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AbbiTheDog
May 21, 2007

sullat posted:

Yeah, they can fix it. Do you like spending time on hold? If so, I have good news about that, too.

Only took me a week to get through for a customer. Yay.

Best shot is they are open until 7:00 PM local time. Try after 5:30.

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T. J. Eckleburg
Apr 10, 2007
sorry about the clock.

I have a bit of a weird situation arising from moving across state lines:

Home address: From Jan 1 - June 15 of this year, I will live at a NC address. I'm staying with my parents in NC for a short time, and then from July 10 - Dec 31, I will live at a WA address. I can't actually switch my home address that payroll has on file to the WA address until July 10, because our new lease doesn't start until then and I won't be there.

Work address: From Jan 1 - June 12 of this year, I will work at a NC address. On June 13 - Dec 31, my employer will consider my work location to be a WA address, but I am officially working from home.

So, when do I pay taxes to which state? Do I have to do anything in particular other than just change the home address that payroll has on file for me on July 10? Am I making this more complicated than it needs to be?

edit: in case it's not clear, there will be a period from June 13 to July 10 where I will be officially a resident of NC but working at a WA address. Not sure how this affects taxes.

T. J. Eckleburg fucked around with this message at 19:30 on Jun 9, 2015

Skinnymansbeerbelly
Apr 1, 2010
changed my mind

Skinnymansbeerbelly fucked around with this message at 19:18 on Jun 10, 2015

Damn Bananas
Jul 1, 2007

You humans bore me
Is there a tax credit for installing new energy saving windows on your home? I feel like I have heard of that before, but can't recall the specifics. I got some fancy-pants efficient ones installed this weekend and want to take note right now before I forget come tax time next year.

Edit: drat, found the info. "Be installed between January 1, 2012 and December 31, 2014." LAAAAAME.

vvvv Thanks! I will keep an eye/ear out.

Damn Bananas fucked around with this message at 18:55 on Jun 15, 2015

AbbiTheDog
May 21, 2007

drat Bananas posted:

Is there a tax credit for installing new energy saving windows on your home? I feel like I have heard of that before, but can't recall the specifics. I got some fancy-pants efficient ones installed this weekend and want to take note right now before I forget come tax time next year.

Edit: drat, found the info. "Be installed between January 1, 2012 and December 31, 2014." LAAAAAME.

Don't be too discouraged, over the past 6 years there's been tons of stuff that sunset and then are retroactively re-instated months later. Just wait until later this year and watch the news for a "tax extender bill."

Usually happens after any November elections, but since there really aren't any this year, hopefully it will happen sooner.

Pain of Mind
Jul 10, 2004
You are receiving this broadcast as a dream...We are transmitting from the year one nine... nine nine ...You are receiving this broadcast in order t
Sorry if this has been covered elsewhere in the thread, but it is fairly large and in skimming through I did not see anything. We just received a notice from the IRS stating that there were differences between our 2013 Form 1040 and reported information from other sources, and that we have a few weeks to fix or contest the differences. We just used turbo tax when filing. Every line item discrepancy is from E-Trade related to 1099-B stuff. For my return it seems all of the discrepancies are from either selling stock from ESPP, or when the company got acquired and all vested stock options I had were automatically sold. Under E-trade the reported numbers that were sent in are under the cost or sales basis column, and the number that was reported to the IRS from E-Trade is from the sales price less commissions and option premiums, which is a bigger number. I thought tax was withheld but it was 2 years ago and I cannot remember, I have no 12 V stuff on my W2.

My wife's discrepancies are a little different. She has a bunch of line items, most show 0 in the shown on the return column, but some are similar to mine in that they have an actual number that is just smaller than the E-Trade reported number. I am guessing they are either related to selling or vesting of RSUs, and maybe ESPP also. Whenever her RSUs vested she always chose to sell shares to cover tax, and she had a pretty sizable 12 V on her W2 that is about 99% of what the IRS says we shorted them on, but I do not know if the numbers are related. Her W2 box 1 income is significantly higher than her actual salary, so I am assuming at least some of that is related to the 1099-B stuff being taxed as income, but the IRS also thinking we still owe on it? I don't have the paperwork in front of me and she went to bed so right at this moment I cannot tell if the difference is exactly the same as what the IRS wants, but it is at least very close just going from memory. My W2 box 1 income is also significantly higher than my salary, but when the company I worked for got bought all unvested options were cashed out as income, so I cannot tease that out from any possible withholdings at the moment.

