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I casually read this because its kind of interesting.. but why in the gently caress is the IRS so inefficient? Old computers etc etc, but come on.. the ONE thing people should be good at is collecting money owed right? Like, shouldn't the IRS be high up on the gov't list of things to make work better? I'm not even meaning adjusting tax code to flat rate or anything, but the ability to enforce and collect what is written. If they can't pull taxes, the gov't doesn't get paid right? Am I just naive.
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Jun 27, 2018 23:30
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deong posted:I casually read this because its kind of interesting.. https://www.washingtonpost.com/news/powerpost/wp/2017/11/07/irs-chief-departs-blasting-congress-for-budget-cuts-threatening-tax-agency/ Rinse and repeat for many years.
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Jun 27, 2018 23:34
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deong posted:I casually read this because its kind of interesting..
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Jun 28, 2018 03:02
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black.lion posted:Any of y'all noticing about 1000% increase in erroneous claims of unpaid tax/penalty/interest being sent out by the IRS? We're getting like a dozen a week from clients and basically none of them make sense; sometimes the notices even contradict themselves. We received a few for 1095-A reporting issues, some for clients that weren't even in the ACA.
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Jun 28, 2018 17:44
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AbbiTheDog posted:We received a few for 1095-A reporting issues, some for clients that weren't even in the ACA. That's the marketplace's fault! And if there's one agency that's being sabotaged by the political branch more than the IRS, it's HHS.
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Jun 28, 2018 17:54
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Honestly the vast majority of those notices have always been off in my experience, read somewhere once something like 1/3 of all CP2000 notices are thrown out upon review; that's kind of lowballing it for me even. Only real pattern I noticed is it seems they decide to focus down on one particular issue every year, and when they pick a dumb one (last year I think it was "you're claiming a mortgage that doesn't have your name on it", which naturally failed to follow little changes like divorces and ex-spouses on paperwork) you get a ton of people with the same stupid problem. If there's one thing working offseasons has taught me, is that EVERYBODY screws up constantly. Taxpayers screw up, preparers/software screw up, and the tax agencies screw up, and often the real trick is figuring out who the idiot was and hoping it's not you this time at least.
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Jun 28, 2018 18:24
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MadDogMike posted:the real trick is figuring out who the idiot was and hoping it's not you this time at least. This is probably the best summary of my experience working in tax thus far
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Jun 28, 2018 18:54
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black.lion posted:This is probably the best summary of my experience working in tax thus far This and professional CYA for when things do go wrong.
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Jun 28, 2018 20:36
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Two questions for you guys. I tried googling around but couldn't find any great answers. We all know cosmetic surgery can not be deducted, but any reason someone couldn't deduct expenses related to complications that arose afterwards? Apparently a lot of insurance will not cover those complications, even if treatment is medically necessary. How are state and local tax refunds treated going forward with the new SALT cap?
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Jul 16, 2018 23:01
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I'm getting some conflicting info and was hoping someone here might clear it up. I'm a US citizen living abroad and recently got married to a non-US citizen. I go back and forth to the US but my wife lives full time abroad with no plans to move permanently to the US. I'd like for her to be added to my bank accounts in case anything happens, and I understand I need an ITIN for that. So my questions: 1. If she has an ITIN does she have to file a yearly tax return? (This IRS website seems to suggest she does). 2. Would she have to file just for any US income (for example, her share of interest from the savings account) or for all her income globally? 3. Some related articles seem to suggest that I can just file as Married-Filing-Separately, include her share of any US income under my name and as long as the tax is paid in full there's no requirement for her to file yearly. This all seemed simpler in my head, sorry if it's confusing.
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Jul 17, 2018 21:54
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Sweet Tsunami posted:Two questions for you guys. I tried googling around but couldn't find any great answers. I'd take the costs for the complications, good luck getting enough to deduct though. State and local tax refunds are taxable based on the destructibility of the taxes in the year they were actually paid, which is why state/local tax refunds tend to be tax free for standard deduction filers/taxpayers impacted by AMT.
