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Heth posted: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? Usually what you have to do is you need to come up with that 20% from somewhere else to include with your rollover contribution, otherwise it will be treated as an early withdrawal. When it comes time to file your taxes in 2016, you'll report the full amount as rolled over and the 20% withheld will be included in your refund calculation.
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Sep 30, 2015 17:03
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sleepy gary posted: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? Look at this from the IRS' perspective: 1) Employees work for free, AND the employees are related 2) Business "pays" the employees with gifts, takes deduction for gifts, issues no W-2/1099 to the employees Think about that for a second and ask the question again. (And to answer your question, no, unless you put the value of the gifts on a 1099/W-2 and charge the appropriate taxes)
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Sep 30, 2015 20:23
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AbbiTheDog posted:Look at this from the IRS' perspective: I had not considered that at all, so thank you for that perspective. It appears that 1099s are only required for $600 and up annually (including "prizes" which I guess is the applicable category here) and the gifts I am sending are well below that amount, so maybe it is still valid and legal to take the deduction? I mean, in this case the deduction would be tiny but I am asking as much to learn tax law as it pertains to my slowly growing business as I am to save on taxes. I'll probably have a real 1099 situation soon, hopefully.
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Oct 1, 2015 11:50
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I've been helping out a friend of mine finish a house she's selling. She wants to pay me. How do I report this income? Do I have to get her to supply me with a W-2 or whatever? I've never worked for an individual and don't know how it works, tax-wise.
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Oct 1, 2015 16:32
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sleepy gary posted:I had not considered that at all, so thank you for that perspective. It appears that 1099s are only required for $600 and up annually (including "prizes" which I guess is the applicable category here) and the gifts I am sending are well below that amount, so maybe it is still valid and legal to take the deduction? I mean, in this case the deduction would be tiny but I am asking as much to learn tax law as it pertains to my slowly growing business as I am to save on taxes. "Prizes" is for wheel of fortune, not for what you're doing. And technically the IRS disallows gifts valued over $25 annually. If your family is working for free, frankly I'd just let it go, man. Pigs get fat, hogs get slaughtered.
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Oct 1, 2015 17:41
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AbbiTheDog posted:"Prizes" is for wheel of fortune, not for what you're doing. And technically the IRS disallows gifts valued over $25 annually. Yeah, fine by me. Much appreciated.
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Oct 1, 2015 18:31
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Droo posted:Since none of the tax pros answered you yet, if I were you I would use her maiden name for 2012. That is what it was in 2012, that i what the IRS should have on file for that year, and I would think using a different name would only screw things up. IRS to my knowledge goes off the Social Security database for IDing folks, so if she changed her name there definitely go with that one. Worst case as was mentioned you'd just get a bounce for "name and SSN don't match" on electronic filing so just resubmit under the other name if so. Do match whatever is written on any forms like the W-2 when entering that info, the IRS does not update things from those in their database. So long as the general return info has the current name and address it won't matter what gets entered for info on those types of forms, just so the SSN matches still.
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Oct 2, 2015 16:17
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I have a pretty specific question. I am starting work as a tutor, and I am an independent contractor for a tutoring company. It's in NYC, so I use the subway to get to clients. I'd like to deduct my transportation costs. But, like anyone who needs to go places in NYC, I have an unlimited metrocard ($Now, anyone who uses the subway more than a little gets an unlimited ride card, which costs $116.50. Is there a way to reasonably claim a portion of this cost?
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Oct 2, 2015 23:29
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ma i married a tuna posted:I have a pretty specific question. I am starting work as a tutor, and I am an independent contractor for a tutoring company. It's in NYC, so I use the subway to get to clients. I'd like to deduct my transportation costs. But, like anyone who needs to go places in NYC, I have an unlimited metrocard ($Now, anyone who uses the subway more than a little gets an unlimited ride card, which costs $116.50. Is there a way to reasonably claim a portion of this cost? Just figure out how many times you use your card and how many times those uses are work related and take that percentage of the cost. Keep a calendar for back up. It's up to you whether that's too much effort to be worth it or not.
