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I'm closing on a house next month and using a portion of my Roth ira to cover part of my downpayment. From what I understand, I can take out my contributions tax free. Since I will be taking out less than my total contributions, it will be tax and penalty free. My main question is, will I still receive a 1099-R? Or how will I report this so the IRS doesn't send me a letter beyond reporting the distribution and also reporting it as tax free on my 1040? And yes, I know taking money out of a retirement account early is not the smartest idea.
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Apr 21, 2016 05:58
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mcpringles posted:I'm closing on a house next month and using a portion of my Roth ira to cover part of my downpayment. Any distribution should be reported on a 1099-R, it has a "taxable amount" on line 2 that should be 0 in your case if you're right. Also look into the instructions for Form 5329 for more details on avoiding the penalty if need be, though the home buying penalty exclusion is only for a first time homebuyer and only goes to $10,000 FYI. Sounds about right with the "taking less than your contributions" to avoid any taxable distribution though.
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Apr 21, 2016 13:19
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Weird situation re: Federal tax refunds When I submitted my return through Turbotax, I elected to receive my $610 refund via direct deposit. Last week, I received a check from the IRS made out to my wife and me for $400 or so. The check states that it is a tax refund. "Huh," we thought, "why did they send a check instead of DD? And a smaller amount too? Oh well." Today I checked my bank account and discovered a direct deposit from the IRS of $610. Any idea what's going on? More importantly, what would be the best way to sort this out with the IRS? We aren't going to deposit the check until we know it's OK. Thanks 
pig slut lisa fucked around with this message at 02:51 on Apr 28, 2016 |
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Apr 28, 2016 02:42
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There are any number of situations that could cause that, but it would be best to set a few hours out of your day to call them, because if it is a mistake they will want the money back, with interest.
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Apr 28, 2016 05:09
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Admiral101, now that things have settled down, can you explain why insolvency is so tricky?
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Apr 28, 2016 18:11
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sullat posted:There are any number of situations that could cause that, but it would be best to set a few hours out of your day to call them, because if it is a mistake they will want the money back, with interest. If you don't tender the check they don't charge interest.
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Apr 28, 2016 18:32
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sullat posted:There are any number of situations that could cause that, but it would be best to set a few hours out of your day to call them, because if it is a mistake they will want the money back, with interest. Oh man, you weren't joking about the "few hours" thing. Yesterday I spent about 1.5 hours on hold--and I'm pretty sure that 45 minutes in I got switched to the Spanish language hold queue, and then 20 minutes after that to the business tax hold queue--before I hung up, realizing that I was a few blocks away from a walk-in office. Then I spent an hour there before I gave up and went back to work. Next week I'll show up to the walk-in office when they open and hopefull get to work by 9:00 AM.
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Apr 29, 2016 13:18
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I have a tax-ish question. I'm trying to advantage myself as much as possible on taxes, because I pay too drat much for my liking. What I've been doing is socking away post-tax cash into savings/some savings bonds and have reached the point I have a comfortable emergency fund between the two, primarily in straight cash ($15,000). I'm thinking the 'right' choice will be to set my contribution percentage high enough to max out the 401k contribution limit (that is, to the $18k or whatever it is this year limit), but should something really, really, really awful happen what, exactly, is the tax issues around taking a 401k loan? If I'm reading it right it's a case of 'as long as it's paid back within 5 years, and you don't change jobs then it's not an issue' other than paying back pre-tax money with post-tax income. Is this actually right?
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Apr 29, 2016 23:06
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cstine posted:I'm thinking the 'right' choice will be to set my contribution percentage high enough to max out the 401k contribution limit (that is, to the $18k or whatever it is this year limit), but should something really, really, really awful happen what, exactly, is the tax issues around taking a 401k loan? That's pretty much it. It's a viable option for certain types of emergencies (obviously not job loss), though your loss is that the money isn't growing while it's on loan. You have to pay back interest, but that's out of your pocket, not earnings. The only tax issue I see is if you default, I think you're taxed as if you withdrew early plus there is usually an additional penalty.
