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Quick question: I sent in my contribution to my traditional IRA for the 2013 contribution period and was waiting for it to clear before filing my taxes, but it seems that the USPS is taking a bit long to deliver it, and I am starting to get concerned it might arrive after the 15th. Can I file my taxes with the IRA contribution in them, and then amend it later if the IRA contribution doesn't arrive on time?
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Apr 11, 2014 18:29
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A quick question on how to reduce taxes for a S-Corp. I own my own business and I formed an S-Corp on January of this year. I get checks from my clients and deposit them into the business account and then write myself a paycheck from the business to myself, there are deductions taken out because I use a payroll system. Now I am noticing that I have to pay medicare as the employer and the employee. I am also noticing a lot of taxes I have to pay on the business side. The % is quite large when I look at how much money in the end I am actually getting. Would I be able to side step things to start using the business account directly to purchase things that are business related? Would this reduce my tax liability or is the tax liability fixed to the gross income of the corp? Or maybe I am right to assume the tax liability is based on how big of a salary I am giving myself? e: State is CAlifornia
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Apr 11, 2014 18:39
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SiGmA_X posted:Could one roll a 401k into an IRA and then use the money to buy a house? The people that push these schemes should have a special place in hell. http://www.journalofaccountancy.com/Issues/2013/Oct/20137626.htm http://www.cliftoncpa.com/publications/enewsletters/tax/issues/3/Beware.asp https://www.mtrustcompany.com/Corpo...d-Questions.pdf
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Apr 11, 2014 22:48
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SiGmA_X posted:Could one roll a 401k into an IRA and then use the money to buy a house? How about 401k to Roth IRA and then pulling contributions out? I'm guessing the answer is no to both, but you guys are the experts!
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Apr 11, 2014 23:09
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AbbiTheDog posted:The people that push these schemes should have a special place in hell. I don't think he meant he was going to have his IRA actually own the property - he's talking about rolling it into an IRA so he can withdraw penalty-free funds to buy a home. Off the top of my head I can't really think of a reason why he wouldn't be able to roll his 401k into an IRA and do that.
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Apr 12, 2014 00:19
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SoUr posted:I need help understanding how my US taxes are going to work now that I'm a UK tax resident; I've been trying to read about this online, but it's getting close to making my head explode. Just as a general matter,IRS Publication 54 is a good resource for persons in your position. 1) Income earned in excess of the foreign earned income exclusion is subject to US tax at regular rates. You may, however, take a foreign tax credit for income taxes paid to the UK on income earned over the exclusion (i.e. you CANNOT take a foreign tax credit for taxes paid to the UK on earnings which have been excluded). 2) The housing exclusion makes my head hurt. I'm not calculating it for free on the internet, but Pub 54 lays out how it works. Basically, you can exclude your housing expenses up to a limit based on your location (up to $88,200 for London), less a base amount ($15,616 for a full year). Check Form 2555 for more information. 3) You can do it this way if you want, or take the exclusion plus credits for taxes paid on amounts that were not excluded.
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Apr 12, 2014 01:24
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Admiral101 posted:I don't think he meant he was going to have his IRA actually own the property - he's talking about rolling it into an IRA so he can withdraw penalty-free funds to buy a home. Unless specifically stated I always assume the client will do the dumbest thing possible and plan accordingly. I've seen this happen. Doesn't help that the local talk radio stations are always running ads about how to do crazy things in your IRAs.
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Apr 12, 2014 16:30
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I'm 26 this year, and have just gotten a full-time job this year, so I won't be countable as a dependent. However, due to various circumstances, I plan on continuing to live with my parents so that we can share expenses; we're a close-knit Asian-style family. How should we file our income taxes-- jointly or separately? Would my income be counted along with my mother and father's as combined household income?
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Apr 12, 2014 20:10
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DrSunshine posted:I'm 26 this year, and have just gotten a full-time job this year, so I won't be countable as a dependent. However, due to various circumstances, I plan on continuing to live with my parents so that we can share expenses; we're a close-knit Asian-style family. How should we file our income taxes-- jointly or separately? Would my income be counted along with my mother and father's as combined household income? You file your own return separate from them, claiming yourself. The fact that you live with your parents is irrelevant.
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Apr 12, 2014 23:26
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Epi Lepi posted:You file your own return separate from them, claiming yourself. The fact that you live with your parents is irrelevant. Okay, thanks!
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Apr 12, 2014 23:38
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AbbiTheDog posted:The people that push these schemes should have a special place in hell. AbbiTheDog posted:Unless specifically stated I always assume the client will do the dumbest thing possible and plan accordingly. I've seen this happen. I'm not planning on doing this, I think retirement funds should be left alone and not pillaged because of poor planning/saving, but I was curious and I know you folks have a better qualified answer than I do. And drat, I fail at Googling this one, I tried first!
