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I have a quick tax question. I live in TX, but my employer is based in CA. On my taxes they deduct CA state taxes each month. This means I have to file a state return with CA to get that money back. I totally forgot to do this because it just didn't cross my mind until just now. So I went to turbotax, and went through the process and now it seems my CA refund is on it's way. I already received my federal refund when I filed my federal taxes like in April. Since it's past the deadline, does that mean there's some kind of penalty? Nowhere in the turbotax workflow did it say anything about there being a penalty for being late. Is there just not a penalty this year because of covid?
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Jun 27, 2021 07:28
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Looking at the California Franchise Tax Board site, it looks like they handle late filing penalties the same way as the federal government, namely as a percentage of the amount due if you owe taxes. Since you had a refund instead of owing taxes, there is no penalty.
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Jun 27, 2021 07:49
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Peyote Panda posted:Looking at the California Franchise Tax Board site, it looks like they handle late filing penalties the same way as the federal government, namely as a percentage of the amount due if you owe taxes. Since you had a refund instead of owing taxes, there is no penalty. Yeah, I can’t recall any tax systems in the US that penalize you for filing a late refund return, from their perspective you just gave them a free loan for that period, though if you miss the usual amendment timeframe (generally three years) for filing the original return they won’t pay the refund.
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Jun 27, 2021 17:08
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I see there's a Tax Credit available for installing energy star windows, which looks to be 10% of the price of the window, up to $200. What I can't tell is if this applies one for the entire house for that year, or is that a per window amount?
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Jun 30, 2021 18:46
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Comrade Gritty posted:I see there's a Tax Credit available for installing energy star windows, which looks to be 10% of the price of the window, up to $200. What I can't tell is if this applies one for the entire house for that year, or is that a per window amount? It's $200 forever for windows if I'm reading this correctly: https://www.irs.gov/pub/irs-pdf/i5695.pdf "• A combined credit limit of $200 for windows for all tax years after 2005"
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Jun 30, 2021 18:54
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What happens if I have refundable and nonrefundable credits that separately are less than my tax bill but combined are greater? Specifically: I'm looking at solar panels and am considering the tax incentives. Before any credits, we'll have about $7000 in federal taxes for 2021. The credit for the panels would be about $5000. We have 2 kids, so that's worth $6000. Would we still be able to carry over the unused part of the child credits as refundable credits?
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Jun 30, 2021 19:46
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Harveygod posted:What happens if I have refundable and nonrefundable credits that separately are less than my tax bill but combined are greater? Yes, the child tax credit splits that way automatic (in fact, it's technically the "child tax credit" and "additional child tax credit" on the 1040 to reflect that split). Note you'll only have $3000 though on your return thanks to the advance payment thing starting in July, unless you opt out.
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Jun 30, 2021 21:01
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Cool, thanks.
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Jun 30, 2021 21:19
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Peyote Panda posted:Unfortunately there's no more specific guidance on the timeframe at the moment other than what you stated. If you're able to set up an account on IRS.GOV you can check your 2020 account transcript for updates. Once the adjustment is completed you should see a Transaction Code 291 which reflects a reduction in tax. Subsequent to that you'll see a TC 846 for the refund being issued. GhostofJohnMuir posted:thanks for the info! looks like nothing neither step has been taken yet, guess i'm settling in for a long wait just wanted to give an update on this post from forever ago. my transcript just updated showing the correction for both my reduced tax total and my adjusted aca premium credit the money hasn't hit my account yet, but it's nice peace of mind knowing it's in the works. so if anyone else is waiting on a correction for unemployment just know that they actually are going out
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Jul 12, 2021 17:10
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School of How posted:I have a quick tax question. I live in TX, but my employer is based in CA. On my taxes they deduct CA state taxes each month. This means I have to file a state return with CA to get that money back. I totally forgot to do this because it just didn't cross my mind until just now. So I went to turbotax, and went through the process and now it seems my CA refund is on it's way. I already received my federal refund when I filed my federal taxes like in April. Since it's past the deadline, does that mean there's some kind of penalty? Nowhere in the turbotax workflow did it say anything about there being a penalty for being late. Is there just not a penalty this year because of covid? Following on this, are you classified as a remote employee, or is this how it's done for any person who works for a company based in CA, regardless from what's considered their work location (i.e. a home in another state)? I'm asking because I'm going to start working for a CA-based company as a remote employee
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Jul 13, 2021 01:15
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My federal return has been pending processing for 12 weeks now. I have to move soon, and i think my accountant hosed up again and didn't input my direct deposit info on the return. Besides submitting a USPS change of address, is there anything I need to do with the IRS to ensure that the refund check is mailed to the correct new address?
