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Missing Donut posted:Just double check that the funds went into your Roth. I’ve had multiple clients try to do the same thing as you but that the transfer of the traditional 401k actually went into a traditional IRA, not a Roth. So I’m basically asking “did you try turning off your computer and turning it on again?” but for taxes. Yes, I can confirm the funds went into the Roth account. I'm going to speak with the accountant today and have him change the 1099-R from G to 2. And that will be the last time I use his services. I appreciate the assistance everyone has given.
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Feb 12, 2020 15:20
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Question for the thread. My wife was given a gift of some shares of a closed-end fund as a child. At some point over the ensuing decades, the operator of said fund stopped (or perhaps never did?) allowing sales of said shares without that sale being run by an outside brokerage. This past year we were finally able to get them to transfer those shares to an online brokerage and sold them. The 1099-B finally came in for said sale and they list it as a short term gain, with the acquisition date being when the shares were transferred to the new brokerage. She's had the shares for some unknown but very long period of time (any records of when they were first bought are long gone). When I'm plugging this in, should I use the acquisition date the new brokerage reported on the 1099-B, or should I pick some date approximately around when we think they were actually bought? We've also got zero data for the cost basis of said shares so I'm expecting to pay tax on the full sold value anyway.
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Feb 12, 2020 17:20
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IOwnCalculus posted:Question for the thread. My wife was given a gift of some shares of a closed-end fund as a child. At some point over the ensuing decades, the operator of said fund stopped (or perhaps never did?) allowing sales of said shares without that sale being run by an outside brokerage. This past year we were finally able to get them to transfer those shares to an online brokerage and sold them. Unless they actually sold/rebought the stocks to do the transfer, using the brokerage's acquisition date would be an error and you should report the correct date of purchase on Form 8949 with (if memory serves) a T code in column f to tell the IRS the 1099-B form is wrong and type of basis is long term not short term. As for basis, if you can nail down the date there are historical stock price lookup sites on the Internet that can give you the price per share, you could try reconstructing the basis that way. Might be worth checking with the original fund people for the date/purchase price info, they may have the records even if the new brokerage doesn't.
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Feb 13, 2020 07:54
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Already tried that with the original company, and suffice it to say that every adult who should have kept relevant records, didn't. The shares shouldn't have been sold/rebought since the entire reason we moved them is that the original brokerage literally would not just sell them for us.
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Feb 13, 2020 14:38
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I have another question about that "here's how return troubles work all the way up to Audits" post a couple weeks back. Assuming I entered everything I have and answered all questions accurately, would it be extremely abnormal for online preparation/filing software like FreetaxUSA to not submit a required form when e-filing, resulting in a whoopsie letter from the IRS, or is that something that happens a lot or with some kinds of filing?
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Feb 14, 2020 16:18
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Ciaphas posted:I have another question about that "here's how return troubles work all the way up to Audits" post a couple weeks back. Assuming I entered everything I have and answered all questions accurately, would it be extremely abnormal for online preparation/filing software like FreetaxUSA to not submit a required form when e-filing, resulting in a whoopsie letter from the IRS, or is that something that happens a lot or with some kinds of filing? Does tax software have serious unexpected bugs sometimes?... Yeah, look into your heart (and any experience with computers) and the answer to that one is pretty obvious. I'm not aware of any bugs like that in particular with FreeTaxUSA mind you, buuuut I would not be horribly surprised if you ran into one. Considering the stuff has to be constantly rewritten for tax law changes (many of which Congress LOVES to pass in late December like this year) and has to take into account every state and federal income tax rule (and approved by each agency), honestly it's a wonder any of it works as well as it does really. Suffice it to say tax preparers need to be more than a brainless monkey just typing things into the system if they want to do the job well.
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Feb 15, 2020 05:45
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In particular, I know that turbotax has a whole laundry list of "Exception error" sort of situations where some part of your situation is just unusual enough that the software will spit out an error number and, if you're lucky, associated materials will tell you roughly what form number to fill out to actually address your situation - usually involving the sort of manual calculations and ambiguities that are the whole reason someone might want to get tax software in the first place!
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Feb 15, 2020 08:57
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As a software dev and YOSPOS regular I should have remembered the fundamental truth that Computers And Programming Are Terrible, forget Congress' "help". 
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Feb 15, 2020 15:20
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Ciaphas posted:As a software dev and YOSPOS regular I should have remembered the fundamental truth that Computers And Programming Are Terrible, forget Congress' "help". Computers And Programming Terrible Congress's Help Ah I guess that's what it stands for?
