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Harlock posted:I've been getting conflicting information when Googling this, so hopefully someone can help me out. Better question: do they withold federal taxes on their social security benefits? No sense letting that go to waste. Also, you need 5 years tax history for things like Medicaid so what's the harm? A single 1099-SSA is like a 15 minute "shake hands, do the return, chat, hand them a print copy, get signatures, collect your fee, and advise them to consider not withholding on the SSB if they have no other income to save on tax prep costs" affair. For the most part, homeowner benefits are itemized deductions. At their age, they probably have a 26k standard deduction. They're deductions, not credits, so not enough to break standard or no taxable income means no real benefit. But if they're withholding might as well get yout money back.
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Jan 29, 2021 00:44
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Covok posted:Better question: do they withold federal taxes on their social security benefits? No sense letting that go to waste. Also, you need 5 years tax history for things like Medicaid so what's the harm? A single 1099-SSA is like a 15 minute "shake hands, do the return, chat, hand them a print copy, get signatures, collect your fee, and advise them to consider not withholding on the SSB if they have no other income to save on tax prep costs" affair. Thanks for the quick reply. No federal taxes are withheld since they're under the yearly minimum earned to pay tax.
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Jan 29, 2021 01:07
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Harlock posted:Thanks for the quick reply. They certainly aren't legally required to file, and have no financial reason to file without any refund. Unless you have some non-tax related reason to have returns (I know my state requires two years of taxes for some stuff related to the DMV for example) I don't really recommend filing, there's no point sending a return with the equivalent of a bunch of zeros in. But there's certainly no legal penalty for filing if they want to at least. Ur Getting Fatter posted:Back in August 2020 I mailed in amendments for 2017 and 2018. Sorry, if I knew a way to reliably get through to the IRS I'd be using it myself. I will say it not showing up is not evidence it wasn't received at least, even if it's probably in a stack of mail next to the Ark of the Covenant at this point.
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Jan 29, 2021 03:06
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Harlock posted:Thanks for the quick reply. Possibility entered my mind: you just meant income tax, right? Some states tie elderly property tax reduction to your last income tax return's reported income. Check your state's rules.
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Jan 29, 2021 03:42
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MadDogMike posted:They certainly aren't legally required to file, and have no financial reason to file without any refund. Unless you have some non-tax related reason to have returns (I know my state requires two years of taxes for some stuff related to the DMV for example) I don't really recommend filing, there's no point sending a return with the equivalent of a bunch of zeros in. But there's certainly no legal penalty for filing if they want to at least. Don't be ridiculous, the Ark is stored in in DC and the returns are probably sitting around in Ogden. At any rate, one thing you can do is get an account transcript for those years and look for the code that says "Amended return received" on it.
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Jan 29, 2021 04:22
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My 1099G tax form from when I collected unemployment between May & July claims $7500.00. That is a lot of money, definitely a lot more money than I actually collected. Their website shows every payout I received + dates and it only totals up to $3,500 (This includes the $600 bonus bux, and I only collected for 5 weeks) Is there some sort of card somewhere they sent me with the remaining $4k, do I need to contact the unemployment office for that money or did I really just get scammed by the government and need to pay taxes on $4,000 I didn't receive? I'm doing my taxes online now and I've never had this issue before, and it's cutting my refund from about $12k down to $200 federal and $100 owed to the state.
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Feb 2, 2021 01:08
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How would taxes on $4k reduce your refund by $12k? That makes no sense.
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Feb 2, 2021 01:12
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KillHour posted:How would taxes on $4k reduce your refund by $12k? That makes no sense. e: Additional, specific info If I change my Unemployment benefits to what I actually received my is $900 Federal, $250 state. If I claim the $4,000 that I didn't receive from benefits I get $300 Federal and owe $100 state. That's a $750 difference over $4,000 I never got from unemployment. RealFoxy fucked around with this message at 01:28 on Feb 2, 2021 |
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Feb 2, 2021 01:17
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One of the places I contract for didn't give me a 1099, and now they're asking me if I want one or if we want to pretend I made under $600. I guess they're afraid of filing a amended return (probably because that will increase their audited chances). I don't care either way as I already paid taxes on that income quarterly but unsure about f what I should do. The 1099 doesn't really matter in that case right?