We did not try to conceal any earnings, even listing tiny things like double digit interest earned from low interest savings accounts etc, so we were kind of surprised by this. I cannot imagine we are the only person this has happened to, any advice or suggestions or where to start in getting this cleared up? We are in CA if that matters.

Asterios
Apr 17, 2008

So long, Skorpex!

https://www.presidentbaby.com
I filed through TurboTax too. Did you guys buy the TaxAudit.com protection? If so, I would talk to them right away. I've used them for the past two years to help with minor discrepancies and they're incredibly effective and fast.

AbbiTheDog
May 21, 2007

Asterios posted:

I filed through TurboTax too. Did you guys buy the TaxAudit.com protection? If so, I would talk to them right away. I've used them for the past two years to help with minor discrepancies and they're incredibly effective and fast.

This isn't an audit issue, it's an input issue. Stock options and RSU can be reported on 1099-B forms, EVEN IF the gain is already taxed on your W-2. You still need to list the gross amount of the sale on the Form 8949 and might need to put in a code "O" for "other adjustments to basis" to get the actual gain/loss on the Form 8949 (and, eventually, Schedule D) to be zero. The IRS computers only get the 1099-B info and lately the clearing houses have been pushing out 1099-B forms showing what the exercise price/sales price are and showing that net amount as the gain on the sale without taking into account the gain already reported and taxed on the W-2.

I'd suggest hiring someone to get you out of this mess. All it involves is sending a letter back to the IRS (do NOT file an amended return to the IRS, you might need one for CA - see below) explaining what happened, provide backup (if any) and politely inform them what you think your answer should be. They will then re-run the numbers and get back to you. In four to eight months.

NOTE: THEY ALSO SEND A COPY TO YOUR STATE. Expect the CA FTB to start chasing you down for more money as well. I don't know about CA but here in OR the state will NOT budge off the original IRS letter until you send them a corrected letter from the IRS which might take months. You might need to send CA money, even if you don't owe it, and then turn around and file an amended state return only months later when you get the IRS resolution letter.

Bottom line: get your rear end in gear on this before CA seizes your money and dings your credit score.

Asterios
Apr 17, 2008

So long, Skorpex!

https://www.presidentbaby.com

AbbiTheDog posted:

This isn't an audit issue, it's an input issue.

I'm about the farthest thing from an expert on taxes, so take this or leave it, but TaxAudit.com has helped me with like small, non-audit issues. Once, I got a bill from the IRS saying I owed them a little more money due to me filing some wrong information about my Roth IRA. Another time, CA told them I owed way more in state tax after I filed due to me putting in some information wrong. Because I bought the audit protection, they represented me in both cases and chopped the bills way down.

If you already bought the audit protection, it might be at least worth a phone call. That being said -- again -- I'm a dumb guy who barely knows how to file his taxes, so take my advice with a grain of salt.

Pain of Mind
Jul 10, 2004
You are receiving this broadcast as a dream...We are transmitting from the year one nine... nine nine ...You are receiving this broadcast in order t

AbbiTheDog posted:

This isn't an audit issue, it's an input issue. Stock options and RSU can be reported on 1099-B forms, EVEN IF the gain is already taxed on your W-2. You still need to list the gross amount of the sale on the Form 8949 and might need to put in a code "O" for "other adjustments to basis" to get the actual gain/loss on the Form 8949 (and, eventually, Schedule D) to be zero. The IRS computers only get the 1099-B info and lately the clearing houses have been pushing out 1099-B forms showing what the exercise price/sales price are and showing that net amount as the gain on the sale without taking into account the gain already reported and taxed on the W-2.

