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FCKGW posted: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. Have you capitalized anything in the past, or just been expensing everything as you went along? Did he pay you entirely in cash, or is this something thats being paid over several years? This is actually a somewhat complicated question. You mention owning several websites, all of which are presumably for sale. You also mention selling websites in the past. In this situation, it sounds like your business is essentially building websites and selling them, which is going to have ordinary treatment.
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Dec 17, 2013 18:11
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Basically I build websites as a side hobby for fun. A few of these generate an income for me from Google Adsense advertising an I receive a 1099-misc from Google at the end of the year to pay taxes. When I pay my yearly taxes I calculate various costs in running the sites such as hosting, domain registration, etc for deductions. Usually adds up to a couple hundred. He paid me in a lump sum of cash. I'm in escrow right now. We have a written contract as well. I don't build websites for resale but sometimes people will contact me asking if I would like to sell, as this was the case. I don't have a business or LLC, I'm operating as an individual. From what I've been reading, most situations like this would treat the tax as a capital gain as opposed to ordinary income.
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Dec 17, 2013 18:59
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I have a couple websites that have generated a total of around $13,000 this year (through advertising and affiliate marketing). I've set aside about 30% for taxes (this is the first year I've made money from the sites). Do I have to do anything out of the ordinary for doing my taxes this year? Also, what exactly can I deduct? Can I deduct web hosting? What about work done to develop the site — I paid about $50 wordpress themes and about $100 for other web development. I also do a lot of product reviews for one of my websites — can I purchase products to review and then write those off as a business expense? For example, can I buy a $200 backpack, review it, and then write that off? Additionally, if I pay writers to write content for me can I deduct that expense, too? Can I deduct my socks because my feet are cold?
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Dec 17, 2013 19:42
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FCKGW posted:Basically I build websites as a side hobby for fun. You should determine if this is a side hobby or a business. If you've been deducting expenses related to the income, you've been historically treat it as a business (expenses related to hobbies have to be deducted on Schedule A, which means you can't deduct anything against your hobby income unless your itemize). Your situation is vague - partly because of the circumstances surrounding your business, and partly because all I know about you is what you've summed up in a couple brief posts. What your situation reminds me of is a home builder who rents out units to maintain cash flow before the units are sold. In this case, the units that are being sold aren't business assets - they're inventory - and as such get ordinary treatment instead of capital treatment. Now replace "home builder" with "website builder" and "rents out units" with "sells ad space" and you'll have your situation. What the blogger in your link is describing are people whose business is conducted on a website, instead of the business being the website itself. You could make the argument that your gain is capital. But I think the stronger argument is that it's ordinary.
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Dec 17, 2013 20:24
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Omits-Bagels posted:I have a couple websites that have generated a total of around $13,000 this year (through advertising and affiliate marketing). I've set aside about 30% for taxes (this is the first year I've made money from the sites). Do I have to do anything out of the ordinary for doing my taxes this year? You'll have another form(s) to fill out, depending on the nature of the business (namely Schedule C).[/quote] Omits-Bagels posted:
You may deduct expenses related to the production of the income. Web hosting would qualify, as would site development (though development should get capitalized, $150 is too trivial of a number to be concerned about). Omits-Bagels posted:I also do a lot of product reviews for one of my websites — can I purchase products to review and then write those off as a business expense? For example, can I buy a $200 backpack, review it, and then write that off? Are you keeping the backpack afterwards for personal use? Omits-Bagels posted:Additionally, if I pay writers to write content for me can I deduct that expense, too? Yes. Keep in mind that you may have to send them a 1099-MISC depending on how much you're paying them.
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Dec 17, 2013 20:31
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Admiral101 posted:You'll have another form(s) to fill out, depending on the nature of the business (namely Schedule C). You may deduct expenses related to the production of the income. Web hosting would qualify, as would site development (though development should get capitalized, $150 is too trivial of a number to be concerned about). Are you keeping the backpack afterwards for personal use? Yes. Keep in mind that you may have to send them a 1099-MISC depending on how much you're paying them. [/quote] Thanks! When you say that $150 is too trivial... does that mean too trivial for Uncle Sam to care about or too trivial for me to report? As for the backpacking equipment. No, I wouldn't use them for personal use. Are there any rules about reselling them? I haven't hired writers at this point but I've considered doing it in the future. It would probably be a few hundred dollars if I did decide to do it.