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Oct 3, 2015 05:02
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I've got a question I'm hoping someone here can help with. A friend of mine (US Citizen) moved to Europe 5 years ago, and is now a dual citizen as of this summer. She just discovered that she was supposed to file taxes for income here even though she hasn't worked in the US at all during this time. She's freaking out a bit and isn't sure where to turn to sort this out and what kind of trouble she's in. I'm trying to get her to deal with it ASAP because whatever fine or whatnot isn't gonna shrink by putting it off. I did find something about a foreign income tax exemption up to ~$100'000 but I don't know if she can retroactively claim that since she hasn't filed the paperwork. Googling gives me a lot of results but some of them seem shady and I'm not really sure which info to trust. Does anyone know who to contact about this? Should she just go to the IRS directly or use a service to help her out? Thanks in advance!
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Oct 5, 2015 20:23
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Yeah, she has to file, but the exclusion you're thinking of will probably mean she owes nothing (look up Form 2555 for the full details on that). If you don't owe anything there are no penalties per se, people have filed years later with me. If you're comfortable with the forms you can just write it up for each year and mail it in to the IRS, otherwise a tax preparer office can certainly do it (I know someone doing it for one poor soul catching up on about ten years), though it will probably cost a fair bit as it's (relatively) complex as tax forms go. Basic online prep stuff like TurboTax doesn't come with prior year prep ability though IIRC, at least not without paying extra.
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Oct 5, 2015 22:09
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MadDogMike posted:Yeah, she has to file, but the exclusion you're thinking of will probably mean she owes nothing (look up Form 2555 for the full details on that). If you don't owe anything there are no penalties per se, people have filed years later with me. If you're comfortable with the forms you can just write it up for each year and mail it in to the IRS, otherwise a tax preparer office can certainly do it (I know someone doing it for one poor soul catching up on about ten years), though it will probably cost a fair bit as it's (relatively) complex as tax forms go. Basic online prep stuff like TurboTax doesn't come with prior year prep ability though IIRC, at least not without paying extra. If you don't mind wading through it, all the tax forms (and instructions) are online in PDF format. Just google, print, fill out, and mail. As MadDogMike stated, start with 2555 and the 1040.
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Oct 6, 2015 20:08
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This is all true, but watch out for a few areas with nasty penalties, such as undeclared foreign bank accounts with balances over $10k or ownership of foreign entities or other foreign assets. An accounting firm should be able to help, but if you are comfortable reading the instructions and filing out the forms (assuming no complications) that should be fine. Let us know if you have any general questions about the forms.
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Oct 7, 2015 02:36
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Thank you so much guys! I've never been this happy about having my SA account. The first searches I did turned up articles saying people are actually renouncing their US citizenships because filing abroad is so bad. So these replies have relieved a lot of stress. From what I've been able to see it shouldn't be too complicated for a student with barely any money so hopefully we'll manage without hiring anyone.
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Oct 7, 2015 07:32
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So, my best friend and I are wanting to get into ebook publishing. Our first story is very very nearly ready, but now I've hit a bit of a roadblock. Amazon wants tax information. We have no idea how much money we'll be making off of our work, as we go. All I know is we're going to have royalties sent to a checking account I've set up, and then I'll be transferring her share to her. I think technically, we are a partnership, but I'm trying to figure out if I need to apply for an EIN, or if I should just apply as an individual, and do a little tax form magic later on to make it work. I have no idea how any of this works. Please help. 
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Oct 11, 2015 04:11
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uberwekkness posted:So, my best friend and I are wanting to get into ebook publishing. Our first story is very very nearly ready, but now I've hit a bit of a roadblock. Amazon wants tax information. You're probably going to want to get a formal partnership agreement in place and have an LLC set up for legal protection purposes, but that means that you'll need to get an attorney to draft the agreement and probably also set up the LLC (dealing with registered agents can be a pain so I'm not sure if you want to do it yourself). You'll need to register for an EIN through irs.gov (here: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online) or, alternatively, by faxing/mailing in a SS-4, which is a crapload slower.
