US Income Tax Thread: Bank error in your favor! GO DIRECTLY TO JAIL.

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > US Income Tax Thread: Bank error in your favor! GO DIRECTLY TO JAIL.

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Droo: Jun 25, 2003

mishaq posted:

https://www.youtube.com/watch?v=Otbml6WIQPo

Or the version for today's congress, https://www.youtube.com/watch?v=uf2q66G3lmM

# ? Oct 28, 2016 04:03

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# ? May 11, 2024 09:16

Kinson: Nov 25, 2007; Working hard for the money.

mishaq posted:

https://www.youtube.com/watch?v=Otbml6WIQPo

This is the best answer.

However here's a little TL:DW for you...

Tax law originates in the House.

# ? Oct 28, 2016 15:38

potatoducks: Jan 26, 2006

Ahahaha. I changed my mind. There SHOULD be minimum educational requirements in order to vote.

Finally, something Trump supporters and I can agree on.

# ? Oct 28, 2016 17:46

MadDogMike: Apr 9, 2008; Cute but fanged

It has taken YEARS for the Affordable Care Act's tax provisions to phase in, and some of them are still in the process of coming in as we speak. So for any sanely written law the answer can be "a while" even if it is passed. They sure as hell can't make massive changes right after a president is inaugurated since tax season is already started by then.

# ? Oct 29, 2016 13:45

SiGmA_X: May 3, 2004; SiGmA_X

potatoducks posted:

Ahahaha. I changed my mind. There SHOULD be minimum educational requirements in order to vote.

Finally, something Trump supporters and I can agree on.

Agreed. Same with serving on a jury. But this isn't the right sub/thread for this OT!

Eugene, first, the president doesn't set tax policy. Second, a policy change could happen in the year the house passes the tax change (see annual renewals of PMI deduction and education credits), or it could take years to go into law.

# ? Oct 30, 2016 20:47

AbbiTheDog: May 21, 2007

Orange Sunshine posted:

About $1000 per month to our accountant to do the taxes, payroll, monthly profit and loss statements.

Is your accountant a CPA or through a CPA firm (do they slap a one-page letter on the profit and loss, or do they have disclaimers at the bottom)?

If so, you're paying extra bucks for a wasted service - when CPAs (or CPA firms) issue financial statements, we're required to do, at a minimum, a "compilation report." This costs money, not in the final product, but in the amount of back-end work we're required to do.

Do yourself a favor, and if you're using a CPA, ask for a backup copy of the quickbooks file and print the statements yourself - that gets the CPA out from the reporting requirement and you might be able to negotiate down a lower monthly fee.

# ? Oct 31, 2016 17:10

cr0y: Mar 24, 2005

If I rent should I be having local city school tax pulled from my pay? I see it coming out (2% !)but i do not own a home. This is in Pittsburgh of it matters. Is this on my W2 somewhere?

# ? Oct 31, 2016 17:34

Missing Donut: Apr 24, 2003; Trying to lead a middle-aged life. Well, it's either that or drop dead.

AbbiTheDog posted:

when CPAs (or CPA firms) issue financial statements, we're required to do, at a minimum, a "compilation report."

That is no longer true. SSARS 21 allows a non-compilation preparation engagement for CPAs.

# ? Oct 31, 2016 18:41

Orange Sunshine: May 10, 2011; by FactsAreUseless

AbbiTheDog posted:

Is your accountant a CPA or through a CPA firm (do they slap a one-page letter on the profit and loss, or do they have disclaimers at the bottom)?

If so, you're paying extra bucks for a wasted service - when CPAs (or CPA firms) issue financial statements, we're required to do, at a minimum, a "compilation report." This costs money, not in the final product, but in the amount of back-end work we're required to do.

Do yourself a favor, and if you're using a CPA, ask for a backup copy of the quickbooks file and print the statements yourself - that gets the CPA out from the reporting requirement and you might be able to negotiate down a lower monthly fee.