I'd suggest hiring someone to get you out of this mess. All it involves is sending a letter back to the IRS (do NOT file an amended return to the IRS, you might need one for CA - see below) explaining what happened, provide backup (if any) and politely inform them what you think your answer should be. They will then re-run the numbers and get back to you. In four to eight months.

NOTE: THEY ALSO SEND A COPY TO YOUR STATE. Expect the CA FTB to start chasing you down for more money as well. I don't know about CA but here in OR the state will NOT budge off the original IRS letter until you send them a corrected letter from the IRS which might take months. You might need to send CA money, even if you don't owe it, and then turn around and file an amended state return only months later when you get the IRS resolution letter.

Bottom line: get your rear end in gear on this before CA seizes your money and dings your credit score.

I guess tomorrow I will call some tax people to see if I can get it looked at. Most places only mention audits and tax filing preparation, I assume they could figure this out also? Any estimate of what something like this would usually cost? I cannot image we are the only people with RSUs vesting using E-Trade and TurboTax, is this an individual screw-up somewhere or do people get these all the time?

AbbiTheDog
May 21, 2007

Pain of Mind posted:

I guess tomorrow I will call some tax people to see if I can get it looked at. Most places only mention audits and tax filing preparation, I assume they could figure this out also? Any estimate of what something like this would usually cost? I cannot image we are the only people with RSUs vesting using E-Trade and TurboTax, is this an individual screw-up somewhere or do people get these all the time?

I'd call around in your area (or check with your banker/investment broker for a referral, if you have any) and make sure whomever you hire has experience with stock based compensation.

If you wandered into my office I'd probably quote $400 - $600 to fix this mess (2-3 hours) so don't be surprised, considering you're looking at immediate IRS issue, soon to be CA issue, and months later more IRS and CA issues.

damnfan
Jun 1, 2012
So I recently graduated and will be moving out of my parents home with a job in a neighboring state. I know nothing about filing taxes and was wondering if it would be complicated later on when I do my taxes for this 2015 tax year.

I will have 3 W-4 positions to report for this year:
  • Job in State A living in State A (no longer working at this position)
  • Job in State B living in State A (no longer working at this position)
  • Job in State B living in State B (working this position next month)

JohnnyPalace
Oct 23, 2001

I'm gonna eat shit out of his own lemonade stand!
Your federal taxes won't be too complicated, but your state taxes might be. It depends on what states A and B are.

And make sure you keep track of your moving expenses. If the distance between your old home and your new job is 50 miles greater than the distance from your old home to your old job, it is deductible.

DogsCantBudget
Jul 8, 2013
My FIL just got a notice from the IRS, telling him he owes them ~10k from 2010. He hasn't held a job since 2003/2004 due to a debilitating stroke and lives on Social Security. He is very fixed income. He did at one point get a ~30k inheritance when his father passed away(but not in 2010, we don't think), and also get a settlement from an accident he was in (we're not sure the year). What could he owe taxes for? Estate tax doesn't kick in till 1million, right? And settlements like that aren't taxed AFAIK? What's the deal? Who should he get in touch with?

This is very much blood from a stone, he doesn't have any money, gets ~1k a month from SSI and doesn't own a house or car. What's the deal here?

Epi Lepi
Oct 29, 2009

You can hear the voice
Telling you to Love
It's the voice of MK Ultra
And you're doing what it wants

DogsCantBudget posted:

My FIL just got a notice from the IRS, telling him he owes them ~10k from 2010. He hasn't held a job since 2003/2004 due to a debilitating stroke and lives on Social Security. He is very fixed income. He did at one point get a ~30k inheritance when his father passed away(but not in 2010, we don't think), and also get a settlement from an accident he was in (we're not sure the year). What could he owe taxes for? Estate tax doesn't kick in till 1million, right? And settlements like that aren't taxed AFAIK? What's the deal? Who should he get in touch with?

This is very much blood from a stone, he doesn't have any money, gets ~1k a month from SSI and doesn't own a house or car. What's the deal here?