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Feb 15, 2020 15:55
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Ciaphas posted:As a software dev and YOSPOS regular I should have remembered the fundamental truth that Computers And Programming Are Terrible, forget Congress' "help". To be fair, with a spec being constantly rewritten at the whim of Congress/the states at the last minute, I can hardly blame the tax software programmers for this stuff. Kind of the ultimate “garbage in, garbage out” setup really.
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Feb 15, 2020 17:39
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MadDogMike posted:To be fair, with a spec being constantly rewritten at the whim of Congress/the states at the last minute, I can hardly blame the tax software programmers for this stuff. Kind of the ultimate “garbage in, garbage out” setup really. Yeah, last filing season there were some education credits that expired in December, and then were renewed retroactively in, like February, so for the first two months of the year they were denied, and then they were accepted. Or maybe it was the year before? It's all blending together now.
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Feb 15, 2020 19:09
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At some point I will share some stories about the software we have to use internally at the IRS. Imagine using microsoft office, but pressing the print icon or any button labeled "Cancel" will cause a full application crash.
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Feb 15, 2020 21:30
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sullat posted:Yeah, last filing season there were some education credits that expired in December, and then were renewed retroactively in, like February, so for the first two months of the year they were denied, and then they were accepted. Or maybe it was the year before? It's all blending together now. Year before. Last year they didn't renew a bunch of that extender legislation until December. Again retroactively. So all of tax season last year we didn't have say, mortgage insurance as a deduction or the tuition and fees deduction and now we have the joy of determining whether to amend last years returns to add them back. Oh, and last year all of the forms had reserved lines for these deductions to be added back but they redesigned the forms without those lines for 2019 but now those deductions are back. Yay congressional stupidity.
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Feb 15, 2020 22:33
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Discendo Vox posted:At some point I will share some stories about the software we have to use internally at the IRS. programming is already terrible but i'm constantly shocked at how much worse government software seems to be! (the whole loving Congress problem exacerbates it here, true) Ciaphas fucked around with this message at 00:06 on Feb 16, 2020 |
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Feb 15, 2020 23:42
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Without further detail I'd say that like most of the other issues at IRS (and the issues are dire), the tech problems stem from: a) several decades of catastrophically insufficient funding, b) the procedures and triage and workarounds that have built up as multiple generations tried to address a), and c) the culture of fatalism that develops when a) and b) have been in place longer than anyone has been working for the organization. The people I work with at IRS are almost universally well-intentioned and as effective as the environment lets them be. Everyone is stretched too thin, or held accountable to too onerous and myopic a set of standards, to make the connections and revisions that could ameliorate things. The budget problem's the core of it all, espeically as it effects tech. Last I checked IRS spends a billion dollars of its budget just on tech upkeep. The federal taxpayer database, IDRS, is a 1960s command mainframe, a direct successor to UNIVAC built out of cobol and assembly. Almost all of the other tech and procedures and systems that exist at IRS (which are all also old and semifunctional in their own ways) were built to accommodate IDRS. Maybe the worst part is that in every case I can understand why every one of these bad buggy incoherent rules made perfect sense to a decisionmaker, once upon a time. Discendo Vox fucked around with this message at 08:11 on Feb 16, 2020 |
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Feb 16, 2020 08:04
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I ran into a bug once doing a return for my sister where dependent care expenses weren't calculated right in H&R Block at home (and i've been using it since it was TaxCut without any problems). This got me to go back to Intuit for a year, and it made me remember why I loving hate Intuit, and I'm back with H&R Block at Home this year. Their schedule C guidance is so much better than Intuit's that it's not even close.
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Feb 16, 2020 14:41
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Are there any internal or external reports estimating the cost of upgrading all the IRS’s systems to something more modern? It seems like any time I read about an agency trying to do that it becomes a decade long rolling disaster (probably because most governments aren’t good at project management).
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Feb 16, 2020 18:43
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I think Etrade messed up my 1099 - Last year I bought a T-Note on the secondary market at a discount to par, and held the note to maturity in 12/2019. My read of the IRS guide says the amount of the discount should have showed up in box 10 on the 1099-INT to be taxed as interest income. Etrade, OTOH put the redemption on the 1099-B with unknown basis and holding duration (despite the fact that I bought it though them) with instructions for me to add the details and report on 8949, meaning they think it's a capital gain. Can anybody confirm whether I'm right or they are?
