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Sephiroth_IRA posted:I just wanted to double check something about AGI. Assuming the IRA contributions are deductible, yes. There are income limits to this, especially if one or both of you is covered by an employer sponsored retirement plan (whether you choose to participate in it or not). 401(K) contributions (non Roth) reduce your box 1 wages on your W-2, so yes they reduce AGI. In theory you can bring your AGI into range for the savers credit using retirement contributions to reduce your income, but the thresholds to qualify are so low that it is not practical for the vast majority of taxpayers ($55K for a married couple).
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Dec 10, 2014 21:41
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I lived in Michigan for half of this year and Massachusetts for the other half, but only worked and made money from MA while living in MA. Do I need to file taxes in MI? If I do, will I be paying income tax in two states?
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Dec 13, 2014 02:07
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Amara posted:I lived in Michigan for half of this year and Massachusetts for the other half, but only worked and made money from MA while living in MA. Do I need to file taxes in MI? If I do, will I be paying income tax in two states? Any income you earned while a Michigan resident is taxed by Michigan, and any income earned while a MA resident is taxed by MA. Things get complicated if you have MA or MI sourced income during the periods of non-residency, but that doesn't sound like the case for you. Each state should have a special "partial year" resident form available on your tax preparation software of choice. So if there's no MI income, no form needs to be filed. sullat fucked around with this message at 04:28 on Dec 13, 2014 |
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Dec 13, 2014 04:24
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Good afternoon, all! I have a few questions to clarify before filing so that I can try not to gently caress myself again, so here goes: 1. Can I claim my son as a dependent? - Five years old, I pay his child care expenses ($7,440 for the year,) BUT he only lives with me 45% of the time and am non-custodial parent, our divorce decree makes no mention of who can file, but does list her as custodial parent. 2. I have $5,700 in freelance income that I expect to receive 1099's for. Can I file before I receive those? 3. Is there any benefit to me filing my freelance income under my business, as opposed to just including it with my personal filing? Ive been reading this and it seems to say that the custodial parent has the right to claim. I claimed him last year & since I filed after her the IRS bounced back my return. When I called the IRS I was told that whoever claims him first gets to claim him, which seems absurd to me, but if that is the case I will file Jan 1. Article: http://www.irs.gov/publications/p504/ar02.html#en_US_2013_publink1000273723
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Dec 17, 2014 19:22
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Bojanglesworth posted:Good afternoon, all! I have a few questions to clarify before filing so that I can try not to gently caress myself again, so here goes: 1. Person on phone was wrong, custodial parent in this situation gets exemption under the tiebreaker rules. It has NOTHING to do with time of filing. You CAN have that exemption passed to you as part of the divorce agreement (I know some divorce agreements have parents swapping the exemption every other year and the like) or by having them fill out a Form 8332 to release the exemption, but minus any specific agreement from all parties involved the IRS rules will default to the rules that give it to parent with more custody time. Also note that while you pay the child care expenses, you can't claim that credit even if the other parent released the exemption to you, that one requires the custodial parent to be claiming it. Releasing the exemption doesn't necessarily make a dependent qualify for you for certain things tax-wise, that's one of them. 2. Yeah, you want to have them. Worst case you can file without them, but that requires you made a "reasonable effort" to obtain them which I'm fairly sure "didn't want to wait for the paper" won't work for  . If you're concerned you won't receive a 1099 because of problems with the person who's supposed to send them, be sure to document everything so you have the info needed.3. Think somebody with more business tax experience should weigh in here, sorry.
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Dec 17, 2014 22:32
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The way it works when two people try and claim the same dependent is that the first one to e-file goes through, and then later filers get rejected because the dependent's SSN is already used in the IRS system. Now, this has nothing to do with who is eligible for the credit, just the way that the system responds to disputes about whose dependent it is. The second filer (if they are eligible to claim the dependent) would need to paper file their taxes, claiming the dependent. A few months later, the IRS will send paperwork to both parties asking them to prove who is actually eligible for the dependent, and then demand whatever money is owed to be returned by the ineligible filer.
