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Right, and the employee contribution is $18k of that $53k right? So that would be $35k each for the employer contribution, meaning I would need to make around $350k total (it's like 20% earnings once you take the tax into account I believe) to be able to max out both 401ks completely. I actually do have an S-corp that is separate from my self employment income, but I wouldn't be able to contribute to another 401k through that, would I? Or would I be able to make employer contributions through the S-corp as well even if I've already maxed out my $53k limit through the self employment earnings? We had a big windfall this year so I'm trying to stuff money into tax advantaged places wherever I can. edit: after doing some research I think that $53k cap is a hard cap across all employers, so that wouldn't work. Correct me if I'm wrong! moana fucked around with this message at 19:32 on Aug 25, 2015 |
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Aug 25, 2015 19:28
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We need a taxgoon. I found this which adds to my confusion  quote:Example 1: Greg, 46, is employed by an employer with a 401(k) plan and he also works as an independent contractor for an unrelated business. Greg sets up a solo 401(k) plan for his independent contracting business. Greg contributes the maximum amount to his employer’s 401(k) plan for 2014, $17,500. Greg would also like to contribute the maximum amount to his solo 401(k) plan. He is not able to make further elective deferrals to his solo 401(k) plan because he has already contributed his personal maximum, $17,500. He has enough earned income from his business to contribute the overall maximum for the year, $52,000. Greg can make a nonelective contribution of $52,000 to his solo 401(k) plan. This limit is not reduced by the elective deferrals under his employer’s plan because the limit on annual additions applies to each plan separately.
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Aug 25, 2015 19:39
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Oh, interesting. So if I set up another 401k through my S-corp and do the employee contribution of 18k there, I could do the full 53k from the self-employment "employer" side? I will talk with my tax guy to confirm but I dunno if we'll hit that max anyway by the end of the year.
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Aug 25, 2015 23:10
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I'm not sure. That just feels wrong to me, but from the little bit I read today it may be correct. I'm going to read the IRS Crap more this evening and see if I can figure it out!
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Aug 26, 2015 00:01
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SiGmA_X posted:I'm not sure. That just feels wrong to me, but from the little bit I read today it may be correct. I'm going to read the IRS Crap more this evening and see if I can figure it out! Or you could, you know, pay a professional to assist you as opposed to trying to get free answers on the internet from random strangers. Penny wise and pound foolish.
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Aug 26, 2015 17:17
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AbbiTheDog posted:Or you could, you know, pay a professional to assist you as opposed to trying to get free answers on the internet from random strangers. Want to weigh in?
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Aug 26, 2015 17:49
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I like to be prepared as possible since my CPA charges $250/hr to ask him questions, is all. When I get a confirmation one way or another I'll post back here!
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Aug 26, 2015 23:03
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SiGmA_X posted:I agree. And if memory serves, Moana has a tax professional. You can't fault someone for doing some research on their own though, and I definitely disclosed that we need an expert. No you can't fault someone. However, as a tax professional myself, I'm well aware of the liability I incur on the internet (even to random strangers) handing out tax advice that might very well be wrong. I'm not willing to risk the liability to give a very technical answer to someone without seeing all of the details and knowing all the facts. Random bits of simple advice? No problem, which is why you see the other tax pros also pitching in for some of the simple questions. Something that has the potential of getting me sued years down the road for something I didn't even get paid for? No thanks.
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Aug 26, 2015 23:50
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I'm gonna sue you for a milion dollars Abbi!!! The litigation environment around anything financial sucks rear end, I wish I could give better financial advice to my friends who ask me questions =/
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Aug 27, 2015 00:12
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moana posted:I'm gonna sue you for a milion dollars Abbi!!! And we tax preparers/CPAs don't get attorney/client privileges either, everything we're told is subject to subpoena powers. I've terminated clients because they've told me too much.
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Aug 27, 2015 17:58
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My grandmother recently passed away. My mother is dealing with the issues of her estate. She is trying to figure out how to take her annuity payments (lump sum or annual payments). She was talking about how this would increase her to a higher tax bracket. I thought annuity payments would fall under the estate tax with its $5 million exemption. Does it is not?
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Aug 29, 2015 00:52
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When I inherited an annuity, I had to pay taxes on it as income when I did annual payments. I think it depends on how it was set up initially. edit: make sure she understands that being "in a higher tax bracket" doesn't mean she'll have to pay a dime more of taxes on her previous income, that's not how tax brackets work.
