Muttonchips posted:

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.

mrmcd posted:

Do you mean you want to move to a self-employed / 1099 situation, or just change jobs? If you are just changing jobs there's not really anything special to do. You just fill out the forms HR gives you on your first day. At most, if your new job pays a lot less then you might want to setup your payroll deductions to withhold extra just be be sure.

Self-employed is a whole other thing where you have to pay extra taxes and send estimated payments to the IRS. That's a situation where you might want to have an accountant walk you through it.

https://www.irs.gov/irm/part4/irm_04-076-014.html posted:

4.76.14.3.5.1 (08-30-2010)
Strike Fund Benefits and Lockout Benefits

Strike fund benefits may be wages subject to FICA, FUTA, and federal income tax withholding if the labor organization directs the members' activity. (Rev. Rul. 75-475, 1975-2 C.B. 406)

Strike fund benefits may be compensation to the member, but not subject to FICA, FUTA, and federal income tax withholding, if the payment is in accordance with the union's constitution and not as remuneration for services performed by an employee for his employer. (Rev. Rul. 68-424, 1968-2 C.B. 419) and 26 USCS §3401), distinguished as in Gregory v. United States, 637 F.Supp. 624)

Note:

There are numerous cases where Kaiser was distinguished and strike benefits were held to be includable as gross income under IRC § 61. Woody v. United States, 368 F.2d 668 (9th Cir.1966); McConnell v. United States, 70-2 U.S.T.C. par. 9467 (E.D Tenn. 1970); [**8] Halsor v. Director of Internal Revenue, 240 F. Supp. 738 (D.Minn.1965); Godwin v. United States, 6501 U.S. Tax Cas. (CCH) 9121, 15 A.F.T.R.2d 258 (W.D.Tenn.1964); Placko v. Commissioner, 74 T.C. 452 (1980); Colwell v. Commissioner, 64 T.C. 584 (1975); Brown v. Commissioner, 47 T.C. 399 (1967); Hagar v. Commissioner, 43 T.C. 468 (1965); Stone v. Commissioner, T.C.M. (P-H) par. 85-544 (1985); Jernigan v. Commissioner, T.C.M. (P-H) par. 68-268 (1968). All of these cases refer to the legal standards set forth in Duberstein by the Supreme Court for determining excludable income as gifts.

Strike fund benefits may be excludable from the member's income as a gift based on the form and amount of the payment, the member's need, etc. (Rev. Rul. 61-136, 1961-2 C.B. 20, and United States v. Allen Kaiser. 363 U.S. 299 (1960), 1960-2 C.B. 33)

Lockout benefits are treated like strike fund benefits. (Rev. Rul. 58-139, 1958-1 C.B. 14)

4.76.14.3.5.1.1 (03-18-2002)
Examination Guidelines - Strike Fund Benefits and Lockout Benefits

Review the organization's constitution, articles, bylaws, etc. for the terms and conditions under which strike fund benefits and lockout benefits are paid.

Check the organization's minutes for any references indicating the intent of the payment.

Examine the disbursement journals to ascertain whether the members received the same amount.

Inspect any documentation provided by the members.

Review Forms W-2 and 1099 to determine whether payments were reported to the members

sullat posted:

Anyone know, if you make excess contributions to a Roth IRA and have to pay the penalty on them, can you get those penalties waived or abated?

Raimondo posted:

alnilam posted:

I have a question about form 8283. Basically, I moved, and donated a fuckton of good stuff to goodwill. Easily above $500 worth of revenue that Goodwill is going to make on that stuff, and $500 is the threshold where you have to do form 8283.

My question is, for anyone who has used that form before, is it worth it? I could probably estimate all the stuff I donated at about $1,000-1,500, which basically means an extra $200-300 off of my taxes. If instead I only claim $499 (and therefore don't need to bother with the form), then I save about $100 off of my taxes.

So how much does the IRS scrutinize the form? Again I'm not being dishonest to the IRS at all, but rather wondering if saving an extra 100-200 is worth the risk of possibly having to expend some effort answering IRS questions down the line, or even prove things (which I really can't, since Goodwill doesn't write your items into the receipt they give you).


Also, why does the form only have space for 5 items? I guess I could categorize my donations, like Clothing, Kitchenware, Electronics, etc?

kaishek posted:

I wanted to confirm my understanding of this situation:

For the first 6 months of the year, I was an employee of a foreign company residing abroad (I qualified for the FEIE via physical presence). For the latter six months of the year, I will still be an employee of the same company, but residing in the US and working remotely. The company is pretty small.