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Jul 18, 2018 23:11
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Hi everyone, I'm thinking about taking a job as a researcher in Germany. One possibility is through a postdoctoral fellowship, the other as a public employee. For the Humboldt fellowship: The stipend is 2650€/mo and is not taxed by the German government, but a US citizen would still be required to file taxes with the IRS. Because the fellowship is not directly tied to a degree, the US still sees it as taxable income (https://www.irs.gov/taxtopics/tc421). Does this mean that for a US postdoctoral fellow through Humboldt, the equivalent pay would be subject to a ~15% tax by the US government? From what I understand, in the case of a normal postdoctoral appointment in Germany, one would generally be recognized as a public employee under TVöD Bund E13 or 14, and taxes would be withheld from each paycheck. These payments can then be noted as foreign tax credits when filing US taxes. If I pay ~43% taxes in Germany, will I still have to shell out money to the IRS?
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Jul 19, 2018 18:38
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Ur Getting Fatter posted:I'm getting some conflicting info and was hoping someone here might clear it up. 1. No; however, if she does not file for 3 consecutive years her ITIN will expire and she will have to renew it by filling out the application and submitting her identification documents to the IRS again. 2. Maybe. Since you are a citizen, you both can elect to treat her as a resident and file a joint return. A resident joint return would report all of both of your worldwide income. You might be able to use the foreign tax credit or the foreign earned income exclusion to reduce the tax you part the US on her non-US income. This election would continue until it is revoked, and then you cannot make that election again. So you usually make a choice which way to treat her and stick with it. If you do not elect to treat her as a resident, then you would file separately, and her return would only report her US-related income. Which route is better will depend on your specific income situations, and you probably should talk to a professional to figure out which is better for you. 3. This question only comes up if you do not elect to treat her as a resident and file a joint return, so you would be filing a married filling separately resident return and she would possibly be filing a married filling separately nonresident return. Generally deposit interest is not taxable for nonresidents, but I do not know if you can allocate interest from a joint account between a resident return and nonresident return.
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Jul 19, 2018 19:04
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Greatest Living Man posted:Hi everyone, You don't owe anything to the US unless you make over something like $100K, AFAIK. You still have to file though.
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Jul 19, 2018 20:48
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KillHour posted:You don't owe anything to the US unless you make over something like $100K, AFAIK. You still have to file though. That's kind of what I was seeing. What about if I made ~32K euro a year and wasn't taxed on it in Germany?
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Jul 20, 2018 03:38
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Greatest Living Man posted:That's kind of what I was seeing. What about if I made ~32K euro a year and wasn't taxed on it in Germany? It's an exclusion of income, not a tax credit. It removes the first ~100k off the top of your taxable income whether you were taxed on it anywhere or not. The only requirement is that it be non-US source earned income (not passive) and you reside overseas for a full year (330 days out of 12 consecutive months). You can extend your filing deadline if necessary to reach the 330 days. Gabriel Grub fucked around with this message at 04:32 on Jul 20, 2018 |
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Jul 20, 2018 04:30
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Bear in mind that income excluded cannot be used to calculate stuff like contribution limits. If you have IRAs you’re contributing to and your taxable income is $0, then you can’t contribute that year. Edit: not a CPA, consult a professional. dpkg chopra fucked around with this message at 15:02 on Jul 20, 2018 |
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Jul 20, 2018 04:35
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Ur Getting Fatter posted:You can get around this by either not excluding the income and taking a foreign tax credit or in your case eating the tax since you’re not paying any taxes abroad either. I've never been able to find enough consensus that this is a legitimate strategy to either recommend it to clients or do it myself. Not sure if it's been tested in tax court, but I wouldn't want anyone to find out at 60 years old.
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Jul 20, 2018 04:58
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Awesome. Thanks guys. That makes this fellowship a lot more reasonable.
