|
NancyPants posted:W4 just affects your withholding, it doesn't determine whether you can file as married. Thanks, that's what I thought. I sent my new W4 in today, but I was worried one of ours might not get processed in time.
|
#
?
Dec 18, 2015 03:56
|
|
|
|
| # ? May 12, 2024 22:17 |
|
|
dog nougat posted:Anyone know anything about tax deductions for bicycle maintenance? I use my bike as both my personal vehicle as well as do food delivery on it. I've been fastidiously saving all of my receipts for parts like tires and such. It may not be all that much $$, but it's not like I make that much to begin with, so every little bit helps. It seems to me that since I use my bike for work and that's where the vast majority of miles on it come from that it should be deductible. A cursory glance at the IRS site pretty much only talks about automobiles. Before even going into whether any of those expenses would qualify (likely not): 1). What are your gross earnings for the year? 2). How much approximately did you spend? 3). Do you use a standard deduction, or do you itemize? Based on you saying you don't make much, I'm guessing you use the standard deduction. Meaning any kind of employee business expense isn't going to do anything for you anyway since you need to itemize to get a benefit.
|
|
#
?
Dec 18, 2015 13:40
|
|
|
Tax question: Healthcare.gov flubbed my fiancées subsidy calculation horrifically. Zero subsidies given despite a job change that cratered her income at the beginning of the year. I know we can get those subsidies back when we file taxes, but... We also want to claim the medical costs as a deduction. By my rough estimation the bills were likely around 50% of her gross income (high deductible, out of network care, and the premiums add up quick) and easily clear the standard deduction. But the subsidy is calculated on adjusted gross income, so is it applied after the deduction of medical costs? It seems a bit strange as the deduction will include the insurance premium which is supposedly offset by the subsidy.
|
|
#
?
Dec 18, 2015 16:50
|
|
|
Crossposting this from the Long Term Investments thread It looks like my income is going to get really close to pushing the annual limit for Roth contributions. I contributed the 11k in Roth IRA for my wife and in Jan of this year. If I am over, will I then need to roll this over into a taxable account, and recalculate my MAGI based on the loss? (I'm showing an unrealized loss at this point)
|
|
#
?
Dec 23, 2015 16:29
|
|
|
You can roll it over into next year and pay a slight penalty iirc.
|
|
#
?
Dec 23, 2015 17:38
|
|
|
I Love Topanga posted:Crossposting this from the Long Term Investments thread I'm in the same boat, but won't know until my December 31st pay clears. I'm just hoping that if it is enough to make me over the limit that paying penalties will be worth it.
|
|
#
?
Dec 23, 2015 17:50
|
|
|
Shifty Pony posted:Tax question: Healthcare.gov flubbed my fiancées subsidy calculation horrifically. Zero subsidies given despite a job change that cratered her income at the beginning of the year. I know we can get those subsidies back when we file taxes, but... Itemized deductions (like medical) come in after AGI is calculated, so no. AGI is basically the bottom number on page 1 of the 1040, itemized deduction is subtracted out on the next page. Considering several itemized deductions are limited by AGI, you have to have the number worked out by the time you get to them anyway.
|
|
#
?
Dec 23, 2015 21:14
|
|
|
Nephzinho posted:I'm in the same boat, but won't know until my December 31st pay clears. I'm just hoping that if it is enough to make me over the limit that paying penalties will be worth it. The way I understand it https://investor.vanguard.com/ira/excess-contribution you have until April 15th to withdraw the excess contribution and the gain/loss by April 15th without any penalty.
|
|
#
?
Dec 24, 2015 01:11
|
|
|
I Love Topanga posted:The way I understand it https://investor.vanguard.com/ira/excess-contribution you have until April 15th to withdraw the excess contribution and the gain/loss by April 15th without any penalty. What's to stop you from setting up 10 different IRAs with different banks on Jan 1 and withdrawing the 9 that perform the worst on April 14? Does the 10% penalty apply to those 9 withdrawals?
|
|
#
?
