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MadDogMike posted:That’s if you want to avoid paying your Social Security/Medicare taxes until next year, you can put that amount there. Mind you, it’s kind of a dumb idea so I can’t recommend it unless you really can’t afford that stuff now but will this time next year along with that year’s taxes. Oh, I don't need it but I'm always happy to get some interest on money, if I can, especially after 2020 being such poo poo for income. In any case I was more mystified by the circular reference in the worksheet, is that a mistake or am I missing something? Edit: unless the deferral isn't interest-free?
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Feb 23, 2021 00:44
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If we start a business, using it as a pass through, you get to write off the first $5000 worth of organization stuff, legal zoom etc, and then 5000 of start up costs immediately, and then $50,000 after that, but you have to amortize that over 6 years on a monthly schedule? So if I make $100,000 personal income from my day job and I'm in the imaginary 25.0% tax bracket, and I buy $5000 business gadget, I can effectively reclaim $1,250 of that $5000 in my pass through taxes? And then if I buy four $10,000 business widgets, I get to claim $1,666 each year on my pass through business taxes? And I guess we can deduct state and federal taxes on the business gadgets and widgets? So in year 1 after spending 45,000 on start up costs I should expect from the business alone a return of $2916? And then in year two though six, $1,666? Hadlock fucked around with this message at 01:21 on Feb 23, 2021 |
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Feb 23, 2021 01:19
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Hadlock posted:If we start a business, using it as a pass through, you get to write off the first $5000 worth of organization stuff, legal zoom etc, and then 5000 of start up costs immediately, and then $50,000 after that, but you have to amortize that over 6 years on a monthly schedule? If you're asking questions like this you're better off getting your own accountant to advise you instead of just asking the internet. Also not to be a dick, but it's tax season so I don't care, but this is not the kind of advice I'd give for free.
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Feb 23, 2021 02:53
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Epi Lepi posted:If you're asking questions like this you're better off getting your own accountant to advise you instead of just asking the internet. Ah, here it is, furushotakeru posted:I asked a question and was told to go hire a professional to help me! I just wanted you to answer my question for free and not have to pay someone. You guys are all jerks! But this pass through taxes thing is sort of the key pillar of the 2017 tax cuts and jobs act right? We are mega hosed as a country if tax law designed to help small business owners is too complex to discuss on the internet I guess at the core of my question is, am I understanding how the pass through business tax break works, in relation to start up cost deductions I'm not expecting an answer at this point, just complaining that us personal income tax law is ridiculous enough that the reply to my question would be "pound sand, pay me bitch" rather than "yep, that's roughly how it's supposed to work" for a pretty foundational small business start up question We're supposed to be one of the easier countries to start a business too right? We're number six on the "ease of doing business index" most other people must be completely hosed Hadlock fucked around with this message at 03:49 on Feb 23, 2021 |
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Feb 23, 2021 03:29
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MadDogMike posted:That’s if you want to avoid paying your Social Security/Medicare taxes until next year, you can put that amount there. Mind you, it’s kind of a dumb idea so I can’t recommend it unless you really can’t afford that stuff now but will this time next year along with that year’s taxes. Interested to know why you think deferral of taxes is a bad idea? I have this option for about $1k worth of SS/Medicare Tax, and I figure I may as well do it. Best case scenario some of it gets forgiven (highly highly unlikely, but you never know), worst case scenario is I pay it off over the next two years gaining a bit of interest and letting inflation take a bite out of the real cost. I'm open to other logic though!
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Feb 23, 2021 06:13
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Correct, the chance that you will prepare this correctly on your own is effectively zero, even with forums help. The pass-through tax benefits are still enormous even if you have to cut us accountants in for our fees.
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Feb 23, 2021 06:17
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Hadlock posted:But this pass through taxes thing is sort of the key pillar of the 2017 tax cuts and jobs act right? We are mega hosed as a country if tax law designed to help small business owners is too complex to discuss on the internet Can't stop laughing at this.