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Aug 29, 2015 00:59
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She knows that (because I told her). I was just confused because I assumed that an annuity would fall under the estate instead of income.
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Aug 29, 2015 01:05
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http://www.irs.com/articles/what-is-taxable-income-2 Interest earned on the money while it sits and before she gets it is taxable income. savesthedayrocks fucked around with this message at 02:13 on Aug 29, 2015 |
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Aug 29, 2015 01:52
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Bizarro Kanyon posted:I thought annuity payments would fall under the estate tax with its $5 million exemption. Does it is not? The estate tax and income tax are two different things - the estate tax is a transfer tax whereas income tax is tax on the income. Annuity payments and other retirement funds (other than Roths) are subject to both the estate and income tax as they're Income in Respect of a Decedent (IRD), but there is an itemized deduction (not subject to an AGI percentage floor) for estate taxes paid on that income to mitigate double taxation consequences (at least on the Federal level).
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Aug 29, 2015 17:44
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AbbiTheDog posted:And we tax preparers/CPAs don't get attorney/client privileges either, everything we're told is subject to subpoena powers. I've terminated clients because they've told me too much. Well occasionally I've worked under a Kovel letter, but that usually means things have become fairly hosed up (file your FBARs and pay US taxes kids).
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Aug 29, 2015 22:15
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PatMarshall posted:Well occasionally I've worked under a Kovel letter, but that usually means things have become fairly hosed up (file your FBARs and pay US taxes kids). I think you mean pretty  ...  Who doesn't love being tried by the DOJ and/or state governments?
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Aug 29, 2015 23:01
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ThirdPartyView posted:I think you mean pretty I like to sleep soundly at night, I don't want to hassle over your offshore accounts or tax schemes.
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Aug 31, 2015 19:27
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Alright, I have a question about per diem. I'm a contractor, and part of my contract had 50% of my income declared as per-diem for the first 40 hours per week. As I have been on this contract for more than a year, my per diem has expired. It used to be that contract houses would put you through a "lay-off" at the end of the year and re-hire you, or you could get a letter from the client saying your position has changed and they're giving you a new contract, thereby getting around the 52 week limit on per diem. Some contract houses still do this, but many have quit. My understanding is that the ones that have quit were caught doing the per diem reset inappropriately, and some were actually still "paying" per diem, but keeping it for themselves without notifying the employee. While I was trying to find information on a different shady situation with my contract house, someone told me that even though I am no longer getting paid my per diem split, I could declare it on my taxes anyway as long as I filled out the proper paperwork, and that the whole thing with getting paid per diem through the contract company was simply a matter of convenience of having them do the paperwork. So the question is, is this true? And if so, what do I need to do? Also, during the year they were claiming per diem for me it was only up to 800 a week, whereas the published rates are 1036/week for my area. Can I also go back and claim that difference as an adjustment to last year's taxes?
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Sep 1, 2015 20:11
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AbbiTheDog posted:I like to sleep soundly at night, I don't want to hassle over your offshore accounts or tax schemes. I've read that the classic "Use a nonprofit as a piggy bank until the IRS/DOJ catches your rear end evading taxes" scheme perpetrated by guys like Jim Bakker is back in vogue.
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Sep 2, 2015 02:18
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ThirdPartyView posted:I've read that the classic "Use a nonprofit as a piggy bank until the IRS/DOJ catches your rear end evading taxes" scheme perpetrated by guys like Jim Bakker is back in vogue. I ran into this years ago on a potential client. Dentist who had a schedule C. He had maxed out his retirement deferrals, so he and his prior CPA concocted a scheme where he setup a 501(c)(3), "donated" around $20k a year or so and deducted it on his taxes as charity, and sent in a postcard for the 990 since the donations were so low. The nonprofit did zero nonprofit activities and he was the only one on the board. I politely declined.
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Sep 2, 2015 16:33
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ApathyGifted posted:Alright, I have a question about per diem. Ugh. This kind of stuff just gets messy in a hurry.
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Sep 2, 2015 18:46
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AbbiTheDog posted:Ugh. This kind of stuff just gets messy in a hurry. Legal messy or paperwork messy? My main concern is if someone told me some shady poo poo, I want to do some cursory verification before I go and claim that gigantic deduction. Or I could just pay someone who does this as their career and not worry.