Dec 24, 2015 07:21
|
|
|
Jewdicator posted:What's to stop you from setting up 10 different IRAs with different banks on Jan 1 and withdrawing the 9 that perform the worst on April 14? Does the 10% penalty apply to those 9 withdrawals? This wouldn't be nearly worth the effort.
|
|
#
?
Dec 24, 2015 13:53
|
|
|
Jewdicator posted:What's to stop you from setting up 10 different IRAs with different banks on Jan 1 and withdrawing the 9 that perform the worst on April 14? Does the 10% penalty apply to those 9 withdrawals? So, provided you have a real investment strategy that doesn't include a dart board, and you had enough money to invest in all of the accounts equally, you would be willing to pay transaction fees on 9 accounts? What diversification strategy would accommodate such stupidity?
|
|
#
?
Dec 24, 2015 14:56
|
|
|
Nine IRAs were gifted to forums poster Jewdicator, who above all else desired tax deferral. For within these IRAs was bound the capital and return to retire. But they were all of them deceived, for another IRA was made.
|
|
#
?
Dec 24, 2015 15:35
|
|
|
(I apologize, wrong thread)
legsarerequired fucked around with this message at 00:57 on Dec 25, 2015 |
|
#
?
Dec 24, 2015 22:23
|
|
|
Alright so I've been self-employed for many years now, filing a schedule C. 2015 was the first year where I stopped pursuing my previous self-employment and pursued betting/trading/investing in the stock market. Which is to say, that I have 0 income from any sources except that. The rub is that it appears that there are very strict restrictions for marking to market (and Schedule C) versus unrealized/realized short term gains (like everyone else)...not only do I have to be "seek[ing] to profit from daily market movements in the prices of securities" (I'm not), doing many transactions (I'm not), but I have to get permission a year ahead of time. So it seems a Schedule C/marking to market is out of the question? Seems odd to me because I am not pursuing any other source of income. I'm effectively unemployed in the IRS eyes I guess. These are the guidelines: https://www.irs.gov/taxtopics/tc429.html Second issue is my tax liability...using hypothetical round numbers, I've had a realized/taxable gain on sales of $100k this year (all short term), but the securities that I am holding currently have unrealized losses of $50k. So I assume as it currently stands I would need to pay taxes on $100k even though based on liquidation value, I've only made $50k this year. That is gonna be very painful in that scenario. The next question is how does this $50k loss carry forward? Let's say I liquidate on January 4th and never make another trade again. Which is to say, I have a 100k gain in 2015 but a 50k loss in 2016. How would that work for my taxes?
|
|
#
?
Dec 27, 2015 17:05
|
|
|
Arkane posted:Alright so I've been self-employed for many years now, filing a schedule C. 2015 was the first year where I stopped pursuing my previous self-employment and pursued betting/trading/investing in the stock market. Which is to say, that I have 0 income from any sources except that. Your assessment regarding trader status is correct: the standard for getting it is very very high. Without more details it's hard to have any kind of opinion though. Describe your investing "style". Unless you're buying and selling daily, you're not a trader. You're also correct that you will have to pay taxes on the $100k. Only thing I can recommend at this point is to sell on or before 12/31 in order to recognize the losses on your unrealized losses. However, keep in mind that you can only recognize those losses if you do not/have not bought those same securities within the past 30 or future 30 days of the sale date. If you sell in January 2016, the $50k loss will be recognized in 2016. However, if you do not have any capital gains to use that loss, it will effectively be useless. If you have no capital gains, you can only use $3k of that loss against other types of income for that year. The excess (47k in this scenario) gets carried forward to 2017, 2018, 2019 etc in which case you will be able to either apply it against capital gains recognized in those years, or use the annual $3k against other types of income. The loss carries forward for a max of 20 years (not relevant in this scenario). State treatment can vary, but states in general give less favorable results than the fed. Short answer: There is no scenario where you can carry back that capital loss from 2016 to 2015. If you have no intention in investing/trading in the future, sell now and take the loss or it's just going to be sitting there suspended for years. Admiral101 fucked around with this message at 11:48 on Dec 28, 2015 |
|
#
?