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Jul 20, 2018 12:21
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sale on Banksy art posted:I've never been able to find enough consensus that this is a legitimate strategy to either recommend it to clients or do it myself. Not sure if it's been tested in tax court, but I wouldn't want anyone to find out at 60 years old. Yeah, I'm going to edit that out since I'm not a CPA and it's basically "advice" I found on the internet, sorry. urnisme posted:1. No; however, if she does not file for 3 consecutive years her ITIN will expire and she will have to renew it by filling out the application and submitting her identification documents to the IRS again. Does "renewal" keep the same ITIN number or would she be assigned a new one? The point of getting the ITIN is making sure she has access to my accounts and I imagine the bank isn't going to look favorably on her tax id number changing every three years. Honestly the ideal situation is where I can just add her to my accounts and then pretend she doesn't exist for tax purposes. dpkg chopra fucked around with this message at 15:07 on Jul 20, 2018 |
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Jul 20, 2018 15:01
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You could make her an authorized signer, which means she can get a debit card with her name on it and access basic account information, but you would be solely responsible for the account with the money being legally yours.
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Jul 20, 2018 15:20
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Konstantin posted:You could make her an authorized signer, which means she can get a debit card with her name on it and access basic account information, but you would be solely responsible for the account with the money being legally yours. That's a good solution. I guess I was under the impression she needed an ITIN for that. I'll call the bank, thanks!
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Jul 20, 2018 16:25
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Looking for some advice on a Groudhog Day loop I seem to be stuck in. In 2016 (so tax year 2015) someone filed a fraudulent return with my SSN. Sucks, but poo poo happens, at least it was caught almost right away so I could notify the IRS. I file on paper that year; they send me the 4301C; I call in and do the identity verification and confirm which return is correct. By fall '16 it appears all is well and my refund will be delayed several more months, but it should be on its way eventually. [Ron Howard Voice] It wasn't [/RHV] A few times a year, I call in to see what's going on, and it's always some variant of "Your account is still messed up / the previous person didn't fix it right; Let's redo verification / I'll fix it; OK you should get your refund + interest in 9 weeks" [Ron Howard Voice] I didn't [/RHV] Repeat as desired. I just spent another hour on the phone this very morning. The CSRs are genuinely apologetic, and the explanations of what is wrong seem to make sense facially, but no one ever knows why the previous attempt didn't work and I'm still waiting for that refund 2 years later. Is there anything else I should be doing?
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Jul 20, 2018 17:05
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SlapActionJackson posted:Looking for some advice on a Groudhog Day loop I seem to be stuck in. Try contacting Taxpayer Advocate Service. They basically exist to get things unstuck in the system. It's never a guarantee, but it's worth a shot. https://www.irs.gov/taxpayer-advocate
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Jul 20, 2018 18:29
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Ur Getting Fatter posted:Does "renewal" keep the same ITIN number or would she be assigned a new one? The point of getting the ITIN is making sure she has access to my accounts and I imagine the bank isn't going to look favorably on her tax id number changing every three years. The ITIN stays the same.
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Jul 20, 2018 19:12
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Ur Getting Fatter posted:I'm getting some conflicting info and was hoping someone here might clear it up. OK, bunch of things here: 1. The ITIN, once applied for, stays active as long as it is used on returns. If there's no return using it within three years it gets turned off. Her requirement to file a return basically boils down to whether she has any US source income or not, if she does she needs a 1040NR. 2. It depends on if you do married filing jointly or not. If you do, you have the option to elect to treat her as a resident alien since she's married to a US citizen. If you do that, then you would have to include any income she makes even if foreign, but you would be able to do the foreign earned income exclusion/foreign tax credit just like I assume you do. Which, unless she makes a LOT of income or has a ton of passive investments, it probably won't affect the taxable income much. This does have the advantage that your income gets taxed at the married filing jointly rate instead of married filing separate rate. With ITIN/elected as being treated as resident alien she's more or less under the exact same tax rules as you for most purposes. 