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Motronic posted:You're probably even further away now that the standard deduction has been raised. I mean....do you really think you'll have anywhere near $24k? It's pretty tough to get there MFJ these days. Without 1099 income there's really not much you can deduct other than your mortgage. You mention SSDI so maybe medical? If it's more than 7.5% of your AGI you can add that to your deductions. I think we'll likely be at 24k this year. Is itemizing or not when it makes sense to get a CPA?
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Jan 6, 2020 00:32
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Residency Evil posted:I think we'll likely be at 24k this year. Is itemizing or not when it makes sense to get a CPA? I figured you might be. But no, that was not the decision making point for me. It was complexity of income and/or investments. TurboTax really does do a fine job at calculating the math in multiple scenarios for you. Where I've found my CPA to be the most helpful is planning for tax efficiency over the near to mid term when dealing with 1099 and significant (meaning way more than my salary income OMFG we went public and I'm still vesting....4 different types of equity with 4 different tax treatments) and handling bullshit like quarterly estimated taxes. If you have no need for doing those things and are looking for more long term.....that's what my estate attorney is for. And you (yes, you in particular as a high earner) should have one of those. But also for a high earner: is is not worth doing it yourself AND having a professional look it over for a few hundred bucks? See what they can do for you in your particular situation. If you're comfortable they're doing the right things, even if they aren't saving you money......you have money to trade for time. And a CPA signing your return. Motronic fucked around with this message at 00:51 on Jan 6, 2020 |
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Jan 6, 2020 00:49
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Ring of Light posted:We have always taken the standard deduction but I have heard that once you own your home you usually come out ahead itemizing. Is there a resource you would recommend to educate myself on what kinds of expenses can be claimed? I’ve never paid much attention since it wasn’t even close before. Once you own a home (or have other significant non-retirement assets) you really need an estate planning package. This helps you avoid probate when you die. It's a long drawn out process to divvy up your assets where, in california at least, the lawyers get paid a % of assets probated. This includes things like your house. Your estate plan can also help you with the whole getting on with dying part, as it should include an advanced medical directive. Check the box that says pull the plug.
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Jan 6, 2020 01:30
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I think I’ve asked this before but I can’t seem to find the post, so just in case: My wife and I live abroad. She’s a non resident alien but we file MFJ. She runs her own business. It is my understanding that she’s subject to income tax but NOT to self employment taxes. Am I right? Google isn’t giving me a clear answer.
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Jan 6, 2020 02:07
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Ring of Light posted:Thank you. Yes it is our primary residence and we only have W2 income for me and SSDI income for my spouse. Sounds like I should just keep doing them myself. Just to add one thing; I know H&R Block offers (and it wouldn’t surprise me if others do it too) what’s called Second Look service, where you do the return and have a preparer look it over afterwards. It’s a free service to review, they only charge if they find something wrong and help you amend the return. Think you can also request a review during online tax software prep (I know we do it and I think TurboTax does as well), but those aren’t free as I understand it. So if folks are nervous whether they did it right on their own, there are options for a double check that don’t involve having somebody just do it for you. Ur Getting Fatter posted:I think I’ve asked this before but I can’t seem to find the post, so just in case: Self employment tax is the equivalent of social security, so if the country in question has what’s called a totalization agreement with the US saying you don’t pay FICA if you’re already paying the local equivalent, you don’t owe SE tax. List of countries is here if you want to check.
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Jan 6, 2020 19:55
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I'm getting married in May of this year, but my fiance's company just told her that if she needs to change her witholdings, then that needs to happen by friday. A few questions on this: 1) Do we both need to change witholdings on checks? 2) What's better? Filing jointly at tax return time this year, or filing separately? 2A) Can we file together this year, or do we have to wait till next year? This tax stuff is confusing
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Jan 7, 2020 03:09
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ARCDad posted:I'm getting married in May of this year, but my fiance's company just told her that if she needs to change her witholdings, then that needs to happen by friday. A few questions on this: You will just need to ensure that the proper amount of taxes is withheld. So if you're MFJ, that could be 100% of taxes are paid by you, or 100% by your partner, or a happy balance in-between.