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Feb 2, 2021 01:19
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furushotakeru posted:
My SO is going to be doing a small, barely-paid amount of contracting work this year, but still working his full-time job. This is 2% of our entire AGI, right? Not just the 1099 work? Also, if travel is necessary and the employer offers to put him up at someone's house and he would really rather just stay in a motel and eat the cost, are we allowed to deduct that if it's worthwhile? Or does it not count since lodging was offered?
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Feb 2, 2021 01:45
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RealFoxy posted:My 1099G tax form from when I collected unemployment between May & July claims $7500.00. That is a lot of money, definitely a lot more money than I actually collected. Their website shows every payout I received + dates and it only totals up to $3,500 (This includes the $600 bonus bux, and I only collected for 5 weeks) You need to call and talk to someone to ensure you haven't been the victim of fraud. The IRS is going to reject you for a mismatched form if you submit it with "correct" information.
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Feb 2, 2021 02:34
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guaranteed posted:My SO is going to be doing a small, barely-paid amount of contracting work this year, but still working his full-time job. This is 2% of our entire AGI, right? Not just the 1099 work? You're mixing up the employee business expenses deduction (which isn't a thing now thanks to the Trump tax laws except for a vanishing small number of W-2 jobs) and expenses for a business (which his being a contractor/Form 1099-NEC person makes him). He can deduct any expenses related to the 1099 work on the Schedule C for it without any 2% AGI limit, but if the expenses are associated with a W-2 job you're out of luck claiming them. Empress Brosephine posted:One of the places I contract for didn't give me a 1099, and now they're asking me if I want one or if we want to pretend I made under $600. I guess they're afraid of filing a amended return (probably because that will increase their audited chances). I don't care either way as I already paid taxes on that income quarterly but unsure about f what I should do. The 1099 doesn't really matter in that case right? The 1099-NEC was supposed to be sent out by January 31st which is why I assume they aren't keen on doing it now. For you at least, you're right that so long as you accurately report all the income you receive having or lacking the 1099-NEC or 1099-MISC doesn't make a huge difference.
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Feb 2, 2021 04:43
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Sweet thank you so much for confirming that
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Feb 2, 2021 04:49
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guaranteed posted:My SO is going to be doing a small, barely-paid amount of contracting work this year, but still working his full-time job. This is 2% of our entire AGI, right? Not just the 1099 work? drat, that OP is 10 years old, we've had the rise of the ACA and the TCJA between then and now. Also the one with the lady admiral. But yeah, on the job expenses for w-2 employees were practically eliminated by Trump.
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Feb 2, 2021 06:03
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New thread is probably appropriate at this point. The OP is really outdated and furu has been gone for ages.
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Feb 2, 2021 13:42
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RealFoxy posted:I meant $1,200. I went back and applied charitable donations. Either way, the 1099G form dropped my refund by a significant amount and now I owe state tax for an extra $4,000 the State says I benefited from but I never actually received. (I did collect the initial $3500, but not the additional $4,000.) I’m gonna reiterate because it’s super important, call unemployment and find out the source of the discrepancy. You will be hosed otherwise either because you’re missing out on money or you’ve become a victim of identity theft. Hope it’s the former.
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Feb 2, 2021 16:33
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Epi Lepi posted:I’m gonna reiterate because it’s super important, call unemployment and find out the source of the discrepancy. You will be hosed otherwise either because you’re missing out on money or you’ve become a victim of identity theft. Hope it’s the former.  I did IT for the Workforce offices that handle unemployment and I know from top to bottom they're incompetent as gently caress, and while I was researching I found out that there's up to 200,000 legitimate fraud claims for unemployment from 2020 which is roughly 10% of the state. I don't know who's supposed to step in and bust their asses over this but I'm sure it's going to happen.
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Feb 2, 2021 18:07
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RealFoxy posted:Their offices are impossible to contact, they have no queue so you just automatically get hung up on if there's no agents free. They've also shut down all offices state-wide because of Covid so In that case you need to file for an extension and write them a letter. Include a full accounting of the amounts deposited into your account and ask for a reconciliation. I would send it registered mail unfortunately. (Your bank probably has a way to export transactions as a CSV. Do that, delete all the rows that aren't relevant, then print it "with gridlines" showing dates, name, and amount.) "My records show I received $1234.56, this 1099-G is reporting $5234.56. This is a discrepancy of $4,000 which I did not receive. Can you please fix my 1099-G? If you believe it accurate please provide a full accounting of where, when, and how the additional money was dispersed." If you don't get an answer you should seriously go to the police and report suspected ID theft. Get a report number - make them do it, sometimes it can be done online - and update the letter to them including the report number. In the interim, check and lock your credit reports. Get the real ones from annualcreditreport.com (google this, follow the link off the US Government's website.)