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Feb 23, 2021 13:47
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Ungratek posted:Can't stop laughing at this. Yeah, I'm getting a Palo Alto-an talking about 'average millionaires' vibe from the post.
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Feb 23, 2021 14:13
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This is maybe a long shot, but I know there are some PA goons in here. I've done my own taxes through Turbotax for my entire adult life, and as far as I know that's been ~fine for federal and state taxes. However basically my entire adult life, I've been loving up the various local taxes that happen in PA. I'm kind of over trying to deal with it and would like to just pay someone else to handle all the tax poo poo for me from now on. It's not a particularly complicated tax situation (One W2, RSUs, some ESPP sometimes), I'm just tired of dealing with it. I did just get another letter from my township saying I hosed something up (again), so hopefully someone who can look at all that and just tell me who to pay and how much. I figured that someone in the PA area would probably be best since they're likely to know the PA specific laws. I'm in Eastern PA, about an hour-ish drive NW of center city philly in the very north of Chester County. I don't really care about only dealing with someone online, I'm fine doing everything through email/phone calls/zoom, I just want someone who already knows their way around this stuff (or will learn it I guess). Nobody I know in this area uses a tax expert other than like.. H&R Block, but I'm kind of sketch on the idea of using them because Ideally it'd be someone I can just have a longer term relationship with rather than whoever H&R block person who happened to get assigned to me that time. Does anyone with any familiarity in this area have any suggestions? If not is there a better way to find someone other than just googling CPAs?
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Feb 23, 2021 23:29
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^^ Is there another person you work with in the same situation? I would ask them who they use and then try to see if that professional is taking more clients.Hadlock posted:I'm not expecting an answer at this point, just complaining that us personal income tax law is ridiculous enough that the reply to my question would be "pound sand, pay me bitch" rather than "yep, that's roughly how it's supposed to work" for a pretty foundational small business start up question I’m a CPA with 15 years of experience. I’ve read your post twice. I can’t figure out what you’re even trying to do here. You want to invest $45k in a business to save $10k in taxes?
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Feb 24, 2021 00:48
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Missing Donut posted:^^ Is there another person you work with in the same situation? I would ask them who they use and then try to see if that professional is taking more clients. I guess that depends on how fungible tax expertise is across different locales. AFAIK, I'm the only person in my company who lives in PA, the biggest critical mass of them are either in NYC or Boston so that's maybe not *too* different. The next biggest critical mass is Paris, which I assume is basically not useful in the slightest. I don't really know how likely it is that a NYC CPA will know the specific for PA taxes (particularly the hyper local nonsense like local municipality income taxes and such).
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Feb 24, 2021 01:24
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Comrade Gritty posted:I guess that depends on how fungible tax expertise is across different locales. AFAIK, I'm the only person in my company who lives in PA, the biggest critical mass of them are either in NYC or Boston so that's maybe not *too* different. The next biggest critical mass is Paris, which I assume is basically not useful in the slightest. I don't really know how likely it is that a NYC CPA will know the specific for PA taxes (particularly the hyper local nonsense like local municipality income taxes and such). Ask on facebook in your local Bumfuck Nowhere, PA group, emphasize the ESPP component. In fact, I would just say "I need someone to do my taxes in X township who understands how ESPP's work." - ignore everything else about your taxes. Interview your CPA on the phone and ask how you handle ESPP's. "I always seem to get it wrong and it says I owe a ton of taxes." See what they say. If they get it right ("You have to adjust your basis using form 3922 (don't quote me) to compensate for the income already captured on your W-2.") Good luck getting through as a new client right now. 
