LLCs "disregarded entities" for tax purposes (unless incorporated, which his LLC is not), and individuals should file as though those profits were through a sole proprietorship instead. So the Forms he'll need to fill out are: Disclaimer: I don't regularly deal with trucking businesses. Form 720 would not be applicable. Excise tax is included the price of fuel by gas stations etc. Form 720 is what the sellers of fuel use to report to the government what they collected in excise tax every quarter. Form 8849 would not be applicable either. That only applies to people who are exempt from fuel excise taxes (like farmers, as you mentioned). As your stepfather is (I'm assuming) a highyway semi-truck driver, he's not exempt. Be aware that he may have to file income tax returns in multiple states (not just your home state) depending on where he's driving. He needs to keep mileage logs and quality records of where he drives. This is going to be 100% over your and your step-father's head. Find a professional before the Fascist State of Ohio impounds his truck on a traffic stop when they find out he hasn't been filing income taxes there (somewhat of an exaggeration). And no, he isn't going to want to file as a C-Corp.
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Dec 8, 2013 00:01
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I am regularly employed (W2 style) doing research and writing for a non-profit. I will be doing a one-time side consulting gig for a payment that comes in over the reporting limit for self-employment. I presume I will get a 1099-MISC for the payment. I was trying to think through what I could deduct from this income to minimize the tax I'll owe on this - I am a member of a professional association that deals with this subject, and have paid subscriptions to publications that deal with this subject also. Are these deductible despite the fact that these memberships and publications also apply to my regular work? Are there any other things I might be neglecting? No home office and they are reimbursing me for my travel but not my food. Thanks!
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Dec 8, 2013 00:25
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Admiral101 posted:Disclaimer: I don't regularly deal with trucking businesses. Alright, that helps clear things up a bit. quote:Be aware that he may have to file income tax returns in multiple states (not just your home state) depending on where he's driving. He needs to keep mileage logs and quality records of where he drives. This is going to be 100% over your and your step-father's head. Find a professional before the Fascist State of Ohio impounds his truck on a traffic stop when they find out he hasn't been filing income taxes there (somewhat of an exaggeration). Most definitely; thanks for the assistance.
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Dec 8, 2013 04:16
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How much extra paperwork is involved in taking out your Roth IRA contributions (just what shouldn't be penalized) early? Yes, I realize this is generally a terrible idea. I have a bit of an edge case here.
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Dec 8, 2013 13:23
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St. John Coltrane posted:Cross-posting from the musician's thread cause this thread seems like a better place for my question: I've found that the main problem in these situations is the different band members varying feelings on paying taxes on that money at all. A lot of people follow the "it's only income if it's an IRS form" strategy. They really need to work out all the details in advance.
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Dec 8, 2013 16:41
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My wife and I are both currently getting normal paychecks with federal and state (CA) taxes withheld and we file jointly. Next year, my wife will be getting paid on a fellowship that does not withhold taxes. The university she works at told her she would need to fill out and pay quarterly federal and state tax forms (they aren't very helpful with tax information/questions). Rather than deal with the quarterly estimated tax payments, can I just increase my withholdings by the appropriate amount (ie what would normally be withheld for federal and state taxes from her paycheck)? This makes sense in my brain, but I don't want to run the risk of having issues with the IRS come tax time in 2015. Thanks in advance!
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Dec 10, 2013 01:19
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Haha, the university's lawyers will not let them give you anything that could possibly be construed as tax advice. Your plan fine. You just need to pay enough, soon enough, to avoid penalties. You basically have to guess at your next year's tax filing to figure the amount (1040-ES helps). Adjusting withholding is probably more convenient than sending a check at the IRS' weird "quarterly" deadlines. If you get it kind of wrong, the world doesn't end - the IRS will just calculate your penalty and send you a bill. Speaking from experience there
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Dec 10, 2013 01:46
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Kilty Monroe posted:How much extra paperwork is involved in taking out your Roth IRA contributions (just what shouldn't be penalized) early? You just have to file a form 8606 on that year's tax return to let the IRS know that it was all contributions and no earnings.
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Dec 10, 2013 18:24
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slap me silly posted:Haha, the university's lawyers will not let them give you anything that could possibly be construed as tax advice. Your plan fine. You just need to pay enough, soon enough, to avoid penalties. You basically have to guess at your next year's tax filing to figure the amount (1040-ES helps). Adjusting withholding is probably more convenient than sending a check at the IRS' weird "quarterly" deadlines. If you get it kind of wrong, the world doesn't end - the IRS will just calculate your penalty and send you a bill. Speaking from experience there Thanks! Yeah, I knew they couldn't really tell us anything tax-specific. It was just frustrating to have them tell her to contact them with any questions and then say they couldn't answer THOSE questions. We can actually make really good estimates for what her withholdings should be. It's just a lot easier for me to log into my payroll account and add $X additional tax withholdings than to have to fill out and file quarterly federal and state returns for her. We haven't filed jointly that many times yet, so I just wanted to make sure that was acceptable rather than finding out a year from now.