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Oct 11, 2015 14:34
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ThirdPartyView posted:You're probably going to want to get a formal partnership agreement in place and have an LLC set up for legal protection purposes, but that means that you'll need to get an attorney to draft the agreement and probably also set up the LLC (dealing with registered agents can be a pain so I'm not sure if you want to do it yourself). You'll need to register for an EIN through irs.gov (here: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online) or, alternatively, by faxing/mailing in a SS-4, which is a crapload slower. While I was digging last night, I heard that I can do this as a sole proprietor, get their info with a W-9, and cut them a 1099 at the end of the year. Would that work too? Simplicity would be great, but obviously I don't want to do the wrong thing here, and have it come back and bite me in the rear end.
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Oct 11, 2015 20:37
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I'm a US citizen that does not and has not ever resided in the US. You can check my other posts in this thread for more background, but the gist of it is that I'm self-employed and all my income is outside the US. Up until 2013 I'd never filed taxes in the US (I didn't know I had to), but now I've filed 2013 and 2014 returns. Because of the Foreign Income Exclusion I basically only pay Self-Employment tax. Because in my country of residence I pay a flat tax, I've never bothered with keeping track of expenses for my business (or, more accurately, never bothered keeping receipts), which means both on 2013 and 2014 I've claimed the standard deduction and basically paid full taxes over my gross instead of my net income . For 2015 I've kept good track of my expenses and copy of my receipts and will most likely deduct expenses for over 50% of my income. Should I be worried about how this "sudden" increase will look to the IRS? The expenses I'm reporting are normal for my business so it's not like I'm suddenly operating at a near loss or trying to pass my groceries as business expenses. Thanks for any help.
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Oct 12, 2015 00:08
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Ur Getting Fatter posted:Should I be worried about how this "sudden" increase will look to the IRS? I would guess that as long as you have documentation to support the expenses, it doesn't matter how it looks to the IRS. If they have a problem with your return, you can provide copies of the receipts when asked.
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Oct 12, 2015 01:15
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ThirdPartyView posted:You're probably going to want to get a formal partnership agreement in place and have an LLC set up for legal protection purposes, but that means that you'll need to get an attorney to draft the agreement and probably also set up the LLC (dealing with registered agents can be a pain so I'm not sure if you want to do it yourself). You'll need to register for an EIN through irs.gov (here: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online) or, alternatively, by faxing/mailing in a SS-4, which is a crapload slower. Some states (like here in Oregon) allow you to file your own articles of organization pretty easily if you want to shortcut the lawyer to save fees. When things get better, hire an attorney to flesh them out. You'll need to do this before you apply for an EIN in case of the off chance that someone else has registered a company with the same (or substantially similar) name.
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Oct 12, 2015 16:17
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If you are a US + Swiss dual citizen, and you are working in the UK on your Swiss citizenship, are you required to file a US tax return? Not thinking about issues of making enough money that the US would tax you, simply whether a return needs to be filed in the first place.
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Oct 12, 2015 17:32
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Nephzinho posted:If you are a US + Swiss dual citizen, and you are working in the UK on your Swiss citizenship, are you required to file a US tax return? Not thinking about issues of making enough money that the US would tax you, simply whether a return needs to be filed in the first place. Yes.
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Oct 12, 2015 21:59
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Nephzinho posted:If you are a US + Swiss dual citizen, and you are working in the UK on your Swiss citizenship, are you required to file a US tax return? Not thinking about issues of making enough money that the US would tax you, simply whether a return needs to be filed in the first place. Yes, but read up on the foreign income exclusion.
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Oct 13, 2015 05:17
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Ur Getting Fatter posted:Yes, but read up on the foreign income exclusion. Also Foreign Tax Credits. In Europe, most of the time you are going to be paying way more in taxes than you would in the US and you can carry over any excess credits for the next 10 years, which could be useful if you ever want to work in the USA. It's also not any more complicated than claiming the FEIE. Total Confusion fucked around with this message at 11:15 on Oct 13, 2015 |
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Oct 13, 2015 11:11
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Gold and a Pager posted:Also Foreign Tax Credits. In Europe, most of the time you are going to be paying way more in taxes than you would in the US and you can carry over any excess credits for the next 10 years, which could be useful if you ever want to work in the USA. It's also not any more complicated than claiming the FEIE. To carryover the credits you need to file Form 1116 with the returns, FYI.
