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I'm doing my taxes on my own and I've run into two things I can't puzzle through: 1)I took classes from May 2012 and Aug 2013. Last year on my taxes I used the Lifetime Learning Credit (LLC) for the two courses I took in 2012. In 2013 I spent $4,560 on the final two courses in my program. In January, 2014 my company finally decided to reimburse me for my final two courses ($4,560), and cut me a check. Should I bother with the Lifetime Learning credit this year? It's not clear to me if receiving that $4,560 check would count as income during 2014 and maybe allow me to go for the LLC, or if I should look at it as canceling out the $4,560 I can put towards the LLC. Wildtortilla fucked around with this message at 00:36 on Mar 19, 2014 |
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Mar 19, 2014 00:26
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Wildtortilla posted:I'm doing my taxes on my own and I've run into two things I can't puzzle through: Chances are your tax bracket for 2014 will be higher than the 20% credit you get from LLC in 2013. I would probably not claim the credit using those expenses.
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Mar 19, 2014 00:51
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Papercut posted:My wife has shares in a family business that is an S-Corp, and every year they send us a Schedule K (that has an impact on our AGI I think). This is the first year where I am part owner of a C-Corp. Are there equivalent forms I should be expecting from the C-Corp? I was gifted the shares, if that makes any difference. Only a 1099-DIV if they cut you dividend checks.
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Mar 19, 2014 01:58
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I am an alaska resident. I forgot to add my permanent fund dividend as income in 2011 and they just recently sent me a letter about it so I paid the new tax owed. I also didnt claim it in 2012 but I havent gotten a letter about that yet. Should I amend my tax return for that year to show it or can I just wait for them to sent me another letter about that year? Amending a return looks like a huge pain in the rear end and im worried id gently caress it up somehow if I tried. So I kind of just want to wait for the letter, is that adviseable? It only changed my tax owed by 170 in 2011.
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Mar 19, 2014 02:05
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I moved halfway through 2013 and I have to file one of my state returns by mail. If I'm declaring a deduction for paying student loan interest while living in that state, I should probably throw my form 1098 stating such in with the rest of my return, right?
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Mar 19, 2014 03:03
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AbbiTheDog posted:Only a 1099-DIV if they cut you dividend checks. Cool, thanks.
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Mar 19, 2014 06:28
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varna posted:I am an alaska resident. I forgot to add my permanent fund dividend as income in 2011 and they just recently sent me a letter about it so I paid the new tax owed. I also didnt claim it in 2012 but I havent gotten a letter about that yet. Should I amend my tax return for that year to show it or can I just wait for them to sent me another letter about that year? Amending a return looks like a huge pain in the rear end and im worried id gently caress it up somehow if I tried. So I kind of just want to wait for the letter, is that adviseable? It only changed my tax owed by 170 in 2011. Either way is fine, as long as you are OK paying a few more dollars of penalties and interest later to avoid the hassle of having to amend. Seems like a worthwhile tradeoff in my opinion.
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Mar 19, 2014 20:57
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C-Euro posted:I moved halfway through 2013 and I have to file one of my state returns by mail. If I'm declaring a deduction for paying student loan interest while living in that state, I should probably throw my form 1098 stating such in with the rest of my return, right? Typically you only have to include tax forms that report withholding for that state. Won't hurt if you feel like including it anyway though.
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Mar 19, 2014 20:57
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Hello US tax knowledgeable goons! I have some questions regarding tax write offs/deductions w/respects to a home office and 1099 income, but first let me give some relevant information about my financial structure. My wife and I both work full time and receive a W-2 from our respective employers. We live in Los Angeles County. We have a mortgage [so we obviously are itemizing our deductions]. Starting sometime this year we are looking at starting up a side business for which we will operate out of a portion of our house, about 200 sq ft of our 1200 sqft home. We will be paid as contractors for this work, and so I expect to receive 1099's for this work. I have been self employed before, and I know this means filing a 'schedule C'. My question is related to what we can write off on schedule C? Do I get to write off a % of my mortgage, my property tax, my homeowners insurance, my utilities, major home improvements etc? Are there limitations? For example, if I make $5k on the 1099, does that mean my deductions on schedule C can't exceed my income? I had a new HVAC installed in my home this year, so I'm wondering if I can write off a portion of that improvement based on the % of space my home office takes up of the house. I did read the OP and didn't see a direct answer to my question. Look forward to your responses.
