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Epi Lepi posted:I for one am not sure what I should do if I encounter any clients who got the first stimulus but not the second. There's no reason they shouldn't get the second if they got the first, but I know there's gonna be at least one because that's how things always work. I would want to fill out the recovery rebate reconciliation saying they didn't get the $600 but then what if I do that and they then receive it, outside of the refund, I don't want anybody to be hosed and have to pay back the IRS or something like that. Near as we've been told I think the IRS is basically defaulting to "if it didn't go and you checked the IRS website impact payment thing to confirm it wasn't sent, put it on the return". Worst case if they got a check afterwards the client could void it then probably (think the FAQ for the economic impact payment stuff has rules on returning direct deposits too). And I've seen at least one client who got hit that way, that was the one I mentioned (first payment went through OK, it's only the second that might get seized).
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Jan 12, 2021 02:59
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Epi Lepi posted:For the first part, I have no idea. You're correct that the original payments were supposed to be exempt from being seized but who knows what the IRS will do for anything attached to a refund. Anecdotally I know of at least one person who received their ex's stimulus to pay back child support but I'm unclear of the timing and if that is solely because it was child support which I know can abide by different rules. Just knowing how the IRS is working on ancient tech with lovely programming I would imagine that they may not have the ability to distinguish between one part of the refund and another in regards to applying it to back bills. The IRS can absolutely distinguish between different parts of the refund. I don't know if this is how it's going to be done, but I imagine that the Recovery Rebate Credit will be flagged to ignore offsets. But don't quote me on that.
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Jan 12, 2021 04:00
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IRA conversion questions. Because of Rona, I was able to make contributions later to my 2020 Traditional IRA later in the year. I did a backdoor conversion to a Roth as soon as they hit (~1 week), so I have minimal gains to report on them. But because of this, I now have a 1099-R that shows distributions for 6,572.10. This number is made up of 6k worth of contributions for 2019, $500 of contributions for 2020 (I'm maxing this out before tax day, don't worry) - both of which I contributed post-tax - and apparently $72.10 in capital gains that I presumably have to pay taxes on. These were over several distributions, but they were all total distributions and seem to be consolidated into a single form. My understanding is I need to fill out an 8606 to offset this, but I'm foggy on the details. Do I have to fill out one for each year? One for each contribution? Just one? How do I indicate that I already paid taxes on this stuff? Sorry if this is all basic and I'm just being dumb and the answer is "Your tax software will handle it," but this is my first time doing this and I REALLY don't want to get screwed out of a couple thousand dollars on my retirement. Also, the contributions I'm still going to make for 2020 are going to be used on the 2021 taxes to offset the distributions that happen in FY 2021 for the conversion, right?
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Jan 12, 2021 06:17
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Your tax software will handle it. One 8606 per person will aggregate the entire year's worth of transactions. KillHour posted:Also, the contributions I'm still going to make for 2020 are going to be used on the 2021 taxes to offset the distributions that happen in FY 2021 for the conversion, right? Yes.
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Jan 12, 2021 06:25
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SlapActionJackson posted:Your tax software will handle it. Thanks. I'm not gonna lie, I panicked a little when Vanguard sent me a 1099-R with $6500 in "taxable" distributions. I thought I hosed up at first. KillHour fucked around with this message at 06:31 on Jan 12, 2021 |
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Jan 12, 2021 06:26
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I'll bet box 2b "Taxable amount not determined" is checked, which basically means ignore box 2a "Taxable amount" and let your tax software figure it out.
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Jan 12, 2021 06:37
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I'm starting to work on my 2020 taxes and I'm pretty confused on how to handle the EIP. I received a partial payment for the first EIP. This was based on my 2018 year as the IRS had failed to process my return in time (hopefully when the website is back up on the 20th I can confirm they finally processed my return - as of December 5th they had not). Based on my 2019 income I am not eligible for the EIP. I have not received the EIP 2 payment. I couldn't get the "Get My Payment" tool to work as I am not sure which tax return data it is using for my address and ran out of guesses. Maybe they finished processing my 2019 tax return and I became ineligible? I thought the EIP payment is supposed to be a tax refund for the 2020 year paid out early, but on the 1040 form I cannot find a way to declare that I have already received a partial refund in the form of the EIP. Looking at the Recovery Rebate Credit Worksheet for Line 30, it says: " If line 16 is more than line 15, you don’t have to pay back the difference" where line 16 is the amount paid out through the EIP ($1150 something) and line 15 is how much I am owed ($0) Do I get to keep the EIP then? Reading online, it seems like it is supposed to be untaxed, but since I am not owed the EIP would I declare it as income?