Dec 28, 2015 11:46
|
|
|
So for the past few years I have filed married jointly with my wife, used turbo tax, kept it simple. We both just get a W2 from our jobs. This year we are trying to reduce her student loan payments from her masters, because she is going to be full time working for the county, so we can file for IBR for her loans. Apparently to have only her income factored in (which would lower our monthly), we have to file married separately. Is this something I should be involving an actual tax person with? How big of a difference is filing for joint vs separate?
|
|
#
?
Dec 28, 2015 13:50
|
|
|
Admiral101 posted:Your assessment regarding trader status is correct: the standard for getting it is very very high. Without more details it's hard to have any kind of opinion though. Describe your investing "style". Unless you're buying and selling daily, you're not a trader. Thanks for the response. The IRS sucks. Will probably just end up buying a different, but similar company and then just re-buy the original in 31 days.
|
|
#
?
Dec 28, 2015 17:42
|
|
|
Arkane posted:Thanks for the response. The IRS sucks. Congress did it, the IRS just enforces it. Besides, the tradeoff is you don't have to pay taxes on unrealized gains. sullat fucked around with this message at 17:55 on Dec 28, 2015 |
|
#
?
Dec 28, 2015 17:52
|
|
|
Duckman2008 posted:So for the past few years I have filed married jointly with my wife, used turbo tax, kept it simple. We both just get a W2 from our jobs. It's not hard. Turbotax is perfectly fine. sullat posted:Congress did it, the IRS just enforces it. Besides, the tradeoff is you don't have to pay taxes on unrealized gains. Yes - it's overall a very taxpayer friendly part of the code. Buffet really loves touting it too.
|
|
#
?
Dec 28, 2015 22:57
|
|
|
Are public transit fares to and around a professional convention deductible as a business expense for sole proprietors if the convention is held in your hometown?
|
|
#
?
Dec 30, 2015 01:48
|
|
|
My mom has been unemployed for years and recently I gave her one of my rental apartments to live in free. She's been living off savings and I'm the only one in my family providing financial support. Can I claim her as a dependent? She's in her late 50s so I don't know if that counts or if she has to be older. I'm in MA. I'm also receiving veteran benefits and notice they increase with a parent dependent so that'd help me help her out.
|
|
#
?
Dec 30, 2015 17:05
|
|
|
Maybe. Go to the IRS website and use the ITA (interactive tax assistant) and follow the checklist to see if she can be claimed. Generally, someone has to live with you to be claimed, but parents are often an exception to that rule.
|
|
#
?
Dec 30, 2015 17:14
|
|
|
sullat posted:Maybe. Go to the IRS website and use the ITA (interactive tax assistant) and follow the checklist to see if she can be claimed. Generally, someone has to live with you to be claimed, but parents are often an exception to that rule. Cool, according to that I can claim her, in fact I ran it a few times and it seems to suggest her age, whether she lives with me, and the amount I give her is irrelevant. Since she makes $0 and no one else supports her, I could technically give her  and still claim her.
|
|
#
?
Dec 30, 2015 17:36
|
|
|
Hey all. Recently got hired as an independent contractor for an online gig (about 3-4 months ago). The company has written everything in the contract to be explicitly clear that I'm an independent contractor, and that it will stay that way, and should it be deemed I be considered an employee, I'll be responsible for the related expenses. Now, I received a "bonus" for Christmas. Is that just considered part of my normal income? or is it taxed differently? I know for normal employees it's taxed differently, but not sure on independent contractors. Thanks! BeAuMaN fucked around with this message at 12:07 on Jan 2, 2016 |
|
#
?
Jan 2, 2016 10:58
|
|
|
It's not taxed differently, just withheld differently, and you shouldn't be having any withholdings anyway given that you're an IC
|
|
#
?
