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SiGmA_X posted:I would add that many individuals donate because of the principle of donating to help good causes. And they get a side benefit of a tax deduction. Obviously this is the best reason, but to hear some people describe it, rich people donate primarily for tax reasons which doesn't make any sense to me because, well, you're still donating money moreso than your tax benefit is. I guess the people who describe it that way are just wrong? e: or in other words balancedbias posted:people don't understand that deductions are not dollar for dollar credits... alnilam fucked around with this message at 13:06 on Jan 20, 2016 |
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Jan 20, 2016 12:53
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Today I got a letter from the IRS saying I owed them about to 90 bucks from my 2014 filing due to "Failure to pay proper estimated tax penalty", "Failure-to-pay penalty" and Interest charges. I filed my 2014 taxes on October 2015 (after having filed an extension) via TurboTax. I'm guessing TT didn't correctly estimate proper penalty for filing late or whatever. Three questions: 1) For whatever reason I thought quartely payments were only for Income tax? I only pay Self-Employment tax because I'm covered under the Foreign Earned Income Exclusion. I have no basis for this other than that's how I've always done so feel free to call me dumb. 2) I don't live in the US. The letter I got today said to pay before December 7, 2015. Is there any way to dispute the fact that I'm over a month past due for something I was only notified of today? Or will the IRS won't give a gently caress because of international postage? 3) If I want to pay this via DirectPay on the IRS site, would this be the correct option? 
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Jan 20, 2016 15:09
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alnilam posted:Obviously this is the best reason, but to hear some people describe it, rich people donate primarily for tax reasons which doesn't make any sense to me because, well, you're still donating money moreso than your tax benefit is. I guess the people who describe it that way are just wrong? Also, there's the aspect of control. Do you want to give $2000 to the military-industrial complex or the poors, or do you want to give $1500 to the MIC and maybe $2000 to your church so they can do what they want with it? Or to a foundation that you control and that isn't solely limited to charitable giving (like Facebook guy)? Ur Getting Fatter posted:Today I got a letter from the IRS saying I owed them about to 90 bucks from my 2014 filing due to "Failure to pay proper estimated tax penalty", "Failure-to-pay penalty" and Interest charges. 1: If you owe more than $1000 dollars habitually, you may be required to make estimated tax payments. There is a penalty for not doing so; usually turbo tax or whatever calculates it for you. If you owe taxes, they have to be paid by 4/15 regardless of any extensions you file. 2: The IRS will say that you are responsible for paying taxes on time and keeping up with your correspondence. There are penalties and interest on tax liabilities, but on $90 it isn't going to be too much for paying a month late. 3: Looks good.
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Jan 20, 2016 15:46
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sullat posted:1: If you owe more than $1000 dollars habitually, you may be required to make estimated tax payments. There is a penalty for not doing so; usually turbo tax or whatever calculates it for you. If you owe taxes, they have to be paid by 4/15 regardless of any extensions you file. Thanks for the info!
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Jan 20, 2016 16:00
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sullat posted:Also, there's the aspect of control. Do you want to give $2000 to the military-industrial complex or the poors, or do you want to give $1500 to the MIC and maybe $2000 to your church so they can do what they want with it? Or to a foundation that you control and that isn't solely limited to charitable giving (like Facebook guy)? Yeah I'm not trying to argue that there aren't lots of good reasons to donate to charity. I donate regularly. I just don't get why people sometimes cynically say "oh [famous rich guy] is just donating to charity for the tax write-off" as if that actually makes any financial sense. I think the answer is that people who say that are misinformed about how taxes work.
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Jan 20, 2016 16:22
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therobit posted:Sounds kind of like lending fraud to me. Is it a felony to mislead a lending institution for the purpose of obtaining credit? Maybe try googling that.