3. Married filing separate is your other option. This does have a few advantages; if you have a regular dependent you can effectively treat yourself as unmarried for tax purposes with a nonresident alien spouse and file as head of household instead of MFS if you otherwise meet the HH filing requirement. There's also an option if she has no US source income to claim her exemption (or under the new system I presume the non-child family credit) when doing MFS, though if she's on your account I don't know if that would apply seeing as how she would technically be earning interest from a US source (the bank account). May puts her as required to do her own 1040NR since she'd technically have US source income then too (don't think you can just claim it all yourself if she's on account). I also don't know if using an ITIN as the non-filing spouse (since you normally put the other spouse's SSN on a MFS return for reference) counts as usage for the purpose of keeping the ITIN active. You can file without an ITIN at all when MFS (just put NRA for "nonresident alien" for the other spouse's SSN entry) and since she's not on the bank account you'd have her exemption for not having any US source income, but pretty sure that IRS e-file can't handle the NRA entry electronically yet so you'd have to mail your return in for processing. Which way you want to go depends largely on your preference. Married filing separate sidesteps a lot of the issues, but MFS also imposes some hard limits on your ability to claim certain credits and other things (not necessarily an issue since I assume you're excluding most of your income already, but worth noting). Married filing jointly obviously gives you the advantages of that filing status but you would have to be sure to report your spouse's income, even if again you're excluding most of it. But FYI make sure you are NOT filing as single; barring that edge case I noted where if you have a traditional dependent and otherwise qualify for head of household you can claim HH status, you ARE married and need to report it that way on your taxes, ITIN or not. TL:DR Your best options are probably to do MFS without the ITIN (use the signer trick mentioned by Konstantin for the bank), use NRA for the spousal SSN entry and claim her exemption, and just mail your returns in physically if the IRS won't accept e-file with an NRA entry. Or you go married filing jointly and go the route with getting an ITIN and be sure to include (then promptly exclude/tax credit away) her income on the return. Do check with local tax advisors to be sure, there may be tax treaty arrangements that affect all this as well. If you do decide to go for an ITIN feel free to ask any questions here, I'm a certifying acceptance agent which means I help people in the US apply for ITINs all the time. incogneato posted:Try contacting Taxpayer Advocate Service. They basically exist to get things unstuck in the system. It's never a guarantee, but it's worth a shot. If that fails you can also try your Congressman/Senator's office, they often have people who can assist as well as I understand it. Honestly not sure why it's taken them THIS long, they certainly have enough tax identity theft these days you'd think they'd have the system down by now sadly.
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Jul 20, 2018 23:55
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SlapActionJackson posted:Looking for some advice on a Groudhog Day loop I seem to be stuck in. I'd guess the genuine return was flagged as the identity theft return . Taxpayer Advocate or the special ITAR (Identity theft Assistance request) will get someone assigned to figure out what the heck has gone wrong.
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Jul 21, 2018 04:20
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MadDogMike posted:OK, bunch of things here: Holy mother of helpful posts, Batman. Thanks a million for the effort. I'm gonna take a bit to read this over carefully before asking any followups. Thanks again.
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Jul 21, 2018 20:52
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Ur Getting Fatter posted:I'd like for her to be added to my bank accounts in case anything happens, and I understand I need an ITIN for that.
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Jul 22, 2018 00:11
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I want her to have access and use to the money (and get if if I die, of course). I'm also looking at the ITIN because I want to her to be an authorized user on my credit cards, and some card companies seem to require at least an ITIN. Thankfully Chase doesn't, and that's my main card. Still, obviously there's a tradeoff with the tax complexities for all of that, which is what I'm getting from MadDogMike's post.
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Jul 22, 2018 03:20
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So I filed a complaint with the labor board against my old employer and they settled and cut me a check. They issued the check through payroll and thusly had taxes taken out as if I was still an employee and as if this were wages, which they aren't. I don't really care about the income taxes as I was gonna pay those one way or another, but perhaps not at the rate they probably charged (as if it were a bonus), but refunds are a thing. Is there any way to recover the social security and medicare? As I understand, those are payroll taxes, but does this really count as a payroll situation?
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Aug 3, 2018 07:36
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skooma512 posted:So I filed a complaint with the labor board against my old employer and they settled and cut me a check. It's short term income to you no matter how you slice it and you owe those taxes on it. Your ex-employer may have actually done you a favor because you are only paying half of the actual SS tax this way, your (ex)employer pays the other half.