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Feb 24, 2021 01:30
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Hadlock posted:If we start a business, using it as a pass through, you get to write off the first $5000 worth of organization stuff, legal zoom etc, and then 5000 of start up costs immediately, and then $50,000 after that, but you have to amortize that over 6 years on a monthly schedule? I'll take a stab at this because I think I know where you are getting confused. Startup costs are not "all costs incurred with a business" - they're costs specific to starting the business. Ie: advertising for a business before the business begins, professional fees for starting the business, etc. You can deduct up to 5k of these expenses in one year, any excess has to be evenly amortized over 15 years. Dont' know where your 6 year number comes from. The 5k year 1 expense phases out ratably if you have over 50k in startup costs, so if you have 55k of such costs, you get zero year 1 expense (and instead have to amortize evenly over the previously mentioned 15 years). Most 5k business gadgets would be fully deductible/depreciable in year 1 for federal purposes. Think computers, phones, etc. States are usually different. These are not startup costs, but costs incurred in connection with your ordinary trade or business. I'm not sure where you're going with your math, but having a passthrough to deduct expenses you use for your 100k 'day job' is not a business. Expenses incurred in connection with being an employee arent deductible anymore.
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Feb 24, 2021 01:55
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Comrade Gritty posted:This is maybe a long shot, but I know there are some PA goons in here. I know a lot about PA since I'm literally just a few miles over the border in Delaware, but I'd probably need research time/more currently functional brain cells for some of the ESPP/RSU Pennsylvania specific stuff before I'd feel 100% confident advising you (also, I AM working for H&R Block so I could understand a lack of confidence  ). For most of the local income taxes I know in PA you should be more or less matching the PA state income numbers since I can't recall any examples off the top of my (admittedly sleepy) head where they use different rules (although some things are taxed in PA state that don't apply to PA local); are you not matching or are you having issues with PA state as well? Also which local collection agency; Keystone, Lancaster, Berkheimer, someone else?EDIT: I do know PA doesn't discriminate between qualified/non-qualified stock options like the feds do, you can check here under "Pennsylvania Taxation of Stock Options" if you want more details and a table of some of the differences. H110Hawk posted:Ask on facebook in your local Bumfuck Nowhere, PA group, emphasize the ESPP component. In fact, I would just say "I need someone to do my taxes in X township who understands how ESPP's work." - ignore everything else about your taxes. Interview your CPA on the phone and ask how you handle ESPP's. "I always seem to get it wrong and it says I owe a ton of taxes." See what they say. If they get it right ("You have to adjust your basis using form 3922 (don't quote me) to compensate for the income already captured on your W-2.") Good luck getting through as a new client right now. Yeah, if they're in PA and know the investment stuff by definition they should be able to advise you. Though the last line is kind of a thing too; I'm working 10-12 hour days pretty much every day and I'm booked solid (and yet I STILL post here about taxes afterwards, God help me...). MadDogMike fucked around with this message at 05:41 on Feb 25, 2021 |
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Feb 25, 2021 05:36
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MadDogMike posted:
Right now I would just run the napkin math to the best of your ability, and file extensions with everyone, paying whatever you think you owe. On May 1 start calling around. It's probably easier than you think to get close enough. Add up all your income, subtract out any basis (option price, espp purchase price), subtract your 401k, and standard deduction. Look it up in a tax table. Subtract out any taxes already paid. Look about right? (Did you have $50k in stock income which was withheld at 22% but your salary puts you in 24%? Well you probably owe 2%. Get it?) If you're a little bit wrong you'll probably pay whole dollars in interest.
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Feb 25, 2021 05:52
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Oh yea. It didn’t even occur to me that it’s almost tax time. I’m actually less concerned about getting it done *right now* before tax time this year and I’m more concerned with just finding someone who will be able to handle it for me long term. This was actually prompted by getting yet another letter from our local tax collectors (Keystone I think) yelling at me for something not matching some other thing from like, 2017. I don’t mind just paying them to make them happy this time, I just don’t want my long term plan to be waiting for the angry letter then paying whatever it says. I mostly wasn’t sure how to go around finding someone. The extent of my tax knowledge is basically filling in the blanks on TurboTax and hoping it’s something reasonably close to correct, which makes it hard to evaluate people. Add onto that I’ve worked remote basically my entire career for companies not based in PA, that makes asking coworkers less useful (I tried once before, got a reco of someone in Oregon who then hosed up local taxes again). The tip (and the correct answer) for dealing with ESPP is a great tip to hopefully help with it. I’ll probably just file extensions for now and wait till after the busy season to try and poke folks. I don’t have anything against H&R Block in particular, I’m sure the folks there are reasonable professionals and do a good job. My understanding of their service is that you typically go in and get whoever happens to get tasked with your return that year. I’m hopefully looking more for someone I can have a longer term relationship with year after year. Anyway, this has all been useful. Thanks a lot for the help (and for the reminder that these folks are swamped right now so maybe it’s smart to wait till after April).