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Jan 20, 2016 18:11
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alnilam posted:Yeah I'm not trying to argue that there aren't lots of good reasons to donate to charity. I donate regularly. I just don't get why people sometimes cynically say "oh [famous rich guy] is just donating to charity for the tax write-off" as if that actually makes any financial sense. I think the answer is that people who say that are misinformed about how taxes work. Pretty much, though to a certain extent "X gives to charity because of the tax benefits" is usually the philosophy behind those benefits existing in first place. I can't claim really to be an expert on tax law writing, but from studying it so far it feels personally like the reason tax law can get so complicated is primarily thanks to the collision of three at least semi-competing belief systems. One wants taxes to be "fair" (which creates complexity in tax code trying to cover edge cases), one wants to use taxes to encourage certain behaviors that are considered beneficial to society like charitable giving and saving for retirement (which creates complexity the more finely they try to direct behavior), and of course one faction that just wants to ensure they pay as little as possible (which can add complexity so people have ways to weasel, but honestly seems these days to mostly be "cut rates on us period "). Mix them together and you get most of the tax code. Again, personal belief here, so take it with a heavy grain of salt; in practical terms my only goal when actually doing taxes is to get people the best result, not worry about the why of it. Bojanglesworth posted:It certainly doesn't get any more clear cut than this, especially for the IRS Yeah, though I think it's normally treated as a mistake rather than a crime per se so don't panic about prison time or something if you get expenses messed up by honest error (God knows there's probably a bunch of poor sole proprietorships out there that must have depreciation wrong if nothing else). But please don't deliberately mess up your taxes in any way, no matter what supposed benefit it will bring, it NEVER turns out well  .
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Jan 20, 2016 20:24
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alnilam posted:Yeah I'm not trying to argue that there aren't lots of good reasons to donate to charity. I donate regularly. I just don't get why people sometimes cynically say "oh [famous rich guy] is just donating to charity for the tax write-off" as if that actually makes any financial sense. I think the answer is that people who say that are misinformed about how taxes work. I can pretty much guarantee that it is the same people who think that if you make $1 into the next tax bracket you pay that rate on all your money. In general people are rather stupid about finances and taxes.
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Jan 21, 2016 02:17
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I'm an independent contractor, and all of my income comes from one client. I used to be an employee of this company. My former boss told me that I can save on my taxes by starting an LLC. Might this be true? What other advantages, if any, might there be for me to start an LLC?
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Jan 21, 2016 04:59
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I work as a restaurant sales analyst for a liquor distributor -- what are the chances that I can write off wine and liquor that I purchase for myself as "market research"?
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Jan 21, 2016 17:54
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SiGmA_X posted:I would add that many individuals donate because of the principle of donating to help good causes. And they get a side benefit of a tax deduction.
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Jan 21, 2016 17:56
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Turkeybone posted:I work as a restaurant sales analyst for a liquor distributor -- what are the chances that I can write off wine and liquor that I purchase for myself as "market research"? That is not nearly enough information to even guess at an accurate answer.
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Jan 21, 2016 19:00
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I am part of the very small population of people where MFS is going to be the right way to go. My wife and I both have significant student loan debt from law school and are on Income Based Repayment (IBR) with our consolidated Federal loans. The IBR rules say if you file jointly then your spouse's income gets imputed to yours. Filing jointly would almost double my monthly loan payments (tried with the calculators.) What I'm interested in estimating is how much, if any, the difference in my taxes will be compared to last year when i wasn't married. I know I lose the student loan interest deduction and that in virtually every other case filing jointly is more beneficial. All things being equal, how big a difference would the tax burden be for somebody filing single vs married filing separate? Let's assume an AGI of like 90K just for funsies. Previously I have been getting a modest Federal refund.
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Jan 22, 2016 02:15
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Ramrod Hotshot posted:I'm an independent contractor, and all of my income comes from one client. I used to be an employee of this company. My former boss told me that I can save on my taxes by starting an LLC. Might this be true? What other advantages, if any, might there be for me to start an LLC? An LLC isn't really going to give you any tax advantages, it's principal purpose is liability protection. A single member LLC is typically disregarded for tax purposes.