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Apr 30, 2016 02:44
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cstine posted:I have a tax-ish question. Some 401k plans don't even allow you take a loan. Make sure you can do that before you count on that money.
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Apr 30, 2016 21:31
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Beerdeer posted:Admiral101, now that things have settled down, can you explain why insolvency is so tricky? Because the law surrounding it is complicated enough that there are attorneys who sit around arguing tax insolvency cases as a full time career. Especially when you get into business insolvencies and the effects it has on the shareholders/partners/members. Granted - I don't think your situation is particularly complicated - most CPA's who practice in tax should've been able to get to the correct conclusion with your situation given the facts involved. At the very least, you should've gotten something in writing from a professional guiding you on the tax treatment of that debt discharge (if not just outright hire the professional to handle your taxes for the year in question). It just sounds like the CPA you were talking with was 'shooting from the hip' with his tax advice. Hopefully that's a reasonable explanation - but I'm not sure what kind of elaboration you're looking for. Admiral101 fucked around with this message at 00:51 on May 2, 2016 |
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May 2, 2016 00:42
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Admiral101 posted:Because the law surrounding it is complicated enough that there are attorneys who sit around arguing tax insolvency cases as a full time career. Especially when you get into business insolvencies and the effects it has on the shareholders/partners/members. No, that's cool, and I appreciate you going into more detail. I'm going to talk to a professional when/if we get denied. Thanks.
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May 2, 2016 02:05
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Beerdeer posted:No, that's cool, and I appreciate you going into more detail. I'm going to talk to a professional when/if we get denied. Thanks. Fortunately - the IRS doesn't "deny" amended returns based on technical errors - they'll accept basically any kind of nonsense you mail to them. You can anticipate your amended return being processed and a refund check being issued within the next few weeks or months. Congrats on the submission of a fraudulent return and highlighting the dysfunction inherit within IRS tax return processing.
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May 2, 2016 03:14
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Admiral101 posted:Fortunately - the IRS doesn't "deny" amended returns based on technical errors - they'll accept basically any kind of nonsense you mail to them. You can anticipate your amended return being processed and a refund check being issued within the next few weeks or months. Congrats on the submission of a fraudulent return and highlighting the dysfunction inherit within IRS tax return processing. The dysfunction is 90% of the fun of dealing with them though - especially having to track down a portable disc drive because their IDR wants everything on a drat CD.
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May 4, 2016 02:24
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My in laws are gifting my husband and I ~$45k (below the $14k x 4 for the gift tax exclusion). To be "official", do they need to write four separate checks or can they just transfer it electronically in four separate transactions from their joint account to our joint account? Thanks!
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May 4, 2016 22:51
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I've been doing a good job at not needing to post in this thread for a few years, but now something has gone wrong. 2015 is the first time that I had to a file a separate return for my son due to his unearned income. His mom and I are married, he lives with us full time and we pay all of his expenses, etc. I paper filed his return several weeks ago with no issue, but my subsequent attempt to e-file a joint return for my wife and me was rejected becausequote:Your dependent's Social Security number (SSN) cannot be used to claim an exemption on two separate tax returns. You claimed a dependent as an exemption on your tax return, but this dependent has also filed their own tax return claiming a personal exemption. As far as I can tell, this isn't true. I'm staring at my son's 1040 and box 6a is unchecked and he has a total of 0 exemptions. Since I could claim him as a dependent, I don't think he even could claim his exemption. After spending an hour on hold with the IRS I was advised to paper file our return and include a note explaining the situation, but TurboTax tells me that nobody will read it and that I should just paper file with no explanation. Presumably then the IRS will then paper reject me via form letter and we can go from there. Any suggestions on what the lowest-hassle way to get this resolved is likely to be? I don't particularly need the refund soon but don't enjoy having this hanging over my head.