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Dec 17, 2014 23:52
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MadDogMike posted:2. Yeah, you want to have them. Worst case you can file without them, but that requires you made a "reasonable effort" to obtain them which I'm fairly sure "didn't want to wait for the paper" won't work for Technically, you file on what you received, NOT what the 1099 forms say. That being said.... We recommend to clients to wait until they get all the 1099 forms to double check. Why? Take this example: 1) Your customer mails you a check on 12/30. 2) You get the check in the mail on 1/2. 3) Customer looks at their records, sees they paid you, sends you a 1099. 4) You correctly leave that income off your 2014 return, since you didn't constructively receive it until 2015. Who's right? You both are. Who are the IRS computers going to flip their poo poo over? You. Their system looks at all the 1099 forms under a certain EIN/SSN, and then look to the return filed under that EIN/SSN and see if the gross income reported is at least the amount they have on 1099 forms. Waiting for the 1099 forms to arrive can assist your tax preparer to make sure they can "tweak" your return to get through the IRS computers and still calculate an accurate net income (in my firm we gross up the sales and add in an expense item to net out the funds not yet received. The IRS computers look at gross sales, not net.). We then note for next year that the 1099 forms are missing the income reported on the prior year 1099 but needs to be included in the 2015 gross income.
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Dec 18, 2014 01:25
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So I'm thinking about updating my W4 since I just had my first kid (born 12/7/14). I honestly don't remember what I put on my W4 previously as it was years ago since I submitted one (probably a bit off anyway since I always end up owing a few thousand but nothing I can't handle). I did one of those online calculators and it said I should claim 0 even while filing married with 1 kid. Could that still be correct? I'm married and my spouse and I both work and are not dependents of anyone else. We don't have any extraordinary income or investments. Its just: Me: $110k/yr Wife: $130k/yr Baby: doesn't work Should my wife and I put down 0 allowances on our W4s?
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Dec 18, 2014 14:49
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A $10k+ "Taxable Gift" just showed up on my pay stub for a sales performance trip I went on in March. The value of this trip wasn't communicated at any time until now. Did my taxable income just balloon by <$10k in 2014? What other impacts could this have?
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Dec 18, 2014 19:51
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MadDogMike posted:1. Person on phone was wrong, custodial parent in this situation gets exemption under the tiebreaker rules. It has NOTHING to do with time of filing. You CAN have that exemption passed to you as part of the divorce agreement (I know some divorce agreements have parents swapping the exemption every other year and the like) or by having them fill out a Form 8332 to release the exemption, but minus any specific agreement from all parties involved the IRS rules will default to the rules that give it to parent with more custody time. Also note that while you pay the child care expenses, you can't claim that credit even if the other parent released the exemption to you, that one requires the custodial parent to be claiming it. Releasing the exemption doesn't necessarily make a dependent qualify for you for certain things tax-wise, that's one of them. Great, that pretty much answers all of my questions. Thanks so much! sullat posted:The way it works when two people try and claim the same dependent is that the first one to e-file goes through, and then later filers get rejected because the dependent's SSN is already used in the IRS system. Now, this has nothing to do with who is eligible for the credit, just the way that the system responds to disputes about whose dependent it is. The second filer (if they are eligible to claim the dependent) would need to paper file their taxes, claiming the dependent. A few months later, the IRS will send paperwork to both parties asking them to prove who is actually eligible for the dependent, and then demand whatever money is owed to be returned by the ineligible filer. That is what happened to me. Our divorce decree does name her as the custodial parent, is that enough for her to prove who can claim him? Although she is named as custodial parents in divorce, we are actually very close to 50/50 on actual custody, literally a one day difference... but once you factor in the days that I take him when she cant, it swings it into me having him more days out of the year. I did also read something in regards to the parent with the higher adjusted gross income being favored if tiebreaker rule comes into play. I do make substantially more money than her.
