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Credit Karma says they’ll let you file federal and state for free with no income limit. Sounds appealing.
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Jan 31, 2020 19:26
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Josh Lyman posted:Credit Karma says they’ll let you file federal and state for free with no income limit. Sounds appealing. Been using them since they announced it. Been solid for my semi-simple tax situation. This will be my 3rd(?) year using it.
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Jan 31, 2020 20:52
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SlapActionJackson posted:Yes, you'll need to adjust the basis to $2800. From a tax perspective: Thanks!
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Jan 31, 2020 22:49
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Just took a first pass at our taxes for 2019 and am I loving things up? In 2018, my wife and I rented and got married. We ended up essentially net even, getting a 4K federal refund and owing 3k to the state. In 2019, we bought a house and made a bit more money, but not dramatically so. We now owe $70 bucks to the state, but 16k to the federal government. If we hadn’t paid mortgage interest/itemized, it would have been 25k. We didn’t change our withholdings between 2018/2019. How did the numbers change so much? Is this the new tax law at work? Would it be worth having a CPA look things over?
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Feb 1, 2020 14:07
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Gonna be hard for us strangers on the internet to know whether that's correct or not without actually preparing the return. Looks like you have 16K reasons to have someone double check your work. See if your parents/friends/friends parents have a tax accountant and see if they can help you out. Unfortunately it may be hard to get an appointment before April 15th at this point, but start trying now. Good luck.
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Feb 1, 2020 17:06
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Residency Evil posted:Just took a first pass at our taxes for 2019 and am I loving things up? In 2018, my wife and I rented and got married. We ended up essentially net even, getting a 4K federal refund and owing 3k to the state. As someone also in health care, I've anecdotally had these types of talks come up in the doc lounge. What is your definition of "a bit more?" Remember that usually all of what you earn in addition to prior earnings is taxed at your highest bracket. So even a "minor" 10k bump can lead to 4k in extra taxes. Also, is there a gap in earnings between you and your spouse? Your witholdings are handled independently of each other. The lower income earner will usually withold LESS than they should if you go by the standard MFJ table. The new W4 handles this much better, but plenty of people got hit in my state (NJ) depending on the circumstances.
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Feb 1, 2020 17:36
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balancedbias posted:As someone also in health care, I've anecdotally had these types of talks come up in the doc lounge. What is your definition of "a bit more?" Remember that usually all of what you earn in addition to prior earnings is taxed at your highest bracket. So even a "minor" 10k bump can lead to 4k in extra taxes. Also, is there a gap in earnings between you and your spouse? Your witholdings are handled independently of each other. The lower income earner will usually withold LESS than they should if you go by the standard MFJ table. The new W4 handles this much better, but plenty of people got hit in my state (NJ) depending on the circumstances. Our income went up by $37k. The confusing part is because of a large increase in our deductions, our taxable income only went up by $10k. It looks like for some reason we paid less in taxes during the year than we did in 2018, so I guess that's where the discrepancy comes from. I guess I'll double check Taxhawk with Turbotax and just be grumpy on April 15th. Or just make up social security numbers for our two dogs. 
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Feb 1, 2020 17:49
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Residency Evil posted:Our income went up by $37k... our taxable income only went up by $10k. Without comparing your actual tax liability from year to year, it sounds like you just didn't withhold enough once you were married, not that you necessarily have to pay that much more tax. As others have said, w4 worksheets are not the greatest for 2 married earners. There are scenarios where two married high earners pay more in taxes together than they would have separately, but that's due to things like SALT and other programs not being doubled at certain brackets. You can run the numbers quarterly to see if your combined withholding is on target to match your expected liability (which is pretty straightforward) and adjust as needed.