The letter should indicate what the source of the tax is. If it doesn't then it's not actually the first letter he's gotten and he probably threw out the original. There should be a number on the letter to call and a case id number or something to that effect so that you can get someone to look it up. Be advised the IRS agent will give you very limited if any information if you don't have a POA or your FIL isn't in the room with you to confirm that he lets you speak for him.

sullat
Jan 9, 2012
Could be anything, yeah. If your FIL is able to, he can call and find out what it is, and if necessary, work out something, either a minimum payment plan or a currently non-collectable request. If he isn't, someone will need to get a POA from him to work it out on his behalf. Form 2848 is the IRS POA form.

AbbiTheDog
May 21, 2007

DogsCantBudget posted:

My FIL just got a notice from the IRS, telling him he owes them ~10k from 2010. He hasn't held a job since 2003/2004 due to a debilitating stroke and lives on Social Security. He is very fixed income. He did at one point get a ~30k inheritance when his father passed away(but not in 2010, we don't think), and also get a settlement from an accident he was in (we're not sure the year). What could he owe taxes for? Estate tax doesn't kick in till 1million, right? And settlements like that aren't taxed AFAIK? What's the deal? Who should he get in touch with?

This is very much blood from a stone, he doesn't have any money, gets ~1k a month from SSI and doesn't own a house or car. What's the deal here?

The inheritance was probably either an annuity/IRA (reported on form 1099-R) or, if an actual trust or estate return was filed (Form 1041), on a Form K-1.

Note there are two parts to the estate tax - the one you're referencing is the "death tax" snapshot of someone's worth on their date of death. The second part is if there are assets in the estate/trust, and those assets generate income, SOMEONE will need to pay INCOME tax on the gains, even if no ESTATE tax is due.

But yeah, you're going to need to drag someone in to help out. See the above post about getting a Form 2848 to call the IRS.

FUN NOTE: I've been experiencing recent hold times of 90-120 minutes, if they put me into the hold line at all (seems like about half the time they just tell me to call back tomorrow). Make sure you have a speaker phone and it's charged, and find something else to do to pass the time. The lines are typically open until 7 PM local time, so calling in the evening might be your best bet.

Nephzinho
Jan 25, 2008





My NJ state refund has been processing for about 9 weeks now. Online query shows it as received, but not yet approved for a refund. It says paper takes 12 weeks, electronic may be faster, and I filed electronically. NY and Federal are long since done. Should I give it a few more weeks before calling and seeing what is going on?

George H.W. Cunt
Oct 6, 2010





I just got a letter from Uncle Sam stating I owe about 2,300 from 2013 due to a settled and discharged debt with my student loan providers. At the time I had my car, clothes, and a computer and managed to save enough money to pay a lump sum of $8,000 off a $18,000 debt. How easy is it to get the insolvency exception so I don't have to pay this nonsense? I never received a 1099-C either which is pretty annoying.

Admiral101
Feb 20, 2006
RMU: Where using the internet is like living in 1995.

SaltLick posted:

I just got a letter from Uncle Sam stating I owe about 2,300 from 2013 due to a settled and discharged debt with my student loan providers. At the time I had my car, clothes, and a computer and managed to save enough money to pay a lump sum of $8,000 off a $18,000 debt. How easy is it to get the insolvency exception so I don't have to pay this nonsense? I never received a 1099-C either which is pretty annoying.

Well, uh, were you insolvent?

weas
Jul 22, 2007

Tougher than the
toughest tough guy
I'm closing on a house in about a month, and since I'm going to be suddenly paying a buttload of deductible interest, I'd like to adjust my withholding at work so I don't get a huge refund. Is there an easy way to figure out how to fill out the W-4 so I get a small refund, or is this something I need to see a tax professional about?

JohnnyPalace
Oct 23, 2001

I'm gonna eat shit out of his own lemonade stand!

weas posted:

I'm closing on a house in about a month, and since I'm going to be suddenly paying a buttload of deductible interest, I'd like to adjust my withholding at work so I don't get a huge refund. Is there an easy way to figure out how to fill out the W-4 so I get a small refund, or is this something I need to see a tax professional about?

The IRS has a tool you can use to figure it out: http://www.irs.gov/Individuals/IRS-Withholding-Calculator

weas
Jul 22, 2007

Tougher than the
toughest tough guy

Thanks, this was helpful.