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Dec 18, 2014 20:12
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I Love Topanga posted:A $10k+ "Taxable Gift" just showed up on my pay stub for a sales performance trip I went on in March. The value of this trip wasn't communicated at any time until now. Did my taxable income just balloon by <$10k in 2014? What other impacts could this have? Taxable gifts are compensation (as per Commissioner v. Duberstein), so that's increasing your gross income, which will increase AGI and can affect many different items. Bojanglesworth posted:That is what happened to me. Here are the tiebreaker rules. Horseshoe theory fucked around with this message at 04:21 on Dec 19, 2014 |
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Dec 19, 2014 04:18
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ThirdPartyView posted:Here are the tiebreaker rules. Remember that while you believe that you will qualify for the dependency exemption, if she believes that as well, you will need to prove that to the IRS. Records showing how long the child lived at your address, where the child's address of record is with the school district, doctor's office, that sort of thing. It would be much easier to contact the kid's mother and see if an arrangement can be reached, because it may be easier than dealing with the IRS. Although it may not be; I don't know your particular situation.
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Dec 19, 2014 04:33
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Shaocaholica posted:So I'm thinking about updating my W4 since I just had my first kid (born 12/7/14). I honestly don't remember what I put on my W4 previously as it was years ago since I submitted one (probably a bit off anyway since I always end up owing a few thousand but nothing I can't handle). I did one of those online calculators and it said I should claim 0 even while filing married with 1 kid. Could that still be correct? How are you not getting screwed with tax penalties already? You should both be claiming 0 and having additional income withheld to avoid paying penalties. There's a worksheet on the W4 you should fill out.
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Dec 19, 2014 15:40
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I need a bit of help regarding my tax situation. My full-time job right now pays about 60k/year. I am going to occasionally take shift work that pays at $1500/day that is going to be somewhat variable, but I expect my 2015 income to also include an additional $20k or so from the extra work. I just filled out the W-4 sheet for that job and took 1 exemption, but how do I figure out if I should be asking them to withhold additional money? I'm single, no kids.
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Dec 19, 2014 20:48
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ThirdPartyView posted:Taxable gifts are compensation (as per Commissioner v. Duberstein), so that's increasing your gross income, which will increase AGI and can affect many different items. They "grossed up" the taxes on this, so it's actually about $15k additional gross income. Can I dispute the value of this? Seems high. I hate to complain about something like this, but there it is. The only thing I have been thinking about is Roth IRA contribution limits as this will put our joint income in the 180-190k range. Is there anything else I should be keeping an eye on? I guess it's time to pay someone to prepare my taxes.
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Dec 20, 2014 00:16
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I forget if I asked this here or not, so I'll just ask again: I lived in Philadelphia until Sept 1st, then relocated to outside the city. So I no longer should have to pay Philly's 2% higher income tax. My work has yet to fix my paycheck so it stops withholding for Philly taxes, so I have been overpaying on taxes since September. I usually use turbo tax to file my taxes. Any idea if I will have any issues with it picking up this discrepancy, or is it pretty clear cut?
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Dec 21, 2014 19:25
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Duckman2008 posted:I forget if I asked this here or not, so I'll just ask again: Turbo Tax doesn't have the forms you need, iirc. You'll have to fill out the Wage Tax Refund form from the City's website by hand. It's very straightforward, but you will have to get your employer to sign that they over withheld.
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Dec 21, 2014 19:57
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Is there a dummies guide to registering a business? I have a small internet hosting service that I want to turn into a legitimate business and I think I want to register an LLC?? Is this something that I need to speak with a professional about or is it something that I can research?
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Dec 22, 2014 22:34
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I have a normal job that brings in 99.99 percent of my income. I also run a small side business that brought in 300$ this year of profit for registration fees. Do I have to claim this income on my taxes? What rate would that be taxed at?
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Dec 23, 2014 16:42
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How did you receive that income, was it cash? Will you receive a 1099? If cash, don't sweat it, however if you will be receiving a 1099 from someone, you should pick up the income on your return. The income will be taxed at whatever your marginal rate is.
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Dec 23, 2014 17:31
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You have to claim the income even if it was in cash, what the gently caress dude.
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Dec 23, 2014 18:44
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Yeah, especially in the Tax Megathread of all places. You'll pay your marginal tax rate plus SE tax on amounts over $300. It'll amount to not much money. Just do it.
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Dec 23, 2014 19:26
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SiGmA_X posted:Yeah, especially in the Tax Megathread of all places. What is SE tax? Self Employment? Again, this was 300. I figured I was supposed to claim it... As I said, 300$ came from Self employment, the rest was w2 income...
