PatMarshall posted:

Try IRS publication 4345 to start. On my phone, but if that is not detailed enough, let me know and I can link you to the IRS audit guide tomorrow.

scavok posted:

So my employer offers a pre-tax flex spending account package that includes health, public transit, and parking (when used for work commuting purposes). I'm not the biggest fan of flex spending accounts since it's difficult for me to predict these expenses for an entire year, and somehow it's legal for them to just make any remaining balance at the end of the year vanish. Am I correct in assuming that I can alternatively write off my commuting expenses when I file my taxes, and the savings in the end will be the same as using a flex account?

FogHelmut posted:

My wife is self employed. She is getting a new car which she will use for personal and as well as for work. If I cosign on the loan, will this have any tax implications vs the loan being fully in her name? We normally file together.

BEHOLD: MY CAPE posted:

I have substantial side income as a sole proprietor and have a question about the deductibility of credit card annual fees. I don't really need a business credit card for the amount of business related spending I do, but if I was able to open a platinum tier type credit card for my business activity, deduct the annual fee as a business expense, and use the card benefits at a ~45% discount given my marginal tax rate I would probably do it. Of course I would do all my business spending and only my business spending on the card, and since I am as sole proprietor the card would be in my personal name rather than a business entity. Is this an allowable practice or is this too obviously a loophole?

BEHOLD: MY CAPE posted:

I have substantial side income as a sole proprietor and have a question about the deductibility of credit card annual fees. I don't really need a business credit card for the amount of business related spending I do, but if I was able to open a platinum tier type credit card for my business activity, deduct the annual fee as a business expense, and use the card benefits at a ~45% discount given my marginal tax rate I would probably do it. Of course I would do all my business spending and only my business spending on the card, and since I am as sole proprietor the card would be in my personal name rather than a business entity. Is this an allowable practice or is this too obviously a loophole?

Steampunk Hitler posted:

Does this really seem like I overpayed my taxes by a whopping ~17k? (or will I assume, if I don't adjust my deductions). I understand there isn't a penalty for overpayment, but is a 17k refund going to make the IRS think I'm cheating on my taxes? Is this something I should go to a professional about or am I worried over nothing?

Thanks a lot!

Steampunk Hitler posted:

Am I using these withholding calculators wrong or did I really overwithold to the tune of ~$17,000 this year?

Going by what the the turbotax calculator asked I get paid twice per month, my gross income is $6740 per pay period. I am married, I live in Pennsylvania with a wife who doesn't work and a child under the age of 17. I've always just claimed 0 on my withholding and got back a grand or so. If I put my information into the IRS withohlding calculator, it's telling me I should claim 36 on my w4... which does not seem correct either. I will pay roughly $20,000 in mortgage interest this year and $8000 in property taxes (this will be the first year I do this, bought the house in December last year). My last paycheck was 8/31 and the values on that were:

code:

Description       Current  YTD
---------------------------------------------
Fed Witholding    109.55   17002.61
Fed MED/EE        93.00    1527.51
Fed OASDI/EE      391.64   6351.40
PA Unempl EE      4.72     77.40
PA Withholding    196.02   3220.82
401(k)            269.61   9152.12
Pre-Tax Benefit   355.12   5681.92



           Total Gross   Fed Taxable Gross   Total Taxes   Total Deductions   Net Pay
-------------------------------------------------------------------------------------
Current    6740.26       6144.03             1785,93       684.88             4269.45
YTD        108742.44     96193.08            28359.74      15796.44           64586.26

Does this really seem like I overpayed my taxes by a whopping ~17k? (or will I assume, if I don't adjust my deductions). I understand there isn't a penalty for overpayment, but is a 17k refund going to make the IRS think I'm cheating on my taxes? Is this something I should go to a professional about or am I worried over nothing?

Thanks a lot!