Hufflepuff or bust!
Jan 28, 2005

I should have known better.
Do any goons do expat taxes? Just moved to Abu Dhabi, and need a quick (I think?) consult to figure out my withholding for a partial-year Foreign Income Exclusion and Foreign Housing Exclusion.

Edit: thanks to scribe jones who was quick on the PMs. Thanks tax goons for the invaluable service you provide!

Hufflepuff or bust! fucked around with this message at 20:58 on Jul 6, 2015

Boot and Rally
Apr 21, 2006

8===D
Nap Ghost
I received relocation assistance from my prior landlord because they evicted me (no-fault, they wanted to tear the building down) and my building was rent controlled. Is this money taxable? What forms should I read?

My feeling is that because pub 525 and 17 don't talk about it there is no specific exemption and is therefore taxable, but I'd like to be sure.

Swingline
Jul 20, 2008
I have an HSA question. My employer offers a health plan that meets the deductible and out of pocket max thresholds to qualify as a HDHP, with the exception that they all also include a full purpose FSA. Could I sign up for the plan, but opt out of the FSA in order to qualify as having a HDHP and therefore make HSA contributions? Or does even having the option of a full purpose FSA disqualify the plan?

SiGmA_X
May 3, 2004
SiGmA_X

Swingline posted:

I have an HSA question. My employer offers a health plan that meets the deductible and out of pocket max thresholds to qualify as a HDHP, with the exception that they all also include a full purpose FSA. Could I sign up for the plan, but opt out of the FSA in order to qualify as having a HDHP and therefore make HSA contributions? Or does even having the option of a full purpose FSA disqualify the plan?

You can definitely setup an HSA elsewhere as long as you meet HDHP requirements.

Blinky2099
May 27, 2007

by Jeffrey of YOSPOS
I originally planned to work ~8 months. I raised my federal allowances for ~4 of my pay periods by a lot to help adjust for the fact that it was withholding taxes based on me making $70k (1yr) instead of ~$48k (8 months). Now, I've extended my internship through the end of the year and lowered my allowances back down to 1.

The federal withholding calculator says:

quote:

Based on your responses, your anticipated income tax for 2015 is $11,700. If you do not change your current withholding arrangement, you will have $10,207 withheld for 2015 leaving $1,493 due when you file your return. To meet your anticipated tax of $11,700 change your current withholding arrangement by claiming 0 allowances plus an additional amount of $1,438 for the balance of 2015
and http://www.irs.gov/taxtopics/tc306.html says this:

quote:

If you did not pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and estimated tax payments
I feel like I've been pretty accurate in the calculator... single, will file as a dependent, standard $6300 deduction. The only thing I'm missing is a potential 1 semester of school tuition which might make me eligible for some tax credit. I believe last year they gave me $1500 back but that was for 2 semesters.

It sounds like I should really claim 0 allowances for the remainder of the year + add in the additional withholding to avoid any potential fees for owing over $1k, but I just want to make sure since I'd much rather have more of this money pumping into my 401k rather than receiving a less-useful refund check at the end of the year. Thoughts?

C-Euro
Mar 20, 2010

:science:
Soiled Meat
I got my first paycheck from my new job yesterday and need some help figuring out where all my money went. I live in Philadelphia PA but work in NJ, where my weekly income is $1057.70. I was pretty bummed, then, to see that my paycheck was for only $710. I have two allowances on my W-4 (Not a dependent of anyone, single with one job) and also had them withhold an extra $50/week on each paycheck because I wasn't sure what the tax rate would, but even if I get rid of that withholding I'm still losing 30% of my paycheck to taxes each week. Does that sound normal for my living arrangement?

Series DD Funding
Nov 25, 2014

by exmarx
What does the paystub say? It should show where the money is going.

asur
Dec 28, 2012

C-Euro posted:

I got my first paycheck from my new job yesterday and need some help figuring out where all my money went. I live in Philadelphia PA but work in NJ, where my weekly income is $1057.70. I was pretty bummed, then, to see that my paycheck was for only $710. I have two allowances on my W-4 (Not a dependent of anyone, single with one job) and also had them withhold an extra $50/week on each paycheck because I wasn't sure what the tax rate would, but even if I get rid of that withholding I'm still losing 30% of my paycheck to taxes each week. Does that sound normal for my living arrangement?