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Sep 3, 2015 02:54
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ApathyGifted posted:Legal messy or paperwork messy? My main concern is if someone told me some shady poo poo, I want to do some cursory verification before I go and claim that gigantic deduction. Or I could just pay someone who does this as their career and not worry. Well, as a professional, here's what I see: You've got vague tax practices going on for a reason that seems to be "it's the way it's always been done." You have them monkeying around with contracts to get around the letter, but not intent, of the law. You've got an industry that messes with the per diem (keeping it in some cases). You're involved in a "different shady situation" at work in addition to this issue. At a certain point if you've got a potential client calling me with this fact pattern, it's going to be rather expensive for a tax professional to fix, and the legal fix we might recommend might be painful to you in losing a "tax break" or making you pay more income taxes to do it the legal way, at which point a lot of people tend to shoot the messengers, and there's nothing like a pissed off client that owes you money and refuses to pay because they didn't like what they hear. If I had to chose between working on your account, or taking on a new client that doesn't have any of these messy issues, I'm taking client B.
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Sep 3, 2015 17:19
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AbbiTheDog posted:Well, as a professional, here's what I see: There's no way I end up owing more money seeing as I don't get per diem anymore and my W-4 is single with no allowances (not even a standard deduction). I'm just asking around if there's anything better than "hosed." Apparently the answer is no.
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Sep 3, 2015 23:26
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ApathyGifted posted:There's no way I end up owing more money seeing as I don't get per diem anymore and my W-4 is single with no allowances (not even a standard deduction). I'm just asking around if there's anything better than "hosed." Apparently the answer is no. It is no. Expect if you hire a professional to be charged a decent sum to get an answer you probably will not want to hear. If anything, try to avoid the dude working out from his garage with a pirated copy of turbo tax.
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Sep 4, 2015 17:22
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AbbiTheDog posted:If anything, try to avoid the dude working out from his garage with a pirated copy of turbo tax. Haven't met that kind of guy yet, my question was based on some idle contractor-to-contractor chat during a smoke break. Was just checking up on the idea before I went and hired a professional specifically to make sure I didn't spend more money to save nothing.
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Sep 5, 2015 00:40
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Just got a letter from NYS, they want to challenge a tuition credit on my 2012 return. My income as a student was $923 for 2012. I claimed $1312 of tuition which meant my AGI was -$389. I paid $8 in taxes. This $1312 generated a $221 credit on my tax return .. so I got a $229 refund. But I realized now looking back that I actually paid the bill in 2013, even though it was charged in 2012 (it went to collections actually before I finally sucked it up on a credit card).. so I guess technically while I was charged that tuition in 2012, I paid it in 2013. Do I need to basically tell them to disallow my claim on 2012 and subsequently amend my 2013? Is it even worth fighting over $200 bucks?
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Sep 10, 2015 23:37
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Does claiming unclaimed property count as taxable income?
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Sep 11, 2015 04:42
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Turkeybone posted:Just got a letter from NYS, they want to challenge a tuition credit on my 2012 return. Those 1098 forms for tuition suck, the colleges push those out based on billings but most taxpayers are cash basis. You'd need to read the NY credit rules, but most of the time it's in the year PAID.
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Sep 11, 2015 20:27
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I have a pretty basic question that I'm having trouble finding the answer to. My sister never filed her 2012 taxes, so I'm helping her with them. In 2013 she married and changed her name. On the 2012 1040ez, should she use her name as it was in 2012, which will match the W-2 and 1099 from that year, or her current name, which she used on her 2014 return? I keep finding all kinds of info on how to change your name with the IRS, but nothing regarding what name to use when filing an older return from a period before a name change took place. Has anyone run into this before?
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Sep 26, 2015 16:02
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I've got an HSA question. A benefits provider says a plan is not HSA compliant but will not give any details as to why it's not compliant. It seems to be entirely compliant as an individual plan, with an individual deductible of $1500 and an OOP maximum of $5000. What could be missing here, or is the benefits provider just being a piece of poo poo? They also said "it may be IRS compliant, but it may be otherwise invalid for an HSA", what the gently caress? There's no FSA or any other spending account associated with the plan, but there are, somewhat unusually, direct copays before deductibles are met.