Thanks for the advice, but our accountant is the sloppiest, laziest accountant in the country. It's safe to say that he is doing the least possible back end work already, regardless of whatever the laws or rules are. I catch him making obvious mistakes all the time. Like forgetting to include 1 week's worth of food expenses for the month in our monthly statement, or making various simple mathematical or reporting errors. The last time he did my personal taxes, he forgot to include all my income for the year, for example.

# ? Nov 1, 2016 01:00

BonerGhost: Mar 9, 2007

Why are you still using the guy? It doesn't sound like he's cheap either.

# ? Nov 1, 2016 01:11

BEHOLD: MY CAPE: Jan 11, 2004

Personal federal income tax question: I make about half of my income as W2 wages and half as a 1099 independent professional. I had a big income increase and I figure I will owe about $10k in taxes when I file. I increased my withholdings a bit so I will withhold more than my 1040 total tax owed for last year, and therefore I should qualify for safe harbor from underpayment penalty. My question is, will I still qualify for safe harbor if I request an automatic extension to file? This seems like a much too obvious loophole but it would be really nice to put off forking over a big tax bill for an extra six months.

# ? Nov 1, 2016 01:42

urnisme: Dec 24, 2011

BEHOLD: MY CAPE posted:

Personal federal income tax question: I make about half of my income as W2 wages and half as a 1099 independent professional. I had a big income increase and I figure I will owe about $10k in taxes when I file. I increased my withholdings a bit so I will withhold more than my 1040 total tax owed for last year, and therefore I should qualify for safe harbor from underpayment penalty. My question is, will I still qualify for safe harbor if I request an automatic extension to file? This seems like a much too obvious loophole but it would be really nice to put off forking over a big tax bill for an extra six months.

An extension only extends your filling deadline; you still need to pay what you owe by April 18. You're supposed to estimate what you will owe and pay it with your extension. They'll charge interest from April 18 until you pay the balance of what you owe.

# ? Nov 1, 2016 01:59

Admiral101: Feb 20, 2006; RMU: Where using the internet is like living in 1995.

urnisme posted:

An extension only extends your filling deadline; you still need to pay what you owe by April 18. You're supposed to estimate what you will owe and pay it with your extension. They'll charge interest from April 18 until you pay the balance of what you owe.

Interest and late payment penalties* - the penalties are much more significant than the interest.

# ? Nov 1, 2016 03:16

Lord of Garbagemen: Jan 28, 2014; Look on my works, ye Mighty, and despair!

Missing Donut posted:

That is no longer true. SSARS 21 allows a non-compilation preparation engagement for CPAs.

This, you can do a "prep of financial statements" with no letter . Just some checklists.

# ? Nov 1, 2016 06:01

BEHOLD: MY CAPE: Jan 11, 2004

urnisme posted:

An extension only extends your filling deadline; you still need to pay what you owe by April 18. You're supposed to estimate what you will owe and pay it with your extension. They'll charge interest from April 18 until you pay the balance of what you owe.

That's what I figured... Thanks!

# ? Nov 1, 2016 16:54

AbbiTheDog: May 21, 2007

Missing Donut posted:

That is no longer true. SSARS 21 allows a non-compilation preparation engagement for CPAs.

True, but the CPA is still required to do all of work they would do for a compilation, including disclosure reporting and departures that you're not going to book in the interim. It's not really a time saver from the CPAs standpoint, whereas if we just gave a QB copy to the client and they printed their own reports, we don't need to mess with that stuff.

Why pay a CPA for checklist preparation when you don't need to? If you can trim two-three hours of CPA time per month that aren't providing value, why wouldn't you?

Edit: Common issue would be depreciation, which for most small businesses is kept at the tax basis, not GAAP, which would be a required disclosure even under a non-reporting engagement. Also, if you're on the accrual method, did you accrue wages? Payroll taxes? All the other ticky-tack stuff? Or if you skipped it since it was immaterial, is that documented in the workpapers? It's just a bunch of busy work, frankly, that most small business owners just don't give a crap about.