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Feb 25, 2021 09:09
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Hopefully this is an easy question about Roth IRAs. I'm under 59, and in Jan 2020 I closed a Roth IRA (after the 3 year period it was associated with) and so got the money from it. Stock language from my bank suggested that I wouldn't need a 1099-R since a distribution wasn't made. 1. Is that correct that I don't need to worry about a 1099-R? 2. If so, does the amount I withdrew need to be noted (counted as income?) in some other way? It seems like probably, at least for my state [MD] given a site saying "money from Roth IRA...must be reported on your [MD] state income tax return." dirby fucked around with this message at 14:27 on Feb 27, 2021 |
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Feb 27, 2021 14:24
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dirby posted:Hopefully this is an easy question about Roth IRAs. I'm under 59, and in Jan 2020 I closed a Roth IRA (after the 3 year period it was associated with) and so got the money from it. Stock language from my bank suggested that I wouldn't need a 1099-R since a distribution wasn't made. You closed the account and got the money out of it. Getting money out of a retirement account is a distribution. Your bank should send you a 1099-R showing the total amount being distributed. At least, as far as I know.
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Feb 27, 2021 18:12
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Actuarial Fables posted:You closed the account and got the money out of it. Getting money out of a retirement account is a distribution. Your bank should send you a 1099-R showing the total amount being distributed.
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Feb 27, 2021 19:46
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I'm one of those lazy folk who used H&R Block to efile and have for the past 15 years. Decided to be extra lazy this year due to lack of time, and pay them to e-file my state taxes specifically. Get through the whole process and suddenly we're not eligible/receiving the married couple credit. Nothing has drastically changed with our filing or the eligibility requirements. The requirements basically are make over $16,000, get $480 credit (minus some foreign $$ exceptions). It's a preformed area compiled by from federal taxes, with no option to see what the background computations were to "not be eligible." Every year I've filed by hand and done the math, we're eligible for the max. To get a $0 credit on this, you essentially have to have $0 income because its 3% of the smallest (16k, your/spouse income). Then I decide to be super unlazy and run through the fed/state by hand and things are the same numbers I'm seeing from H&R Block so no math problems that I can see. Because I'm a jerk who doens't like to lose and want to be lazy next year again, I decided to try and take it up with them. Their chat feature never connects to an agent after it's your turn. Call their 1800 # and the person goes through it and tells me I can pay to talk to a tax professional about it. I have the form/instructions pulled up and go through the super simple calculation and exclusions. Puts me on hold and comes back to say pay for a tax professional. I tell her I want to be lazy this year and use their service but they'll lose out on me entirely if they can't explain this since I have the forms by hand and all the other math checks out for federal, and essentially lose me as a long term customer. puts me on hold, tells me to pay for a tax professional again. All this after going through my taxes the first time, it being a jumble of "WTF" on the numbers/outcome not seeming correct, then getting an email about some "secret SSN#" the IRS tied to imported W2s and ours being messed up. I spent like 4 hours just trying to figure out why things were messed up, prior to getting the email, and almost just paid a CPA to do it for us it was that far off. I log in today, fix the W2, and our federal shoots up. I spend another 2 hours going over all the numbers just to make sure there wasn't some other mess up and it's correct. Doing my taxes by hand is an equal to going to the dentist, but I've invested this much so far with their mess ups, no reason why I can't do it all by hand from now on if this is their "support."