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Jan 12, 2021 06:52
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SlapActionJackson posted:I'll bet box 2b "Taxable amount not determined" is checked, which basically means ignore box 2a "Taxable amount" and let your tax software figure it out. It is but now this is confusing. Maybe Credit Karma tax is just bad at this but there's nowhere to enter an 8606 and there's just questions about basis, which I guess is about your 8606 from last year? I didn't file an 8606 last year. Was I supposed to? What is my basis in this case? Edit: I think I figured out the magic combination of things. Did I do this right, assuming I plan to max out my 2020 contributions before April 15?   If I understand it correctly, this should now give me the 5500 I need to use as a basis next year to offset the conversion for the rest of my 2020 stuff. KillHour fucked around with this message at 07:28 on Jan 12, 2021 |
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Jan 12, 2021 07:20
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freezepops posted:I'm starting to work on my 2020 taxes and I'm pretty confused on how to handle the EIP. You don’t pay it back and it’s not income. Enjoy your freebie. Also your 2020 income is what determines your final eligibility so if that’s less than 2019 then make sure you’re using the right numbers. Tax software should handle that part correctly but I’m just being cautious.
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Jan 12, 2021 15:10
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Are there any good ways of finding a competent CPA? I've been doing my taxes using Turbotax/checking them in another program the past few years, but I'm wondering if I'm doing things the "right" way. My taxes aren't incredibly complicated: just a single state with two W2s, some stray 1099s on occasion for some minimal consulting income, and associated retirement/brokerage stuff. It's getting to the point where Turbotax ends up costing a not-insignificant amount of money, and I'm wondering if I could get a CPA to do them for not much more. We do itemize, and since a stray box can make thousands of dollars worth of difference, I'm wondering if I'm doing everything I can to pay the right amount of taxes. How much should I expect to pay for a CPA? Would it be more than say, $500? Anyone have any recs for PA?
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Jan 12, 2021 15:28
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KillHour posted:It is but now this is confusing. Maybe Credit Karma tax is just bad at this but there's nowhere to enter an 8606 and there's just questions about basis, which I guess is about your 8606 from last year? I didn't file an 8606 last year. Was I supposed to? What is my basis in this case? That looks right. You should've filed an 8606 last year because you made non-deductible contributions.
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Jan 12, 2021 15:55
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SlapActionJackson posted:That looks right. Yes, but I'm stupid (and didn't realize I'd be making contributions until after I filled my taxes). Do I need to do anything about it or just  ?
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Jan 12, 2021 16:40
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Residency Evil posted:
I don’t know how much a solo practitioner would charge but I’ve worked at small and large firms, and the invoice for a return you’re describing could go anywhere from 1500 to $10k.
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Jan 12, 2021 17:45
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Residency Evil posted:Are there any good ways of finding a competent CPA? I've been doing my taxes using Turbotax/checking them in another program the past few years, but I'm wondering if I'm doing things the "right" way. My taxes aren't incredibly complicated: just a single state with two W2s, some stray 1099s on occasion for some minimal consulting income, and associated retirement/brokerage stuff. It's getting to the point where Turbotax ends up costing a not-insignificant amount of money, and I'm wondering if I could get a CPA to do them for not much more. We do itemize, and since a stray box can make thousands of dollars worth of difference, I'm wondering if I'm doing everything I can to pay the right amount of taxes. I would keep doing your thing unless you think you're missing out on something. Unless you have a complicated situation your numbers are just larger not complicated. If you have K-1's or ISO stock or a farm or espp (things where basis is complicated or tax code is written by a lobbiest). Otherwise some small % of your income being 1099 is sorta I paid around $300-500 depending on complexity. Ironically the better guy was on the cheaper end of the scale but I think he did personal returns as a break from the monotony and to have someone to chat with about life. The other person saying $1500 seems like an impossibly complicated return or further accounting being done, $10k sounds like bookkeeping being done for you. I do basic things like sum common forms (1099-int, charity, dmv fees, that sort of thing) and come prepared with everything in rough order (income on the top, deductions in the middle, supporting docs like receipts on the bottom for my records.)