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Apr 13, 2014 00:46
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SiGmA_X posted:This discussion sparked a question I am failing to find via Google. This IRS FAQ actually answers this exact question: quote:Can I avoid the additional tax on early withdrawals if I roll over a 401(k) distribution to an IRA and then withdraw that money to use as a down payment on a house? So yes, this does work.
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Apr 13, 2014 07:03
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Not so much a question, but I encountered a very stupid bug with TaxAct software package that I thought I would share. My federal e-file attempts are rejected by the IRS because of a mismatch between my wife's identity protection PIN # and what the software allows me to enter. It appears that the data field for the entry of this PIN # is set up to delete leading zeros. Since the PIn # is supposed to be EXACTLY SIX DIGITS and it happens to start with a zero.... guess what, there's no way to correctly enter the PIN #! Lovely!
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Apr 14, 2014 04:47
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PatMarshall posted:Just as a general matter,IRS Publication 54 is a good resource for persons in your position. If I can take tax credits for taxes paid to another country and use these to basically eliminate any taxes owed to the US (since UK taxes are higher at every bracket), why would I bother taking the income exclusion? Is the exclusion an optional thing or do I have to take it? From what I understand, I can use the foreign tax credit and carry over any excess I've paid forward up to 10 years; wouldn't this allow me to take further tax breaks when I eventually get back to the US and start paying US taxes again? Say I pay 6000 USD in taxes to the UK this year, and I only would have owed 4000 USD to the US, would I use the 6000 USD tax credit from taxes paid to the UK to eliminate the 4000 USD tax debt to the US and still have 2000 USD in tax credits left to carry over to another year? I guess 2013 was my last year of easy turbotax returns. 
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Apr 14, 2014 15:38
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SoUr posted:If I can take tax credits for taxes paid to another country and use these to basically eliminate any taxes owed to the US (since UK taxes are higher at every bracket), why would I bother taking the income exclusion? Is the exclusion an optional thing or do I have to take it? You can only use your FTC carryover to the extent of your foreign income, so that doesn't work.
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Apr 14, 2014 15:44
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Because of a gently caress-up on TurboTax's end I had to manually pay my 2013 state and federal taxes via their respective e-pay systems. Last Friday I received a tax refund check in the mail from my state's Franchise Tax Board for the amount I paid them three weeks ago. What should I do with the check? I'm definitely not cashing it because I know it's not my money. What I'm thinking of doing is holding on to it, a copy of my bank statements showing the payment being withdrawn from my account, and a copy of the payment confirmation from the their's e-pay system from the day I made the payment. I'm thinking that'll be enough to cover my rear end if they come knocking. I tried calling the Franchise Tax Board this morning to get a straight answer but of course their phone lines are swamped because of tomorrow's deadline.
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Apr 14, 2014 19:27
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U-DO Burger posted:Got a couple tax questions here. Follow up on this. Turns out the reason the taxes owed was so high was because the IRS assumed the cost basis of the investment fund was $0. I got a hold of the 1099-b form, only there's no cost basis listed on it. So now we get to wade through 20+ years of stock info to calculate the cost basis ourselves, so we can figure out what our actual tax obligation is. Has anyone here done this before? Any tips for how to calculate your cost basis without killing yourself in the process?
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Apr 14, 2014 19:49
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U-DO Burger posted:Follow up on this. Turns out the reason the taxes owed was so high was because the IRS assumed the cost basis of the investment fund was $0. I got a hold of the 1099-b form, only there's no cost basis listed on it. So now we get to wade through 20+ years of stock info to calculate the cost basis ourselves, so we can figure out what our actual tax obligation is. Nope. If you had a drip (dividend reinvestment plan) you adjust for the 1099-DIV information each year as well.
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Apr 14, 2014 20:14
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Enigma89 posted:A quick question on how to reduce taxes for a S-Corp. I own my own business and I formed an S-Corp on January of this year. I get checks from my clients and deposit them into the business account and then write myself a paycheck from the business to myself, there are deductions taken out because I use a payroll system. So you buy things for the business using your after tax paycheck income? You pay yourself 100% of your revenue? You probably could save some tax by having the S-corp pay for things directly if this is the case. The lower your salary the lower your medicare tax will be and employer paid tax. If you didn't DIY your formation your tax planner is bad, if you did DIY your tax planing, you are on the right path to fixing your bad planning. 2013 might be a lost cause, how long do you have to correct a w2? Might be worth paying the penalty.