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Dec 17, 2013 20:38
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Too trivial for the IRS to be concerned with capitalizing $150 and amortizing it. If it was $1,500 it would be a different story. If you resell the backpack you would have to report the proceeds as income. But if you're buying a product to review without using it for personal use, you may deduct it as an expense.
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Dec 17, 2013 20:43
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Admiral101 posted:Too trivial for the IRS to be concerned with capitalizing $150 and amortizing it. If it was $1,500 it would be a different story. How do you prove to the IRS that something is or isn't being used for personal use in the case of an audit?
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Dec 17, 2013 20:53
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Epi Lepi posted:How do you prove to the IRS that something is or isn't being used for personal use in the case of an audit? Are we talking stuff like backpacks here, or stuff like cars? Items that lend themselves more frequently to personal use, such as cars, tend to require more substantial proof.
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Dec 17, 2013 21:09
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Admiral101 posted:Too trivial for the IRS to be concerned with capitalizing $150 and amortizing it. If it was $1,500 it would be a different story. This might be out of your expertise scope but what if I gave the stuff that I reviewed to my readers? Like a raffle or a giveaway. Would there be any tax implications there? If I did that, could I deduct the shipping costs for sending the stuff to the winners?
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Dec 17, 2013 22:38
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Omits-Bagels posted:This might be out of your expertise scope but what if I gave the stuff that I reviewed to my readers? Like a raffle or a giveaway. Would there be any tax implications there? If I did that, could I deduct the shipping costs for sending the stuff to the winners? There are no special income tax implications with that. You may or may not have to register somewhere depending on your city/state for having a small raffle/game of chance, however. You would be able to deduct shipping expenses. I'm also assuming that these giveaway prizes are small in value.
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Dec 17, 2013 22:56
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Admiral101 posted:There are no special income tax implications with that. You may or may not have to register somewhere depending on your city/state for having a small raffle/game of chance, however. Awesome. Thanks. The prizes would be under $250 in value but a majority would be $50-$150.
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Dec 17, 2013 23:08
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Admiral101 posted:Are we talking stuff like backpacks here, or stuff like cars? I was just asking generally. I work in a tax accounting office and I'm more interested from the perspective of being able to assist a client if one ever started making money from a reviewing-items-blog. I like to be knowledgeable of potential audit defenses.
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Dec 18, 2013 07:16
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Epi Lepi posted:I was just asking generally. I work in a tax accounting office and I'm more interested from the perspective of being able to assist a client if one ever started making money from a reviewing-items-blog. I like to be knowledgeable of potential audit defenses. You'll be able to find a fairly comprehensive discussion of what should be kept and what should be able to be proved here: http://www.irs.gov/publications/p463/index.html See under the recordkeeping section, specifically "How to prove certain business expenses" You're not going to find specifics. What counts as "sufficient evidence" varies enormously between IRS auditors
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Dec 18, 2013 16:16
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I've been having trouble with this, so I wanted to confirm: If I had $85,000 in gross income for 2013 (including W2, contract income, stock sales, and conversion from a 403(b) to a Roth IRA). If I'm married filing jointly, that means $20,000 in deductions/exemptions, which would put me squarely below the $72,500 cutoff for the 15% bracket, meaning I would pay 0% capital gains tax. I would have to gross $92,500 between my wife and I to fall into the 25% bracket (and thereby have to pay capital gains tax). Do I have this right?
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Dec 21, 2013 00:58
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kaishek posted:I've been having trouble with this, so I wanted to confirm: Kind of. The tax brackets aren't "all or nothing," you fill up one bucket of taxable income before you move to the next. If you've overshot your income bracket for the year and fall into the 25% bracket, then some of the long-term capital gains are taxed at 0% and some at 15%. Note that your deductions reduce ordinary income first, leaving capital gains for taxation.