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Jan 22, 2016 03:20
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E-Money posted:What I'm interested in estimating is how much, if any, the difference in my taxes will be compared to last year when i wasn't married. I know I lose the student loan interest deduction and that in virtually every other case filing jointly is more beneficial. All things being equal, how big a difference would the tax burden be for somebody filing single vs married filing separate? Let's assume an AGI of like 90K just for funsies. Previously I have been getting a modest Federal refund. Assuming standard deduction and just 1 exemption for yourself, let's say $80,000 of taxable income. Your total tax would be $133 higher MFS than the same income if you were single. But if your employer is withholding at a different rate, you may not have the same refund you are used to.
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Jan 22, 2016 03:21
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JohnnyPalace posted:Assuming standard deduction and just 1 exemption for yourself, let's say $80,000 of taxable income. Your total tax would be $133 higher MFS than the same income if you were single. But if your employer is withholding at a different rate, you may not have the same refund you are used to. Cool, thanks!
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Jan 22, 2016 03:39
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Is it worth it to itemize little things that I meet criteria for. For example I was going to deduct 1/3 of my home internet for a work expense. After reading the criteria I feel that is the appropriate amount. However, if its gonna raise a bunch of red flags and cause me a bunch of headaches. I'll just leave it out as it only comes to 30$ tax break or something.
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Jan 22, 2016 07:53
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Ramrod Hotshot posted:I'm an independent contractor, and all of my income comes from one client. I used to be an employee of this company. My former boss told me that I can save on my taxes by starting an LLC. Might this be true? What other advantages, if any, might there be for me to start an LLC? More employment law related but: Brief and simple: http://www.dol.gov/whd/regs/compliance/whdfs13.pdf Detailed, more complex, and a bit legalese: http://www.dol.gov/whd/workers/misclassification/ai-2015_1.pdf
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Jan 22, 2016 15:40
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sullat posted:That is not nearly enough information to even guess at an accurate answer. Ok, what else can I provide?
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Jan 22, 2016 17:36
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Bigntasty posted:Is it worth it to itemize little things that I meet criteria for. For example I was going to deduct 1/3 of my home internet for a work expense. After reading the criteria I feel that is the appropriate amount. However, if its gonna raise a bunch of red flags and cause me a bunch of headaches. I'll just leave it out as it only comes to 30$ tax break or something. You are obligated by law to deduct all deductible expenses, although if you're a W2 earner you probably are not going to meet the 2% AGI threshold to deduct work expenses.
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Jan 22, 2016 17:49
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PatMarshall posted:An LLC isn't really going to give you any tax advantages, it's principal purpose is liability protection. A single member LLC is typically disregarded for tax purposes. They skipped step two. He elects S Corp status and takes payroll and plays that tax game. If you're the only employee, and you're consulting, it's going to be difficult to argue that the whole income for the company shouldn't be on a W-2, thus negating the tax benefits. Talk to a tax pro, not your boss.
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Jan 22, 2016 18:00
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Turkeybone posted:Ok, what else can I provide? Short answer: No. Long answer: Nooooooooooooooo.
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Jan 22, 2016 18:01
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Quick question: I have income from 3 jobs this year, one is 60k, one is 10k, and one is going to be about 25k, all with 1 exemption listed on my W4. This is dumb and I'm going to owe a lot of money right? For some reason Federal+SS+Medicare is about 21% or so on my 60k job but only 13% or so on my 10k one.
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Jan 22, 2016 21:36
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Residency Evil posted:Quick question: I have income from 3 jobs this year, one is 60k, one is 10k, and one is going to be about 25k, all with 1 exemption listed on my W4. Don't worry about the SS or Medicare portions. Those have the same flat rate up to $118,500. But there is a chance you will be under withheld for your federal income tax. Did you have the jobs simultaneously, or consecutively? If you didn't have them at the same time, your withholding might be ok.