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Feb 2, 2021 18:32
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RealFoxy posted:My 1099G tax form from when I collected unemployment between May & July claims $7500.00. That is a lot of money, definitely a lot more money than I actually collected. Their website shows every payout I received + dates and it only totals up to $3,500 (This includes the $600 bonus bux, and I only collected for 5 weeks) Take a screenshot of/print to PDF that website showing the totals you received. Download PDF copies of your bank records showing the deposits. Basically save any relevant documents you can think of that show the amount you actually received. Documents actually from the unemployment agency or state (such as the website you mentioned) are especially useful. In the event the IRS does send you a notice saying you underreported, you can at least be ready to respond with a letter clearly laying out your position and those supporting documents. Obviously this is a back up alternative to setting things right with the unemployment office. But I've heard about how my state's unemployment office is doing, and I wouldn't hold out hope of reaching them for a meaningful respond either.
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Feb 2, 2021 19:02
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H110Hawk posted:In that case you need to file for an extension and write them a letter. Include a full accounting of the amounts deposited into your account and ask for a reconciliation. I would send it registered mail unfortunately. (Your bank probably has a way to export transactions as a CSV. Do that, delete all the rows that aren't relevant, then print it "with gridlines" showing dates, name, and amount.) "My records show I received $1234.56, this 1099-G is reporting $5234.56. This is a discrepancy of $4,000 which I did not receive. Can you please fix my 1099-G? If you believe it accurate please provide a full accounting of where, when, and how the additional money was dispersed." My best guess is that it's a dumb accounting error where they marked me down for what I potentially could've drawn total for 2020 from unemployment instead of what I actually ended up drawing from it. Still calling, according to my phone I've called 60 times in the last 5 hours (No queue, apparently you just have to get lucky) It's still early in the year but calling the unemployment office might very well end up being a full time job.
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Feb 2, 2021 19:17
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MadDogMike posted:You're mixing up the employee business expenses deduction (which isn't a thing now thanks to the Trump tax laws except for a vanishing small number of W-2 jobs) and expenses for a business (which his being a contractor/Form 1099-NEC person makes him). He can deduct any expenses related to the 1099 work on the Schedule C for it without any 2% AGI limit, but if the expenses are associated with a W-2 job you're out of luck claiming them. OK, thanks to you and sullat for the reply. This is all so frustrating because the W2 job is solid, but the 1099 job is essentially a loss after expenses, so if I pay someone who knows what they're doing to do the taxes, we're losing even more money for no particular reason except IRS might IRS, but this is kind of beyond me. The experience is good; he's retiring in a not-crazy number of years, and this might be a good semi-retirement job if he makes the contacts and gets the experience now. It's worth the small financial imbalance, but taxes are so drat complicated. If I decided to just claim the income at the end of the year and not worry about deductions -- as a simple return is probably going to be cheaper than hiring someone -- are we open to trouble about not filing quarterly estimated? It's unlikely he'll cross $2000 in a quarter this year, at least. Last year and this year we've gotten around $700 back from the W2 job. We could either increase the W2 withholdings or put some of the 1099 money aside, so I'm not worried about having to pay out, but will the IRS get mad if we don't pay quarterly over a few thousand dollars over nine months? I want to do the right thing, but dang.
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Feb 2, 2021 19:20
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RealFoxy posted:I've already verified that there were no changes to my credit score recently, no new accounts opened, and even if the state's unemployment website is run by incompetent idiots it still lists every single attempt to file unemployment, including the test that I did this morning. That all sounds good. I would just write them a letter and stop calling. You have plenty of time right now.