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Sep 27, 2015 05:03
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JohnnyPalace posted:I have a pretty basic question that I'm having trouble finding the answer to. My sister never filed her 2012 taxes, so I'm helping her with them. In 2013 she married and changed her name. On the 2012 1040ez, should she use her name as it was in 2012, which will match the W-2 and 1099 from that year, or her current name, which she used on her 2014 return? Since none of the tax pros answered you yet, if I were you I would use her maiden name for 2012. That is what it was in 2012, that i what the IRS should have on file for that year, and I would think using a different name would only screw things up. baquerd posted:I've got an HSA question. A benefits provider says a plan is not HSA compliant but will not give any details as to why it's not compliant. It seems to be entirely compliant as an individual plan, with an individual deductible of $1500 and an OOP maximum of $5000. What could be missing here, or is the benefits provider just being a piece of poo poo? They also said "it may be IRS compliant, but it may be otherwise invalid for an HSA", what the gently caress? I am not sure what you mean by "direct copays", but I know that for my high deductible plan the concept of a copay basically doesn't exist - I pay the first $5,000 of medical expenses (except for some specific things like an annual physical as per Obamacare/health insurance) and then insurance pays the rest (after they claim that no one is in their network for 6 months first of course). See here: http://www.hsabenefitsconsulting.com/faqs/ :: 2) In general, no co-pays. There are no co-pays prior to deductible except for possibly preventive care. A few insurance carriers’ HSA plans require co-pays after the deductible and/or the coinsurance is met. Typically co-pays never apply to the deductible or coinsurance.
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Sep 27, 2015 15:51
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If some friends or family help me out for free with some business stuff, and then I buy them gifts as thanks, is the cost of the gifts deductible as a business expense?
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Sep 27, 2015 16:03
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Re: direct copays, are you saying you actually pay a copay before the deductible is met, instead of the traditional "pay the whole bill until deductible met" fashion?
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Sep 27, 2015 16:14
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NancyPants posted:Re: direct copays, are you saying you actually pay a copay before the deductible is met, instead of the traditional "pay the whole bill until deductible met" fashion? Yeah, they phrase it as being covered "100% after $30 copay" for some items like physical therapy. Other items are standard "80% after deductible" stuff I see on an usual HDHP. Does anyone have a link to the extensive regulations for what constitutes an HDHP? This link is pretty vague and seems like the plan I'm looking at would be just fine: http://www.irs.gov/publications/p969/ar02.html#en_US_2014_publink1000204030
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Sep 27, 2015 16:33
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JohnnyPalace posted:I have a pretty basic question that I'm having trouble finding the answer to. My sister never filed her 2012 taxes, so I'm helping her with them. In 2013 she married and changed her name. On the 2012 1040ez, should she use her name as it was in 2012, which will match the W-2 and 1099 from that year, or her current name, which she used on her 2014 return? If you are filing electronically, the tax software will send the info to the IRS, which will make sure the name and SSN match their records, and reject it if it doesn't match. She will get an email to that effect. If one doesn't work, try the other. If you are filing on paper, some dead eyed filing clerk will pull out the cuneiform tablet with your sister's details on it, make sure it matches their records, and then sacrifice a lamb to Lugal Enlil, the god of tax collection, to ensure that he does not release the black hounds of the CP 2000 on her house. Also, she will have to wait another 3 months for her refund. So try filing electronically under the old name first.
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Sep 27, 2015 18:13
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Triglav posted:Does claiming unclaimed property count as taxable income? Yes, assuming you didn't already report the associated income in a prior year.
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Sep 27, 2015 19:24
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baquerd posted:Yeah, they phrase it as being covered "100% after $30 copay" for some items like physical therapy. Other items are standard "80% after deductible" stuff I see on an usual HDHP. That link makes it pretty clear that only a narrow amount of things with a low deductible are allowed, everything else must fall under a given deductible.
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Sep 29, 2015 23:26
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I took a lump sum buyout of my pension and planned to roll it over to a traditional IRA. However, there was a screwup either on my part or the company doing the rollover, and they sent the money to my checking account with 20% taken out in taxes instead. If I still put the money into a traditional IRA, what is the process for reclaiming the 20% in taxes?
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Sep 30, 2015 14:19
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