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Jul 13, 2021 15:05
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Call 800-829-1040, wait approximately 1 to 2 hours on hold and change your address with an agent on the phone. Then pray that when they finish processing your return it doesn't overwrite your address to what's on the return.
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Jul 13, 2021 21:27
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Epi Lepi posted:Call 800-829-1040, wait approximately 1 to 2 hours on hold and change your address with an agent on the phone. Then pray that when they finish processing your return it doesn't overwrite your address to what's on the return. I mean, that's what's going to happen no matter which god he prays to, unless he picks the only one that the IRS obeys, which is classified.
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Jul 13, 2021 22:57
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sullat posted:I mean, that's what's going to happen no matter which god he prays to, unless he picks the only one that the IRS obeys, which is classified. The USPS change of address is good, but double check with your local post office to see if they forward IRS checks as that's a matter of individual policy for each branch. If they don't forward it then they should return it to the IRS at which point you can call to get your address updated and the check re-issued.
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Jul 13, 2021 23:36
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Peyote Panda posted:whatever is listed on the return Or sometimes only part of what is listed on the return, causing your check to be returned to sender.
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Jul 14, 2021 00:59
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GhostofJohnMuir posted:just wanted to give an update on this post from forever ago. my transcript just updated showing the correction for both my reduced tax total and my adjusted aca premium credit this is nice to hear except I filed 2 months ahead of you, am likely delayed for similar reasons (prorated rebate check b/c income and child headcount change), and I still have no update and it is fairly tilting because I expect to also be owed a similar mid four digit amount on my 2021 return, there is not much I can do about that because of our insurance situation, and the whole thing annoys the poo poo out of me even though I know other people are hurting for the cash worse than we are. School of How posted:I have a quick tax question. I live in TX, but my employer is based in CA. On my taxes they deduct CA state taxes each month. This means I have to file a state return with CA to get that money back. I totally forgot to do this because it just didn't cross my mind until just now. So I went to turbotax, and went through the process and now it seems my CA refund is on it's way. I already received my federal refund when I filed my federal taxes like in April. Since it's past the deadline, does that mean there's some kind of penalty? Nowhere in the turbotax workflow did it say anything about there being a penalty for being late. Is there just not a penalty this year because of covid? Hi I have been a remote worker since 2016 and the first 2 years my VA based employer hosed up and did same and it was a pain in the butt because I had to get all that money refunded and also make a substantial payments to my native state. I am not a tax specialist but if you are a fulltime resident of Texas and do your work from there I 100% believe you need to pay texas taxes, not CA taxes, and this is the same situation I am in and our tax person took care of all this for us. If CA did anything other than issue a complete refund of all taxes collected, it sounds like they also are not clear on your place of residence. You owe taxes based on state of residence and where work is performed, not based on where your corp HQ is: If it were me I would go to a tax person because if my read of the situation is at all right, this is several obnoxious corrected returns to work through and I personally would rather pay someone to do all that, having been through this. Twice. A quick read of this makes me think my own understanding is incomplete and this stuff is complicated as gently caress: https://www.wealthenhancement.com/blog/tax-considerations-working-remotely I know that when my last employer moved our first employee up here to Vermont, they had to do some stuff to establish a tax number etc. Here is my own state's specific guidance: https://tax.vermont.gov/coronavirus/working-remotely#:~:text=For%20Employees,is%20not%20located%20in%20Vermont. quote:If you live and work remotely in Vermont, then income earned during the entire period of time that you live in Vermont is subject to Vermont income tax. This is true even if you claim another state as your domicile, or even if you perform the remote work for a company that is not located in Vermont. We recommend that you speak with your employer(s) so that the correct amount of Vermont income tax can be withheld. Cabbages and VHS fucked around with this message at 17:46 on Jul 19, 2021 |
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Jul 19, 2021 17:39
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My wife and I just recently figured out that our withholding is going to be short in 2021. However, we also aren't sure if my wife is going to have her job beyond Sept, so simply changing our withholding to catch up doesn't seem like the best idea. To avoid underpayment penalties, is there any reason not to just send in the difference as estimated payments, instead of upping our withholding? Can you do that?