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Feb 27, 2021 21:06
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Duxwig posted:Doing my taxes by hand is an equal to going to the dentist, but I've invested this much so far with their mess ups, no reason why I can't do it all by hand from now on if this is their "support." Same. If it's big enough to hire a professional then sure. But if it's small enough for the basic bs, I can screw it up myself thank you very much
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Feb 27, 2021 21:32
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here is a fun one: this year i'm going to file taxes for 2020 and receive the recovery rebate credit and (assuming it passes) the $1400 check that joe biden loving owes me. my parents, who have been previously claiming me, cannot claim me on their 2020 taxes, assuming that the stimulus package wording stays as is, they will receive $2800 + $1400 per dependent based off of either their 2019 or 2020 tax returns, whichever the IRS has on file when they are sent. assuming they don't file in time this year for 2020, which seems likely, this means they are going to receive 2800 + 1400 because i was claimed on their 2019 return... right? i don't want my parents to get flagged or audited by the IRS if this happens, or is this Working As Intended? my thought is they should probably file their 2020 return ASAP but again i just don't think its gonna happen. my guess is nobody really loving knows whats going on, but it would probably just be safe for them to hang onto that $1400 if they get it in case the IRS wants it back.
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Feb 27, 2021 22:11
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Too Many Birds posted:
Yep that's the one.
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Feb 27, 2021 22:46
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also thinking i could've just read the thread title and gotten my answer as well.
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Feb 27, 2021 22:53
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dirby posted:Hopefully this is an easy question about Roth IRAs. I'm under 59, and in Jan 2020 I closed a Roth IRA (after the 3 year period it was associated with) and so got the money from it. Stock language from my bank suggested that I wouldn't need a 1099-R since a distribution wasn't made. Not a CPA but I did work with one to do my taxes after also pulling from my Roth IRA: Your bank will give you a 1099R. They may or may not calculate your earnings and contributions; mine did not and just checked "taxable amount not determined." If that's the case, you will need to go manually figure out what your total contributions were: Contributions are not subject to tax nor counted as income. Earnings are counted as income and subject to tax as well as an early withdrawal penalty of 10% unless you meet early withdrawal exemption criteria; you probably don't since they all require an IRA be at least 5 years old, so you will not report your contribution amount, but you will report and pay tax on the earnings plus an additional 10% penalty on just the earnings. PageMaster fucked around with this message at 02:20 on Feb 28, 2021 |
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Feb 28, 2021 00:09
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Just a random guys so not an accountant and not legal advice, but my understanding is that the prior covid checks did not have clawback language if your income disqualified in the next year and it was common advice to delay filing if this changed your status for the check. I don't know if this applied to a change in dependents and of course the new checks could have different language
asur fucked around with this message at 00:15 on Feb 28, 2021 |
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Feb 28, 2021 00:12
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I’ve never been happier to only owe the feds 3.5k. And I own my state $69! 
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Feb 28, 2021 00:25
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dirby posted:Hopefully this is an easy question about Roth IRAs. I'm under 59, and in Jan 2020 I closed a Roth IRA (after the 3 year period it was associated with) and so got the money from it. Stock language from my bank suggested that I wouldn't need a 1099-R since a distribution wasn't made. Roth IRA contributions are after-tax. These dollars have already been taxed by the time you put them in and you can withdraw these dollars penalty-free and tax-free. You can withdraw them to pay for a house, strippers, Gamestop, or any other reason of your choosing, and you can withdraw them when you're 30, 59.4, 59.6, or 100000000000 years old, and you can withdraw them whether you initially put the money in years ago or seconds ago. But any distribution exceeding your cost basis (total contributions) are considered earnings and you'll report this amount as income and you'll be hit with an additional 10% early withdrawal penalty on this amount. For all distributions >$10, you'll receive a 1099-R from your IRA custodian indicating the amount of the distribution, even if the amount is less than your total contributions. It's up to you (afaik) to determine your cost basis and what portion of the distribution, if any, exceeds this basis so you can pay taxes on it. It's your responsibility because there are no limits to how many IRA accounts you can have and all your Roth IRA accounts are treated as one for withdrawal purposes. Example:
Example assumes a non-qualified distribution for someone younger than 59.5. There are exceptions that help you avoid taxes and penalties e.g. medical expenses or a first time home purchase. See Investopedia for a good explanation on the rules and exceptions. I'll point out the 5 year rule if you're currently dealing with rollover/conversions.