AbbiTheDog fucked around with this message at 17:47 on Nov 1, 2016

# ? Nov 1, 2016 17:00

Kinson: Nov 25, 2007; Working hard for the money.

Admiral101 posted:

Interest and late payment penalties* - the penalties are much more significant than the interest.

Once every three years you can get that penalty waived through 1st time abatement provided you're otherwise current.

# ? Nov 1, 2016 18:35

scribe jones: Sep 17, 2008; One of the key problems in the analysis of this puzzling book is to be able to differentiate a real language from meaningless writing.

urnisme posted:

An extension only extends your filling deadline; you still need to pay what you owe by April 18.

April 17 next year, thank Christ.

# ? Nov 1, 2016 20:33

no go on Quiznos: May 16, 2007; Pork Pro

My mother bought me a bunch of savings bonds back when I was younger. Both of our names are on them. If I go and redeem them who pays the tax on the interest: Her (because she bought them with her money initially), or me (because I'm the one redeeming them)?

# ? Nov 4, 2016 18:18

Missing Donut: Apr 24, 2003; Trying to lead a middle-aged life. Well, it's either that or drop dead.

AbbiTheDog posted:

True, but the CPA is still required to do all of work they would do for a compilation, including disclosure reporting and departures that you're not going to book in the interim. It's not really a time saver from the CPAs standpoint, whereas if we just gave a QB copy to the client and they printed their own reports, we don't need to mess with that stuff.

Why pay a CPA for checklist preparation when you don't need to? If you can trim two-three hours of CPA time per month that aren't providing value, why wouldn't you?

Edit: Common issue would be depreciation, which for most small businesses is kept at the tax basis, not GAAP, which would be a required disclosure even under a non-reporting engagement. Also, if you're on the accrual method, did you accrue wages? Payroll taxes? All the other ticky-tack stuff? Or if you skipped it since it was immaterial, is that documented in the workpapers? It's just a bunch of busy work, frankly, that most small business owners just don't give a crap about.

I agree that the SSARS 21 preparation engagement doesn't save a lot of time compared to a compilation, but it does save some time, especially multiplied by the number of engagements you perform.

But based on your post, I think you're missing the bigger picture here. I haven't wasted my time on GAAP financials with notes in several years, because they're mostly irrelevant for SMEs. Almost all financial statements done at my previous employer (10ish-employee local CPA firm) were tax basis and management elected to omit disclosures. I'm currently a controller at a mid-sized manufacturing company, and I report directly to the owners, and while they care about a reliable concept of net income for comparison and analysis purposes, they really care about their tax bills, so everything is done on the tax basis. If I put notes together for them, I'll probably get blank stares in return. My solo practice only does tax basis, notes-omitted financials because that's the maximum that my clients care about.

Let's face it, notes and GAAP are a pain in the rear end, clients normally don't want them, and increasingly banks don't care about them either. So why do them? If the client agrees, adjust next year's engagement letter, change the titles of the financial statements, and move on with life. And by all means do that before the new GAAP revenue recognition rules come into effect!

I would suggest that you look at your checklists and workpaper documentation and give them a long, hard think. If you're doing a compilation, you're not doing a review, and therefore I don't believe you should be documenting materiality concerns of accrued wages and whatnot, especially on an interim basis. Really, you're doing review procedures on a compilation engagement, opening yourself up to litigation risk if you don't upgrade the entire engagement to a review and perform said review adequately.

Does all this CPA stuff take time? Absolutely. But if I've dispensed with as much of the pointless stuff as possible, my checklists and engagement administration will be minimal, and my fees won't exceed the actual value of what I'm providing to the client.

# ? Nov 6, 2016 15:42

AbbiTheDog: May 21, 2007

Missing Donut posted:

I agree that the SSARS 21 preparation engagement doesn't save a lot of time compared to a compilation, but it does save some time, especially multiplied by the number of engagements you perform.