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May 6, 2016 21:49
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Magicaljesus posted:That's pretty much it. It's a viable option for certain types of emergencies (obviously not job loss), though your loss is that the money isn't growing while it's on loan. You have to pay back interest, but that's out of your pocket, not earnings. The only tax issue I see is if you default, I think you're taxed as if you withdrew early plus there is usually an additional penalty. One thing to beware of is that some plans require any outstanding loans to be paid back essentially immediately if you leave that job (your choice or theirs), and if you can't, the outstanding loan amount is treated as a distribution and you'll be subject to income tax on that amount as well as the 10% penalty tax. I'd still recommend having an emergency fund away from your work-based retirement. I used my work's retirement plan (profit sharing not 401(k)) but when the company I worked for went bankrupt and I needed access to emergency funds to pay things like my mortgage, I couldn't get access to it since no one but the bankruptcy trustee could act on behalf of the company and I was locked out. The money was still there, but no one could authorize me to take funds out of it.
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May 6, 2016 22:19
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ChineseBuffet posted:I've been doing a good job at not needing to post in this thread for a few years, but now something has gone wrong. 2015 is the first time that I had to a file a separate return for my son due to his unearned income. His mom and I are married, he lives with us full time and we pay all of his expenses, etc. I paper filed his return several weeks ago with no issue, but my subsequent attempt to e-file a joint return for my wife and me was rejected because If you're absolutely sure you didn't file him claiming himself then it may just be a coincidence that this is happening when you filed a return for him. You may be dealing with an identity theft situation. In which case you're gonna want to look into Form 14039.
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May 7, 2016 00:23
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skeetied posted:My in laws are gifting my husband and I ~$45k (below the $14k x 4 for the gift tax exclusion). To be "official", do they need to write four separate checks or can they just transfer it electronically in four separate transactions from their joint account to our joint account? Thanks! Uh, just to double-check, but you do realize the gift tax exclusion is per year, not per gift, right? It's also a per person thing, so if your in-laws are married they can give you $28,000 total per year between the two of them. If they're making the separate payments over two years (to get up to $28,000 the first year and the remainder of the money the second year) there's no tax issue. Otherwise, they can just give you the $45,000; they have to file a gift tax form, but that will just subtract from the amount that can be inherited from them without tax later, and considering that it's several million before estate tax ever becomes an issue they won't owe anything. Still have to file the gift tax form (Form 709) though. Epi Lepi posted:If you're absolutely sure you didn't file him claiming himself then it may just be a coincidence that this is happening when you filed a return for him. You may be dealing with an identity theft situation. In which case you're gonna want to look into Form 14039. It's either that or whatever software you used didn't file it as a dependent return (i.e. without the personal exemption) correctly. Assuming the software gives you a paper copy, double-check it to make sure he's not claiming the personal exemption on it. If the paper copy of the return is correct then yeah, I'd suspect identity theft.
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May 7, 2016 00:47
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MadDogMike posted:Uh, just to double-check, but you do realize the gift tax exclusion is per year, not per gift, right? It's also a per person thing, so if your in-laws are married they can give you $28,000 total per year between the two of them. If they're making the separate payments over two years (to get up to $28,000 the first year and the remainder of the money the second year) there's no tax issue. Otherwise, they can just give you the $45,000; they have to file a gift tax form, but that will just subtract from the amount that can be inherited from them without tax later, and considering that it's several million before estate tax ever becomes an issue they won't owe anything. Still have to file the gift tax form (Form 709) though. They're a married couple, so it's $28,000 to husband and $28,000 to wife, so they're in the clear with just $45k.
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May 7, 2016 01:41
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Ancillary Character posted:They're a married couple, so it's $28,000 to husband and $28,000 to wife, so they're in the clear with just $45k. Oh right, forgot about the couple thing on the other end  . Yeah, then two separate checks to each of them should keep them safe in the unlikely event the IRS got interested.