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Dec 23, 2014 19:40
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lord1234 posted:What is SE tax? Self Employment? Again, this was 300. I figured I was supposed to claim it... Also I was wrong, the floor is $400! Either that went up or my memory is fuzzy - I'm betting on the latter. I don't do taxes much. So you'll just pay your marginal tax rate and no SE tax, which saves you 15.3%. TurboTax or similar can easily help with this next month. It should be a Schedule C and no SE form, because you're under the $400 floor.
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Dec 23, 2014 20:02
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With regards to the Self Employment Health Insurance Deduction, do I deduct premiums for coverage on January 2015 that I paid in December 2014 this year or when I file for 2015? I also paid premiums for December before finding out that my coverage was being cut off at the end of November. I applied for a refund, but I likely won't get it until 2015. Should I leave the amount for December 2014 off since I didn't actually get any coverage out of it?
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Dec 24, 2014 03:44
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I have an international small business tax question. I'm an American wanting to form a software company with a South African resident. We would only be selling digital goods online. If I'm understanding tax law correctly, if I were to form an LLC in the US he would have to pay taxes in both the US and SA. Could this be avoided by forming offshore or would that be irrelevant and/or blow back on me? I'm not trying to evade, only avoid him having to pay double if possible.
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Dec 26, 2014 03:48
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Hi all. In 2012, I withdrew what was left of my 401k (after losing most of it in 2008/9). Being a dumbs, I neglected to put any of it on my 2012 taxes, so the IRS sent a letter asking for it to be repaid (of course). When I withdrew it, the holding company withheld Federal taxes, so I thought my tax obligation was fulfilled, and I explained that in my rebuttal letter to the IRS. However, if I am reading this response I received today correctly, they are saying that since I didn't report any of it, that the withheld amount doesn't count? If that is the case, wherefore art thou my $4 grand in initially withheld taxes? (See a snipped image here: http://qte.me/1Bcbxx5 ) Or am I reading this poo poo all wrong? They've offered to provide a tax lawyer if I want to go to court (I paid the $60 appeal fee a couple of months ago just in case), so - any thoughts? Post questions if you'd like, happy to answer so I can sort this out. Thanks! PS: If you're an expert in the Atlanta area and want to make a few bucks, let me know!
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Dec 27, 2014 01:53
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Did you pay the penalty associated with early withdrawal? Don't forget that, in addition to the taxes you pay on the withdrawal, you have to pay a 10% penalty on top of it since (presumably) you are under 59.5 years old. You should have a form 1099-R from your 401k plan that states what you withdrew and how much was withheld from it.
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Dec 27, 2014 03:05
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pipebomb posted:Hi all. In 2012, I withdrew what was left of my 401k (after losing most of it in 2008/9). Being a dumbs, I neglected to put any of it on my 2012 taxes, so the IRS sent a letter asking for it to be repaid (of course). I'm not a tax expert, but judging from the letter, your initially withheld $4k was refunded to you after you filed for 2012. Did you get a large refund that year? Or maybe the $4k made it so you got a refund instead of actually owing without it. Since you neglected to add in the $21k as income, when you filed your return there was no additional tax to cancel out that additional withholding, so the IRS just assumed you overpaid and refunded you the difference. But now we know that's not the case. So I hope you didn't see that giant refund for 2012 and decided to buy a boat with it.
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Dec 27, 2014 05:17
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Demon Allie posted:I have an international small business tax question. It's unlikely that your partner would bear double taxation as SA would likely grant tax credits for taxes paid in the US (this is an SA tax question, however, and should be checked with an advisor in SA). In addition, the US and SA have a double tax treaty that may apply. If your partner qualifies for benefits and does not have a permanent establishment in the US, then his business income may be exempt from tax. I would advise you both to consult a tax advisor as there are a lot of factors to consider. An offshore structure would likely not be a good choice as it could still be subject to tax in the US, or if it is a pass through would still expose your partner to US taxation.
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Dec 27, 2014 17:07
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PatMarshall posted:[..] Thanks a bunch, getting a professional response this time of the year has been tough. I'll hire a chartered accountant.