But based on your post, I think you're missing the bigger picture here. I haven't wasted my time on GAAP financials with notes in several years, because they're mostly irrelevant for SMEs. Almost all financial statements done at my previous employer (10ish-employee local CPA firm) were tax basis and management elected to omit disclosures. I'm currently a controller at a mid-sized manufacturing company, and I report directly to the owners, and while they care about a reliable concept of net income for comparison and analysis purposes, they really care about their tax bills, so everything is done on the tax basis. If I put notes together for them, I'll probably get blank stares in return. My solo practice only does tax basis, notes-omitted financials because that's the maximum that my clients care about.

Let's face it, notes and GAAP are a pain in the rear end, clients normally don't want them, and increasingly banks don't care about them either. So why do them? If the client agrees, adjust next year's engagement letter, change the titles of the financial statements, and move on with life. And by all means do that before the new GAAP revenue recognition rules come into effect!

I would suggest that you look at your checklists and workpaper documentation and give them a long, hard think. If you're doing a compilation, you're not doing a review, and therefore I don't believe you should be documenting materiality concerns of accrued wages and whatnot, especially on an interim basis. Really, you're doing review procedures on a compilation engagement, opening yourself up to litigation risk if you don't upgrade the entire engagement to a review and perform said review adequately.

Does all this CPA stuff take time? Absolutely. But if I've dispensed with as much of the pointless stuff as possible, my checklists and engagement administration will be minimal, and my fees won't exceed the actual value of what I'm providing to the client.

That's why we skip all that and just give the clients the QB file back. Turns it into a simple accounting engagement. Inform the client how to print their own reports and save their fees for something that provides value.

# ? Nov 7, 2016 20:01

Xandu: Feb 19, 2006; It's hard to be humble when you're as great as I am.

Am in New York State. I paid them $374 back in April and filed for an extension. Just paid it last month and then got a letter in the mail saying

quote:

1. We adjusted the estimated tax claimed on your return to reflect the payments and/or credit in your tax account.

2. We settled your account based on information provided on your return.

Looking through the rest of the letter it says

quote:

Total New York State taxes .... $ 946.00
...
Total amount due .... $1,441.00

I'm skeptical Turbo Tax was off by that much, but I'm not going to dispute it. I'm just a little confused what it means when they say "we settled your account." Do I still owe them money? It didn't include anything about how to pay, just how to contact them if I disagreed.

edit: Now if I look further down it says

code:

Total payments and refundable credits $1,441.00
Overpayment 			      $0.00
Subtotal 			      $0.00

So maybe I don't owe them anything?

Xandu fucked around with this message at 21:05 on Nov 8, 2016

# ? Nov 8, 2016 20:51

Epi Lepi: Oct 29, 2009; You can hear the voice
Telling you to Love
It's the voice of MK Ultra
And you're doing what it wants

Xandu posted:

Am in New York State. I paid them $374 back in April and filed for an extension. Just paid it last month and then got a letter in the mail saying

Looking through the rest of the letter it says

I'm skeptical Turbo Tax was off by that much, but I'm not going to dispute it. I'm just a little confused what it means when they say "we settled your account." Do I still owe them money? It didn't include anything about how to pay, just how to contact them if I disagreed.

edit: Now if I look further down it says
code:
Total payments and refundable credits $1,441.00
Overpayment 			      $0.00
Subtotal 			      $0.00
So maybe I don't owe them anything?

Tried to send you a PM but your box is full. Based on what you've posted you don't owe them anything but if you were expecting a refund it's not coming.

# ? Nov 8, 2016 21:34

Xandu: Feb 19, 2006; It's hard to be humble when you're as great as I am.

Thanks! Apparently my PM box fills up now that I'm not a mod anymore

Ended up calling them, you're right, turns out they only sent the form because I didn't put the extension payment ID on the form when I filed in October.

# ? Nov 8, 2016 21:40

Scrapez: Feb 27, 2004

Question on preparer screwing up leading to being audited and owing money.