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Oct 13, 2015 16:37
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FWIW, Turbotax was fairly good at asking me about that stuff, and it filed my 1116 automatically, as well.
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Oct 13, 2015 16:53
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The friend I was trying to help appears to have been trying to file completely manually and was utterly lost, gave her a few IRS pages to point her in the basic direction of her situation + sending her towards TurboTax for the hand holding on filing.
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Oct 13, 2015 18:52
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Nephzinho posted:The friend I was trying to help appears to have been trying to file completely manually and was utterly lost, gave her a few IRS pages to point her in the basic direction of her situation + sending her towards TurboTax for the hand holding on filing. TT is garbage in, garbage out, so be careful.
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Oct 13, 2015 23:31
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AbbiTheDog posted:TT is garbage in, garbage out, so be careful. Is that like a general assessment of all the online tools for tax filing or something specific about turbo tax? At least in my case, which seems similar to his friend's, TT pretty much filled out my 2014 return the same as the CPA who did my 2013 return. Not defending TT, just curious.
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Oct 14, 2015 05:13
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Ur Getting Fatter posted:Is that like a general assessment of all the online tools for tax filing or something specific about turbo tax? No problem. It might *look* the same, but if you don't understand *why* the software is doing something, or what it might impact in the future, it's like taking an architects' blueprints and tracing over them to use for your next building. Is it right for the conditions? Does it take into account any building code changes this year? Did the laws change? Are there things happening next year you don't know about? It's the small things TT doesn't talk to you about, or the long-term planning, that is where the program falls down. 90% of tax prep is sorting through docs and dropping in the numbers to the software - that's frankly the easy part. It's the 10% part, the "how does this impact the future? Is your income/lifestyle changing in the next five years? Have you considered the state/local tax impact?" Edit for example: Everything the IRS says about selling your home is, "if the gain is low enough to be tax-free, AND you meet the holding period required, don't even list the home sale on your return." The reality is, if the GROSS sales price of your home is potentially high enough to maybe, possibly, perhaps be considered income the IRS is sending out matching notices and subjecting these home sales to taxes. You then are forced to respond. Here in Oregon, in the meantime, they've gotten a copy of the IRS notice and then THEY start sending you notices. Oregon won't budge until the IRS budges....in six months. But the software isn't going to tell you this. AbbiTheDog fucked around with this message at 20:55 on Oct 14, 2015 |
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Oct 14, 2015 16:28
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My fiancee and I bought a house together (we are both on the mortgage and the deed) in late August. We are getting married in April of 2016. I'm a bit confused on how to handle the taxes on this (Tennessee). Can only one of us claim the house and mortgage interest deduction? Is it split between the two of us? Or should we just get legally married before December 31st so we can file MFJ/MFS (we both make over $90k, so I don't believe there's a benefit for us one way or the other)?
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Oct 16, 2015 17:49
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Omne posted:My fiancee and I bought a house together (we are both on the mortgage and the deed) in late August. We are getting married in April of 2016. I'm a bit confused on how to handle the taxes on this (Tennessee). Can only one of us claim the house and mortgage interest deduction? Is it split between the two of us? "Pub 936 posted:More than one borrower. If you and at least
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Oct 17, 2015 02:51
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Pros who still check this thread: anyone used Intuit Tax Online, or heard any horror stories?
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Oct 17, 2015 03:02
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Does the tax burden of a rollover from a Traditional IRA to a ROTH IRA always apply to the year the rollover was in or are there special rules like the contribution dates that would allow you to perform a rollover in the next year but have it applied to last years taxes?
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Oct 17, 2015 13:00
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My friend wants me to help him with some contract work with a Chinese firm. The work will be done online--I won't actually leave the country. From what Google tells me, the IRS wants this income taxed at the higher of either the American or Chinese rate. Is the American rate calculated only on the income I receive from this company, or does it get added into the income I already receive from my regular employer? (I imagine the former). Does anyone know what paperwork I'd need to prove I'd already been taxed in China, and what what rate? Most of the info online I've found is for expats actually living in China, and the company seems less than concerned with helping us Americans figure out the tax situation (sketchy or normal? no idea!).