Why would you have them withhold extra with no actual basis for doing so? :argh: Read your paystub and do some quick research. You should be paying FICA, 6.2% and 1.45%, PA state income tax, 3%, Philly city tax, 4%, and federal income tax, I estimate about 10% or $6k if you worked a full year at $55k with minimal deductions using an internet calculator but you should do this calculation yourself. The 10% is going to be high if you didn't have another job this year but is a baseline.

You don't mention if you held a job previous to this one, but using the IRS calculator I get 6 allowances, with $2k taxes paid over the year, if you've held no other job this year and have an estimated gross of $26,442 from July to the end of the year with no extra deductions or income. Another random calculator gives a me a somewhat lower number, but seems to verify. Just as a note, if this assumption is correct then your tax burden this year will be lower than next year due to how tax brackets work and you'll need to adjust your withholding at the start of next year.

asur fucked around with this message at 20:55 on Jul 11, 2015

C-Euro
Mar 20, 2010

:science:
Soiled Meat

asur posted:

Why would you have them withhold extra with no actual basis for doing so? :argh: Read your paystub and do some quick research. You should be paying FICA, 6.2% and 1.45%, PA state income tax, 3%, Philly city tax, 4%, and federal income tax, I estimate about 10% or $6k if you worked a full year at $55k with minimal deductions using an internet calculator but you should do this calculation yourself. The 10% is going to be high if you didn't have another job this year but is a baseline.

You don't mention if you held a job previous to this one, but using the IRS calculator I get 6 allowances, with $2k taxes paid over the year, if you've held no other job this year and have an estimated gross of $26,442 from July to the end of the year with no extra deductions or income. Another random calculator gives a me a somewhat lower number, but seems to verify. Just as a note, if this assumption is correct then your tax burden this year will be lower than next year due to how tax brackets work and you'll need to adjust your withholding at the start of next year.

Yeah it has a breakdown on my paystub, I guess I should have posted that first-
Federal Income Tax -$184.02 (I'm guessing this is where my $50/week is)
Soc Sec Tax -$65.58
Medicare Tax -$15.34
PA State Income Tax -$32.47
Philly Income Tax -$41.36
NJ SUI/SDI Tax -$5.45
NJ Disability -$2.64

Also this isn't my first job for this year, last one was in IL where I thought the tax rate was pretty high, but I was living out in the middle of nowhere instead of a big city like now.

asur
Dec 28, 2012
I'd refill out the IRS withhold calculator with the information from your last job and the current job and use that number. If that's what you did then you can probably remove the extra $50 and you'll probably get a small refund at the end of the year. Everything else looks correct, you're probably paying around 4% more than in IL due primarily to the Philly city tax.

C-Euro
Mar 20, 2010

:science:
Soiled Meat
Thank, I'll work on that tonight. It just sucks that at my last job, when I left I was making $19/hr (non-exempt), and with a few hours of overtime each week I was bringing home what I'm making now (in an exempt position, granted). I was so excited for the salary bump I was getting but I'm not even taking home much more than I was in my lovely entry-level job :( Oh well.

Swingline
Jul 20, 2008

SiGmA_X posted:

You can definitely setup an HSA elsewhere as long as you meet HDHP requirements.

Thanks. I understand that I can set up an HSA independently from my employer. My question is whether a hypothetical plan that meets the deductible and out of pocket max thresholds for an HDHP, but offers a full purpose FSA that I opt out of would still qualify as an HDHP, since full purpose FSAs disqualify plans from being HDHPs.

MadDogMike
Apr 9, 2008

Cute but fanged

Blinky2099 posted:

I originally planned to work ~8 months. I raised my federal allowances for ~4 of my pay periods by a lot to help adjust for the fact that it was withholding taxes based on me making $70k (1yr) instead of ~$48k (8 months). Now, I've extended my internship through the end of the year and lowered my allowances back down to 1.