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Jul 19, 2021 18:42
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alnilam posted:My wife and I just recently figured out that our withholding is going to be short in 2021. However, we also aren't sure if my wife is going to have her job beyond Sept, so simply changing our withholding to catch up doesn't seem like the best idea. To avoid underpayment penalties, is there any reason not to just send in the difference as estimated payments, instead of upping our withholding? Can you do that? Absolutely. You could have work withhold nothing and just make estimated quarterly payments, but expect an audit and interest if you screw it up even a little bit.  Also, if this is your first year and you weren't required to make quarterly payments in 2020 then just save the money and pay it if you owe it at the end. At least wait until after September. "First ones free" with the underpayment as long as you hit the safe harbor.
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Jul 19, 2021 19:04
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H110Hawk posted:"First ones free" with the underpayment as long as you hit the safe harbor. This is a good point... just to confirm how I think it works: if your withholding is low, but your withholding is in line with what your previous year's total tax was, then you don't pay a penalty. Right? Like, made up numbers: 1. My total tax in 2020 (line 24 on my 2020 W2) was 10k 1a. My Withholding in 2020 was 8k so I underpaid by 2k, but did not pay penalty (this is irrelevant info, I think, but I'm including it in case I'm wrong about that) 2. My total tax in 2021 is going to be 14k 3. My withholding is going to end up being 11k In 2021 I end up underpaying by 3k (14 - 11), but I am saved from having to pay penalty because my withholding (11) is greater than my last year's total tax (10). So I owe 3k when I file next April, but no penalty. Correct? alnilam fucked around with this message at 21:14 on Jul 21, 2021 |
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Jul 21, 2021 21:10
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alnilam posted:This is a good point... just to confirm how I think it works: if your withholding is low, but your withholding is in line with what your previous year's total tax was, then you don't pay a penalty. Right? Correct, as long as your withholding is at least 100% of the total tax for the previous year or 90% of the current year tax due (whichever is lower), you will still have to pay the balance but will not be assessed a penalty. Do note that this is for Federal, each state has their own rules for these things.
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Jul 22, 2021 08:28
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Dumb question, https://www.idverify.irs.gov is real, right? Got a letter saying I need to confirm my ID for any refunds or credits.
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Jul 22, 2021 16:45
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Pollyanna posted:Dumb question, https://www.idverify.irs.gov is real, right? Got a letter saying I need to confirm my ID for any refunds or credits. Looks legit. If you're worried start at "https://www.irs.gov" and search "idverify" and the resulting website is the top search result. Just make sure you aren't at "irs.com" or any of the other obvious scam sites.
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Jul 22, 2021 16:56
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Pollyanna posted:Dumb question, https://www.idverify.irs.gov is real, right? Got a letter saying I need to confirm my ID for any refunds or credits. Yes, it's legitimate. You can find more info by going to IRS.gov and typing IDVERIFY into the search box, but basically the IRS is double checking to make sure the return they received was a legitimate one you filed and not a fraudulent return filed by someone else. All sorts of things can trigger this so it doesn't necessarily indicate there's an issue with the return itself.
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Jul 22, 2021 17:19
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If a company screws up 401K contributions, like that they don’t make one they were contractually obligated to, and it isn’t figured out until a year later, can they give back dated contributions?
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Jul 23, 2021 14:02
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gonna try to summarize quickly. worked at a startup, bought shares when i left, company sold to another company but at a loss, my shares aren't worth much but i haven't "claimed" the money from the sale... assuming i can get that part sorted... is it too late to claim any losses from the stock? this happened ~4 years ago. i basically lost most of my money and at the time i didn't know i could claim losses on my tax returns (yup i'm dumb) so i never really bothered..