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Jan 12, 2021 18:02
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JohnnyTreachery posted:I don’t know how much a solo practitioner would charge but I’ve worked at small and large firms, and the invoice for a return you’re describing could go anywhere from 1500 to $10k. Oh my god. H110Hawk posted:I would keep doing your thing unless you think you're missing out on something. Unless you have a complicated situation your numbers are just larger not complicated. If you have K-1's or ISO stock or a farm or espp (things where basis is complicated or tax code is written by a lobbiest). Otherwise some small % of your income being 1099 is sorta Yeah this seems more reasonable. I kind of enjoy doing them, minus the heart attack at the end where I find out how much I underpaid. My return isn't really complicated, although technically I do file a Schedule C for the few thousand I earn. It's more that I keep on hearing about situations where people do taxes on their own, and then get wildly different numbers from their accountants. I guess I'm hoping for that. 
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Jan 12, 2021 18:07
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JohnnyTreachery posted:I don’t know how much a solo practitioner would charge but I’ve worked at small and large firms, and the invoice for a return you’re describing could go anywhere from 1500 to $10k. I've worked with a few CPAs and this seems absurdly expensive to me.
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Jan 12, 2021 18:27
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Epi Lepi posted:You don’t pay it back and it’s not income. Enjoy your freebie. Also your 2020 income is what determines your final eligibility so if that’s less than 2019 then make sure you’re using the right numbers. Tax software should handle that part correctly but I’m just being cautious. Thanks for the help!
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Jan 12, 2021 19:00
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KillHour posted:Yes, but I'm stupid (and didn't realize I'd be making contributions until after I filled my taxes). Do I need to do anything about it or just I'm sure the official answer is "file amended 2019". But I know I'd probably try just filing correct 2020 and see if the IRS complains about the mismatch in previously reported basis.
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Jan 13, 2021 00:53
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I googled it and apparently there's a $50 fine if they catch it but it's like... whatever, sure I'll cut them a check.
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Jan 13, 2021 02:02
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Small White Dragon posted:I've worked with a few CPAs and this seems absurdly expensive to me. Firms have bill rates and budgets - I really don't want to do 1040s, and I can't make any money at my bill rate on a return if I don't get at least 1,500 for it, and that would be a simple one. You probably don't want or need me to do your return though unless you have entities and businesses outside the US.
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Jan 13, 2021 03:53
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PatMarshall posted:Firms have bill rates and budgets - I really don't want to do 1040s, and I can't make any money at my bill rate on a return if I don't get at least 1,500 for it, and that would be a simple one. You probably don't want or need me to do your return though unless you have entities and businesses outside the US. Sole practitioners exist you know.
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Jan 13, 2021 05:34
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Small White Dragon posted:I've worked with a few CPAs and this seems absurdly expensive to me. It's absolutely absurd. His return sounds like $300 to $500 like H110Hawk said. Not sure what the other guys are smoking.
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Jan 13, 2021 05:45
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Epi Lepi posted:It's absolutely absurd. His return sounds like $300 to $500 like H110Hawk said. Not sure what the other guys are smoking. Agreed. Another data point: a W-2 job and three different kinds of equity vesting, advice on how to best handle all that from a tax perspective at the best known firm in the immediate area, $600.
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Jan 13, 2021 16:34
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PatMarshall posted:Firms have bill rates and budgets - I really don't want to do 1040s, and I can't make any money at my bill rate on a return if I don't get at least 1,500 for it, and that would be a simple one. You probably don't want or need me to do your return though unless you have entities and businesses outside the US. The last sentence there sums it up. A normal person should not hire you. I expect to get out for well under a grand this year with a similar return to Motronic + household employer nonsense (w-2, w-3, who knows what for California.)