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May 7, 2016 23:10
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MadDogMike posted:It's either that or whatever software you used didn't file it as a dependent return (i.e. without the personal exemption) correctly. Assuming the software gives you a paper copy, double-check it to make sure he's not claiming the personal exemption on it. If the paper copy of the return is correct then yeah, I'd suspect identity theft. Thanks, folks. I had to paper file for him since I gather you can't e-file your first return if you are under x years old (or something like that). Just to make sure I am not doing something totally stupid, all there is to making it a "dependent return" is to not check box 6a on the 1040, right? And then that flows through to 0 exemptions on 6d and from there to $0 of exemptions on line 42. Not some other box to check or form to file? Looks like it is time to start following up on the ID theft angle. Next year I am filing first! EDIT: He also only took the $1,050 dependent standard deduction.
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May 9, 2016 00:15
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Anyone know if I can use the IRA First-Time Home Buyer's Exception to purchase a house outside of the US? I haven't been able to find anything specifying that the house has to be in the US...
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May 11, 2016 21:30
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ChineseBuffet posted:Thanks, folks. I had to paper file for him since I gather you can't e-file your first return if you are under x years old (or something like that). Just to make sure I am not doing something totally stupid, all there is to making it a "dependent return" is to not check box 6a on the 1040, right? And then that flows through to 0 exemptions on 6d and from there to $0 of exemptions on line 42. Not some other box to check or form to file? Technically, a dispute over a dependent is not resolved using the 'identity theft' path. That is when somebody uses your SSN to file. If someone uses your dependent's SSN, the IRS will send you both letters, and make a determination over who is eligble to claim the dependent. You wouldn't submit a Form 14039 in this instance.
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May 13, 2016 04:09
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It wouldn't be considered a dependent dispute if it was just some rando, though, would it? If there's no one known to the family who would have claimed him, isn't this more likely to be ID? E: vvv that is bizarre. I don't doubt it, I just wouldn't have expected it. BonerGhost fucked around with this message at 05:16 on May 13, 2016 |
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May 13, 2016 04:45
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NancyPants posted:It wouldn't be considered a dependent dispute if it was just some rando, though, would it? If there's no one known to the family who would have claimed him, isn't this more likely to be ID? That's the IRS for you. They don't distinguish between ID theft dependent fraud and regular dependent fraud when it comes to resolving the situation.
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May 13, 2016 04:59
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I'm setting up my own office and my parents have been helping me out by covering a few of the expenses (electricity and internet) until I get a regular flow of income. Utilities are in my name but they've been paying it with their credit card. Can I still deduct the cost of those expenses out of my Self Employment Tax? If not, going forward could I ask them to give me the money as a gift, pay for the utilities myself and then deduct those expenses? Not trying to scam the IRS or anything, just double checking so I don't gently caress up.
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May 13, 2016 16:58
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sullat posted:That's the IRS for you. They don't distinguish between ID theft dependent fraud and regular dependent fraud when it comes to resolving the situation. That's not the issue though, he's not saying that someone else claimed the kid, but that someone filed a return with the kids social as the primary taxpayer social AND that person took the exemption for the kid. Unless I misunderstood something. I mean there's a specific part of the 14039 that is explicitly for parents filing on behalf of a dependent.
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May 13, 2016 18:38
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Epi Lepi posted:That's not the issue though, he's not saying that someone else claimed the kid, but that someone filed a return with the kids social as the primary taxpayer social AND that person took the exemption for the kid. Unless I misunderstood something. Right, the rejection message was pretty explicit that the dependent in question had filed his own return claiming his exemption (rather than being claimed as a dependent on someone else's return). So I think it could be either: 1) IRS misprocessed kid's return and has him as claiming his exemption. They transcribed my name from my paper return incorrectly a decade or so back, so I don't put this past them. 2) Someone else filed a fraudulent return as the kid. I assume I will get some more information when the IRS processes my paper return. I also requested a transcript of the kid's return thinking that will show whether they have him down as claiming his exemption but with all of the other information as I filed it.
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May 13, 2016 23:56
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Epi Lepi posted:That's not the issue though, he's not saying that someone else claimed the kid, but that someone filed a return with the kids social as the primary taxpayer social AND that person took the exemption for the kid. Unless I misunderstood something. Gotcha. Yeah, if the fraudulent return was for the dependent as the primary, and the parents are submitting the 14039 form on behalf of the dependent, that is the proper method to clear up the fraudulent return. It's only when the dependency exemption is claimed on multiple returns that you wouldn't need the 14039 form. Even if it is technically identity theft and being claimed by a complete stranger.