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Mar 20, 2014 23:38
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tijag posted:My question is related to what we can write off on schedule C? With regards to a home office, you can elect to either deduct the actual percentage (or amount if it's readily determinable) of the home allocated solely to business use (that is, no mixed personal and business use space is allowed to be expensed) or, alternatively, you can use a safe harbor allocation of $5/square foot for up to 300 square foot (which prohibits depreciation from being taken but you can still take mortgage interest, taxes, etc. under Schedule A). The home office deduction information can be read here. The safe harbor, obviously, is meant as a means to minimize the calculation work (and chances of an IRS audit as it's a safe harbor) but will (more than likely) provide less Schedule C expenses, so it may still be worth doing the standard home office deduction. Also, you are allowed to take expenses in excess of income, assuming that the business doesn't qualify as a hobby under Section 183 (otherwise you're limited to the income generated by the business).
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Mar 21, 2014 03:10
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I know that married couples filing jointly can make a total $11,000 in tax-advantaged contributions to two IRAs, even if only one spouse earns income. Do similar rules apply for 401k's? For instance, If one spouse makes $100,000 and the other spouse makes $10,000, can the couple make $17,500 + $17,500 in tax-advantaged contributions to 401k's, or only $17,500 + $10,000? What if the $10k earning spouse is self-employed and has a solo-401k?
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Mar 21, 2014 15:07
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ThirdPartyView posted:With regards to a home office, you can elect to either deduct the actual percentage (or amount if it's readily determinable) of the home allocated solely to business use (that is, no mixed personal and business use space is allowed to be expensed) or, alternatively, you can use a safe harbor allocation of $5/square foot for up to 300 square foot (which prohibits depreciation from being taken but you can still take mortgage interest, taxes, etc. under Schedule A). The home office deduction information can be read here. The safe harbor, obviously, is meant as a means to minimize the calculation work (and chances of an IRS audit as it's a safe harbor) but will (more than likely) provide less Schedule C expenses, so it may still be worth doing the standard home office deduction. Also, you are allowed to take expenses in excess of income, assuming that the business doesn't qualify as a hobby under Section 183 (otherwise you're limited to the income generated by the business). Pigs get fat, hogs get slaughtered.
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Mar 21, 2014 15:37
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ThirdPartyView posted:With regards to a home office, you can elect to either deduct the actual percentage (or amount if it's readily determinable) of the home allocated solely to business use (that is, no mixed personal and business use space is allowed to be expensed) or, alternatively, you can use a safe harbor allocation of $5/square foot for up to 300 square foot (which prohibits depreciation from being taken but you can still take mortgage interest, taxes, etc. under Schedule A). The home office deduction information can be read here. The safe harbor, obviously, is meant as a means to minimize the calculation work (and chances of an IRS audit as it's a safe harbor) but will (more than likely) provide less Schedule C expenses, so it may still be worth doing the standard home office deduction. Also, you are allowed to take expenses in excess of income, assuming that the business doesn't qualify as a hobby under Section 183 (otherwise you're limited to the income generated by the business). I can itemize the deduction for mortgage interest and property tax on my normal form. Lets say that is something like $19200 annually. Now, my mortgage + prop tax + homeowners insurance is about $25k a year. Do I get to write off 16.6% of that amount on my schedule C, or $4150?
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Mar 21, 2014 16:25
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Got a couple tax questions here. Back in 2012, my wife and I closed out an investment fund to help clear up some debt. I asked our financial adviser over and over about what our tax obligation would be for that income, and he assured us each time that since our joint income was less than $250,000, we would not owe taxes on that investment income. We took his word for it, and we never got a 1099 form from Fidelity, so I figured that was the end of it. Yesterday we got a letter from the IRS telling us that we do in fact owe taxes on that income, and that they received a 1099-B from Fidelity (which we never got for some reason). So we owe a pretty big chunk of back-taxes. Did the IRS make a mistake, or was our adviser full of poo poo? My other question is more about how the IRS resolves these things. Our refund for this year exceeds the back-taxes we may owe, can they just deduct the owed amount from our refund, because that would really be the easiest way to resolve this.
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Mar 21, 2014 19:54
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Does charity money count in addition to my standard deduction, or is it an either or type of thing where I need to itemize in order to claim charity donations?
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Mar 21, 2014 22:44
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tijag posted:Now, my mortgage + prop tax + homeowners insurance is about $25k a year. Do I get to write off 16.6% of that amount on my schedule C, or $4150? I'm pretty sure you can. Those would go under Indirect Expenses on form 8829 (along with utilities and some other items). But then I think you would have to reduce the mortgage and property tax deduction on Schedule A by the amount used as a business expense on Schedule C. I'll let someone with more experience give a definitive answer. Boris Galerkin posted:Does charity money count in addition to my standard deduction, or is it an either or type of thing where I need to itemize in order to claim charity donations? You have to itemize to deduct charitable contributions.