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Apr 14, 2014 21:13
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Another question on US taxes while living in the UK. For the purposes of reporting my income in the US after having paid my UK taxes, say I earn 100k USD in UK income and pay the respective UK taxes on it; when it comes time to prepare the US taxes, I would report the same 100k USD income, but after the 97k foreign income exclusion and tax credits from the UK taxes I would end up not paying any US taxes. This seems pretty clear so far. I have a good amount of money tied up in company stocks as part of the company's discount stock purchase program, all of which I bought during an industry downturn; after some years the money I've put in there has grown roughly 60%, making it subject to a lot of capital gains taxes if I were to cash out. In the scenario above where I earn 100k USD then exclude 97k USD, would that mean that that year I would be in the 10% tax bracket (3k USD total income) and therefore pay no capital gains tax if I cashed out on those stocks? I've held the stocks for more than a year, so they would fall under long term capital gains.
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Apr 15, 2014 17:23
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Admiral101 posted:I don't think he meant he was going to have his IRA actually own the property - he's talking about rolling it into an IRA so he can withdraw penalty-free funds to buy a home. I did exactly this with no problems. I had an old IRA that came from a defunct 401K that I couldn't roll into my new 401K so I just cashed it out and used it for a home purchase. I was able to avoid the penalty. E to the F to the B
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Apr 15, 2014 18:01
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SoUr posted:Another question on US taxes while living in the UK. Your tax bracket is defined based on overall income, even if you're only paying taxes on part of it.
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Apr 16, 2014 01:20
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So if my dad claims me as a dependent and therefore also claims my 1098-T, will he automatically get the full amount ($17,000) on the 1098-T back, or will he get a percentage of it back such as 50%, or is how much he gets back a function of some factors specific to his tax return? Thank you!
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Apr 16, 2014 01:59
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Xandu posted:Your tax bracket is defined based on overall income, even if you're only paying taxes on part of it. You may also need to file Form 8938 to report your stock, depending on the value. Form 8938 is attached to your income tax return.
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Apr 16, 2014 02:06
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PoorUser posted:So if my dad claims me as a dependent and therefore also claims my 1098-T, will he automatically get the full amount ($17,000) on the 1098-T back, or will he get a percentage of it back such as 50%, or is how much he gets back a function of some factors specific to his tax return? Thank you! BonerGhost fucked around with this message at 16:46 on Apr 16, 2014 |
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Apr 16, 2014 07:25
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NancyPants posted:1098-T decreases your taxable income by the amount on the form, so it depends on his income/tax bracket. This is not correct unless he's taking the tuition and fees deduction for some bizarre reason. Assuming his dad is within the AGI limitations (assuming his AGI is less than 180k if he's married), he'll be getting a $2,500 tax credit on his return for claiming the $17,000 of tuition expenses.
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Apr 16, 2014 12:51
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Admiral101 posted:This is not correct unless he's taking the tuition and fees deduction for some bizarre reason. I think I was thinking of 1098-E and failed to mention the $2500 limit? Isn't that how it works?
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Apr 16, 2014 16:48
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NancyPants posted:I think I was thinking of 1098-E and failed to mention the $2500 limit? Isn't that how it works? Yes, student loan interest paid is a reduction of AGI and limited to 2,500.
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Apr 16, 2014 17:56
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Admiral101 posted:Yes, student loan interest paid is a reduction of AGI and limited to 2,500.
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Apr 16, 2014 18:29
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Is your AGI around 75,000? Taxpayers with over 75,000 AGI are limited by how much interest they can deduct, and turbotax may be limiting it to accomodate this. Generally, however, the ratio is 1:1. If you pay 2,500 of interest, you'll get a 2,500 deduction.
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Apr 16, 2014 18:37
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If I do online work on Mechanical Turk but don't actually transfer the money to my bank account, it's not taxable if I don't convert it to actual currency, right? I want to earn $1,000-$2,000 in 2014, transfer it to my bank account on 1/1/2015 and then accrue interest on it for the full year before having to pay taxes on it in April 2016. Is that a good move?
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Apr 16, 2014 22:25
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My question is a little tricky I think so bare with me. My ex-wife and I agreed that we would alternate years claiming our son as a dependent and head of household on our taxes, but now for the second year in a row she has claimed them both on her taxes. We have him almost 50/50, although she does have a few more days per year than I do. I know for almost a fact that she will not be willing to add this agreement to our custody agreement, so is it just going to be a race against time to see who files their taxes first? This year she filed before me and claimed him, so when I submitted my taxes the IRS bounced it back because our son had already been claimed on her taxes. Meaning my return went from over $4k, to under $250. A little background: I make a good 40% more than her per year and pay for ALL of his expenses, child care, clothing, food, Insurance etc. I know that life isn't fair, but it seems unreasonable for her to get to claim him each year, and racing eachother to get our taxes done first is extremely childish and causes nothing but fights. Does anyone have any advice?