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Jan 13, 2021 16:46
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I pay like $2k, but that is with a K-1, income across a ton of states, international income, at a mid-size somewhat fancy shop.
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Jan 13, 2021 18:06
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gvibes posted:I pay like $2k, but that is with a K-1, income across a ton of states, international income, at a mid-size somewhat fancy shop. That makes sense when you're dealing with that many forms.
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Jan 13, 2021 18:07
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Oh yeah, I agree completely, I was not suggesting anyone pay my rate unless they really are in a complicated situation! I still use turbotax for my own taxes.
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Jan 14, 2021 00:34
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Residency Evil posted:Are there any good ways of finding a competent CPA? I've been doing my taxes using Turbotax/checking them in another program the past few years, but I'm wondering if I'm doing things the "right" way. My taxes aren't incredibly complicated: just a single state with two W2s, some stray 1099s on occasion for some minimal consulting income, and associated retirement/brokerage stuff. It's getting to the point where Turbotax ends up costing a not-insignificant amount of money, and I'm wondering if I could get a CPA to do them for not much more. We do itemize, and since a stray box can make thousands of dollars worth of difference, I'm wondering if I'm doing everything I can to pay the right amount of taxes. Wife and I are in a roughly similar boat but don't itemize, and file separately for IBR/PSLF calculation. Plus dealing with equity/options on her end and occasional international stuff. I think we pay about $500/yr.
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Jan 14, 2021 01:03
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gently caress. Estimated is due Friday isn't it? As long as I hit 110% of last year I'm good to ignore it right?
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Jan 14, 2021 02:29
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i've got a w-4 question i'm preparing to setup an hsa outside of my employer (a small non-profit with almost no benefits). i'm planning on taking the tax savings and invest them in my pre-existing roth ira, and i want to adjust my federal withholdings so i can make that extra roth contribution each pay period (i don't have to worry about state taxes because my state doesn't give hsa a tax advantaged status). i went on the irs website and used the withholding estimator to figure out how i would need to change my withholdings for the rest of the year in order to have things to line up correctly. however, the instructions given by the estimating tool on how to reduce my withholdings in order to avoid having a rebate at the end of the year don't make sense to me. i need to decrease my withholding by$18 per biweekly period going forward for a total of a ~$428 annual reduction, and this is the instructions it gives quote:Enter $37 for credits and other reductions to annual withholding (Line 3 on Form W-4 is already pre-filled). This is an annual amount by which to reduce withholding below the standard withholding that would be withheld from each paycheck for this job if lines 3 through 4(c) of the Form W-4 were blank or zero. based on the wording of the instructions, and looking at the form, i'm not sure if this will do what i want it to. in my experience, our administrator/bookkeeper mostly just enters sums into our crap payroll software without having a great understanding of what it all means, so i'm not sure how much help she'll be in figuring all of this out on her own. can anyone with more experience handling w-4s chime in on whether the suggested change looks correct?
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Jan 14, 2021 22:11
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gvibes posted:I pay like $2k, but that is with a K-1, income across a ton of states, international income, at a mid-size somewhat fancy shop. Does that include doing the taxes for the thing that generates the K-1 as well, or just the personal? I've never even come close to a $2K single 1040 return, most I did was over a thousand for a partnership K-1, two Schedule Cs, and 6 rental properties (and a partridge in a pear tree...). Almost anything I have in the multi-thousands is generally things like "I have a business and haven't been filing taxes for 8 years and surprise, got caught!"  . Also depends on the support thereafter I suppose, that does cost more if it's much good. These days at least they adjusted my pricing so I can actually give an estimate for the most part rather than guess a range and find out I'm vastly wrong when they drag in another form (or at minimum tell them the correct price once I see everything but before starting, I despised the old way causing sticker shock at the very end of the return).H110Hawk posted:gently caress. Estimated is due Friday isn't it? As long as I hit 110% of last year I'm good to ignore it right? 100% of last year (unless your AGI was over $150,000 then), or 90% of this year's tax. If you hit that threshold there's no penalty, just have to make up any difference by April 15th of course.