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Feb 17, 2020 05:29
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Real basic question here because oh god I am not good with forms or taxes. I'm single and standard deduction. Doing my (very simple) taxes online today, and would have essentially been dead even with the Feds except for taxes on interest earned/1099-INT from a high-yield savings account I opened late 2018. It wasn't a huge amount owed (<$200), and my state refund covered it plus, but I'd like to adjust my withholdings for this year to get it back closer to even or a small +/- amount. Looking at my W4, there seems to be two ways to do this?: W4 section 4(a): do I enter the anticipated interest earned here? Does this automatically calculate and withhold per paycheck based on what you enter? W4 section 4(c): enter $xy here to be deducted per paycheck, calculated to cover anticipated interest earned divided by 24 paychecks?
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Feb 22, 2020 00:50
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The Royal Nonesuch posted:Real basic question here because oh god I am not good with forms or taxes. I'm single and standard deduction. Don't overoptimize this. $200 in taxes either way could swing just from the interest rates fluctuating or tax law changing mid-year. But yes, you can just say "ok I think I will make $1000 in interest, so 22% of that is Y, divide by pay periods, and slap that in the "withhold this much extra" line. I would just write the check at the end of the year. It's actually earning you more money this way.
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Feb 22, 2020 01:13
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 Thanks, that makes sense.
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Feb 22, 2020 05:37
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My girlfriend received a corrected. W2 after she already filed. The corrected W2 had her wages sightly lower than the original (by about $200). Does she really need to file a corrected return if she doesn't care about the $60 extra she'd get for the trouble?
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Feb 22, 2020 07:37
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Nope. You are free to overpay your taxes. She has three years to change her mind.
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Feb 22, 2020 10:42
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Does anyone have any ideas why my taxes owed are so high? For 2018, I ended up owing about $5K in federal taxes, and after plugging my numbers into TurboTax for this year, it’s looking like I might owe as much as $7K. I am single, don’t own a home, and don’t itemize. I’ve had one job for both of these tax years, as a full time employee getting a W2. My whole life I’ve claimed 0 allowances and I’ve usually gotten a little money back. But I’ve historically never owed, when claiming 0. Shouldn’t my (only) employer know how much I make, and that I am single, and that I have filed 0, and take out the appropriate amount to get me pretty close to owing nothing?
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Feb 23, 2020 16:25
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dexter6 posted:Does anyone have any ideas why my taxes owed are so high? If you're working a simple W2 job as salary, you can easily calculate your expected tax burden ahead of time and see if your withholding will add up to the correct amount. If it doesn't, you can choose to withholding additional money on each paycheck by filling out a new W4.
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Feb 23, 2020 16:31
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Hoodwinker posted:No other sources of income? But how come my employer gets it so wrong?
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Feb 23, 2020 16:32
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dexter6 posted:I get RSUs vested quarterly, and ESPP twice a year. But all of that is still reported on my W2.
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Feb 23, 2020 16:37
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dexter6 posted:Does anyone have any ideas why my taxes owed are so high? Do you have other new sources of income outside of the income on your W2, for which federal income taxes have not been withheld? This might be why you are under-withholding. I think I have heard too that when Trump's Tax Laws went into effect, the withholding rates got adjusted to make your paychecks look bigger and to make it seem like you are paying less in taxes. I haven't carefully checked this, but for my 2018 taxes, I owed a little bit too, despite claiming 1 allowance. I also had a little bit of dividend and interest income though for which federal income tax withholding was not made. I think since you are a single guy, you are supposed to claim 1 allowance, and not 0 allowances. This probably adds to the problem of why you are under-withholding in recent history. I just Googled the 2020 W4 form, and they are doing away with the concept of 'allowances', which is good because it is confusing, in my opinion.
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Feb 23, 2020 16:42
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silence_kit posted:I think since you are a single guy, you are supposed to claim 1 allowance, and not 0 allowances. This probably adds to the problem of why you are under-withholding in recent history. I just Googled the 2020 W4 form, and they are doing away with the concept of 'allowances', which is good because it is confusing, in my opinion. There are two levers on the old W4s: allowances (reduce withholding) and additional withholding (increase withholding). If you have steady income, you can calculate out your liability ahead of time and use the levers to land on the right amount of withholding.
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Feb 23, 2020 16:45
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Hoodwinker posted:Literally exactly the thing that claiming allowances does is reduce the amount of withholding you have. So, no, you should not claim 1 instead of 0 if you have underwithholding problems. Oh, I got it backwards, oops! More allowances is less withholding, instead of the opposite. The other part of my post about the Trump Tax Law affecting withholding rates is true, though, right? Although maybe not as relevant as what you highlighted in your earlier posts regarding stock compensation. silence_kit fucked around with this message at 16:50 on Feb 23, 2020 |
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Feb 23, 2020 16:48
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The issue here isn't really about the W4 though. Your W4 is for handling withholding on regular, roughly fixed wage income. You're still liable for irregular sources of income, and the W4 is not meant to address that. What is meant to address that is your own personal financial planning and the mechanisms that will handle a certain amount of assumed withholding (that may or may not be accurate) to cover the irregular event. You can then use the W4 to your own benefit to ensure that you're filling in the gap.quote:The other part of my post about the Trump Tax Law affecting withholding rates is true, though, right? Although maybe not as relevant as what you highlighted in your earlier posts regarding stock compensation.