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Jul 23, 2021 20:58
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smackfu posted:If a company screws up 401K contributions, like that they don’t make one they were contractually obligated to, and it isn’t figured out until a year later, can they give back dated contributions? Yes even if it is 10000 or more bucks spanning multiple years. It happens all the time if the plan was confusing and some people never got matched they were supposed to and the plan got audited. Then you end up with 100 people that worked one month with balances they have no idea about lol.
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Jul 24, 2021 14:50
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Strong Sauce posted:gonna try to summarize quickly. Anything past 3 years of the due date of the original return they'd be on you can't amend normally, but I'm not sure when the "sale" is taking place since you're talking about not having "claimed" the money. Can you give more detail on that part? The timer starts when you have "constructive receipt" of the funds, but it's unclear when that happened here depending on what "claimed" means (do you still have the shares and haven't actually sold them?).
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Jul 25, 2021 20:24
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MadDogMike posted:Anything past 3 years of the due date of the original return they'd be on you can't amend normally, but I'm not sure when the "sale" is taking place since you're talking about not having "claimed" the money. Can you give more detail on that part? The timer starts when you have "constructive receipt" of the funds, but it's unclear when that happened here depending on what "claimed" means (do you still have the shares and haven't actually sold them?). so the startup created a new company, and i believe i received shares in the new company. that new company merged with the parent company to form a subsidiary of the company. i was given shares of this new company with the same amount of stock, however the stock was now near worthless because it was just common stock. so the new stock that they issued, it is worth about $100-150. they were transferred over to me, and i technically own the shares but they never issued the actual certificate to me. i emailed them but forgot about it, mainly because the value was so low i didn't really have time to look into it at the time. i'm not sure what constructive receipt means... but i did get notice of it, just never the actual certificates.
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Jul 25, 2021 21:32
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Strong Sauce posted:i'm not sure what constructive receipt means... but i did get notice of it, just never the actual certificates.
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Jul 25, 2021 22:52
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Strong Sauce posted:so the startup created a new company, and i believe i received shares in the new company. that new company merged with the parent company to form a subsidiary of the company. i was given shares of this new company with the same amount of stock, however the stock was now near worthless because it was just common stock. If you haven't realized the loss (not sold the stock) then you probably haven't even started the timer or incurred a loss. As in, if you "cash out" today the loss is likely on your 2021 taxes.
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Jul 26, 2021 00:14
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I never got my second or third stimulus, just the letter saying I’ll eventually get my stimulus. I need to file my income taxes and I live abroad. What the gently caress do I do, I’m used to doing the regular 1040 and weird extra form, but now with this complicating matters (plus I move from one part of town to another AND the IRS misspelled my old street address)…I just want my money man. E: I received the first stimulus check in August when I thought I wasn’t receiving it so do I just wait even more? E: lmao it came today. Holy poo poo. this thread is amazing teen witch fucked around with this message at 15:56 on Jul 26, 2021 |
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Jul 26, 2021 10:00
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I'm getting what I think is really bad advice from an accountant and figured I'd run it by you guys to see if it's worth paying for a second opinion. John, who is neither a US citizen or resident, works as a freelance software developer. In this capacity, he provides services as an independent contractor remotely for a US company, Widgets, Inc. John sends them an invoice every month and Widgets, Inc. deposits the amount in John's US bank account. John has provided Widgets, Inc. with a W8-BEN stating his foreign tax status. John is now considering incorporating an LLC to provide services through the corporation, but otherwise everything else stays the same. The accountant claims that, (a) John should've been paying US taxes regardless, and (b) he should incorporate as a C-Corp, not LLC, to take advantage of the lower corporate tax rate. (a) is completely wrong, right? It was my understanding that services provided outside the US by non-residents were not taxable. If (a) is wrong, then (b) is pointless and more expensive because a C-Corporation would pay taxes in the US. Edit: edited to clarify some language. dpkg chopra fucked around with this message at 20:54 on Jul 27, 2021 |
