|
baquerd posted: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? People get paid in stocks all the time. It's the FMV of the assets received. You and your employer would be subject to payroll taxes on it no matter what kind of payment it is.
|
#
?
Apr 17, 2014 17:38
|
|
|
|
| # ? May 9, 2024 21:37 |
|
|
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? The income would be taxable when Amazon puts the money in Amazon Payments regardless of when you move it to your bank. If you do make $1-2k then I'd suspect you'll be getting a 2014 Form 1099 from Amazon and taxes will be due in April 2015, including self-employment tax. If it was more money than at some point you'd need to start making quarterly estimated tax payments. And you do realize the interest you'll accrue on $1-2k would be like $10 or $20 if you had the full amount the entire year, which is basically the amount of money you'll need to upgrade from the basic tax software to a version that support reporting self-employment?
|
|
#
?
Apr 17, 2014 18:05
|
|
|
Karthe posted:What would I have done that would have led to this situation? I claimed 1 exemption on my W4 intending for more taxes to be withheld in the hope that I'd end up neither owing anything nor expecting anything back after doing my taxes. I thought that was all I had to do to make sure enough is withheld from my paycheck each pay period. Ok - the basic concept of "pay-as-you-go" is that you won't owe any additional tax to the tax authority when you file your taxes for the year. What was your California tax liability for 2013? Pretend it was $2,400. Under a pay as you go system, you will want $100 withheld for California every two weeks during the year to cover your liability. This will ensure you are not underpaying your state taxes. Of course, if you are making more money in 2014, you will want to withhold more than that. The bigger issue here seems to be your employer's payroll system. Talk with other employees and see if they're having a similar situation.
|
|
#
?
Apr 17, 2014 20:21
|
|
|
Admiral101 posted:Ok - the basic concept of "pay-as-you-go" is that you won't owe any additional tax to the tax authority when you file your taxes for the year.  I also found out there are penalties for not paying 100% of last year's tax obligations OR 90% of this year's tax obligations. And whaddayaknow, in addition to your bank levying a fine for insufficient funds during an electronic transfer request, the Tax Board levies its own fine as well. These tax agencies will use any excuse they can to secure more money from you  This was a lovely year for paying taxes 
|
|
#
?
Apr 17, 2014 20:31
|
|
|
AbbiTheDog posted:People get paid in stocks all the time. It's the FMV of the assets received. You and your employer would be subject to payroll taxes on it no matter what kind of payment it is. So you if you get paid 100 shares of company X, and it closes at $1/share on the day you took control of the stock, you and the company pay taxes on that $1/share as if it were ordinary income, and then you have a cost basis of $1/share? In the example of bitcoins, due to some illiquidity and high volatile nature, if you immediately sold everything you had, the price you get might be significantly different than the theoretical value. Could the FMV be adjusted for this? Bitcoins have an additional issue that different exchanges could have significant price differences, and what about other instruments that trade on multiple exchanges? I'm still very curious about getting paid in real assets for tax purposes. If you get paid in fine art, the FMV could vary by millions potentially.
|
|
#
?
Apr 17, 2014 21:59
|
|
|
baquerd posted:So you if you get paid 100 shares of company X, and it closes at $1/share on the day you took control of the stock, you and the company pay taxes on that $1/share as if it were ordinary income, and then you have a cost basis of $1/share? 1). The company would not pay taxes on that $1/share. 2). You would pay taxes on the $1/share you received as compensation. So if you received 100 shares in compensation, you would be taxed on $100. You would then have a cost basis of $100. (NOTE: THIS IS A VERY BASIC EXAMPLE - certain qualified plans permit you to defer recognition of this income if you are not a highly compensated employee, the shares are part of a matching program that can be taken advantage of most/all employees, etc. Tax consequences of employees receiving stock is a complicated area, but general rule: it's taxable compensation). 3). You would be able to recognize a loss when you sold the bitcoins. Pretend you received 100 bitcoins of compensation, which were worth a total of $1,000 at the time you received them. You would be taxed at the ordinary rate for $1000. If you then sold these bitcoins a year or two down the road for, say, $400, you would recognize a capital loss of $600 in the year sold. 4). This is what appraisals are for. People getting paid in fine art and other tangible assets aren't very common, mainly because when you receive a $1,000,000 painting in exchange for your services, it's hard to actually pay the taxes on that $1,000,000 painting due to not actually having any cash flow.
|
|
#
?