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Apr 16, 2014 22:40
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EugeneJ posted:If I do online work on Mechanical Turk but don't actually transfer the money to my bank account, it's not taxable if I don't convert it to actual currency, right? That's not remotely how it works. You pay taxes on income when you receive it, regardless of what currency you receive.
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Apr 16, 2014 22:45
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Bojanglesworth posted:My question is a little tricky I think so bare with me. You could paper file and sort it out through a fist fight. This is not at all an uncommon situation, and it sounds like you'd have a pretty good argument for claiming your son as a dependent over her. Especially given your AGI is 40% more than hers (the IRS tends to assume that the person who makes more also pays for more of the dependents' expense).
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Apr 16, 2014 22:47
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Admiral101 posted:You could paper file and sort it out through a fist fight. This is not at all an uncommon situation, and it sounds like you'd have a pretty good argument for claiming your son as a dependent over her. Especially given your AGI is 40% more than hers (the IRS tends to assume that the person who makes more also pays for more of the dependents' expense). I spoke with my tax preparer and she suggested the same, aside from the fist fight part. She said if we paper file I will still get my refund, but then sometime around summer we will each get a letter stating we claimed the same dependent. I will probably play dumb and say I didn't know that she claimed him to avoid a fight between her and I, then just provide documentation of everything I pay etc so I can keep my refund. Is there anything special I should do in order to insure that I come out on the winning end of this battle?
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Apr 17, 2014 01:22
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Can someone please explain to me California's "pay as you go" withholding system? I got hit with a $25 "underpayment of estimated tax" penalty, apparently because my employer hasn't been withholding the appropriate amount of taxes each quarter. A lady I spoke with at the Franchise Tax Board said that, every quarter, my employer was supposed to withhold 30%/40%/0%/30% (respectively) of my gross income. My employer apparently withheld 1/10th of those percentages each quarter instead; based on my gross income for each quarter and those percentages, my employer failed to withhold 22% of my income for 2013... Because of that I owed about $750 this year. I can't find any literature on this system on the tax board's website so none of this is making any sense to me.
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Apr 17, 2014 01:36
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Karthe posted:Can someone please explain to me California's "pay as you go" withholding system? I got hit with a $25 "underpayment of estimated tax" penalty, apparently because my employer hasn't been withholding the appropriate amount of taxes each quarter. A lady I spoke with at the Franchise Tax Board said that, every quarter, my employer was supposed to withhold 30%/40%/0%/30% (respectively) of my gross income. My employer apparently withheld 1/10th of those percentages each quarter instead; based on my gross income for each quarter and those percentages, my employer failed to withhold 22% of my income for 2013... Because of that I owed about $750 this year. I can't find any literature on this system on the tax board's website so none of this is making any sense to me. Every taxing authority has a similar requirement. You're expected to pay your taxes as you earn your wages. Your employer didn't underwithhold - you allowed your employer to underwithhold. Your employer has no idea about your financial situation and how much to withhold from your paycheck without your telling them. So I guess I'm not sure what the question is.
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Apr 17, 2014 03:23
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Bojanglesworth posted:I spoke with my tax preparer and she suggested the same, aside from the fist fight part. She said if we paper file I will still get my refund, but then sometime around summer we will each get a letter stating we claimed the same dependent. I will probably play dumb and say I didn't know that she claimed him to avoid a fight between her and I, then just provide documentation of everything I pay etc so I can keep my refund. I can't really pretend to be an expert in this area. Anything that documents how your son's time is split between the households would be useful. Generally, though, this poo poo just boils down to a "he said she said spent XXX amount of time here but is paying for XXX more than him but YYY is exclusively for holidays and-" until the IRS throws up its hands and just gives the exemption to the ex-spouse with the higher AGI. This is just my understanding of how that process works. I have yet to deal with dependent conflicts (thank god).
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Apr 17, 2014 03:26
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Admiral101 posted:Every taxing authority has a similar requirement. You're expected to pay your taxes as you earn your wages. Your employer didn't underwithhold - you allowed your employer to underwithhold. Your employer has no idea about your financial situation and how much to withhold from your paycheck without your telling them. How does that whole "pay as you go" system work? Is it as simple as withholding a flat percentage of my quarterly gross income each paycheck? If that's the case then I should have had an additional $1200 per month taken out of my pay...and that's in addition to the 25% or so that's already taken out. I don't know that I could survive if that was the case, that's almost an entire (bi-weekly) paycheck for me...
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Apr 17, 2014 14:50
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Admiral101 posted:That's not remotely how it works. You pay taxes on income when you receive it, regardless of what currency you receive. If you get paid in Euros or bitcoins, which FX rate are you using to determine how many USD the IRS gets? What if you get paid in fine art? Stocks?
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Apr 17, 2014 15:01
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