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Jan 15, 2021 00:59
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MadDogMike posted:
My agi is well above that. Is it "whichever is higher"? Because 110% of last year is below 90% of total owed. Thank you by the way. Edit: Fine I paid what I think I owe after doing math. Less than I expected. Promise to write me in jail. H110Hawk fucked around with this message at 22:34 on Jan 15, 2021 |
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Jan 15, 2021 01:12
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i'm sure people saw this already but if not tax season starts feb 12th this year due to the changes related to the pandemic https://twitter.com/brandontvnews/status/1350249538368512006?s=21
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Jan 16, 2021 18:16
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I finally got the refund for the amendment to my 2018 return that I mailed back in April. 
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Jan 17, 2021 03:04
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MadDogMike posted:Does that include doing the taxes for the thing that generates the K-1 as well, or just the personal? I've never even come close to a $2K single 1040 return, most I did was over a thousand for a partnership K-1, two Schedule Cs, and 6 rental properties (and a partridge in a pear tree...). Almost anything I have in the multi-thousands is generally things like "I have a business and haven't been filing taxes for 8 years and surprise, got caught!" gvibes posted:lol, just learned that my accountant accidentally overpaid my state taxes last year by $15k. George Bluth: "I have the worst loving [accountants]"
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Jan 17, 2021 03:25
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You must make a LOT for that to be even possible holy poo poo
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Jan 17, 2021 03:55
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H110Hawk posted:My agi is well above that. Is it "whichever is higher"? Because 110% of last year is below 90% of total owed. Thank you by the way. Whichever is lower, actually. And I gotta be honest, the penalty isn't terribly big even if you screw up. I know some clients who just take it because the extra pain is worth not paying more estimated taxes to them, though they aren't huge $$ owed anyway. Also, jail is only for lying, so don't freak out about that. Mad Wack posted:i'm sure people saw this already but if not tax season starts feb 12th this year due to the changes related to the pandemic Jesus, 7.1 million 2019 personal returns not processed? No wonder so many people are screwed for their refunds still. gvibes posted:No, just personal. But I think I am going to fire him because... Yeesh, I won't claim perfection but I can't recall even coming close to screwing up that badly. Starting to sound like the more bewildering issues I've dealt with in the offseason, where you can't even figure out HOW somebody makes the mistake they did. I can follow misreading one of those mammoth 1099-B forms and missing something, or typos, or whatever, but the mind melts sometimes at how they manage to do what they did. Just wish I could offer to take a look, but doubt you're near me in Delaware (also depending on your states I might be bad myself; California in particular kind of scares me for anything above basic W-2 income, New York is bad enough  ).KillHour posted:You must make a LOT for that to be even possible holy poo poo To be fair if he's got business income (or a lot of credits he should be claiming) you can hit that level of mistake easier than you think. Think my worst one was somebody who liked to pull out a ton of IRA money, spend some of it, then roll the rest back into another retirement account. One year what they rolled in back into wasn't actually a retirement account so the whole thing was a distribution, but I misunderstood the nature of the account they "rolled into" and did a partial rollover when I shouldn't have, which was a LOT of money. Still kick myself for not being clearer there and understanding  .
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Jan 17, 2021 21:12
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gvibes posted:No, just personal. But I think I am going to fire him because... Are you sure this 'overpayment' isn't intended to cover the first quarter or two of the following years tax liability?
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Jan 17, 2021 21:52
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MadDogMike posted:Whichever is lower, actually. And I gotta be honest, the penalty isn't terribly big even if you screw up. I know some clients who just take it because the extra pain is worth not paying more estimated taxes to them, though they aren't huge $$ owed anyway. Also, jail is only for lying, so don't freak out about that. I was just making a joke based on the title of this thread. Past history has made it clear I need to just pay the estimated amounts because I have a tendency to just ignore my return for sometimes over a year.
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Jan 17, 2021 22:15
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I opened a Roth IRA on New Year's Eve. Is it at all possible I have a taxable amount to put in line 4b?
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Jan 18, 2021 06:24
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