Apr 17, 2014 23:15
|
|
|
Admiral101 posted:1). The company would not pay taxes on that $1/share. Thanks, very cool information. Interesting that the company avoids payroll tax when paying in stock.
|
|
#
?
Apr 18, 2014 00:45
|
|
|
baquerd posted:Thanks, very cool information. Interesting that the company avoids payroll tax when paying in stock. Sorry, they would be liable for payroll tax still. I thought you for some reason meant income tax.
|
|
#
?
Apr 18, 2014 00:58
|
|
|
Ok here is the situation. I stopped taking my daughter to daycare last year because my mother offered to watch her for free. However my mother lives 22 miles away which would equate to 88 miles a day round trip twice. I made this trip 64 times last year which would equate to 5632 miles. I have a detailed log with dates traveled and mileage. Can I write off this mileage as a childcare expense or any other expense?
|
|
#
?
Apr 18, 2014 15:53
|
|
|
Cross-posting this from the house megathread since it's kind of a tax question: We are planning to do an all-cash offer on a house to be more competitive, and get a cash out refinancing later. How would taxes work though? Would this be considered an equity loan instead of a mortgage? Then my tax deductions will go way down?
|
|
#
?
Apr 18, 2014 19:20
|
|
|
jomiel posted:Cross-posting this from the house megathread since it's kind of a tax question: If you take the cash out through a loan within a certain period of time it still is considered acquisition debt, not home equity debt. You need that distinction for AMT purposes and/or the $100k limit for home equity interest deduction.
|
|
#
?
Apr 18, 2014 20:11
|
|
|
SardonicCheese posted:Ok here is the situation. Pub 503 says no. See the section on transportation.
|
|
#
?
Apr 18, 2014 22:24
|
|
|
My fiancee and I are getting married this summer and we are planning on maxing our contributions for our 401k/403b. Two questions: 1) Does the contribution limit of $17,500 apply to each individual or is it $35,000 total for the couple (i.e. can we figure out the % of our combined income needed to reach $35,000 and each contribute the same % of our respective paychecks, or do we need to each figure out the % of our respective salaries needed to get to $17,500 and adjust our individual election % accordingly)? 2) My income is fairly stable, however my fiancee often works overtime so it's hard to tell exactly what her income will be. If she ends up over-contributing, how difficult is it to fix it? Or is it best to play it safe and come in under the limit?
|
|
#
?
Apr 20, 2014 01:47
|
|
|
The Agent posted:My fiancee and I are getting married this summer and we are planning on maxing our contributions for our 401k/403b. Two questions: 1) Does the contribution limit of $17,500 apply to each individual or is it $35,000 total for the couple (i.e. can we figure out the % of our combined income needed to reach $35,000 and each contribute the same % of our respective paychecks, or do we need to each figure out the % of our respective salaries needed to get to $17,500 and adjust our individual election % accordingly)? 2) My income is fairly stable, however my fiancee often works overtime so it's hard to tell exactly what her income will be. If she ends up over-contributing, how difficult is it to fix it? Or is it best to play it safe and come in under the limit? The limits are per individual. No aggregating included or allowed. So, your limit in 17,500 and hers is 17,500. You'll have to check with your company's specific plan on how contributions are handled. Most of the major plans do it via percentage of your paycheck, but some also allow a flat dollar amount per pay period. Also, if you only have one job and it's not too complicated, many plans automatically stop contributing when you hit the max for the year. You are wise to confirm that with your benefits department.
|
|
#
?
Apr 20, 2014 12:49
|
|
|
balancedbias posted:Also, if you only have one job and it's not too complicated, many plans automatically stop contributing when you hit the max for the year. You are wise to confirm that with your benefits department. Note to be cautious with this if you receive matching. Some places (I know at least that the Fed gov does this) cap matching on a per paycheck basis, and if you reach your max contribution before your last paycheck, you will end up losing any matching on the rest of your paychecks to the end of the year.
|
|
#
?