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Feb 1, 2020 18:03
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EPICAC posted:I’ll probably be back in a few days with questions about ESPP sales, but I haven’t had a chance to look at those transactions specifically yet. Yeah, so I figured this out, the paystub lines for the sales were pretty cryptic, but Fidelity has some good docs explaining it. I realized I didn’t report the adjusted cost basis for my ESPPs for 2017 & 2018. So I’ll need to file amended returns. I should get a few hundred back 🥳
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Feb 1, 2020 18:26
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BonerGhost posted:Without comparing your actual tax liability from year to year, it sounds like you just didn't withhold enough once you were married, not that you necessarily have to pay that much more tax. As others have said, w4 worksheets are not the greatest for 2 married earners. Yeah I've run the numbers and we fall in to the "marriage penalty" bracket. I double checked my numbers with Turbotax and came within $100 of Taxhawk on my Federal return. Ah well.
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Feb 1, 2020 21:54
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Residency Evil posted:Yeah I've run the numbers and we fall in to the "marriage penalty" bracket. I had this happen my first year of marriage as well. I made half what my wife (at the time a big law attorney) made. Our taxes shot up due to me under withholding all year and my IRA being non-deductible.
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Feb 1, 2020 21:57
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H110Hawk posted:I had this happen my first year of marriage as well. I made half what my wife (at the time a big law attorney) made. Our taxes shot up due to me under withholding all year and my IRA being non-deductible. I guess I'm confused because this is technically our second year of marriage. We got married in 2018 so presumably should have had this same issue last year.
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Feb 1, 2020 22:03
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H110Hawk posted:I had this happen my first year of marriage as well. I made half what my wife (at the time a big law attorney) made. Our taxes shot up due to me under withholding all year and my IRA being non-deductible. While you may under-withhold after marriage by not taking your combined income into account, the 'marriage penalty' (I hate calling it that, it's the cessation of certain tax reliefs for high earners) is when you literally have a higher tax liability married than the sum of your liabilities while single. You each were able to use certain deductions while single, but can't double them up once you marry, or combining your income puts you over the threshold for things like the Medicare surtax. SALT deductions changed quite a bit in 2018, maybe that was it. To tell what changed, you'd really have to compare taxes, credits, and deductions from year to year. More examples: https://www.investopedia.com/terms/m/marriage-penalty.asp
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Feb 1, 2020 22:16
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Ok, I just spent 45 minutes with a Turbotax CPA who couldn't figure this out. I'm using Turbotax Home and Business. I have: 1. W2 income with a maxed out 401k (19k) 2. Solo 1099 income of about $3500, with which I've opened a solo/individual 401k at Vanguard. I've contributed $600 of 401k contributions through the Employer portion of my solo 401k in an effort to get closer to the 57k limit. Where/how do I correctly reflect this in Turbotax? Presumably it's in the Self Employed Retirement section: Here's what I'm filling out.    Am I filling this out the wrong way? It seems as if $1189 is way more than I should be able to contribute. The CPA at Turbotax couldn't figure this out. Residency Evil fucked around with this message at 23:35 on Feb 1, 2020 |
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Feb 1, 2020 23:32
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BonerGhost posted:While you may under-withhold after marriage by not taking your combined income into account, the 'marriage penalty' (I hate calling it that, it's the cessation of certain tax reliefs for high earners) is when you literally have a higher tax liability married than the sum of your liabilities while single. You each were able to use certain deductions while single, but can't double them up once you marry, or combining your income puts you over the threshold for things like the Medicare surtax. Yeah I forget the exact details, and I know tax payment/refund isn't indicative of anything about your obligation going up/down just how well you estimated it over the year. I think most of it was under withholding and bumping some amount into the Medicare surcharge which neither of us had withheld. It was many years ago now.
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Feb 2, 2020 00:45
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I'm racking my brains trying to remember and find out from my records if I already have all my tax documents for the year or not. I don't suppose that there's any other way to know for sure, is there? (I can't imagine such a thing but I've been wrong about weirder things.)