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Feb 2, 2021 19:33
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I'm trying to figure out if I did a big stupid, or if there was a way to avoid this. What does tax thread say? I have a Vanguard brokerage that has been invested in VFIFX (target date 2050 fund) since opened like 5 years ago. I have an auto-transaction going every month buying $1k, 2k, up to 3k more of this VFIFX every month indefinitely (I don't have a 401k option through work and my IRA is fully funded quickly which is why I opened the brokerage). I'm very hands off with it other than that, but in 2020 I got the idea in my head that VFIFX isn't the best fund for a brokerage, I should have it in VTSAX instead! So, I "move" all of it from the target fund to the index fund. Whether what I did is considered a "transfer" or "sale" I really didn't notice, or know whether I needed to care or not. I don't remember the buttons I clicked, I was thinking it was just an easy switch on a whim. Oops? So, now I'm filing taxes. I've got a form 1099-B, and while the boxes on the form are worded differently enough from freetaxusa.com's questions that I'm not sure I'm filling them out right in the first place, but my amount I owe in taxes just jumped up thousands. Ugh. I guess my questions.... 1) Was there a proper way to do that to avoid the tax hit? 2) If so can I retroactively call Vanguard to undo/fix it or am I stuck? 3) Trying to interpret Vanguard's form's wording into FreeTaxUSA's questions... Is this a "single" sale or a "summary" sale? And short-term stock sale or long-term stock sale? Note that I buy monthly and have for years, so... both? Do I just go back in and enter this same 1099-B form twice, once under each short/long category?
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Feb 3, 2021 05:48
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You sold the stock to buy the new stock. You have gains. It’s a brokerage account. You have to pay taxes. There should be an actual 1099-B from vanguard that breaks up what’s short term and long term. If free tax USA is confusing you use something else or an actual preparer this year. If you have enough money to throw $1k a month into a brokerage account every month you have enough to pay to get your return done but someone slightly more competent than you for at least one year.
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Feb 3, 2021 07:08
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Take this an an expensive lesson in never touching your retirement accounts without very good reason.
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Feb 3, 2021 07:17
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I think Vanguard calls it an exchange but yes it’s just a sale. In other news, apparently we can deduct some charitable donations again, and I missed it when it happened last year, so that was a nice surprise. https://www.irs.gov/newsroom/special-300-tax-deduction-helps-most-people-give-to-charity-this-year-even-if-they-dont-itemize
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Feb 3, 2021 13:11
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I mean, technically not a retirement account, but I get your meaning. I don't plan to touch it again until either the e-fund can't cover something or retirement is on the horizon and then I'll be strictly consulting with a fiduciary I suppose. I gather my answers are 1) No 2) n/a 3) Read it again with fresh eyes today and if I still can't figure it out hire a preparer. After a little more googling I'm not as mad at myself. Various posts on Bogleheads and MMM doing things like this and not being the end of the world; just taking a tax hit in order to move on to a better portfolio. Apparently target date funds aren't a good plan in brokerages, so I'm choosing to look at this as ripping off a bandaid that probably had to come off, and in a few decades these couple grand won't be as important.
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Feb 3, 2021 15:35
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drat Bananas posted:I mean, technically not a retirement account, but I get your meaning. I don't plan to touch it again until either the e-fund can't cover something or retirement is on the horizon and then I'll be strictly consulting with a fiduciary I suppose. I wouldn't kick yourself. You had to make a profit to owe taxes. You didn't plan on it, but that's OK assuming you are still in the black. Just sell some of your profits to pay your taxes if you don't have the cash on hand to cover it. If you suddenly owe $1000's you had to have had $10k+ in profits. Make sure you aren't somehow paying for the basis amount, which is whatever money you bought at. Generally speaking next time you need to make a course correction wait until your lots have aged a year and pay those sweet long term cap gain rates. (22% into 15% generally, or 3x% into 20%.) H110Hawk fucked around with this message at 16:22 on Feb 3, 2021 |
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Feb 3, 2021 16:19
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smackfu posted:I think Vanguard calls it an exchange but yes it’s just a sale. Ooh, that is a nice little change.