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Feb 23, 2020 16:51
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Hoodwinker posted:Literally exactly the thing that claiming allowances does is reduce the amount of withholding you have. So, no, you should not claim 1 instead of 0 if you have underwithholding problems. What confused me about allowances was how they translated into amount of tax withheld per paycheck. The translation seemed nebulous to me. Maybe I didn't read the instructions carefully. When I under-withheld in 2018, I filled out the form to make additional withholdings, but that was straightforward because the additional withholding was in dollar amounts, and I could look at my previous years taxes to see what adjustment to make. I didn't need to convert 'allowances' to $. Hoodwinker posted:The issue here isn't really about the W4 though. Your W4 is for handling withholding on regular, roughly fixed wage income. You're still liable for irregular sources of income, and the W4 is not meant to address that. I understand this. silence_kit fucked around with this message at 17:01 on Feb 23, 2020 |
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Feb 23, 2020 16:54
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silence_kit posted:What confused me about allowances was how they translated into amount of tax withheld per paycheck. The translation seemed nebulous to me. Maybe I didn't read the instructions carefully. My comments about the W4 weren't aimed at you. I'm just restating my thesis for the crowd here: the W4 is just a tool but it's not meant to do all of the heavy lifting, you are.
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Feb 23, 2020 16:59
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Thanks all. It seems as though my incorrect assumption was that since taxes were withheld from my RSU and ESPP sales, I was good to go. I didn’t realize they weren’t withholding the correct amount for me, but instead was a standard rate. I’ll keep my allowances at zero, and jack up my additional withholding a this year!
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Feb 23, 2020 17:47
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dexter6 posted:Thanks all. My options are withheld at a static 22% and ESPP at 0%, but all of the income flows to my W-2. This means my marginal rate on the wages is correct, but the options are off by >=0% (depending on when in the year) and the ESPP is off by the entire amount. The easiest way to get this to come out correct is to make a payment on pay.gov every time there is a major event, though this means tracking the receipt for that. Or do what I do, aim to be within the safe harbor and smugly cut the government a check at tax time knowing it's ever so slightly advantageous to me. I keep a folder on my desk or each years taxes that are "active" (so 2019 and 2020 right now). Any time I do something tax related I print off a hard copy and put it into the relevant folder. It's me, the person who owns a printer and gets paper statements in TYOOL2020
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Feb 23, 2020 19:35
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Never had to deal with trusts before, so here is a hypothetical: If someone becomes a successor trustee due to death of person who was in name "Blank Revocable Living Trust", they should: 1) get an EIN for the trust and 2) file a 1041 for the trust (assuming the trust reached the minimum income threshold). Any other reasons they would have to file a 1041? Also if income is zero and nothing was paid out to beneficiaries, does the trust still need to file a 1099k for the beneficiaries?
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Feb 23, 2020 22:28
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I generally dislike the lovely lobbying of TurboTax and the like, but I have some intertia doing my taxes with TurboTax - is there really a good reason to stop? My situation is pretty simple - 2 incomes, some dividends, nothing fancy. Will I somehow feel so happy/save so much money if I go to the IRS website and figure this out myself? I did this back in Canada when I was younger but now I'm 35 and busy and living in the US - do I want to learn it all again?
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Feb 23, 2020 22:37
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Turds in magma posted:I generally dislike the lovely lobbying of TurboTax and the like, but I have some intertia doing my taxes with TurboTax - is there really a good reason to stop? My situation is pretty simple - 2 incomes, some dividends, nothing fancy.
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Feb 23, 2020 22:52
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The Gardenator posted:Never had to deal with trusts before, so here is a hypothetical: You should see an estate planning attorney to make sure you do it correctly. It varies by state and the specifics of the trust documents itself.
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Feb 23, 2020 23:04
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Hoodwinker posted:Use freetaxusa.com for the low low cost of $0 for federal. The name sounds scammy but it's legit. I've used it for the last 3 years. I then go on my state website and do those on there. You can also pay $12 to file your state form on FTUSA. Sounds perfect, I'll give it a shot, thanks!
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Feb 24, 2020 01:32
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