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Feb 2, 2020 17:11
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Ciaphas posted:I'm racking my brains trying to remember and find out from my records if I already have all my tax documents for the year or not. I don't suppose that there's any other way to know for , is there? (I can't imagine such a thing but I've been wrong about weirder things.) Without knowing what accounts/types of income/etc you have, not really  At minimum you should have 2019 versions for everything from your 2018 filing, provided you didn't get last paychecks/close out certain accounts before Dec 31, 2018.Start here: https://www.irs.gov/individuals/checklist-for-free-tax-return-preparation If you're using a preparer, get a checklist from them and go over it line by line, using it to jog your memory for those odd jobs you may have done over the year or that stock/bond your uncle bought you 20 years ago that you keep forgetting to do something about. If you won at least $600 from gambling or a contest or received unemployment benefits, you should have a 1099-G. You may have received a postcard 1099-G for your tax refund. Pay close attention to which docs they say they need to see; the list I linked is for VITA, and for example they're required to see proof of SSN and actual 1095s for insurance coverage, but your preparer may want other docs from you. Unless it's a hardship for you to get copies of them, bring your fed and state returns to your preparer. There are values needed from last year and sometimes there are ways around not having them handy, but the software always fails to carry over from last year when the client didn't bring a copy. There's also this: https://www.nerdwallet.com/blog/taxes/tax-prep-checklist/ I wouldn't take the numbers as gospel since I haven't checked them all against post-2018 figures, but it's a good starting point for what you need, at least. If you're doing your taxes yourself, get all your docs together and sort them by type before you get going. It's much easier.
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Feb 2, 2020 19:49
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About what I figured, thanks; I'll go over the checklist. I have two W-2s and two 1099-Rs to date; left oldjob mid January in Nevada (voluntary, no unemployment) and started in Colorado in May, with some intervening IRA early withdrawals (penalized). Anything else I'm still to get is minor-to-nonexistent in comparison - no property, businesses or investments besides the retirement accounts, so just the standard deduction. I entered those in FreetaxUSA; nothing there jogged my memory, so probably there's nothing left to wait for. Just anxiety  Haven't wholly decided whether or not to go to a CPA, either. Probably will for peace of mind, soon as I can find a reputable one.
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Feb 2, 2020 19:54
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Another request: Most deductions require that you maintain records of the costs associated. Forms, receipts, cancelled checks, bank statements- you are legally required to maintain those records if you claim them on your tax return. If you don't have them during an audit, you're going to lose the deduction, and you're almost always going to face a penalty. Please, keep copies of any tax documentation you have for a year, not just originals. If you get a W2, make a copy of the W2. Mortgage interest statement? Make a copy. Receipts for meal expenses? Scan 'em and make sure they're clear. If you only have originals and you get audited, make copies and bring them to the audit. If you are audited, the IRS has to maintain copies (virtually never originals) of anything we need to evaluate your taxes. If you come in with a bunch of envelopes full of receipts (or a goddamned garbage bag), your audit is going to be extended for weeks as I try to find time to xerox them all and mail them back to you, on top of actually evaluating your case. We are the IRS. We cannot afford to keep our copiers operational There was one working copier in the building at my office last week. It was also the only available printer for most of us. Making copies of documents for you will take a very long time. Interest will continue to accumulate on anything you owe. Make copies. Bring copies. Discendo Vox fucked around with this message at 20:05 on Feb 2, 2020 |
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Feb 2, 2020 20:00
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Ciaphas posted:About what I figured, thanks; I'll go over the checklist. I have two W-2s and two 1099-Rs to date; left oldjob mid January in Nevada (voluntary, no unemployment) and started in Colorado in May, with some intervening IRA early withdrawals (penalized). Anything else I'm still to get is minor-to-nonexistent in comparison - no property, businesses or investments besides the retirement accounts, so just the standard deduction. I entered those in FreetaxUSA; nothing there jogged my memory, so probably there's nothing left to wait for. Just anxiety Keep in mind that I am not certified to prep taxes this year, but if you moved more than 50 miles to start oldjob in 2017 you may have moving expenses you can deduct in 2019 (otherwise, work relocation expenses are no longer deductible in 2019 except for military moves) https://www.lifestorage.com/blog/moving/are-moving-expenses-tax-deductible/ Discendo Vox posted:Another request: I make a copy of every tax document I receive in the mail, blow it up to 250%, and paste it to a wall I've constructed solely for that purpose. On Dec 31 of each year, I spackle over it and give it a fresh coat of paint for the coming new year. I can bring the wall in, but I recommend you have a sharp chisel or maybe a hand plane at your desk.