My understanding is that for the first six months of the year, I am subject to income tax but not to medicare/social security taxes. I'm not sure how to report this, though. The IRS lists a bunch of rules under which you might be subject to SS/MC taxes, and I don't meet any of them, nor was I self-employed.

For the second six months of the year, I understand that I am subject to SS/MC tax because my work is performed in the US (albeit for a foreign employer). However, my employer will not register in the US or withhold any of those taxes. In that case, do I then have to file as "self employed" even though I am not, in fact, "self employed"?

Ur Getting Fatter posted:

Not an accountant so I might be wrong, but the Physical Presence Test requires almost an entire year abroad before you quailify.

At least that's what TurboTax explained to me when I took it and this IRS site seems to confirm it.

https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-physical-presence-test

asur posted:

The physical presence test is in a 12 month period, but that 12 month period doesn't need to align with the US tax year so if he was in that country in the previous year he may qualify.

bows1 posted:

My buddy and I started a company and did our first job before the company was finished being registered with the government and we had an EIN.

For payment I had to write down my personal SS on the w9.

My question is, how can I do an income transfer to my new company, and since i have to pay the people that worked with me quickly; is there something I can fill out to show that its been paid and not personal or company income?

Let me know!

kaishek posted:

I wanted to confirm my understanding of this situation:

For the first 6 months of the year, I was an employee of a foreign company residing abroad (I qualified for the FEIE via physical presence). For the latter six months of the year, I will still be an employee of the same company, but residing in the US and working remotely. The company is pretty small.

My understanding is that for the first six months of the year, I am subject to income tax but not to medicare/social security taxes. I'm not sure how to report this, though. The IRS lists a bunch of rules under which you might be subject to SS/MC taxes, and I don't meet any of them, nor was I self-employed.

For the second six months of the year, I understand that I am subject to SS/MC tax because my work is performed in the US (albeit for a foreign employer). However, my employer will not register in the US or withhold any of those taxes. In that case, do I then have to file as "self employed" even though I am not, in fact, "self employed"?

kaishek posted:

I hate to self-bump, but is this the kind of thing I just need to talk to a tax professional about? It seems like there is very little about this online - there's a lot about americans abroad, but not about this situation.

Ancillary Character posted:

You probably do have to talk to a tax professional for a clear answer. I would expect that you'd have to pay the self-employment rate for SS and Medicare taxes. The SS and Medicare tax rate is 15.3%, employees only get a "break" and pay 7.65% because their employer is required to pay half of the tax. If your employer isn't required to pay their half and isn't expected to by the IRS, that leaves only you to pay the other 7.65%.

Unless there's a mechanism for you to only get credited for half of your half-year of income for SS and Medicare benefits to account for you only paying in half of the 15.3%, I don't see a way you'd get out of not paying self-employment tax, which is just the full SS and Medicare tax rate.

Ancillary Character posted:

You probably do have to talk to a tax professional for a clear answer. I would expect that you'd have to pay the self-employment rate for SS and Medicare taxes. The SS and Medicare tax rate is 15.3%, employees only get a "break" and pay 7.65% because their employer is required to pay half of the tax. If your employer isn't required to pay their half and isn't expected to by the IRS, that leaves only you to pay the other 7.65%.

Unless there's a mechanism for you to only get credited for half of your half-year of income for SS and Medicare benefits to account for you only paying in half of the 15.3%, I don't see a way you'd get out of not paying self-employment tax, which is just the full SS and Medicare tax rate.

22 Eargesplitten posted:

I have a question about this part of the W-4

I claim exemption from withholding for 2016 , and I certify that I meet both of the following conditions for exemption.
Last year I had a right to a refund of all federal income tax withheld because I had no tax liability and
This year I expect a refund of all federal income tax withheld because I expect to have no tax liability.

Last year I got all of my withholdings back as a refund because my education credit covered it. This year, calculating my tax burden with the IRS calculator website, it looks like this year's education credit is going to cover everything, even if my income suddenly doubled. Does "no tax liability" mean I wouldn't owe anything without the credit, or that I won't owe anything after the credits? I'm inclined to claim exemption, but I don't want the IRS to come by, say I don't qualify, and fine me out the rear end for it.

quote:

No Tax Liability Last Year

You do not owe a penalty if you had no tax liability last year and you were a U.S. citizen or resident for the whole year. For this rule to apply, your tax year must have included all 12 months of the year.