Apr 20, 2014 13:34
|
|
|
flowinprose posted:Note to be cautious with this if you receive matching. Some places (I know at least that the Fed gov does this) cap matching on a per paycheck basis, and if you reach your max contribution before your last paycheck, you will end up losing any matching on the rest of your paychecks to the end of the year. That's true, I have a friend that lost out on approx. 2 percent matching for the last 3 months of 2013 because he front loaded the first half of the year with a higher contribution percentage.
|
|
#
?
Apr 20, 2014 16:41
|
|
|
How difficult is it to become an enrolled agent?
|
|
#
?
Apr 22, 2014 23:39
|
|
|
Kiwi Ghost Chips posted:How difficult is it to become an enrolled agent? Much easier than a CPA, but nothing to sneer at.
|
|
#
?
Apr 23, 2014 00:11
|
|
|
I'm sure this has been asked countless times in this thread, but if one were to dip into his Traditional IRA for any reason, how much is he looking at as far as taxes & penalties go? And would living in a city like Chicago make any difference?
|
|
#
?
Apr 24, 2014 00:03
|
|
|
Chris Gaines posted:I'm sure this has been asked countless times in this thread, but if one were to dip into his Traditional IRA for any reason, how much is he looking at as far as taxes & penalties go? And would living in a city like Chicago make any difference? Ordinary income tax at your marginal rate plus a 10% penalty
|
|
#
?
Apr 24, 2014 01:14
|
|
|
Chris Gaines posted:I'm sure this has been asked countless times in this thread, but if one were to dip into his Traditional IRA for any reason, how much is he looking at as far as taxes & penalties go? And would living in a city like Chicago make any difference? The answer to this question depends on the reason.
|
|
#
?
Apr 24, 2014 01:38
|
|
|
I made $40K last year, give or take. $25K came from a W-2 job, $15K came from a 1099. I live in a town that collects tax at a 1% rate. I worked in a town that collects tax at a 1.5% rate. As such, I filed that I'd paid $375 into local taxes and issued a check for $25. Today, my town tax department calls saying I owe them another $125. They note that they will only give me credit for the first 1%. Is this right? It doesn't seem so, and I've never had to pay past my total taxable income rate before.
|
|
#
?
Apr 24, 2014 03:31
|
|
|
Matlock posted:I made $40K last year, give or take. Local taxes aren't identical across the US. You're going to have to provide more information than this (like what state you live in). This sounds like Ohio.
|
|
#
?
Apr 24, 2014 03:44
|
|
|
It's definitely Ohio. What other information would you need to properly discern the information?
|
|
#
?
Apr 24, 2014 04:18
|
|
|
Matlock posted:It's definitely Ohio. What other information would you need to properly discern the information? In Ohio, you are taxed in the town you work, and the town you reside. Your employer's local tax will be withheld at the town you work. I'm not 100% if the facts your providing regarding tax rates/credit rates are accurate (I'll explain below). Let's pretend you reside in town A (1% tax rate), and work in town B (1.5% tax rate). You make $40,000. Your employer/you will/should be withholding and remitting 1.5% local tax, for a total of $600, to town B. Nothing else needs to happen with town B. You will file in the town you reside, town A. The tax you should owe at 1% is $400 In the facts you provided, you should not owe additional tax. You would be claiming a tax credit for your town A return based on the tax you already paid to town B. You mentioned that town A permits a credit of 1%. This means you can claim up to a 1% credit of tax paid to town B, which is (40,000 * .01) $400. This equals the amount of tax liability you owe to town A. Therefore, you shouldn't owe additional tax. Are you sure the percentages you're providing are accurate? I can look it up myself if you provide the name of the town you work and town you reside. Did you pay 1.5% tax to town B based on your 1099 income? Admiral101 fucked around with this message at 12:47 on Apr 24, 2014 |
|
#
?
Apr 24, 2014 12:45
|
|
|
I paid 1.5% out on the W2 but none on the 1099. I assumed the overage of the W2 tax would carry over to the 1099.
|
|
#
?
Apr 24, 2014 14:10
|
|
|
Matlock posted:I paid 1.5% out on the W2 but none on the 1099. I assumed the overage of the W2 tax would carry over to the 1099. Where does the 1099 come from? Is that work unrelated to your W-2 job that do you from home on the side? The local tax being withheld on your W-2 at 1.5% is meant to cover your work town tax liability. It has nothing to do and will have no effect on local ohio tax you owe related to 1099 income.
|
|
#
?