The federal withholding calculator says:
and http://www.irs.gov/taxtopics/tc306.html says this:
I feel like I've been pretty accurate in the calculator... single, will file as a dependent, standard $6300 deduction. The only thing I'm missing is a potential 1 semester of school tuition which might make me eligible for some tax credit. I believe last year they gave me $1500 back but that was for 2 semesters.

It sounds like I should really claim 0 allowances for the remainder of the year + add in the additional withholding to avoid any potential fees for owing over $1k, but I just want to make sure since I'd much rather have more of this money pumping into my 401k rather than receiving a less-useful refund check at the end of the year. Thoughts?

OK, important thing for the penalty for underpayment of taxes is it only kicks in if you did not withhold 90% of this year's tax, OR 100% of last year's tax. It's done that way to avoid punishing you for unexpected windfalls that aren't withheld correctly I expect. The "more than $1000" bit kicks in if neither of those are true. For example, if you withheld $700 but had $1500 in taxes, you pay no penalty because the difference is still less than $1000. If you only withheld $400, but the amount you owed in taxes the year was $400 or less, you still have no penalty because the amount you withheld would have covered all of last year's taxes; your planning was way off from the actual result, but you planned well enough to match the only solid number you had (i.e. last year's taxes).

In your case it appears you're getting a warning because it's saying you've withheld only $10,207 which less than 90% of $11,700 ($10,530). So, couple possibilities. If $10,207 in withholding would have covered your taxes last year, boom no penalty, you're fine. If not, you can play with your withholding to ensure you withhold at least $10,530; I'd aim for more if possible simply because withholding is designed to have extra cushion and you don't want to get screwed up if you suddenly receive extra cash from an inheritance or gambling or something. Or, if you don't want to play with withholding you can just pay the IRS the extra $323 by the end of the year in a lump sum payment. Or finally, you can take the penalty; it's about 2% of the amount underpaid as I recall (minus a certain amount for however many days you pay before April 15th, it's kind of screwy and the sort of thing I'm glad to have software handle normally), which comes to a pretty piddly relative amount unless you're off by thousands, and you can even ask the IRS to do the actual math and send you the bill later at no additional penalty. For further info look up the instructions on IRS Form 2210. The educational credit does affect the numbers also, but without sitting down with the actual paperwork and asking you a couple questions I can't really make a guess as to how much of one, so I'm not taking it into account here; that might get you into the 90% zone on its own but probably not with just 1 semester's worth of bills.

P.S. Hopefully it's obvious but this only applies to additional penalty for under-withholding. You do still have to pay whatever amount you owe before 4/15, they just won't tack on any additional charges for not paying enough in advance is all. Make sure you do have enough of a cash reserve to cover anything, and might be best to do taxes early so you know the damage if you need to save up for a month or two.

Blinky2099
May 27, 2007

by Jeffrey of YOSPOS
Thanks, that was very helpful. I owed significantly less in taxes last year, so it sounds like I'll be fine. I'll budget for the money I'll owe but not bother with additional withholdings.

MadDogMike
Apr 9, 2008

Cute but fanged

Blinky2099 posted:

Thanks, that was very helpful. I owed significantly less in taxes last year, so it sounds like I'll be fine. I'll budget for the money I'll owe but not bother with additional withholdings.

Glad I could help! Just remember it's a moving target each year so when you file in 2017 you'll need either $11,700 in withholding or 90% of that year's taxes. Hopefully you won't have to worry about going from 8 months income to a full year that time ;).

Blinky2099
May 27, 2007

by Jeffrey of YOSPOS

MadDogMike posted:

Hopefully you won't have to worry about going from 8 months income to a full year that time ;).
That's the plan! :ohdear: :f5:

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Mad Wack
Mar 27, 2008

"The faster you use your cooldowns, the faster you can use them again"
Hi Thread,
I received a CP-2000 notice for a tax mistake I made in 2013 and already paid for in full through an IRS payment plan. I think something got screwed up on the IRS side of the equation because they are asking for the entire amount in full, again. Is there a tax professional in NJ I can come see for advice? Any recommendations?

EDIT: Or who knows, maybe there were two mistakes on that form??

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