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Jan 7, 2020 03:41
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ARCDad posted:I'm getting married in May of this year, but my fiance's company just told her that if she needs to change her witholdings, then that needs to happen by friday. A few questions on this: Don't overthink it. Once married just hand HR a new w-4. They will figure it out. Mfj is the only way to fly. You can do it starting in the year you marry. It's only hard if you have wildly different incomes or your combination of incomes jumps you a serious tax bracket.
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Jan 7, 2020 03:42
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ARCDad posted:2A) Can we file together this year, or do we have to wait till next year? This tax stuff is confusing This completely depends on your marriage status as of Dec. 31. It is too late for 2019. You will file as married for the return due in April 2021.
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Jan 7, 2020 04:06
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I’m subletting my apartment since I moved to a new place. My and the subletter’s name are both on the lease but they’re the only person who lives in the apartment. The rent on the lease is $X and the subletter pays me $X - 100, while I keep paying the landlord $X like normal. Do I need to declare what the subletter pays me as rental income?
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Jan 9, 2020 15:18
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A start-up I use to work at was recently acquired in an all-cash deal. The deal is closing in the coming days. I am trying to figure it out if the proceeds from the sale are income tax or short/long term capital gains. Here is the timing: -Began working there in 2013 -Options began vesting in 2014 -Options continued to vest through when I left the company in March 2019 -Executed all options and purchased stock in May 2019 -Deal closing and stock purchased for cash by acquiring company in January 2020 So I have owned the stock for less than a year, but I have owned the majority of the options for over a year. Any ideas?
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Jan 11, 2020 20:12
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It'll be a short term capital gain.
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Jan 11, 2020 20:34
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Buckhead posted:So I have owned the stock for less than a year, but I have owned the majority of the options for over a year. Any ideas? LTCG treatment doesn't have anything to do with options or how long you've had them, only stock. And you haven't had the stock long enough.
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Jan 11, 2020 20:54
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Buckhead posted:A start-up I use to work at was recently acquired in an all-cash deal. The deal is closing in the coming days. I am trying to figure it out if the proceeds from the sale are income tax or short/long term capital gains. As others said, it's STCG, but what isn't mentioned is only on the spread between what you're paying taxes on in our 2019 return and the sale price. Assuming they were ISO's you're potentially looking at a huge AMT hit as they spread between your exercise price and FMV when you exercised and did not dispose of them in that year is all income on the amt worksheet. For example, assuming ISO's: Option exercise price: $1 FMV when you exercised: $2 Sale price in the stock sale: $4. This means you owe $1 in AMT income worksheet for your 2019 taxes, which you can potentially carry over into future years, and $2 in STCG on your 2020 return.
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Jan 11, 2020 21:43
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Thanks for the help all.H110Hawk posted:As others said, it's STCG, but what isn't mentioned is only on the spread between what you're paying taxes on in our 2019 return and the sale price. Assuming they were ISO's you're potentially looking at a huge AMT hit as they spread between your exercise price and FMV when you exercised and did not dispose of them in that year is all income on the amt worksheet. I had multiple option grants and for each one the strike price was different to reflect the latest FMV from the most recent the 409a valuation. So does that still apply to me? Either way, I realize I need to talk to a tax professional about this. Working on that next week.
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Jan 11, 2020 22:27
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Buckhead posted:I had multiple option grants and for each one the strike price was different to reflect the latest FMV from the most recent the 409a valuation. So does that still apply to me? Yes, it's just even more complicated to calculate. Buckhead posted:Either way, I realize I need to talk to a tax professional about this. Working on that next week. Yeah, this is one of those big time "hire a CPA for this year and next" kinda situations.
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Jan 11, 2020 22:33
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Buckhead posted:Thanks for the help all. Yup this is the time to hire a cpa. It's the fmv at exercise time that matters. They will give you all the forms you need. Probably.
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Jan 12, 2020 00:29
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My daughter was born last year and my in-laws bought her an individual bond. I am the UTMA custodian. The bond administrator recently mailed me a W-9 Request for Taxpayer Identification Number and Certification, on which I'm supposed to put an SSN. The back of the sheet says to put the minor's SSN for an UGMA account but does not say anything about an UTMA account. I assume it's the same deal though, right? Put the minor owner's SSN rather than the adult custodian's?