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Dec 27, 2014 20:56
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I think I may have a problem when it comes to tax season next year and I need a bit of advice/yelling about how dumb I was. I sold my condo almost three months ago to a LLC that had been wanting to buy me out. We agreed that I could continue to live in it until I found a new house to buy and have been paying rent since then. The buyout was fairly high, around $40k more than I owed so I have that money sitting in the bank. I paid some taxes on it when I received the check, but I'm pretty sure that I'll be getting hit with another round of taxes come April 15. With the payout I made a bit over $100k this year. Normally I receive a refund back on my taxes of about four thousand dollars between the state and feds, I'm pretty sure I won't be receiving a refund this year. I guess I'm just worried that I'm going to get smacked down even harder by taking the cash and not being able to roll it immediately into a down payment on a new house. So how bad do you guys think the damage will be?
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Dec 27, 2014 21:00
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diremonk posted:I think I may have a problem when it comes to tax season next year and I need a bit of advice/yelling about how dumb I was. I AM NOT A TAX EXPERT but I thought selling your primary residence has a really high tax ceiling, so you may not owe anything.
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Dec 27, 2014 21:51
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balancedbias posted:I AM NOT A TAX EXPERT but I thought selling your primary residence has a really high tax ceiling, so you may not owe anything.
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Dec 28, 2014 01:32
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I have a bit of a tax situation coming up and I'm just wondering if there's any way that I could try and mitigate it. I work as a freelancer and my income is a mixture of w2 and 1099. This is my first year receiving 1099's and I am an idiot and took someone else's interpretation of tax law At face value. I have less than 30 grand in income and at least 8 thousand of that was taxed at a New York State rate with 0 withholdings. How screwed am I going to be with penalties? And is there any way to try and minimize them?
Chef Bromden fucked around with this message at 18:38 on Dec 28, 2014 |
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Dec 28, 2014 15:19
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I just got a letter from the IRS via certified mail that says "Call immediately to prevent property loss" "Final notice of intent to levy and notice of your right to a hearing". It claims I owe ~800 from my 2011 taxes (from which I got a refund of roughly 1700). I called the number and listened to the detailed explaination and they mentioned that the last thing to happen to my 2011 taxes was an adjustment in march of 2013 of ~300. I never received any notice of this adjustment until this "final notice". How can I even find out why my taxes were adjusted two years after the fact? Do I have any right to get interest/penalties removed because I was never notified of the adjustment? How would I even go about doing this? The phone number on the sheet connected me to an automated system and any attempt to get a real person out of it got me in a queue for about 10 minutes then I would get hung up on.
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Dec 29, 2014 22:34
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Paladine_PSoT posted:I just got a letter from the IRS via certified mail that says "Call immediately to prevent property loss" "Final notice of intent to levy and notice of your right to a hearing". It claims I owe ~800 from my 2011 taxes (from which I got a refund of roughly 1700). I called the number and listened to the detailed explaination and they mentioned that the last thing to happen to my 2011 taxes was an adjustment in march of 2013 of ~300. I never received any notice of this adjustment until this "final notice". Google the number to make sure it's legit
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Dec 29, 2014 23:19
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Chef Bromden posted:I have a bit of a tax situation coming up and I'm just wondering if there's any way that I could try and mitigate it. I work as a freelancer and my income is a mixture of w2 and 1099. This is my first year receiving 1099's and I am an idiot and took someone else's interpretation of tax law At face value. I have less than 30 grand in income and at least 8 thousand of that was taxed at a New York State rate with 0 withholdings. How screwed am I going to be with penalties? And is there any way to try and minimize them? It depends on how much in taxes you paid via your W2 and what your tax liability is going to be with everything calculated. Do you have schedule C deductions you could make against your 1099? If you end up owing less than $1000, there's no penalty, but there may be if you owe more than that.
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Dec 29, 2014 23:50
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EugeneJ posted:Google the number to make sure it's legit Its legit, it shows up on irs.gov.
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Dec 30, 2014 00:02
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Paladine_PSoT posted:Do I have any right to get interest/penalties removed because I was never notified of the adjustment? *snickers* Good luck with that line.
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Dec 30, 2014 00:09
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