Jan 2, 2016 15:40
|
|
|
Okay so I got some help here earlier, I just want to make sure of something. Here's a summary of my situation: -In all of 2014 and up until August 2015 I had a lowish-paying job, which withheld tax -Started a new job in September where I make a lot more, but they do NOT withhold tax Since my new job (which doesn't withhold) started in September, right now is the first time I'm actually filling out 1040-ES, since the previous quarterly payments were back before I even started this job. 1040-ES has lines 14a and 14b, which are your estimated tax this year, and your actual tax from last year; you're supposed to pick the smaller of the 2. Based on my income in 2015, line 14a is big. Based on my tax return from 2014, line 14b is much smaller. Also, for the first 8 months of 2015, I had a job that did withhold money. The amount withheld in 2015 was more than 14b but less than 14a. So according to 1040-ES, I don't owe any estimated payment at all, since my 2014 tax was so low. Even though I know that my 2015 tax is much higher and I will in fact owe some money. In April, when I file my 2015 return, it's going to look like I vastly underpaid, but it's only because 1040-ES told me to. But the IRS can't see my 1040-ES - it looks like I don't send in 1040-ES to them, only the payment vouchers if I owe anything. So when I file my return, will they think I owe penalties? Or is there a place in my return that will let me explain why I didn't send any estimated payments?
|
|
#
?
Jan 2, 2016 19:49
|
|
|
When you fill out your return, you may get the opportunity to calculate your "failure to pay estimated tax penalty." Or the software may helpfully do it for you. If you have determined that you were not required to make estimated tax payments during 2015, don't submit your return with those included. If the IRS disagrees, they will contact you and let you know.
|
|
#
?
Jan 2, 2016 20:31
|
|
|
Duckman2008 posted:Is this something I should be involving an actual tax person with? How big of a difference is filing for joint vs separate? It can have some significant knock-on effects to go separate; my usual remark when clients ask about it is the IRS allows it but in a very passive aggressive kind of way. You immediately become ineligible for a lot of things like EIC, the Premium Tax Credit for health care from the Marketplace, and student loan interest deduction, and other things get the worst method of calculation (Social Security taxable income is rated at the max 85% level from dollar one for example). If you can compare MFS to MFJ (and whether the savings from filing that way on your loans outweigh any tax impact) I would do that before making a decision, but in all honesty married filling separate I have only seen work out to the benefit of couples with two very high (i.e. well into the $100,000+ range each) incomes who would have phase out limits on all the credits MFS disallow due to high income anyway. Or people who are separated but without dependents or official divorce/separation decree of course. Zero VGS posted:Cool, according to that I can claim her, in fact I ran it a few times and it seems to suggest her age, whether she lives with me, and the amount I give her is irrelevant. Since she makes $0 and no one else supports her, I could technically give her Yes, parents are one of the only exceptions to the requirement that a dependent live with you for head of household. So long as you maintain at least 50% of all their support (so they are dependents) and 50% of the cost of their actual residence, you can do head of household. alnilam posted:Okay so I got some help here earlier, I just want to make sure of something. Here's a summary of my situation: OK, here's how the penalty for underwithholding works. You have to have withheld enough during the year to pay 90% of this year's taxes OR an amount that would have paid 100% of last year's taxes. It's designed that way deliberately so people don't get screwed by sudden windfalls or other life changing events; if you sent enough to the IRS by withholding or estimated payments to cover what you should have expected to owe i.e. 100% of the amount you needed last year, they won't penalize you for not being psychic enough to predict your tax situation. So, if your W-2 job withheld enough that it would have covered your entire taxes due in 2014, you are fine. You DO obviously have to make up the difference and pay any remaining money you need to cover the actual taxes due of course, but the IRS obviously knows how much you owed on last year's taxes and how much they got in withholding this year, so they don't need an actual 1040-ES to put two and two together here. Now this is obviously a moving target since your tax withholding penalty looks at the current year and the year before, so if you're a contractor this year I'd get on making estimated payments to cover your butt next year. Look up Form 2210 for more details and clarification.
|
|
#
?
Jan 2, 2016 22:29
|
|
|
I get paid two weeks behind. The check I got on 12/31/2015 was for work on 12/4-12/17. I will be getting a check on 1/14/2016 for work done on 12/18-12/31. Only the first goes into my totals for 2015 right? I know I could wait a few weeks for my W2 and see, but I want to plan now.
|
|
#
?