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Aug 3, 2018 14:36
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skooma512 posted:So I filed a complaint with the labor board against my old employer and they settled and cut me a check. If this is a backpay/compensation they owed you situation then it actually is treated as wage income, there’s specifically different handling for them compared to “typical” legal payouts (which unless they’re damages are taxable anyway). You should get a W-2 and everything.
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Aug 3, 2018 15:48
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MadDogMike posted:If this is a backpay/compensation they owed you situation then it actually is treated as wage income, there’s specifically different handling for them compared to “typical” legal payouts (which unless they’re damages are taxable anyway). You should get a W-2 and everything. The check was for a penalty imposed on them for delaying my last check more than a month, or at least they would have had they not settled the day before the hearing. That’s why I’m wondering if it should be taxed like W2 wages and not as some other form of income. I know they did it this way because ADP probably isn’t set up to do it any other way. Like, if i were sell short term stock for a profit, I don’t think I would need to pay for SSI and Medicare. Ixian posted:It's short term income to you no matter how you slice it and you owe those taxes on it. Your ex-employer may have actually done you a favor because you are only paying half of the actual SS tax this way, your (ex)employer pays the other half. Yeah that’s very true.
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Aug 3, 2018 16:56
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skooma512 posted:The check was for a penalty imposed on them for delaying my last check more than a month, or at least they would have had they not settled the day before the hearing. You absolutely pay for SSI and Medicare on a short-term stock sale, they are treated as wages as is this payout. BTW this is also true for other kinds of legal settlements (like if you get a payout due to a car accident or something). They are generally treated as wages. There are some exceptions but in your case here, no. I am just a random dude on an internet comedy forum so seek professional advice if this continues to be a concern for you.
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Aug 3, 2018 17:37
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Ixian posted:You absolutely pay for SSI and Medicare on a short-term stock sale, they are treated as wages as is this payout. A short-term stock sale would be treated as income, not wages. Subject to income tax, but usually not SSI and Medicare, might be different for professional day traders though.
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Aug 3, 2018 19:01
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Ixian posted:You absolutely pay for SSI and Medicare on a short-term stock sale, they are treated as wages as is this payout. There are a couple different ways that legal payouts can be treated for tax purposes. In cases like this where the payout is wage related (which this case does sound like it could be; even as a “penalty” for not paying on time it might legally be compensation) it’s W-2 reported and subject to SS/Medicare. In most other cases, damages are NOT taxable so long as they aren’t punitive/pain and suffering awards (aside from “needed actual psychiatric care” in the latter case), any that are punitive/more than the value of the actual damages amount is taxable as other income and usually is reported on a 1099-MISC form. What constitutes each category varies with type of settlement, so when in doubt ask your attorney for specifics, they tend to help their clients with it in my experience with it.
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Aug 4, 2018 00:01
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Ancillary Character posted:A short-term stock sale would be treated as income, not wages. Subject to income tax, but usually not SSI and Medicare, might be different for professional day traders though. True, doesn't always apply. Pretty sure still in regards to the original question that what they got counted as wages.
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Aug 4, 2018 01:58
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Does income from the sale of a house (which is eligible for the capital gains exclusion) count towards the IRA contribution limits (Traditional or Roth)?
Small White Dragon fucked around with this message at 03:51 on Aug 7, 2018 |
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Aug 7, 2018 03:45
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MadDogMike posted:
Yeah, this is what I do (MFS then switched to HoH when we had a kid). It's a hard sell to get your SO to willingly have a tax liability in the US, especially if you want to do certain kinds of investing (e.g. - owning ETFs in Germany) Also, even if it's hard to give a definitive answer on using FTCs instead of the FEIE so you can contribute to a Roth, using FTCs are good for once you have a dependent because the Child Tax Credit is refundable and you can get $1,000 a year just for being American (I think even more now after the tax bill. Thanks, Trump!). They're also good if you're able to build up a "reserve" for if/when you move back to the US and can then offset your taxes with the excess.
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Aug 7, 2018 07:39
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