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Feb 3, 2021 18:16
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smackfu posted:In other news, apparently we can deduct some charitable donations again, and I missed it when it happened last year, so that was a nice surprise. I was also surprised to learn that you can basically tick a box to take off $300. Now I need to track down evidence since I'm sure my Mint search for "charity" category won't cut it. edit: Am I right in reading that you just have to have receipts on hand in case the IRS comes calling? Freetaxusa didn't ask me for receipts or anything like that when I ticked the $300 box. withak fucked around with this message at 20:17 on Feb 3, 2021 |
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Feb 3, 2021 19:48
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I wonder where that 'checkbox' would be on credit karma tax, i do have receipts to support it, but wasn't worried since I wasn't itemizing. Edit: found it, its in the charity section, duh
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Feb 3, 2021 20:05
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Is this the right place to ask specific unique questions on tax filing procedures? If not, please ignore. Without going into too much detail I was told I would qualify for early qualified withdrawals from my Roth IRA due to a severe disability with poor prognosis. However, my 1099R from the financial institution only lists it as an early withdrawal since it's not in their realm to make the disability determination and I handle that through the IRS with my Dr.s notes and medical documents (that makes sense to me). What I have figured out is that I use a form 5329 to list distributions as exempt from the early withdrawal penalty, but what I can't figure out is how to capture and mark the 1099R taxable amount (essentially my Roth earnings) as qualified and non taxable due to disability. My usual tax software doesn't seem to allow for the latter, and after doing 2 different CPA consults who had ideas but couldn't definitively say, I don't trust them to just do my taxes for me so I figured I'd just give this a shot and see if I can get an idea here before I continue CPA hunting. While I would prefer to do this on my own I don't know how confident I would be doing the number crunching on my own while on chemo without software supporting it, but if I can find the answer I can point a tax preparer in the right direction. PageMaster fucked around with this message at 04:57 on Feb 4, 2021 |
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Feb 4, 2021 04:37
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So on Form 5329 on Line 1 you put whatever is in Box 2a of your 1099R (this will be the taxable amount of your distribution, the portion of your distribution that was gain) and then on Line 2 you'll put that same number from Line 1 (and mark with Code 03 for permanent disability) and that'll slide you past the 10% early withdrawal penalty. You don't need to change the dist code on the 1099R just make sure Form 5329 is cancelling out the 10% penalty and the IRS will ask for documentation from doctorss etc. if they have a problem with it (given current climate they won't even look at your return to decide if they want to ask for probably a calendar year or more lmao i wish i was joking)
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Feb 4, 2021 13:46
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Is there some sort of statute of limitations on how long the IRS can wait before complaining about your return? "Hey, you said you donated $500 to charity in 1972. You have receipts for that, right?"
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Feb 4, 2021 14:54
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I think the rule is 7 years unless they suspect fraud which gives them infinite time. In practice it seems that if they’re going to get you they do it within 3 years. So keep your poo poo at least 3 years, 7 to be super safe or just digitize your receipts and paperwork and keep it forever.
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Feb 4, 2021 15:11
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I'm lucky if I can find my insurance cards when I need them. There's no way I'll have receipts for anything in 7 years.
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Feb 4, 2021 15:26
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KillHour posted:I'm lucky if I can find my insurance cards when I need them. There's no way I'll have receipts for anything in 7 years. Unless it's something you're claiming on your taxes you don't need receipts. Most people aren't in a position to do so anyway these days. If you are it's not all that complicated. I have a folder for each year, sitting in a filing cabinet.
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Feb 4, 2021 15:33
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black.lion posted:So on Form 5329 on Line 1 you put whatever is in Box 2a of your 1099R (this will be the taxable amount of your distribution, the portion of your distribution that was gain) and then on Line 2 you'll put that same number from Line 1 (and mark with Code 03 for permanent disability) and that'll slide you past the 10% early withdrawal penalty. You don't need to change the dist code on the 1099R just make sure Form 5329 is cancelling out the 10% penalty and the IRS will ask for documentation from doctorss etc. if they have a problem with it (given current climate they won't even look at your return to decide if they want to ask for probably a calendar year or more lmao i wish i was joking) Thanks, that's more clarity then I have gotten from anywhere else in months. So does the early penalty only apply to my earnings (and therefore not my contributions) so the 5329 should only capture taxable amount (not total withdrawal)? Second, does this also handle making the amount in box 2a tax free as qualified distribution as well?
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Feb 4, 2021 16:31
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The normal statute of limitations is three years from filing. 6 years for substantial underreporting, indefinite for fraud. The statute does not run if a return is not filed, this includes forms attached to the 1040, such as 5471 etc. This is somewhat oversimplified, but that's the general framework.
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Feb 4, 2021 17:33
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So I noticed a bit of a problem yesterday and didn't get a clear answer from the investment thread, so hoping you guys can maybe help:runawayturtles posted:So, this is probably bad, would appreciate some advice: Given the last few posts here, do I actually need to worry about this or has it been enough time since 2015 that no one's going to bother me about it? If the best course of action is to fix this now, it looks like I have to withdraw that contribution from the Roth IRA? Is that with or without earnings, and do I then owe an early withdrawal fee also? And it looks like there's a 6% tax on it every year since then, do I have to amend all my returns since then or just pay everything this year?
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Feb 5, 2021 19:30
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