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Jan 23, 2016 03:08
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Turkeybone posted:Ok, what else can I provide? Well, are you a w-2 employee our a 1099 contractor? Do you report to your employer any of the data you collect while drinking? Is it after work hours or during work hours? If you are drinking during lunch break, and maybe during cigarette breaks, and then while in the bathroom, and occasionally while hunched over in your cubicle, you may have a better claim than if you are drinking alone at home.
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Jan 23, 2016 04:47
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AbbiTheDog posted:
You should consider reporting them.
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Jan 23, 2016 08:25
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If I know I won't have enough deductions to itemize, do I have to wait for things like my 1098 for mortgage interest to arrive before I file?
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Jan 23, 2016 15:49
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JohnnyPalace posted:Don't worry about the SS or Medicare portions. Those have the same flat rate up to $118,500. But there is a chance you will be under withheld for your federal income tax. Did you have the jobs simultaneously, or consecutively? If you didn't have them at the same time, your withholding might be ok. Jobs were simultaneous. I'm guessing I'm hosed?
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Jan 23, 2016 17:42
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Residency Evil posted:Jobs were simultaneous. I'm guessing I'm hosed? If it was all paid on W2s (i.e. payroll and federal were withheld) you're probably fine, if you got paid on 1099s from the moonlighting jobs you're going to owe a ton of taxes. In general you should plan on about 45% taxes on moonlighting income under the social security cap, which absolutely sucks for residents. Of course the total picture depends upon a lot of other things such as deductions for expenses and non business deductions like mortgage interest etc.
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Jan 23, 2016 18:34
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BEHOLD: MY CAPE posted:If it was all paid on W2s (i.e. payroll and federal were withheld) you're probably fine, if you got paid on 1099s from the moonlighting jobs you're going to owe a ton of taxes. In general you should plan on about 45% taxes on moonlighting income under the social security cap, which absolutely sucks for residents. Of course the total picture depends upon a lot of other things such as deductions for expenses and non business deductions like mortgage interest etc. It was all paid on W2s with 1 withholding on my W-4 in each place (Residency, VA Moonlighting, Outside Hospital Moonlighting). For some reason it looks like the VA has been withholding very little in federal taxes even though I'm listing 1 exemption and it's going to hit me for 1k. I'm not exactly sure how much I made at the third place yet, but if it's more than I think a 6-7k tax bill is going hit the savings pretty hard. Luckily they seem to be taking out a decent amount for taxes.
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Jan 23, 2016 18:52
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Residency Evil posted:It was all paid on W2s with 1 withholding on my W-4 in each place (Residency, VA Moonlighting, Outside Hospital Moonlighting). For some reason it looks like the VA has been withholding very little in federal taxes even though I'm listing 1 exemption and it's going to hit me for 1k. I'm not exactly sure how much I made at the third place yet, but if it's more than I think a 6-7k tax bill is going hit the savings pretty hard. Luckily they seem to be taking out a decent amount for taxes. You are going to owe about $16k of federal tax, minus 25% of any 401k/traditional IRA contributions. If you know how much was withheld total you can approximate what you will owe.
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Jan 23, 2016 19:33
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Droo posted:You are going to owe about $16k of federal tax, minus 25% of any 401k/traditional IRA contributions. If you know how much was withheld total you can approximate what you will owe. Where are you getting this number? You probably just made the guy poo poo his pants. If Fed/payroll taxes is at 21% on his 60k job, that makes 8k of federal withholding there. Assuming nothing is being withheld on his 25k job (guaranteed not the case) and he has no retirement contributions, I'm getting: 95k of agi, less 10k of exemption/standard deduction for 85k taxable income which generates 17k of tax. 17k of tax less 8k of withholding leaves at MOST 9k of tax liability at tax time. Given all of this income is w-2 income, he virtually certainly has more income tax being withheld on his 25k job, which probably will put him in the 6-7k range due at filing. And this is all assuming he doesn't itemize or have retirement contributions etc etc. Admiral101 fucked around with this message at 15:19 on Jan 24, 2016 |
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Jan 24, 2016 15:17
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Droo posted:You are going to owe about $16k of federal tax, minus 25% of any 401k/traditional IRA contributions. If you know how much was withheld total you can approximate what you will owe. Admiral101 posted:Where are you getting this number? You probably just made the guy poo poo his pants. Thanks guys. Can I avoid this in the future by changing my W-4 to read 0 on my additional jobs? It's tough for me to use the IRS calculator since the additional income is sporadic.