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Oct 17, 2015 17:33
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Are you certain China will tax this income? I'd have a quick discussion with the client and check if they would need you to fill out any forms or paperwork to claim the benefits of the US-China tax treaty, which exempts independent personal services income from tax in China where you perform the work outside of China. I'm not a Chinese tax practitioner, but I believe the rules for claiming treaty benefits in China recently changed, read up on Bulletin 60 if you would like to know more, but the client is ultimately responsible for obtaining the appropriate information. If China does not withhold, then you would just report the income on your US return as self employment income and pay tax at your normal rates. If China does withhold, then you may be able to take a foreign tax credit against your US liability on such income. The trouble is that under US rules, income for the provision of services from the US is US source regardless of where the client is located, and you are only allowed foreign tax credits against foreign source income. In addition, as there should be relief available under the treaty, the foreign tax credit may be denied on the grounds that the tax was not compulsory. Given the above, your best bet is to contact the Chinese client and make sure they do not withhold, and supply any documentation they require. Good luck, and let us know how it goes.
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Oct 18, 2015 16:05
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Question about the first time home buyers tax credit. Purchased a home in 2010 and got the tax credit, but now with interest rates being lower, my wife and I are considering refinancing to lower our payments and hopefully have some left over cash for home improvements, but I'm not certain if the tax credit payback rules will trigger because of this. We've been in the house 5 years now and are obviously going to remain, but does refinancing trigger any of the stipulations that would require paying back the credit? I wouldn't think it would, and what I've found online seems to say the same, but I just want to make sure before we go too far down this path.
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Oct 18, 2015 22:48
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Here's a question that's perhaps so basic, I'm having trouble finding a basic enough answer. I just got a new job where they withhold no taxes whatsoever. If you're curious, I was on a grad student stipend "salary" that was, well it was weird, but at least it was reported and taxes were withheld and I got a W2 and it made taxes pretty straightforward. Now I'm getting paid 3x as much as a post-doc "independent contractor," but I'm having nothing at all withheld and there's no reporting and no W2  So I guess there are two options. Option 1. I live my merry life and in April I gather my pay stubs and fill out forms and determine the fairly large sum of money I owe the IRS, and I pay it. You don't know me so you have no reason to trust me on this, but please just assume for option 1 that I'm a good saver and I'll have no trouble with saving enough for the large yearly payment. Option 2. I pay the IRS monthly, or quarterly, or whatever, based on an estimated amount of what I think I'll owe in April. Then in April, I compare what I did pay to what I should have paid and get a refund or I owe a little. I know option 2 is a thing that it seems most people do (though I have no idea how to do it, paperwork-wise). But is there anything wrong with option 1? Would I get any penalties for doing option 1? Is there any reason not to do option 1, other than the danger of not saving enough?
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Oct 20, 2015 01:14
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alnilam posted:I know option 2 is a thing that it seems most people do (though I have no idea how to do it, paperwork-wise). But is there anything wrong with option 1? Would I get any penalties for doing option 1? Is there any reason not to do option 1, other than the danger of not saving enough? You'll get whacked with an underpayment of estimated tax penalty by not paying estimates. And the reason for no withholding is that you're being reported as self-employed (independent contractor), which means you'll have Schedule C (Business) income instead of a W-2. As such, you'll also have self-employment tax, which is half of the FICA taxes, to pay in addition to the tax on the Form 1099-MISC that you'll received around February.
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Oct 20, 2015 02:23
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So how significant is the underpayment penalty? Considering my job started late Sept, how soon should i figure out how and how much to pay how often? Am i okay to slack on it the rest of this year (i mean, I'll pay in April, i just mean if i slack on the monthly payments for now), and start "doing it right" starting January? e: thank you by the way alnilam fucked around with this message at 02:52 on Oct 20, 2015 |
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Oct 20, 2015 02:48
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