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Mar 22, 2014 02:42
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U-DO Burger posted:Got a couple tax questions here. Your advisor sucks
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Mar 22, 2014 16:27
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Everyone here who makes 250k, dont worry about taxes, youre good - that guys advisor as he pockets the one time fee and moves to the next town
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Mar 22, 2014 16:28
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U-DO Burger posted:Got a couple tax questions here. You've gotten a CP2000 computerized matching notice. If you live in a state with an income tax, your state revenue department has also gotten this letter and will be chasing you down shortly. Here's what you need to do: 1) Get a copy of the 1099-B and realized gain/loss statement for 2012. Sometimes the IRS only gets the PROCEEDS, not the BASIS of the stocks sold, and so assume all of the proceeds are 100% gain. 2) Review the IRS notice. They lay out what you filed, what they have, the difference, and what they think the tax is. 3) If you agree with them, check that box later on in the notice, sign, and mail in with payment. 4) If you don't agree, do NOT send in an amended return, it messes up the IRS. Simply write out your case in an articulate letter, include any backup you might have supporting your position, and ask the IRS to re-calculate the tax based on your evidence. In 2-3 months you'll get a revised letter. 5) If the IRS thinks you owe, they will take your 2013 refunds (and eventually return it if they're wrong). 6) If the IRS thinks you owe $10k+, I would call them and tell them you're responding to the notice and they can stop any collections for up to 30 days. Phone number on the notice. Plan to spend 1-2 hours on hold, so use a phone you can set to speaker mode. 7) Here in Oregon, the state LOVES to levy/garnish, and they will NOT change their mind about anything until the IRS issues a new notice. Note that although the IRS sends the initial notice to the state, they do NOT send in any follow up - that's your responsibility. Good luck.
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Mar 22, 2014 16:42
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anne frank fanfic posted:Your advisor sucks Brevity is the soul of wit. If you have anything in writing with your advisor stating no tax is due, call him back and start bitching. If he works for an investment group, talk to the group manager. I would demand at least penalty reimbursement for any penalties you're paying. Side note: as a CPA, it's astounding what people believe without following up. "My friend who packs groceries said his neighbor told him I could do it....." If something sounds too good to be true, follow up or get a second opinion.
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Mar 22, 2014 16:44
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I’ve got a residency issue I can’t seem to work out: my wife and I used to live in NYC and sold our apartment on March 19, 2013. After that we actually bought a boat and moved on to it and were traveling around the east coast until we finally got to our new state of residence (Massachusetts) on July 2, 2013. We did not have jobs during 2013 and the only income we need to declare is capital gains and interest income. Do we say that we were NYC residents from January 1st to March 19th, and Massachusetts residents from March 20th to December 31st? Or do we say that we were NYC residents from January 1st to July 1st, and Massachusetts residents from July 2nd to December 31st? Technically we were not physically present in either state from March 20th to July 1st, but I have to put something down on my forms so the two states can parse out whatever taxes I may owe them.
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Mar 22, 2014 20:09
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About to start a new job and looking to fill out my w-4 so that I have nothing withheld and make a large payment when taxes are due. This is sue to the fact that I have a unique financial situation currently where I receive a large amount of money on or around April 1 of each year. Are there risks involved with taking, say, 9 withholdings? Is there a maximum amount of withholdings?
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Mar 23, 2014 19:56
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Underpayment penalty. Check out publication 505.
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Mar 23, 2014 20:37
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SiGmA_X posted:Underpayment penalty. Check out publication 505. Right but doesn't that apply if I underpay, not under withhold. Like I will pay whatever is due, I just don't want it withheld from me.
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Mar 23, 2014 21:37
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If you wait until the end of the year to pay all your taxes at once, you have underpaid during the year and there will be a penalty.
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Mar 23, 2014 21:39
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slap me silly posted:If you wait until the end of the year to pay all your taxes at once, you have underpaid during the year and there will be a penalty. I see-- so it's pay-as-earned, yes?
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Mar 23, 2014 21:53
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Koppite posted:I see-- so it's pay-as-earned, yes? Yes, here is some more information: http://www.irs.gov/taxtopics/tc306.html Asking about paying the whole year's taxes in April seems to be a popular question lately. Between this thread, the 'Bad with money' thread, and the investing/retirement thread, I think it has been brought up three times this week. JohnnyPalace fucked around with this message at 22:28 on Mar 23, 2014 |
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Mar 23, 2014 22:20
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Welp, I just learned how lovely self employment tax is. I appear to be paying nearly 30% rate on only 60k, thats after my deductions and other costs since I work from home.
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Mar 23, 2014 23:28
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Sylink posted:Welp, I just learned how lovely self employment tax is. I appear to be paying nearly 30% rate on only 60k, thats after my deductions and other costs since I work from home. clearly you need to form an S-corp and pay yourself minimum wage. (note: do not do this.)