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Dec 23, 2013 17:56
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Are there any nice people who can prepare both US and Canadian taxes? I would be over the moon to just pay one person/place a year and loving forget about it. I'm a Canadian citizen residing and earning wages in the US (Bay Area, sup). I had been going to H&R Block, but since I have a Canadian investment account that contains US stocks that pay dividends who's taxes are withheld, they insist I'm difficult and can only use their Master Preparers. The master preparer I'd been using had been strongly implying that my only option past her was to pay Price Waterhouse two grand, and then this year she retired. Am I really unusual here? REALLY? I'm just a poor with a salary in the US and investments in Canada. My car is not worth two grand. What are my good options? Do people exist that can file for me in both the US and Canada? If not, how can I find someone who can handle the us-taxes-withheld-Canadian-income for my US taxes? (Further Q if not, anyone know how I could go about filing in Canada without going there? As is I rely on family favors, and I'd really like a bomb proof backup plan to that) Thank You for any tips or leads. Edit : By filing in Canada without going there, I meant having it prepared and filed assuming the people who can are all located there. Same Great Paste fucked around with this message at 19:17 on Dec 23, 2013 |
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Dec 23, 2013 19:12
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Same Great Paste posted:Are there any nice people who can prepare both US and Canadian taxes? I would be over the moon to just pay one person/place a year and loving forget about it. Ugh. If you're looking for one person to do both you are going to pay a lot, simply because there aren't many that do that kind of work. I'd find someone cheap to do the easier of the two (sounds like Canada) and find someone good here in the states. Any by "good" I don't mean H&R. You can find a good preparer for what you're paying them - they're really not that cheap.
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Dec 23, 2013 19:52
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Same Great Paste posted:Are there any nice people who can prepare both US and Canadian taxes? I would be over the moon to just pay one person/place a year and loving forget about it. I know someone local to the SF Bay Area who does both Canada and US taxes. Email me for contact information if you are interested.
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Dec 23, 2013 23:11
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I bought a house this year. My realtor advised me that since my property taxes are due Jan 31st, I can pay them this year or next year, so I should figure out which is more advantageous for income taxes. I'm not really sure what weighs into deciding that, though. Is there anything significant I should consider?
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Dec 24, 2013 03:50
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Same Great Paste posted:I'm a Canadian citizen residing and earning wages in the US (Bay Area, sup). I had been going to H&R Block, but since I have a Canadian investment account that contains US stocks that pay dividends who's taxes are withheld, they insist I'm difficult and can only use their Master Preparers. The master preparer I'd been using had been strongly implying that my only option past her was to pay Price Waterhouse two grand, and then this year she retired.
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Dec 24, 2013 15:14
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Zhentar posted:I bought a house this year. My realtor advised me that since my property taxes are due Jan 31st, I can pay them this year or next year, so I should figure out which is more advantageous for income taxes. I'm not really sure what weighs into deciding that, though. Is there anything significant I should consider? The main thing to consider is if you will be itemizing this year or not. It is usually true that homeowners benefit from itemizing; the mortgage interest and property taxes by themselves usually more than exceed your standard deduction. Non-homeowners should still check to see if they benefit from itemizing but it is much less common that they do. Because you bought the house this year, you didn’t pay a full year’s worth of interest and taxes. It could go either way. You might still be able to itemize, especially if you bought earlier in the year, you are a high wage earner in a state with high taxes, and if you give generously to charity. But if you are not going to itemize this year, you should wait until next year to pay the taxes. (You should also wait until next year to make your donations to charity if this applies). Also if you think you will be in a higher tax bracket next year, you can also wait. But if you are itemizing this year and don’t see too much change next year, I would pay it this year to get the benefit when you file in a few months and not wait an extra 12 months to wait for that benefit.