Had taxes prepared by a local CPA for 2013. Received notice in mail from state indicating I owe $404 because my previous year federal return amount was not reported.

Looking at 2013 state form, I see preparer left "Federal income tax refund/overpayment received in 2013" field blank.

Appears to be a screw up on CPA's part.

My question is, $45.01 of the account is interest and I paid her $250 to prepare the taxes. I've yet to contact her but would you request she reimburse you $250 preparation fee and $45.01 interest portion of the tax bill?

# ? Nov 10, 2016 21:29

Epi Lepi: Oct 29, 2009; You can hear the voice
Telling you to Love
It's the voice of MK Ultra
And you're doing what it wants

Federal Refunds are not taxable so I don't really know what you are talking about.

Personally if I was your preparer and I actually made a mistake I would reimburse you the interest, but not refund you your fee. I still had to do the work to prepare the return, it still cost me money to use my e-filing service, my tax software, etc.

If the reason I wasn't able to prepare the return properly is you didn't give me all of the information I needed to know and I had no way to know I was missing the information then I would have to say sorry, but I can't refund you.

# ? Nov 10, 2016 22:39

Droo: Jun 25, 2003

Nevermind.

# ? Nov 10, 2016 22:59

Scrapez: Feb 27, 2004

Epi Lepi posted:

Federal Refunds are not taxable so I don't really know what you are talking about.

Personally if I was your preparer and I actually made a mistake I would reimburse you the interest, but not refund you your fee. I still had to do the work to prepare the return, it still cost me money to use my e-filing service, my tax software, etc.

If the reason I wasn't able to prepare the return properly is you didn't give me all of the information I needed to know and I had no way to know I was missing the information then I would have to say sorry, but I can't refund you.

This was a federal refund from the prior year. In Iowa, you are taxed on that apparently. As income I assume?

I received a $3059 refund and wife received a $1778 refund. As a result, our taxable income increased and Iowa department of revenue says we owe $363 + $45.01 interest.

I'm not trying to screw over the cpa that prepared our taxes but it seems like something pretty straight forward that was missed. Just want to know what's fair.

# ? Nov 10, 2016 23:31

Lord of Garbagemen: Jan 28, 2014; Look on my works, ye Mighty, and despair!

Scrapez posted:

This was a federal refund from the prior year. In Iowa, you are taxed on that apparently. As income I assume?

I received a $3059 refund and wife received a $1778 refund. As a result, our taxable income increased and Iowa department of revenue says we owe $363 + $45.01 interest.

I'm not trying to screw over the cpa that prepared our taxes but it seems like something pretty straight forward that was missed. Just want to know what's fair.

The firm I work for would likely pay your penalties and interest in a situation like yours. It seems a little harsh to go after the prep fee as you still needed the return done.

As far as whos fault it was , thats between you and the CPA.

Also Epi, i just looked at the Iowa return they have a section for federal taxes addition and subtraction. Never done an IA filing but that seems quite odd.

# ? Nov 11, 2016 17:02

Epi Lepi: Oct 29, 2009; You can hear the voice
Telling you to Love
It's the voice of MK Ultra
And you're doing what it wants

Lord of Garbagemen posted:

The firm I work for would likely pay your penalties and interest in a situation like yours. It seems a little harsh to go after the prep fee as you still needed the return done.

As far as whos fault it was , thats between you and the CPA.

Also Epi, i just looked at the Iowa return they have a section for federal taxes addition and subtraction. Never done an IA filing but that seems quite odd.

Yeah I've never done an IA return either, I'm based in NY, have some out of state clients but none from that state.

# ? Nov 12, 2016 01:52

Lord of Garbagemen: Jan 28, 2014; Look on my works, ye Mighty, and despair!

Epi Lepi posted:

Yeah I've never done an IA return either, I'm based in NY, have some out of state clients but none from that state.

I hate your state returns. Cant decide if cali or yours is the worst.