Apr 24, 2014 14:13
|
|
|
Admiral101 posted:Where does the 1099 come from? Is that work unrelated to your W-2 job that do you from home on the side? That last line tells me everything. It's another source of income on the side.
|
|
#
?
Apr 24, 2014 14:45
|
|
|
Matlock posted:That last line tells me everything. It's another source of income on the side. I've made it a rule of thumb (which also means take with a grain of salt) that there are 2 situations which require estimated quarterly tax payments. 1 - any 1099 income enough to seem like another separate job 2 - married couples where one spouse earns significantly more than the other.
|
|
#
?
Apr 25, 2014 12:30
|
|
|
For the purpose of determining my Capital Gains tax bracket, do I need to look at my Adjusted Gross Income or my Modified Adjusted Gross Income? I'm specifically interested in the impact my Foreign Earned Income Exclusion would have on my Capital Gains tax if I were to sell some stocks I've been holding for several years. I know that as far as calculating IRA contribution limits you need to look at your MAGI, so even if the exclusion lowers your income to a point where you could invest in an IRA, the limit is set by your MAGI (which doesn't count your exclusion) and therefore you wouldn't be able to contribute.
|
|
#
?
Apr 25, 2014 16:43
|
|
|
Hey guys this is the first time I'm filling out a W-4 after getting married this year and I have a question. Previously I've had a family accountant do my taxes and now that I don't have that resource I have to figure out all this tax horseshit by myself. Me: new job starting june, $50k/year Her: $20-50k/year (doesn't know how much her potential future job will pay as she doesn't have a job in the area we're moving to) Married filing jointly next tax season (unless anybody has some reasons to do otherwise) No assets, houses, deductions, whatever. Very simple situation, both of us are W-2 workers. For the personal allowances worksheet we have a total of 2. It tells us if we are married with two incomes we need to work through the Two-Earners/Multiple Jobs Worksheet After going through this worksheet it tells us in the note below line 3: "If line 1 is LESS THAN line 2, enter "0" on Form W-4, line 5, page 1" which is the line for Total Number of Allowances. Thus our total number of allowances is ZERO. In our case: Line 1: 2 Line 2: 3 (it says if the lowest earner makes less than 65k, you cannot write more than 3) After continuing with the rest of the two-earners worksheet, it says that I need to withhold an additional $23 per paycheck in order to make sure that enough is withheld come tax time. Bottomline question: Am I understanding that a married couple in our situation, filing jointly with anywhere from 70k to 100k yearly income (all W-2) cannot claim any allowances? In addition we need to withhold an extra $23/paycheck in order to be sure we're not going to owe taxes next april? This seems absurd. Getting married is a tax penalty? We can't be doing this correctly. Help! Totally Normal fucked around with this message at 06:21 on Apr 29, 2014 |
|
#
?
Apr 29, 2014 06:13
|
|
|
Totally Normal posted:Bottomline question: Am I understanding that a married couple in our situation, filing jointly with anywhere from 70k to 100k yearly income (all W-2) cannot claim any allowances? In addition we need to withhold an extra $23/paycheck in order to be sure we're not going to owe taxes next april? This seems absurd. Getting married is a tax penalty? We can't be doing this correctly. Help! Yes, getting married can be a tax penalty, but not at those income levels. Check this out: http://taxpolicycenter.org/taxfacts/marriagepenaltycalculator.cfm What you're missing is that claiming zero allowances as a married person filing jointly results in substantially less taxes being taken out than if you a single person claiming zero allowances.
|
|
#
?
Apr 29, 2014 07:11
|
|
|
Totally Normal posted:Married filing jointly next tax season This is kind of odd language to me. Does this mean you will get married on or before 12/31/14? If so then, yes, you will be MFJ for your 2014 1040. If you're getting married on 1/1/15 or later, your 2014 1040 will be single. Maybe I'm reading into it to much, but the distinction is pretty important.
|
|
#
?