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Feb 28, 2021 02:30
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Duxwig posted:The requirements basically are make over $16,000, get $480 credit (minus some foreign $$ exceptions). Hello fellow Wisconsinite. All I would say is go back to your data entry on the federal screen and make sure that you have coded your W-2s to you and your spouse’s W-2s to your spouse. Other than that, if H&R Block software can’t calculate that correctly, I can’t imagine what else it’s loving up.
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Feb 28, 2021 15:51
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Missing Donut posted:Hello fellow Wisconsinite. Oh, that was the FIRST issue. I spent a few hours essentially doing it by hand and confused as gently caress how my math was off (vs a computer calculator of a giant company). Few days later they emailed about their auto import thing messing up. The math all checked out after and refund was on point, but the married couple credit is the SECOND issue. I guess I don’t get -how- we suddenly get $0 meaning essentially no income or ineligible when nothing changed. I also toxxed myself in their after-call written survey saying they lost a long term customer but I’d pay for their tax professional fee if they could prove to me their math is correct. They probabaly won’t respond Duxwig fucked around with this message at 23:01 on Feb 28, 2021 |
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Feb 28, 2021 22:58
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My uncle has been doing my taxes for awhile, but he's hella old and keeps doing poo poo like sending me my brothers tax return and not mine. My wife and I MFS, but file a state return jointly. Should TurboTax or similar work well enough? Only W2 wages, no investments.
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Mar 2, 2021 14:43
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so I filed my taxes about two weeks ago thinking I had everything I needed, then got two unexpected 1099-INTs from my mortgage company, I guess from my refi, that totals $47 of interest income. moral of my story is always wait until the last minute to do your taxes
AndrewP fucked around with this message at 16:36 on Mar 2, 2021 |
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Mar 2, 2021 16:33
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The Slack Lagoon posted:My uncle has been doing my taxes for awhile, but he's hella old and keeps doing poo poo like sending me my brothers tax return and not mine. There is almost no reason to MFS - why do you do that?
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Mar 2, 2021 16:42
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H110Hawk posted:There is almost no reason to MFS - why do you do that? Student loans, IBR, and PSLF One of us has student loans, and the one that doesn't is a higher earner. If we MFS IBR is based on only the income of the spouse with loans. If we filed jointly the student loan payments would be about 6x what they are now.
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Mar 2, 2021 16:46
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The Slack Lagoon posted:Student loans, IBR, and PSLF Gotcha. Yeah TurboTax will be fine but please don't support intuit. Pick any of the other options. You can probably file for free on the low income spouse.
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Mar 2, 2021 16:47
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Freetaxusa was pretty no frills and easy. We used them this year and going forward, will probably keep using them.
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Mar 2, 2021 16:49
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Used tax hawk this year. A+, would use again. Came up with similar numbers to TurboTax, while being cheaper.
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Mar 2, 2021 17:19
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Residency Evil posted:Used tax hawk this year. A+, would use again. Came up with similar numbers to TurboTax, while being cheaper. Bill is in the mail.
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Mar 2, 2021 17:27
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H110Hawk posted:Bill is in the mail. Just checked and they’ve already taken their pound of flesh.
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Mar 2, 2021 17:44
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If I have 1099-R should I type those into the tax software even if the taxable amount is zero? Rollovers from former employers to a Trad IRA at Vanguard.
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Mar 2, 2021 19:57
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