# ? Nov 12, 2016 05:39

Scrapez: Feb 27, 2004

I appreciate the responses. It's likely I'm more pissed about it than I should be because I've always done my own returns and this is the one time I went to a cpa because we'd moved mid-year and I thought that would add a lot of complexity to the return.

Turns out it was very straight forward so I should have just done it myself.

I'm just glad it's nothing major. A few hundred dollars is no big deal. Sounds like that's also something pretty specific to Iowa so it's fairly understandable that an Oklahoma CPA would miss it.

# ? Nov 12, 2016 06:13

Spaceguns: Aug 28, 2007

Hopefully quick and easy question for the pros. A friend of mine is running a single member LLC with (I assume) pass through taxation and just filing with their normal income tax statements. I have done >$600 worth of contract work for them and have advised them they will need to file a 1099-MISC for it before 31 January.

While looking this up though I realized I am at a loss as to how to actually file a 1099-MISC with the IRS without going through a tax professional for what may be just one form required. Do they really need to request a form be mailed from the IRS, fill it out, then mail the thing back? Any other cheap or free easy ways to do this?

This will probably be the only form they will need to do before their personal income taxes. I know enough to tell them what they will need to give me since I am used to receiving 1099s from several sources but am a little off on the best way them to file this with the IRS.

# ? Nov 14, 2016 00:08

AbbiTheDog: May 21, 2007

Scrapez posted:

I appreciate the responses. It's likely I'm more pissed about it than I should be because I've always done my own returns and this is the one time I went to a cpa because we'd moved mid-year and I thought that would add a lot of complexity to the return.

Turns out it was very straight forward so I should have just done it myself.

I'm just glad it's nothing major. A few hundred dollars is no big deal. Sounds like that's also something pretty specific to Iowa so it's fairly understandable that an Oklahoma CPA would miss it.

Speaking as a preparer, sometimes you get what you pay for. If you're paying $250 in the middle of tax season for a multi-state return, expect the preparer to rush through the return as fast as possible. That's cheaper than H&R Block for crying out loud.

Not saying you should pay $400 an hour for a simple 1040 prep, but that's exactly the reason why I raised our minimum fees up - it weeds out the "bargain shoppers" and allows me and my staff to slow down and take the extra time to review for ticky-tack stuff.

# ? Nov 14, 2016 18:19

BonerGhost: Mar 9, 2007

If I come in and say "hey this is what I need done, can you do it?" and you say "yep, $250," it's not as if I've haggled you down or twisted your arm. Do you just need to assume that any inexpensive preparer/CPA is sloppy or an idiot?

# ? Nov 14, 2016 19:31

AbbiTheDog: May 21, 2007

NancyPants posted:

If I come in and say "hey this is what I need done, can you do it?" and you say "yep, $250," it's not as if I've haggled you down or twisted your arm. Do you just need to assume that any inexpensive preparer/CPA is sloppy or an idiot?

Hit a nerve?

Anyways, I will assume if you do have a multi-state return and you do get quoted $250, I will assume there will probably be a careless error or two on the return. In OPs case, the error he mentioned was due to a carryover from the prior year NOT being included on his return. Whenever we get a new client, I make my staff drop in the prior year return to allow our software to pro-forma the return to the new year and generate a custom organizer for the client that we can work on. Typically the pro-forma return, in a case like OPs, would have populated the proper carryforward amount and this mistake never would have happened. However, dropping in a prior year return can take 30-60 minutes (depending on complexity) and a $250 fee quote is probably not going to allow for that kind of time and still hit your rates.

As far as low fee returns, it's like buying a car. A $1,000 car might be an awesome ride and a huge value, but more often than not it's probably going to have issues. Do you feel lucky? It all depends on the preparers.

# ? Nov 14, 2016 22:05

BonerGhost: Mar 9, 2007

AbbiTheDog posted:

Hit a nerve?