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May 14, 2016 01:58
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Tax related question involving HSAs: I recently enrolled in my company's insurance policy and setup a corresponding HSA account that they contribute to; I also recently had major surgery, so I've easily hit my deductible and will have enough savings to cover it without going into debt. From a tax perspective, does it matter how I pay my medical bills? Should I contribute the total of my deductible from my savings account to my HSA, so that I can claim the HSA tax deduction for the entirety of my deductible come tax time? Or am I misunderstanding how HSA tax deductions work?
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May 17, 2016 17:28
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Gift tax questions. When gifting to my parents can I gift $14000 to each of them with out incurring tax? Or can I only gift $14000 in total to the both of them? They are married and file jointly. Also is it legal to gift my parents cash and then have them gift it to my sister, whom I've already gifted $14000? And does it trigger a gift tax on me?
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May 20, 2016 06:53
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.Z. posted:Gift tax questions. Short answer: gift tax is only if you gift in excess of the lifetime exclusion (which is several millions of dollars - don't remember off hand what it's at for 2016). You're not paying tax on anything here. The amount in excess of 14,000 is only the amount that gets applied against the multi-million lifetime exclusion (which is reported on a gift tax return). Unless you're a multi millionaire, this is not an issue for you and I wouldn't worry about any of this.
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May 21, 2016 00:35
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What about gift tax for the recipients?
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May 21, 2016 00:39
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NancyPants posted:What about gift tax for the recipients? Recipients are generally not subject to tax on a gift. Also bear in mind that while the lifetime exclusion is currently over $5M, historically it was much lower, and could change again before you die. IRS has a good FAQ here: https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes Relevant Code section for your reading pleasure: https://www.law.cornell.edu/uscode/text/26/2503 I don't practice gift tax, so for more specific answers you may need to ask an accountant who does.
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May 21, 2016 00:58
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PatMarshall posted:Recipients are generally not subject to tax on a gift. Also bear in mind that while the lifetime exclusion is currently over $5M, historically it was much lower, and could change again before you die. IRS has a good FAQ here: https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes That's really useful, thanks for the links
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May 21, 2016 01:22
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Help, I need help filing back taxes. I've lived abroad since 2010. For calendar years 2011 and 2012 I filed electronically using TurboTax. I tried again in 2013, but the software broke. I failed to file the last 3 calendar years. For 2013, 2014, and 2015 I made well under the $80+k USD 2555 form exemption limits. How can I file my my back taxes?
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May 21, 2016 02:23
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Go to IRS website, print out old forms, fill them out, mail them in. If your taxable income was zero, you won't have any penalties or nothing, but it sounds like you have a requirement to file because of the foreign income.
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May 21, 2016 03:24
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Only other thing to watch out for is the FBAR: if you had more than $10,000 in a foreign bank account, you're required to report the accounts by June 30th each year. Penalties for failure to file could apply even if you did not owe any tax. More information here: https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar In addition, if you have a significant ownership interest (generally 10% or greater) in a foreign entity (partnership, corporation, etc.), you may have had an informational filing requirement for the missed years, and failure to file these returns generally carries a $10,000 penalty for each missed return.
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May 21, 2016 18:40
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I'm considering switching careers, but I have never worked for anyone else before and have no idea how payroll taxes work. Where can I read up about some of the basics before I meet with the CPA? (web-sites books etc etc etc). I know my employer will pay for some of my taxes which come out of my paycheck, and I know about brackets. When I file for taxes at the end of the year, how do I know if I will have to pay additional money? Where can I find this information? I just don't want to get into a situation where I end up owing unexpected taxes when I file. I know my CPA can answer this, but it seems like a really basic thing, and I'd much rather do my research beforehand so I can talk to him about more specific questions I might have.
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May 26, 2016 19:01
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