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Jan 24, 2016 16:29
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I doubt any number would work well for a side job, since the assumption for the withholding tables is that it is your only job, and a side job's income is going to be in lower brackets and have a lot more of the standard deduction taken out proportionally. Your best bet is to roughly figure out your tax rate and then use that to add in additional dollars of withholding.
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Jan 24, 2016 17:26
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Admiral101 posted:Where are you getting this number? You probably just made the guy poo poo his pants. First poster meant $16k tax liability and then explained that OP could estimate tax payable at filling by subtracting withholdings from estimated liability
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Jan 24, 2016 17:28
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Residency Evil posted:Thanks guys. Can I avoid this in the future by changing my W-4 to read 0 on my additional jobs? It's tough for me to use the IRS calculator since the additional income is sporadic. You could do that, and you can also start estimating where you stand at different points and adjust your W4 accordingly. At my job it's all online and extremely easy to change exemptions and specify additional withholdings for the next paycheck.
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Jan 24, 2016 17:31
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BEHOLD: MY CAPE posted:First poster meant $16k tax liability and then explained that OP could estimate tax payable at filling by subtracting withholdings from estimated liability Yes this is correct, but I should have said 17k (I had an extra thousand dollars in the spreadsheet that I forgot to zero out). So the original guy who asked the question will "owe": ~$17k - (25% * 401/Traditional IRA contributions) - (Federal taxes already withheld from all jobs). For example, if he contributed 6k to a 401k and 9k was already withheld from all jobs, he will owe an extra $6,500 when he files his taxes. This assumes he is single and doesn't itemize. Setting your deduction to 0 will improve it but not really by much. You should probably figure out an extra dollar amount to have withheld from each paycheck at your main job (line 6 of the W4 form).
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Jan 24, 2016 17:37
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Droo posted:Yes this is correct, but I should have said 17k (I had an extra thousand dollars in the spreadsheet that I forgot to zero out). So the original guy who asked the question will "owe": So if I'm expecting to earn ~100k this year, the taxable income on that is about 89k and the federal tax on that is 18k. If my "main" job is withholding 8k/year and the other two jobs are withholding $X, I need to withhold an additional 18-8-X each year? edit: Can't wait for this to actually get complicated in a few years. Residency Evil fucked around with this message at 17:55 on Jan 24, 2016 |
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Jan 24, 2016 17:50
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Residency Evil posted:So if I'm expecting to earn ~100k this year, the taxable income on that is about 89k and the federal tax on that is 18k. If my "main" job is withholding 8k/year and the other two jobs are withholding $X, I need to withhold an additional 18-8-X each year? Yeah that's correct. It's pretty stupid the way the exemptions work for withholding - it's almost impossible to get it accurate even for a married couple with two incomes. You could see if job 1 was flexible enough to do a pure dollar amount per check for federal tax - for instance if you get paid monthly you could just have them withhold $1500/check if you get paid monthly and that would make it a lot easier to track your situation. I'm not sure how willing most places are to do that.
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Jan 24, 2016 18:03
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Droo posted:You could see if job 1 was flexible enough to do a pure dollar amount per check for federal tax - for instance if you get paid monthly you could just have them withhold $1500/check if you get paid monthly and that would make it a lot easier to track your situation. I'm not sure how willing most places are to do that. Maybe this could be accomplished by claiming a ton of exemptions (like 20 or something) and listing the desired dollar amount as "additional withholding" on line 6 of the W4?
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Jan 25, 2016 13:00
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