Lord of Garbagemen posted:

I did some napkin numbers, and i think you would be ~500 refund for federal. I was a little confused on your current w/h since its so much different than the average so i just assumed you would withhold 110 for the rest of the pay periods. So basically 17,765 total federal withholding, and 4,592 Penn withholding.

momtartin posted:

So I might have an opportunity to be a contracter for Q4 for a former coworker (she knows I got laid off). She wants me to put together a number to pitch to her boss. I know I need to take into consideration Healthcare, but how much should I take into consideration for taxes? I've heard that contractors get taxed at a higher rate, but that's not taken out of the paycheck, and is reported during tax time. I don't want to screw myself during tax time, so I want to make sure whatever number I give, makes this as profitable as it can be.

Admiral101 posted:

By the way - anyone know what happened to Furu? Just realized I haven't seen his posts in a while and it looks like he hasn't posted since April 2015..?

Hopefully not buried alive in tax compliance

AbbiTheDog posted:

Some other user months ago was ranting about him on here - maybe something went south between the two of them and he got tired of posting here? With all he did, I would have thought he was too busy to post here.

Let's be honest, as a professional these boards are a double edged sword - can we be sued for posting on here? Yes. Do the users (for the most part) need to google their questions first? Yes. Do the answers that really cannot be answered need to be taken to a professional and compensate said professional? Yes. Is it kind of fun and rewarding to help people? Yes, but it does pull us away from, you know, paying clients and our day jobs.

Nephzinho posted:

He stopped posting regularly well before loving me over.

AbbiTheDog posted:

I don't know either of you, but sorry that happened. Frankly that's why I never tried getting clients from a website that might be 2,000 miles away - never know when things can go south in a hurry.

revmoo posted:

IRS sent me a CP2000 demanding money because I filed a W2 and my employer didn't. Not my fault, my taxes were paid accurately, I had nothing to do with it. Their accountant just failed to file.

So I responded with a copy of the W2. They responded saying they needed more time.

Then I received a CP22A demanding payment and late fees on top because it took them so long to respond. They completely ignored the W2 I included and didn't even address it.

Where do I go from here?

AbbiTheDog posted:

Collections and the automated underreporting unit (AUR) are two different arms of the IRS and do not communicate with one another. Call the phone number on the CP22A, explain the situation and that you responded to the CP2000, and ask for more time for the IRS to process. Collections should give you a reprieve. If they give you a response date, DO NOT MISS IT. You might need to call back in 30-60 days.

revmoo posted:

Good god that's loving stupid.

Thanks for the advice!

AbbiTheDog posted:

What's really dumb is a lot of times the agent on the phone cannot even see what letter the IRS sent you in response, so have it in front of you when you call.

revmoo posted:

Just got off the phone. 1:04:51. Fuuuuuck.

The person that reviewed my case simply marked it 'fully agreed' and closed it out.

revmoo posted:

It was about 50 minutes of total hold with about 10 talking with two different agents.

Lord of Garbagemen posted:

This checks out. Also pro tip the irs is required to be open for at least an hour in every timezone (that is relevant to the 50 states). If you want to get through (public or profesional lines) call 4 pm hawaii time. I havent had to wait more than 15 to 20 minutes usually.

momtartin posted:

So I got a job as an independent contracter for a few months, and I have few questions
- I know I have to pay a higher tax rate, but I've heard that I need to do that quarterly. What's the process for that/what forms do I need/what is the deadline?
- I got a new computer for this job, but I got it before I officially signed the contract (though mostly because I needed a new personal laptop, but my old one could not handle this). Do I get to use that as a tax deduction? Or do I have to purchase it after I get the new job?
- I'll be working from home, so what all can I reasonably deduct for "expenses"?
- This ends 12/31, so do I not file this on my normal tax returns?

This is all new to me so if there's something I'm missing, please let me know.

MadDogMike posted:

Steampunk Hitler posted:

The Innocent Spouse Relief programs that the IRS offers... do they apply at all to someone whose spouse handled the finances, the spouse was self employed (though they were personally W2'd), and the spouse never filed the tax returns (and likely never made estimated payments either)?