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Mar 24, 2014 01:17
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scribe jones posted:clearly you need to form an S-corp and pay yourself minimum wage. (note: do not do this.) Better yet, make an S Corp and pay no wages, and wait 12 months for the IRS to show up. (Note: Also do not do this).
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Mar 24, 2014 15:33
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Alternative: claim the Freeman on the Land defense, arguing that you (the employer/employee) are a fiction and therefore are not subject to The full FICA (SE) tax (please don't do this).
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Mar 24, 2014 17:08
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I now have to figure out which forum I'm in by the thread title and not the posts. There's been a sudden upsurge lately in sovereign citizens needing advice.
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Mar 24, 2014 18:31
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ThirdPartyView posted:Alternative: claim the Freeman on the Land defense, arguing that you (the employer/employee) are a fiction and therefore are not subject to The full FICA (SE) tax (please don't do this). We're representing a client in an audit who did this. We didn't prepare the original returns, another cpa does, she gets audit notice. She then goes to one of those "taxes are illegal" people who sent off a huge rant to the auditor. The agent was not amused. Needless to say, the scope of the audit increased tremendously after that.
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Mar 24, 2014 19:28
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Sylink posted:Welp, I just learned how lovely self employment tax is. I appear to be paying nearly 30% rate on only 60k, thats after my deductions and other costs since I work from home.
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Mar 24, 2014 22:43
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[E: Handled with my accountant.]
Cranbe fucked around with this message at 19:38 on Mar 27, 2014 |
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Mar 25, 2014 05:23
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If I'm 1099, shouldn't my employer by now have provided my information?
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Mar 27, 2014 21:56
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QuiteEasilyDone posted:If I'm 1099, shouldn't my employer by now have provided my information? Yes, they technically should have sent out by the end of January (assuming its over the $600 or whatever de minimis amount where they don't have to send out Form 1099-MISC), possibly a bit later, but 2 months later is quite late.
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Mar 28, 2014 04:06
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I have a general question that I can get more specific with if necessary. Broadly, my question is "Why do I owe $2,100 in taxes when I have taxes withheld from my paycheck at work every pay period?". I have claimed "0" on my tax documents at work at the beginning of the year, but for the past 2 years I have owed taxes come April. Some basic numbers (for 2013): $46420 in wages; $2987 withheld for FIC; $2878 SST; $673 MC; $2311 SIC. Married filing separately (wife didn't work last year at all, was in school until December). Purchased a house in December 2013. Looks like I owe roughly $2100 in taxes this year (and on a related note--I get penalized for contributing to a ROTH IRA through my work; Why in the world is that?). Am I doing something wrong? Is it possible I'm filing incorrectly (should be filing jointly, need to mark a deduction, etc)? I'm OK not getting a refund, I just don't want to owe anything, and clearly I'm failing. I certainly don't claim to be a professional when it comes to taxes, so if I'm being dumb about something, feel free to let me know. How in the world do I end up owing money each time? UGAmazing fucked around with this message at 04:12 on Mar 28, 2014 |
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Mar 28, 2014 04:10
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Is there some reason you're not filing jointly? It would make a huge difference - you get a larger standard deduction, and you get credits based on the tuition she paid for school, plus you get a more favorable tax rate by filing jointly. Initio fucked around with this message at 04:41 on Mar 28, 2014 |
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Mar 28, 2014 04:27
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Initio posted:Is there some reason you're not filing jointly? It would make a huge difference especially if your wife doesn't have any income. Well, my wife said it had something to do with her financial aid for 2013. I believe she said she would not be eligible for certain aid (Pell Grant, maybe?) if we filed jointly. She's sleeping right now, but I'll get more information from her tomorrow. She filed her taxes in February without consulting me, and she chose "file separately" on hers. I've read that it's possible to change filing status from separately --> jointly after filing. I know she received a refund of ~$750 on her taxes. She had a small amount of income to report (she was able to file for unemployment, which is counted as income), but it wasn't much ($100/wk, so around $4000 I believe). If we change her status from separately to joint, I assume that would affect her refund amount; looks like either way, her refund wasn't for as much as I would save by filing jointly (just re-ran the numbers in TurboTax and it reduced from owing $2100 to receiving $484 refund--heh). Can I go ahead and file and select "jointly" even though her taxes were filed as "separately"? How would we go about changing her filing status? edit: Also, if I have my wife amend her return, would we then just amend it by adding all of my information to the amended return? Or would I go ahead and file a 2nd return with both her and my information on it? UGAmazing fucked around with this message at 05:12 on Mar 28, 2014 |
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Mar 28, 2014 04:42
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