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Dec 24, 2013 17:20
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Zeta Taskforce posted:The main thing to consider is if you will be itemizing this year or not. It is usually true that homeowners benefit from itemizing; the mortgage interest and property taxes by themselves usually more than exceed your standard deduction. Non-homeowners should still check to see if they benefit from itemizing but it is much less common that they do. Because you bought the house this year, you didn’t pay a full year’s worth of interest and taxes. It could go either way. You might still be able to itemize, especially if you bought earlier in the year, you are a high wage earner in a state with high taxes, and if you give generously to charity. But if you are not going to itemize this year, you should wait until next year to pay the taxes. (You should also wait until next year to make your donations to charity if this applies). Also if you think you will be in a higher tax bracket next year, you can also wait. But if you are itemizing this year and don’t see too much change next year, I would pay it this year to get the benefit when you file in a few months and not wait an extra 12 months to wait for that benefit. If it's your first year, you might have paid points on the loan to bring down the interest rate, you can either deduct those in full the first year or elect to amortize them over 84 months IIRC.
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Dec 24, 2013 18:14
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Thanks, that makes things clearer. When I paid for the house, I was credited for the previous owner's share of the property taxes. What do I need to do to account for that?
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Dec 24, 2013 22:25
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Zhentar posted:Thanks, that makes things clearer. It depends. Here in Oregon it's a bit off, but I'll see if I can clear it up. Grab your settlement statement you got from closing. Here, our property taxes run 7/1 - 6/30 any given year. The property taxes are due in November. So if you buy a home from 1/1-6/30, you will have been charged taxes at closing that you can add to the payment you made in November as an extra deduction for taxes paid. If you bought a home from 7/1-11/1, you'll have a subtraction for the taxes paid that you use to reduce the amount of deductions you claim by subtracting it from the November payment. If you buy a home from 11/2 - 12/31, you'll again be charged property taxes you can add as an extra deduction. Your state may vary, but if the property taxes were included as a seller charge on the settlement statement you probably get to claim an extra deduction.
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Dec 24, 2013 23:41
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Quick question: If I'm not (nor have never been) someone's CPA (or another fiduciary such an attorney or real estate agent) nor a related-party per Section 267 (et al), I can legally be a qualified intermediary in their Section 1031 Like-Kind Exchange transaction, correct?
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Dec 25, 2013 21:26
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ThirdPartyView posted:Quick question: Ugh. That's a lot of liability and risk to take to save $500 at closing.
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Dec 27, 2013 18:31
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Just realized I made some mistakes on estimated taxes this year and wondering if there's anything we can do make the hit a little easier. My fiancee was self-employed this year in a contractor capacity. Next year she's starting a 1-year graduate program and won't make much money. When I did the estimated taxes worksheets at the beginning of the year, I made two mistakes: 1. Underestimated expected income as $40k when it really ended up as $50k. 2. Deducted the entire tuition for next year ($26k) but she's so far only been billed 1/3 of that and hasn't paid it yet (student loans haven't come through yet). The taxes I ended up estimating for her were $5860 for self-employment and only $210 other taxes (seems like the tuition deduction doesn't apply to self-employment). Looking at the worksheet again I underestimated self-employment taxes by ~20% and underestimated AGI as $12k when it was probably more like $40k (adding $10k and most of the tuition back in). So... is there any way to get slightly less hosed? Does tuition deduction depend on year paid or year billed? That is, should we hurry to pay the first semester's tuition in the next couple days (even before student loans go through)? Should we call the billing department and beg them to let us pay the whole year's tuition now (gently caress, they're probably closed)? Should we get married before new years' (I make < $20k taxable)?
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Dec 28, 2013 19:14
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I emailed you 11 days ago about some business and never got a reply
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Dec 29, 2013 03:07
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I own a condo in an apartment building and just bought another one in the same place. I was going to move into the second condo and rent out the first. I know for a rental condo, I can deduct many upgrades, and legal advice fees, among other things. What happens if after X number of years, I move back into the original apartment? Do I have to pay back all the deductions or is there some leeway?