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Jan 13, 2020 22:39
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I have an apartment outside the US which I rent out. The way rentals work here is that tenant pays rent + (most) coop dues + utilities. The tenant pays the coop dues and utilities directly, I never see the money. For purposes of tax reporting, are my rents received equal to Rent + Coop Dues + Utilities? And I'd then deduct those expenses as if I'd paid them myself. Or do I just report the actual rent and ignore the expenses paid by the tenant?
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Jan 14, 2020 03:16
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If you're not receiving the money directly it's not gross income. If you're not paying the money directly it's not a deductible expense.
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Jan 14, 2020 03:41
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That simultaneously makes things a lot easier and also makes the spreadsheet I've been working on for the past two hours completely worthless. Thanks!
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Jan 14, 2020 03:57
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Here's a weird one: My fiance co-owned a house with her mother, both were on deed, mother put down 100% of the mortgage down payment. However, she was the only one on the mortgage. She lived in the house for 2.5 years before moving, but kept the house as rental property for the last 2.5 years. Rental income has been on her tax returns for the last 2 years (2016, 2017) and she has income from this year, 2018, as well. This year, my fiance took her name off the deed and the mother refinanced the mortgage so its only in the mothers name now. A good amount of equity had been built up when this occurred, my fiance did not receive any kind of payment from her mother (since she had put the initial money down). Since, I assume she had a 50% claim on the house by virtue of being on the deed prior - does my fiance have any kind of weird tax implications from this? Would this be considered a gift? Equity was >$15K so beyond the annual gift tax exclusion.
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Jan 14, 2020 20:45
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hostile apostle posted:Here's a weird one: Since she wasn't paid anything she doesn't have to pay any taxes. Since the house hasn't been sold, the mother won't pay any taxes. I know it 'feels' like a gift since your wife is quitclaiming her share of the house, but from the tax man's point of view, the value of what she gave up was zero since that's what she got in return for it. sullat fucked around with this message at 05:02 on Jan 15, 2020 |
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Jan 15, 2020 04:49
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I know the form where they are ultimately filed out is called the "Schedule C", or Form 1040, but I haven't found any explicit breakdowns of what the categories between lines 8 to 27 are supposed to entail. Every time I try looking it up, the pages I find on the IRS website itself are fairly brief and don't list anything beyond the abstract. And since I'm not American, I don't know how trustworthy other sources on the matter are. Edit: Never mind! I was able to prod a bit further and eventually found a link to IRS Publication 535. Morroque fucked around with this message at 05:49 on Jan 15, 2020 |
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Jan 15, 2020 05:26
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Can someone explain a bit about how fed withholding works? I'm trying to dial in my withholding to minimize any payment/refund. I adjusted my 401k up 1% with this latest paycheck, and adjusted my extra withholding down a bit. Taxable income went down $43.57 and fed withholding went down $40. But my total withheld for that paycheck dropped $147 between the previous check and that one. HR is zero help. How can I better estimate what my normal withholding will be, so that I can make the adjustment to the extra amount withheld and get as close to zero on my return as possible?
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Jan 17, 2020 19:48
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Omne posted:Can someone explain a bit about how fed withholding works? I'm trying to dial in my withholding to minimize any payment/refund. I adjusted my 401k up 1% with this latest paycheck, and adjusted my extra withholding down a bit. Taxable income went down $43.57 and fed withholding went down $40. But my total withheld for that paycheck dropped $147 between the previous check and that one. HR is zero help.
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Jan 17, 2020 19:55
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Also there’s a new W-4 out there, with different withholding tables, so be sure to allow for that.
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Jan 17, 2020 21:27
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Question - I initiated a rollover from my 401k (traditional) of a previous employer to my IRA (traditional) in December 2019 I received an acknowledgement from my IRA custodian that the rollover request had been submitted to my 401k provider with an acknowledgment date of 12/30/2019 I'm assuming the actual transfer will happen in the next month or so Will this have any implications on my 2019 taxes? Or will I report the rollover on my 2020 taxes since that's when the actual rollover of funds will happen? I requested a wire transfer from the 401k to the IRA, so I won't be taking it as a check distribution MorrisBae fucked around with this message at 06:40 on Jan 20, 2020 |
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Jan 20, 2020 06:36
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MorrisBae posted:Question - I initiated a rollover from my 401k (traditional) of a previous employer to my IRA (traditional) in December 2019 Report whatever the form says but it will almost certainly be the actual transaction date so 2020.