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Dec 10, 2013 21:00
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furushotakeru posted:You just have to file a form 8606 on that year's tax return to let the IRS know that it was all contributions and no earnings. Looks painless enough, and it still lets me file a 1040A. Cool, thanks.
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Dec 10, 2013 23:28
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Self-employed question about a healthcare write-off: I just made my first payment for my health insurance plan (purchased through a state ACA exchange website), which goes into effect 1/1/2014. Would I write that off for tax year 2013 or 2014?
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Dec 10, 2013 23:55
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Cranbe posted:Self-employed question about a healthcare write-off: I just made my first payment for my health insurance plan (purchased through a state ACA exchange website), which goes into effect 1/1/2014. Would I write that off for tax year 2013 or 2014? You are cash basis, so you claim deductions as you make payments.
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Dec 11, 2013 17:59
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I did some side/freelance work this year for a guy for a total of about $1500 between August and now. He says he is filling out a 1099 for me. I didn't make any kind of quarterly payments or get anything withheld from these checks. Am I hosed in some way? 
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Dec 11, 2013 20:48
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At $1500 I doubt you even underpaid your taxes unless you also hosed up your withholding on your W-2 job(s).
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Dec 11, 2013 21:04
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slap me silly posted:At $1500 I doubt you even underpaid your taxes unless you also hosed up your withholding on your W-2 job(s). Edit: vvv Redacted! Sorry, it's been a long time since I was a first-year contractor and my memory of how I handled taxes back then is apparently fuzzy. Cranbe fucked around with this message at 22:34 on Dec 11, 2013 |
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Dec 11, 2013 22:17
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Wrong  Tax is due when income is earned, you can't skip paying taxes for a whole year just because you never got a 1099 before. You are probably thinking of this: "Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller."
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Dec 11, 2013 22:23
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Nevermind, I see what you mean now.
Admiral101 fucked around with this message at 00:54 on Dec 12, 2013 |
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Dec 12, 2013 00:51
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I've had a few changes at once for this year (2013) so I figure I might as well start doing research now on if I need to change how I file (currently jointly through turbo tax). My income: 60K My wife's income: probably $15K this year, she worked part time while going to school. My wife got her masters degree in September. So final year of schooling. I assume I still get a tax deduction for that? I have a 401k through work, and a Roth where extra money goes. Itemized probably still is a no go for us, I don't have any work related expenses. Just curious on the best way to file, be it joint or listing her as a dependent, whether I can get a deduction for investments, etc? Oh, I live in Philadelphia and we both work in state. Duckman2008 fucked around with this message at 06:48 on Dec 12, 2013 |
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Dec 12, 2013 06:45
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slap me silly posted:Wrong Cool. That shouldn't be a problem then. Thanks.
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Dec 12, 2013 16:08
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Duckman2008 posted:I've had a few changes at once for this year (2013) so I figure I might as well start doing research now on if I need to change how I file (currently jointly through turbo tax). You can't list a spouse as a dependent. File jointly. How she paid for grad school will dictate which education credit you guys can use.
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Dec 12, 2013 16:45
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I sold a website for an amoutn of money I will have to pay taxes on. How do I calculate how much I owe? Is it capital gains? Can I deduct that various expenses in running the site over the last 3 years?
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Dec 17, 2013 01:11
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FCKGW posted:I sold a website for an amoutn of money I will have to pay taxes on. How do I calculate how much I owe? Is it capital gains? Can I deduct that various expenses in running the site over the last 3 years? Were you using the website for business or personal for the past 3 years? Have you deducted anything related to this website in prior tax years? And what do you mean by "sold a website"? Do you mean selling the design?
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Dec 17, 2013 14:43
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Admiral101 posted:Were you using the website for business or personal for the past 3 years? Have you deducted anything related to this website in prior tax years? I would say its a business, it's generated enough income through advertising to break even on operating costs. I've paid taxes on all my websites income for the past few years, around $3k/yr. I've sold the entire website. Domain, content, images, design, everything. This new guy will run the site and I have no input anymore. I've done this a few times in the past but usually just for a few hundred dollars, this sale is north of $10k.
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Dec 17, 2013 17:20
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