Bobx66 posted:

Is it possible to transfer my various old employer 401Ks into my self directed 401K? Will I need to do a "self directed rolloever" in which I liquidate my 401K accounts and then deposit the funds into my self directed 401K within 60 days? Etrade's website is implying that the prior 401Ks are eligible to be transferred directly into the self directed 401k.

MadDogMike posted:

OK, in order:

1. The "higher tax rate" thing is because you owe social security/medicare tax on self employment income, which is collected when you file taxes as "SE tax". There's also the fact no one's doing withholding for the regular tax either, which you have to do yourself since the IRS tax system is theoretically "withhold as you receive income". As for making the withholding payments, you can either use a 1040-ES here or just go to the IRS website at https://www.irs.gov/ and click the payment option to do a payment online (word of warning, there's a service charge if you use a credit card instead of direct debit). Look for "estimate tax calculators/SE tax calculators", there are a bunch online to help you figure out the amount you need to send in.

2. This kinda stuff gets awkward to explain over the Internet. The purchase time alone doesn't screw you over (IRS just cares when it was "put into service" for business purposes), but if you're using it for non-business purposes... that's a whole other can of worms you're opening. Then there's depreciation and such, which you probably need a preparer to handle for you correctly.

3. Home office is yet another can of worms. The crucial one for you is that the office must be a space set aside solely for business purposes, something the IRS can theoretically audit by sending someone to a home and asking to see the office in question and dinging you if they see anything non-business related in the space. As for other expenses, basically if you are spending money out of pocket and not being reimbursed for business-related costs, that's a potential expense, but you want things as clear cut as possible that you're not mixing business and personal expenses.

4. NO, this WILL be on your taxes come filing in 2017. Contractor income is treated as personal income and reported on the 1040. The company will send you something called a 1099-MISC if you earn over $600 this way showing how much they paid you, otherwise it's on you to track your income.

Let me say this to everybody dealing with self employment income, there are two major priorities for you if you want to avoid trouble from the IRS. First, try to keep your business and personal as much apart as you can manage. The places where they cross (like home office and equipment used for both personal and private purposes) are already very tricky to get right. Don't add any more crosses you can avoid, or be prepared to have expenses disallowed as a result. Second, document, document, document!!! Keep receipts, record any financial transactions related to business, have things as organized as possible. Not only does it save your rear in case of audit, it helps the aforementioned business/personal separation thing because it shows the IRS you are taking this seriously, it's not just a casual hobby sideline.

And while I try not to play pushy salesman and encourage you to come to a tax preparer like me, this is one area where I really do suggest it is worth seeing a professional. To be blunt, you WILL usually pay several hundred dollars for the service if you have self-employment income. However, you pay so much because business/self employment tax rules are as complicated as most people will ever get with their taxes, and you do NOT want to screw them up because the IRS knows this area is where mistakes (and outright fraud) are often made, and they will be looking. *Maybe* you can get away with the prompting on TurboTax or H&R Block Online or similar (if you are certain you have no expenses to write off and all the income is neatly on a 1099-MISC you're probably OK with just software) but the rules get complicated so fast and there's so many things you might not know to even consider that the idea makes me leery, it's hard enough "programming" preparers with all of this much less software. At the least if you're going to be doing this for a long time it's worth seeing a professional the first year to make sure things are set up right at first. Getting too cheap and making mistakes is the definition of penny wise pound foolish here, because you'll be amazed how much even small errors in self employment can make you owe in taxes and time dealing with the IRS. Apologies if I sound ranty here, but this is the time of year where my work usually involves fixing things like this, so the thought of sending someone off to do this sort of thing with a few basic tips on their own downright triggers me .

NancyPants posted:

Working from home doesn't mean you're a contractor. If you're an employee, you have to have your taxes withheld unless you qualify for certain exemptions. You're working in NC and are ostensibly a NC resident, you will have to pay NC income tax.