You had no tax liability for 2014 if your total tax was zero or you were not required to file an income tax return.

<snip>
For 2014, your total tax on Form 1040 is the amount on line 63 reduced by the following:

Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 58).

Any tax included on line 59 for excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts, or any tax on excess accumulations in qualified retirement plans.

The following write-ins on line 62:

Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance,

Tax on excess golden parachute payments,

Excise tax on insider stock compensation from an expatriated corporation,

Look-back interest due under section 167(g),

Look-back interest due under section 460(b),

Recapture of federal mortgage subsidy, and

Additional tax on advance payments of health coverage tax credit when not eligible.

Any refundable credit amounts listed on lines 66a, 67, 68, 69, and 72.

If you filed Form 1040A, your 2014 total tax is the amount on line 39 reduced by any refundable credits on lines 42a, 43, 44 and 45.

If you filed Form 1040EZ, your 2014 total tax is the amount on line 12 reduced by the amount on line 8a and 11.

Boris Galerkin posted:

I'm a US citizen and have been working abroad since January. I'm working for a local company, being paid in the local currency, and will pay income taxes to this country. I understand that I need to report my income to the IRS nonetheless but I have the option to claim the FEIE (I don't earn anywhere close to $100k) or a foreign tax credit. How do I decide which one is more tax advantageous for me?

Also I just found out that I apparently need to make quarterly estimated tax payments to the IRS since my employer isn't withholding US taxes for me. Apparently the first payment was due in April. Oops. I wasn't expecting to pay any federal income taxes to the IRS so I just never thought about it but 1040-ES seems to want me to estimate my quarterly payments based on my 2015 income which was entirely in the US and my 2015 salary is more than 200% my current salary, so that just seems really dumb to me to use my 2015 income to estimate my 2016 taxes (where I'll expect to owe $0 to the IRS). What do I need to do to avoid being fined for negligence?

kaishek posted:

In order to avoid penalties for underpayment, you have to pay at least as much in taxes as you paid last year OR within 10% of your tax liability for this year. So you could get away with paying as close as possible to your estimated taxes for this year.

You did, however, also miss the second 1040-ES deadline, June 15. But if you're living abroad the full year, and being paid much less than $100k, your tax liability is likely to be $0 or pretty close to it, so it may not matter. In order to figure out which of the two is more advantageous, you'd need to figure out your US tax liability (as though you weren't living abroad). If your foreign tax liability is higher, that may be the more beneficial credit for you. The FEIE (for your first year, probably based on physical presence) requires that you not be in the US for 330 days out of a 365 day period, so if you're traveling back into the US much you may fail to qualify.

Boris Galerkin posted:

Right, so let's assume I take the FEIE which gives me an AGI of $0 so I'd owe nothing for 2016 to the IRS. How do I handle the estimated payments then? Can I just ignore them until I file taxes in April or do I still need to do something stupid like mailing them the quarterly forms with $0 written on a check?

I'm pretty sure I'd pass the physical presence test for residency either way but I was going to try to claim "bona fide residence" instead. The documents (I forgot which one now, 54 sound familiar? The one for US persons abroad.) are not very explicit about how I can claim bona fide residency abroad. I mean, it basically said something like "you can claim bona fide residency if you work abroad but plan on returning the the US, someday, as long as you set up a tax home there and can demonstrate a good reason." I plan on living here for at least 5 years and I have literally no property of any sorts left in the US so I figured that would pass.

Boris Galerkin posted:

Right, so let's assume I take the FEIE which gives me an AGI of $0 so I'd owe nothing for 2016 to the IRS. How do I handle the estimated payments then? Can I just ignore them until I file taxes in April or do I still need to do something stupid like mailing them the quarterly forms with $0 written on a check?

keevo posted:

I'm a little confused about write-offs for mileage. I DJ and do production for events so I do have to drive to these events around my city and occasionally to other cities. A lot of my office-work is done from my house. From what I understand, I can't write-off mileage for commuting from my house to an office but I can write-off mileage for traveling from one office to another. So if I'm working an event around my city, I can write off that mileage, correct? That wouldn't be considered commuting, right?