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Feb 2, 2020 20:12
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Discendo Vox posted:Another request: Appreciate your insider tips. A lot of it is common sense but most folks don't seem to understand that. Question for you. Does the fact that a return is shown as accepted by the IRS mean it has already gone through the computer check and is currently in the queue to get the refund through the system?
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Feb 2, 2020 20:40
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MrMidnight posted:Appreciate your insider tips. A lot of it is common sense but most folks don't seem to understand that. Probably/usually, yes. There are exceptions, and the processing people are in a whole different part of the country (due to all the cutbacks I think there are only two processing offices in the entire US). I do wanna emphasize none of these are "insider" tips- it's all in public documentation/publications from the IRS.
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Feb 2, 2020 21:00
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Discendo Vox posted:Probably/usually, yes. There are exceptions, and the processing people are in a whole different part of the country (due to all the cutbacks I think there are only two processing offices in the entire US). Ok good to know and yes you're right. Just good to know we have an IRS goon around here!
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Feb 2, 2020 21:04
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Just filed using freetaxusa for the first time and it was a lot nicer paying the $12.95 (for state) than the $90ish TurboTax wanted. Both sites calculated the same amount of returns so it was a no brainer to go with the much cheaper option.
Fhqwhgads fucked around with this message at 08:23 on Feb 3, 2020 |
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Feb 3, 2020 04:48
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Is it normal for forms to still be drafts in February? I’ve got a few hundred in refund I can’t get because there isn’t a 8995 yet.
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Feb 3, 2020 07:17
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Xenoborg posted:Is it normal for forms to still be drafts in February? I’ve got a few hundred in refund I can’t get because there isn’t a 8995 yet. Check with your institution. Most cases they post dates on when tax applicable forms will become available. For example E*Trade doesn't release their stuff until mid-February.
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Feb 3, 2020 08:22
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Xenoborg posted:Is it normal for forms to still be drafts in February? I’ve got a few hundred in refund I can’t get because there isn’t a 8995 yet. https://www.irs.gov/pub/irs-pdf/f8995.pdf Looks final to me. Is this a problem with your e-filer?
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Feb 3, 2020 08:25
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sale on Banksy art posted:https://www.irs.gov/pub/irs-pdf/f8995.pdf Thanks. The draft was a higher result on google than the final for both the form and the instruction page. I’m doing freefilefillableforms and it’s not loaded in there yet, but worst case I can print, correct, and mail.
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Feb 3, 2020 14:40
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Ciaphas posted:Haven't wholly decided whether or not to go to a CPA, either. Probably will for peace of mind, soon as I can find a reputable one. As I've mentioned a few times, H&R Block and I'm sure several other groups/preparers have options to do a free review (H&R Block's version is called Second Look) of a filed return to double check your work if you want to do it yourself, so consider that if you're worried about the expense of having a preparer do it for you/think you can handle it but aren't quite sure. Xenoborg posted:Is it normal for forms to still be drafts in February? I've got a few hundred in refund I can't get because there isn't a 8995 yet. Best idea as a rule is to search the IRS website or state division of revenue site for most current forms, though some have taken a while (pretty sure 1040X only just came out for example). Software it can vary since the developer not only has to put it in, the IRS and state agencies are supposed to sign off on it to be official, which for some forms (particularly for things that only just got put back in by the tax stuff they passed in December) can take a while. Though I'm not entirely sure that any tax agencies actually gives a drat about any of our watermarks on the mailed in versions of forms saying "Not ready to file" if the actual form is correct. States are their own headaches; my own state is still not open for e-file apparently and there are a couple others. Usually most software is set up to just hold the forms and send them out when the agency is ready though in those cases.