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Jan 20, 2020 06:45
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I am moving this year and probably going to rent out my house when I leave, ideally to someone we know. Anyway I know rental income and expenses will change taxes a lot! and in April 2021 I am probably going to hire a professional for the first time. The main thing I want to know ahead of time is: do I need to pay self-employment tax on the rental income, and do I need to be paying it quarterly? I have a regular W2'd job. Also, if the answer is yes, question 2: Does self-employment tax work the same way as regular income tax, in that if I do not make quarterly payments and end up short, but by no more than what I paid the prior year, I am not charged a late penalty?
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Jan 20, 2020 19:56
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alnilam posted:I am moving this year and probably going to rent out my house when I leave, ideally to someone we know. Anyway I know rental income and expenses will change taxes a lot! and in April 2021 I am probably going to hire a professional for the first time. The main thing I want to know ahead of time is: do I need to pay self-employment tax on the rental income, and do I need to be paying it quarterly? I have a regular W2'd job. As a side note, renting to someone you know can be a double edged sword. Tread carefully!
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Jan 20, 2020 20:47
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moana posted:Yes and yes. Either do estimated payments or just up your withholding on your w2 pay. I've done both of these over the years when I've had significant non-W2 income - personally I found upping witholding to be easier, especially in a case like yours where the expected income should be pretty drat predictable.
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Jan 20, 2020 20:48
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quote:self-employment tax work the same way as regular income tax Rental income is taxed like normal earned income, ie, at the same rates. But it isn't subject to the 'self-employment tax" which is a 15.3% tax on earned non-wage income. Keep in mind wage earners pay it too, but it's done automatically so they don't get it rubbed in every April that they're paying for it.
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Jan 20, 2020 21:03
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sullat posted:But it isn't subject to the 'self-employment tax" which is a 15.3% tax on earned non-wage income. Keep in mind wage earners pay it too, but it's done automatically
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Jan 20, 2020 22:33
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moana posted:Not quite - wage earners only have to pay half of it. The other half is paid by your employer. When you're self-employed, you are your own employer, so you get to pay both sides, woo.
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Jan 20, 2020 22:39
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moana posted:Not quite - wage earners only have to pay half of it. The other half is paid by your employer. When you're self-employed, you are your own employer, so you get to pay both sides, woo. Officially yes, that's what is supposed to happen. Sometimes they forget to turn over that part to the IRS.
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Jan 20, 2020 23:20
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alnilam posted:I am moving this year and probably going to rent out my house when I leave, ideally to someone we know. Anyway I know rental income and expenses will change taxes a lot! and in April 2021 I am probably going to hire a professional for the first time. The main thing I want to know ahead of time is: do I need to pay self-employment tax on the rental income, and do I need to be paying it quarterly? I have a regular W2'd job. You will need to consider the need to issue 1099s for your rental as well. Rule of thumb $600 or more in a year for a service (not materials) , you don't need to issue to corporations, attorneys get them no matter what.
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Jan 21, 2020 17:39
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Lord of Garbagemen posted:You will need to consider the need to issue 1099s for your rental as well. Rule of thumb $600 or more in a year for a service (not materials) , you don't need to issue to corporations, attorneys get them no matter what. Wait what? Issue a 1099 to whom, myself?
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Jan 21, 2020 18:10
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1099s to peepz who work on your rental while it's a rental, repairing and maintenencing and landscaping and cleaning etc. etc. - LoG is pointing this out now because you need to be collecting W9s from these people when they start working on the house because trying to get EIN/SSN and address out of people 8 months later is really annoying, and the penalties for failing to file 1099s can get steep af. 1099s are due to be filed in 10 days so this is top of mind for all of us that get stuck
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Jan 21, 2020 18:53
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Obviously asking an accountant as well, but question: I'm a non-resident alien, I draw income from an LLC registered in California. I'm doing a federal tax return, but do I need to submit a non-resident alien tax return for California as well? My income is royalties and equity.
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Jan 22, 2020 04:38
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