Anyways, I will assume if you do have a multi-state return and you do get quoted $250, I will assume there will probably be a careless error or two on the return. In OPs case, the error he mentioned was due to a carryover from the prior year NOT being included on his return. Whenever we get a new client, I make my staff drop in the prior year return to allow our software to pro-forma the return to the new year and generate a custom organizer for the client that we can work on. Typically the pro-forma return, in a case like OPs, would have populated the proper carryforward amount and this mistake never would have happened. However, dropping in a prior year return can take 30-60 minutes (depending on complexity) and a $250 fee quote is probably not going to allow for that kind of time and still hit your rates.

As far as low fee returns, it's like buying a car. A $1,000 car might be an awesome ride and a huge value, but more often than not it's probably going to have issues. Do you feel lucky? It all depends on the preparers.

Nah, it's a genuine question. If you're buying a used car and you don't know about cars, you take it to a mechanic. If you don't know about taxes, you generally take them to a preparer. My experience with other services in life is that paying more is no guarantee they'll do what they're supposed to do, so what should you do to make sure you don't accidentally hire a fuckup (besides avoid chains)?

# ? Nov 14, 2016 23:12

Scrapez: Feb 27, 2004

I may have paid $500. I honestly don't remember. I'd have paid $1000 at the time since I thought it was going to be complicated.

It's a local, small town cpa. Unfortunately, I guess not a very good one. I'm just hoping they'll pay the interest and it's a lesson learned.

You really can't blame this on software because if you reviewed the forms after printing, which they should have done, it's plain as day that the value is called for and is missing.

# ? Nov 15, 2016 02:29

Blinky2099: May 27, 2007; by Jeffrey of YOSPOS

Taxes are getting more confusing as I'm making more money. I've read the OP and now realize I should be deducting state taxes from my federal taxes, assuming they're more than the standard federal deduction of $6,300 (non head of household).

My CA state income tax for 2016: $7045
My CA private state disability insurance/tax: $759 (this counts as a state tax, so is deductible)
= Federal deduction of $7804, larger than $6,300, so worth doing, correct?

I also noticed that you can supposedly claim last year's state income tax as well. I think I used a standard deduction of ~$6k last year because I only paid ~$4.1k in CA taxes. Can I deduct that $4.1k in 2016, for a total of $7.8k+$4.1k=$11.9k federal deduction? I assume this means I cannot deduct this year's $7.8k next year though, right?

Any other weird things I need to know about? I know that social security caps at $7886/year (6.2% up to $127,200 AGI) which I don't have to worry about this year but will next year. Medicare has no cap, afaik. Then these state tax deductions I've listed above, if true. Anything else I should be thinking about? (Single, one job, no kids, no large medicare/education expenses, etc.; I think my situation is really typical aside from now needing to claim a real deduction >$6300.)

Blinky2099 fucked around with this message at 07:46 on Nov 15, 2016

# ? Nov 15, 2016 07:38

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# ? May 11, 2024 09:16

Admiral101: Feb 20, 2006; RMU: Where using the internet is like living in 1995.

Blinky2099 posted:

I also noticed that you can supposedly claim last year's state income tax as well. I think I used a standard deduction of ~$6k last year because I only paid ~$4.1k in CA taxes. Can I deduct that $4.1k in 2016, for a total of $7.8k+$4.1k=$11.9k federal deduction? I assume this means I cannot deduct this year's $7.8k next year though, right?

Taxes are deductible when PAID. IE: if you paid that $4.1k of CA tax in 2016, then you can deduct it in 2016. If that 4.1k of CA tax was just withheld from your paycheck over the course of 2015, then it was paid in 2015 and only deductible in 2015. Does that make more sense?

Regarding the deductibility of SUI: I don't see how you're getting to the conclusion that's deductible on Sch A as it's just a contribution to the state disability fund, and not a tax in the same way that income taxes//sales taxes are. I've seen other practitioners deduct that on Schedule A though so whatever.

# ? Nov 15, 2016 13:52

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > US Income Tax Thread: Bank error in your favor! GO DIRECTLY TO JAIL.

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