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Feb 4, 2020 02:13
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MrMidnight posted:Question for you. Does the fact that a return is shown as accepted by the IRS mean it has already gone through the computer check and is currently in the queue to get the refund through the system? No
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Feb 4, 2020 16:22
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A CPA I was recommended wants $400 for my federal+state return, with my two W2s and I'm confident I've got what I have filled in correct, and at this point from going over my 2019 bank statements I'm 99% sure I have all my income sources covered for. If I'm wrong, any dollar amounts will me minor. Nevertheless: how arduous is the amendment process, and how hard - if at all - would I get dinged by the IRS over and above whatever refund money I'd have to return?
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Feb 4, 2020 17:06
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Ciaphas posted:A CPA I was recommended wants $400 for my federal+state return, with my two W2s and Amendments are way easier than the initial process if for no other reason than they tell you what you hosed up and you're already familiar with the forms. I pay around $250/year for mine to be done by a CPA.
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Feb 4, 2020 17:11
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H110Hawk posted:Amendments are way easier than the initial process if for no other reason than they tell you what you hosed up and you're already familiar with the forms. I pay around $250/year for mine to be done by a CPA. Works for me! I think I'm confident enough at this point to go ahead and finish on FreeTaxUSA, and file if I don't see any alerts. (I know I'm preaching to the choir here, but if they'll know what I did wrong why does this need to be done in the first plaaaaaace. drat you H&R Block etc lobbyists  )
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Feb 4, 2020 18:53
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Do I have to file forms for deductions I'm not claiming? I don't want to pay a bunch of cash for mortgage interest deductions I'm not using
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Feb 4, 2020 19:30
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Nevvy Z posted:Do I have to file forms for deductions I'm not claiming? I don't want to pay a bunch of cash for mortgage interest deductions I'm not using No, if you aren't claiming the relevant deduction/credit you don't need to include the associated form. Most tax software wants you to put your potential itemized deductions into it so that it can see if that's better than the standard deduction, but if you've already determined that you can skip that part.
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Feb 4, 2020 23:05
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Ciaphas posted:A CPA I was recommended wants $400 for my federal+state return, with my two W2s and Please see my post from earlier about filing an amended return mid-audit. No better way to increase how much you owe than forcing another month of interest and delay on your outstanding amount.
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Feb 5, 2020 01:11
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Discendo Vox posted:Please see my post from earlier about filing an amended return mid-audit. No better way to increase how much you owe than forcing another month of interest and delay on your outstanding amount. I should have clarified - I've had them kicked back for amendment by the IRS which was super easy to fix (transcribed a number wrong.) I've also had to amend later when a form I forgot about came in super late. Also easy, just jump to where that form goes then recompute on down from there. Never been audited, knock on wood.
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Feb 5, 2020 01:25
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Discendo Vox posted:Please see my post from earlier about filing an amended return mid-audit. No better way to increase how much you owe than forcing another month of interest and delay on your outstanding amount. Duly noted. If I were to notice a problem before the IRS does (or at least before I know they know via audit letter ), I would want to get the amended return out ASAP, right? Or is it still better in that case to wait, to prevent delays and penalties?Speaking of which: if I file for a (say) $5K refund but an audit determines it should have been $4K, that $1000 difference accrues interest, right? Starting on 15 April? (edit) Reading the above post, is there a clear line between the IRS saying "hey, fix this, no harm no foul" and saying "here's an audit, chump"?