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Dec 29, 2013 18:47
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Zero VGS posted:I own a condo in an apartment building and just bought another one in the same place. I was going to move into the second condo and rent out the first. When you're using the condo as a rental, you're allowed to claim those expenses without any recapture at a later time per Section 212 (there is something called depreciation recapture that may lead to taxable if you dispose of certain property that fall under either Section 1245 or 1250 and that you took (or were entitled to take) depreciation on, but it will only potentially be triggered at the time of disposal (it depends on the circumstances as to whether you'd have to actually claim any recapture, though) and not merely switching the usage of said property). But yeah, renting for a few years then going back won't trigger recapture of expenses, although those rental years would constitute Non-Qualified Use for the Section 121 exclusion on principal residence gain calculation if you ultimately sell the property further down the line, which means you'd have less than the $250,000 (for single) or $500,000 (for married filing jointly) shield against the first $250,000 (or $500,000) of gain on sale. Note that you'd need to live in the rental for 2 of the last 5 years prior to sale (less if there are qualifying unforseen circumstances) to qualify for the Section 121 gain, in any case. Horseshoe theory fucked around with this message at 19:57 on Dec 29, 2013 |
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Dec 29, 2013 19:32
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Oh, that's awesome. I don't plan on ever selling the property, I was just going to continue collecting more apartments in this building to rent out if this first one goes well; economy of scale and all that. Good to know I could theoretically upgrade both and write off both if I do it in the right order.
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Dec 30, 2013 02:22
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Why does it take some places so long to send out their W2s and other end of year statements? My Student Loan has my 1098E form ready in the first week of January, my current bank has the 1099 INT ready early in January, but others are often ready at the IRS deadline. I can understand my brokerage taking a while, they have to compile information from a few sources, etc. But my old bank, who only reported interest, and my current employer don't have that excuse. What are they doing with all that time? Wouldn't you want to get it done as early as possible, giving time to fix problems?
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Dec 30, 2013 15:47
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Question, I earned dividends in Q4 2013 but haven't received a check for the amount yet (probably won't for a couple weeks). I want to include those earning in Tax Year 2013. I've been told by family that I have 60 days to have a check issued to me and have it still count for income in 2013. Is that correct? I've searched but have had no luck in finding a dividends/interest payout cut off date listed anywhere.
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Dec 30, 2013 16:56
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SurgicalOntologist posted:
Tuition is based on when you pay it, not when it's billed, so in some cases you will have a disconnect between your payments for the credit and the 1098-T issued by the school. IIRC, the schools issue the 1098-T based on billings.
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Dec 30, 2013 19:31
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AbbiTheDog posted:Tuition is based on when you pay it, not when it's billed, so in some cases you will have a disconnect between your payments for the credit and the 1098-T issued by the school. IIRC, the schools issue the 1098-T based on billings. So... if the school issues the 1098-T for 2013 (i.e., based on billing) but it hasn't been completely paid, it shouldn't be reported until the 2014 return? That doesn't make sense.
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Dec 30, 2013 19:43
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My tax situation is about to get a whole heck of a lot more complicated this year. I received a sum of money as part of a settlement and I'm unsure about my upcoming tax situation. I understand that receiving the money is considered nontaxable income, but I used them all to pay off my debts (not sure if that affects my taxes except maybe student loan interest payments vanishing) and I used some of the leftover money to start a Roth IRA. I got some dividends this month! Are Roth IRA dividends considered nontaxable income? Do I still need to report them?
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Dec 30, 2013 22:30
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SurgicalOntologist posted:So... if the school issues the 1098-T for 2013 (i.e., based on billing) but it hasn't been completely paid, it shouldn't be reported until the 2014 return? That doesn't make sense. I know. The old credit form was easy, you just put an amount paid and who it was for. The new form requires all sorts of data off the 1098-T and might not tie exactly to your payments made. I can see why they changed (easy to commit tax fraud) but not sure their new solution will fix much.
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Dec 30, 2013 22:53
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I've been waiting on a $9k refund from the state of Oklahoma since about September, I'm starting to wonder when I will see this money. Does anyone generally know who I should call to figure out what's going on?
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Dec 31, 2013 19:14
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My Rhythmic Crotch posted:I've been waiting on a $9k refund from the state of Oklahoma since about September, I'm starting to wonder when I will see this money. Does anyone generally know who I should call to figure out what's going on? I used the magic of google to find the Oklahoma Department of Revenue website and I never left my desk to do it. (405) 521-3160 might be a good place to start. Good Luck
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Dec 31, 2013 19:20
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