Apr 29, 2014 13:51
|
|
|
My wife works as a sole proprietor doing counseling at a clinic. She operates out of an office in their building and they process insurance claims for her and charge a percentage of her gross receipts, which they withhold from the checks that they give her (so the fees are not included as income on her 1099). However, she will soon be taking a couple months off working, during which time she is required to pay a minimum fee as part of her contract. Since she will not be working during this time, she will have to write a check to them for the fees instead of their usual method of taking it out of her cashflow. Does this mean she has to give the company a 1099, or can she deduct these fees as a business expense somewhere on schedule C ? I've tried glancing through the general instructions for information returns, and there is a section there that mentions that payments to corporations are generally not reportable, with some exceptions listed. However, my gut tells me this is a situation where she would need to file a 1099...
|
|
#
?
Apr 29, 2014 20:05
|
|
|
flowinprose posted:My wife works as a sole proprietor doing counseling at a clinic. She operates out of an office in their building and they process insurance claims for her and charge a percentage of her gross receipts, which they withhold from the checks that they give her (so the fees are not included as income on her 1099). However, she will soon be taking a couple months off working, during which time she is required to pay a minimum fee as part of her contract. Since she will not be working during this time, she will have to write a check to them for the fees instead of their usual method of taking it out of her cashflow. Does this mean she has to give the company a 1099, or can she deduct these fees as a business expense somewhere on schedule C ? If total payments are $600 or more, yeah she'll have to send them a 1099.
|
|
#
?
Apr 29, 2014 22:20
|
|
|
flowinprose posted:My wife works as a sole proprietor doing counseling at a clinic. She operates out of an office in their building and they process insurance claims for her and charge a percentage of her gross receipts, which they withhold from the checks that they give her (so the fees are not included as income on her 1099). However, she will soon be taking a couple months off working, during which time she is required to pay a minimum fee as part of her contract. Since she will not be working during this time, she will have to write a check to them for the fees instead of their usual method of taking it out of her cashflow. Does this mean she has to give the company a 1099, or can she deduct these fees as a business expense somewhere on schedule C ? If the clinic is organized as a corporation, she doesn't have to file a 1099. If they aren't, and the payments are over $600, then yes she should issue them a 1099.
|
|
#
?
Apr 29, 2014 22:31
|
|
|
Admiral101 posted:If the clinic is organized as a corporation, she doesn't have to file a 1099. If they aren't, and the payments are over $600, then yes she should issue them a 1099. She should be doing it anyways. The fees they are taking are an expense off her gross and should be treated accordingly.
|
|
#
?
Apr 29, 2014 22:36
|
|
|
Bloody Queef posted:If total payments are $600 or more, yeah she'll have to send them a 1099. I'm guessing 1099-MISC would be the appropriate form? Reading the instructions specific to 1099-MISC it looks like this would be reported on line 7? AbbiTheDog posted:She should be doing it anyways. The fees they are taking are an expense off her gross and should be treated accordingly. The fees they normally take off are not included by them on the 1099 that they send her at the end of the year. So we have just been reporting her 1099 income on line 1 of schedule C. If she did also take those fees as an expense, then it would be doubling the deduction. I suppose in theory they could hand her a check for the full amount of insurance collections, and then she would write them back a check for the fee amounts, which would require her to give them a 1099 for the fee amounts, but all that sounds quite a bit more complicated than necessary. Admiral101 posted:If the clinic is organized as a corporation, she doesn't have to file a 1099. If they aren't, and the payments are over $600, then yes she should issue them a 1099. If they are organized as a corporation (I'm honestly not sure they are, they may be a partnership), then would it be WRONG to send them a 1099, or just unnecessary? I think I would feel better about sending them a 1099 even if it isn't necessary, but I don't want to file something that would cause problems. flowinprose fucked around with this message at 22:48 on Apr 29, 2014 |
|
#
?
Apr 29, 2014 22:37
|
|
|
flowinprose posted:If they are organized as a corporation (I'm honestly not sure they are, they may be a partnership), then would it be WRONG to send them a 1099, or just unnecessary? I think I would feel better about sending them a 1099 even if it isn't necessary, but I don't want to file something that would cause problems. Did they not send a Form W-9 with their business information? The type of entity is listed on there.
|
|
#
?
Apr 29, 2014 23:31
|
|
|
|
| # ? May 9, 2024 21:37 |
|
|
ThirdPartyView posted:Did they not send a Form W-9 with their business information? The type of entity is listed on there. You're assuming companies hand those out without being asked.
|
|
#
?
Apr 29, 2014 23:34
|
|