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Feb 5, 2020 01:26
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These are my best answers given my limited understanding from the perspective of a small part of the bureaucracy. No guarantees, not tax advice, etc. Please see what the other actual tax expert people here say.Ciaphas posted:Duly noted. If I were to notice a problem before the IRS does (or at least before I know they know via audit letter By all means file an amended return in that scenario. If you wait it is possible the IRS won't notice or won't have the resources to pick up your case, but I will know and I will judge you for your ill-gotten gains, you monster. Ciaphas posted:Speaking of which: if I file for a (say) $5K refund but an audit determines it should have been $4K, that $1000 difference accrues interest, right? Starting on 15 April? Yes, assuming everything else is normal/filed on time, etc. Ciaphas posted:(edit) Reading the above post, is there a clear line between the IRS saying "hey, fix this, no harm no foul" and saying "here's an audit, chump"? That I don't know- there are whole systems/ different permutations of correspondence examination/correction, but I've only done office audits. If there's a dollar amount, I would not be legally allowed to tell you. Different tiers of audit from the IRS are mostly based on how much info the IRS needs to understand what's going on, and, through different permutations of that question, whether it's faster to resolve a case by mail("correspondence audit"), getting you to come in with your documents and ask questions ("office audit"), or sending someone to your home/business ("field audit"). As an office audit person who can't go to your house, it is very frustrating to try to evaluate the size/legitness of your home office deduction. The flipside here is that office and field audits are, ofc, more expensive to conduct, so I'd imagine case classification is partly based on the amount involved as well- which is why I still get office in the home cases. But it's not really about the "severity" of the issue. We're so desperately shortstaffed and underfunded we can't even perform that sort of triage. Discendo Vox fucked around with this message at 02:11 on Feb 5, 2020 |
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Feb 5, 2020 02:03
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Loosely speaking, I can think of five different methods that the IRS can use to change amounts reported on your tax return. What you, the honest taxpayer, need to do depends on what the IRS is doing. In chronological order, it goes like this: 1. The IRS says that your tax return is incomplete. You receive a '12C letter' 4-6 weeks after you file your return. The letter tells you to provide the requested information. Don't file an amended return, just send the missing information to the location on the letter. This is not an audit, you just forgot some paperwork. 2. The IRS corrects a 'math error' on your return. They will send you a letter telling you what your mistake was, and what your new refund/balance amount is. You usually receive this at the same time as you receive your corrected refund, 3-6 weeks after filing. I use 'math error' because the IRS can correct 'math errors' without resorting to an audit, even if most of the time it isn't actually a 'math error'. These can often be fixed over the phone, although the letter tells you to send in the missing documentation if you disagree. Don't file an amended return. 3. The IRS holds your refund for 'additional review'. They will send a CP05 or CP05A letter 6-8 weeks after you filed, telling you that they are reviewing your return. The letter will ask you to mail in the requested information (usually w2s and 1099s). Don't file an amended return. Those three things happen before you get your refund. 4. The CP 2000 notice. 8-16 months after filing, after you've gotten your refund and spent it. The letter says, "hey, you forgot some income on your return", here's what you forgot, here's your proposed new balance. Do you agree? If you disagree, there's a special number to call on the letter. Call them and they can help you! If you never respond to the letter, then the IRS can eventually go ahead and make the changes, but they are required to give you several letter's notice before making the change. Don't file an amended return. 5. The exam. The audit. The big one. Dredging up one of my earlier posts from the thread: sullat posted:Pub 463 talks about this briefly, but it is very fact-dependent. So it is really impossible to say without a detailed consult. Just think, though, at some point you may be summoned to the deepest sub-basement of the local federal building, where the unpopular agencies have their offices. As you walk down the damp hallways, feet crunching on the bones of rats or pigeons that have gotten lost amidst the paperwork, remember there will be a bent, old man hunched over his desk, hands trembling with joy over the thought of crushing the entrepreneurial spirit of the small business man. How will he respond when you say your meeting just happened to be at Disneyland? What will he think of the 17 mai tais on the receipt for breakfast? Can you justify these expenses with only your shoebox of receipts to back you up? It can be as wide-ranging or as narrow as needed. DV is our resident expert on this, I'll defer to his advice on the subject, save to say again, Read the Letter! And Don't file an amended return! The only time to file the amended return is if you catch the mistake before the IRS does. So before you get the CP 2000, before you get the exam notice. If you realize, hey, I forgot to include my Uber income on the return. I forgot that I'm not actually eligible to claim my baby mama's other kids for the EITC! Then yeah, go ahead and file the amended return sooner rather than later, so you don't have to worry about someone trying to decide whether or not to apply the 'accuracy related penalty' to your return.
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Feb 5, 2020 03:14
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