Jan 4, 2016 16:53
|
|
|
Xenoborg posted:I get paid two weeks behind. The check I got on 12/31/2015 was for work on 12/4-12/17. I will be getting a check on 1/14/2016 for work done on 12/18-12/31. Only the first goes into my totals for 2015 right? I know I could wait a few weeks for my W2 and see, but I want to plan now.
|
|
#
?
Jan 4, 2016 19:27
|
|
|
I can't figure out a good way to search for this, sorry if it's a stupid question. My wife and I intend to create an LLC to own and operate our rental properties. In doing this, since the LLC is now collecting rent directly, I imagine it wouldn't be taxed on our personal return anymore, right? So when the LLC files it's return, would the tax rate be lower since it wouldn't be combined with our normal salaries?
|
|
#
?
Jan 4, 2016 19:46
|
|
|
Dragyn posted:I can't figure out a good way to search for this, sorry if it's a stupid question.
|
|
#
?
Jan 4, 2016 20:36
|
|
|
SiGmA_X posted:An LLC is a pass through entity. You will receive a K-1 from the LLC and be taxed on your entire income. Ah, that makes sense. Thanks! ninja: Can the LLC reinvest its profits to prevent being taxed on the payout? I'm trying to find a lawyer/accountant to go through all this stuff with us now, but no one seems to want my money.
|
|
#
?
Jan 4, 2016 21:43
|
|
|
Dragyn posted:Ah, that makes sense. Thanks! No. The LLC's income is your income. You need to spend money to save money on taxes.
|
|
#
?
Jan 4, 2016 23:47
|
|
|
SiGmA_X posted:An LLC is a pass through entity. You will receive a K-1 from the LLC and be taxed on your entire income. Technically, you could elect to treat the LLC as a C-Corporation using Form 8832, but it's pretty stupid to do, particularly in real estate where depreciation, coupled with cash expenses, should generate tax losses (with net cash inflows), at least early in the life of the property (which is a good thing to flow through to you). Of course, given the Passive Activity Loss rules, it's doubtful the losses can really be used until later years when income will be earned or the property is disposed of (assuming it's at a gain). Horseshoe theory fucked around with this message at 01:03 on Jan 5, 2016 |
|
#
?
Jan 5, 2016 01:00
|
|
|
edit: Nevermind. Ignore me.
KernelSlanders fucked around with this message at 03:43 on Jan 5, 2016 |
|
#
?
Jan 5, 2016 03:35
|
|
|
Dragyn posted:I can't figure out a good way to search for this, sorry if it's a stupid question. Quick note for you - if you're NOT in a community property state, but a separate property state, technically if there's more than one owner (even husband/wife) the IRS wants you to file a 1065 partnership return for your LLC. This won't change your taxable income any at the end of the year, BUT there is a steep per month, per owner penalty for failure to file these should you be audited. See a professional first.
|
|
#
?
Jan 5, 2016 17:48
|
|
|
AbbiTheDog posted:Quick note for you - if you're NOT in a community property state, but a separate property state, technically if there's more than one owner (even husband/wife) the IRS wants you to file a 1065 partnership return for your LLC. This won't change your taxable income any at the end of the year, BUT there is a steep per month, per owner penalty for failure to file these should you be audited. See a professional first. See a professional.
|
|
#
?
Jan 5, 2016 22:20
|
|
|
Here's a new schedule C question for me. I did some work for a client earlier this year and I still haven't gotten paid for it. This is the first time this has happened in the five years of doing my freelance work (yes, I am incredibly lucky). There is still the chance that I could get paid for it, but the odds are pretty low. It was time I billed and invoiced and the invoice was never paid after months of cajoling and prodding. I do cash-based accounting. Can I claim the value as a loss? I know this means accepting that it will never be paid. Or am I out of luck because I'm cash-based?
|
|
#
?
Jan 5, 2016 22:44
|
|
|
|
| # ? May 12, 2024 22:17 |
|
|
kefkafloyd posted:Here's a new schedule C question for me. If you're cash based, you never took the freelance work into income. Bad debt expense only exists for accrual taxpayers. How can you claim a loss on a fee you never claimed as income in the first place?
|
|
#
?
Jan 5, 2016 23:15
|
|