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Jul 27, 2021 17:06
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H110Hawk posted:If you haven't realized the loss (not sold the stock) then you probably haven't even started the timer or incurred a loss. As in, if you "cash out" today the loss is likely on your 2021 taxes. Yeah, stock that hasn't been sold is still "live", so when you actually sell it is what matters. Ur Getting Fatter posted:I'm getting what I think is really bad advice from an accountant and figured I'd run it by you guys to see if it's worth paying for a second opinion. Gah, last time I tried to work out whether a remote computer worker counted as working in the US it drove me nuts (and when I referred it to our research department I got a wordy version of "we dunno either", decided it was US income in the end because he hosted the server here). Things like that are why I suspect if I did much more 1040-NR work I'd eventually snap and wind up in a padded room with "EFFECTIVELY CONNECTED TO A US TRADE OR BUSINESS!!!" written all over the walls. The "should be a "C-Corp" thing also doesn't take into account forming the drat thing can be its own can of worms if you aren't in the US since company formation is generally done through state commerce/business departments and they all have their own rules that could be a pain (and I say this in Delaware, which makes it about as easy as humanly possible) especially if you're trying to do it remotely. The hassle may NOT be worth any tax savings, assuming it is US taxable income in the first place. I don't know that the accountant is wrong per se about this stuff (i.e. it isn't an incompetent opinion and could be right depending on all the facts), but it isn't a simple question here. I'm reluctant to give much more of an opinion really because I'm not familiar with whether there's more guidance about foreign computer touchers out there I don't know about (and also I get enough of these drat kinds of problems dumped on me at work with "He's the CAA, he must know all this foreign taxation stuff!"  ).
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Jul 28, 2021 04:12
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The country where this person resides almost certainly considers work done while physically present within their borders to be taxable to them, and there is very likely a tax treaty which spells this out. My experience is specific to Japan, but a software freelancer working in Japan would be 100% taxable in Japan, and they would claim Foreign Earned Income Exclusion and/or Foreign Tax Credits on the US side if they had a filing requirement. Regarding the LLC/C-Corp issue, is this accountant taking into account the QBI deduction available to pass-through income?
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Jul 28, 2021 04:37
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MadDogMike posted:Yeah, stock that hasn't been sold is still "live", so when you actually sell it is what matters. Yeah, I've spent more time than I care to admit reading over section 1441 and different publications regarding what qualifies as "US sourced income" than is probably healthy, but I've done work with a bunch of people similar to "John" and this is the first time a US accountant has said something like this. Everyone else usually goes "yeah, just send the W8-Ben and forget about it". Every publication I see seems to agree but these might just be written by firms that have incentives to say this to convince people to hire them. sale on Banksy art posted:The country where this person resides almost certainly considers work done while physically present within their borders to be taxable to them, and there is very likely a tax treaty which spells this out. Yeah, income tax will definitely have to be paid in the country of residence but even in a best case scenario, you're looking at 30% of all your income getting withheld and you not getting it back until April next year, at the earliest. Also I thought that the income tax rate for non residents working in the US was 30%? That's definitely higher than most countries. No idea on the QBI deduction, we didn't get that far. In any case, I though it was much more clear that this was not US sourced income than it apparently is, so maybe I'll have to give this accountant the benefit of the doubt.
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Jul 28, 2021 05:03
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teen witch posted:E: lmao it came today. Holy poo poo. this thread is amazing you're welcome
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Jul 28, 2021 05:13
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thanks MadDogMike, Peyote Panda and H110Hawk. Since I still have some time I'll probably put this in the back of my stuff I gotta do list.
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Jul 28, 2021 06:07
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Ur Getting Fatter posted:Yeah, I've spent more time than I care to admit reading over section 1441 and different publications regarding what qualifies as "US sourced income" than is probably healthy, but I've done work with a bunch of people similar to "John" and this is the first time a US accountant has said something like this. Compensation for services is sourced based on where the services are physically performed. Accordingly, John's income is foreign sourced. John is a NRA and is only subject to US tax on ECI or US source FDAP. Foreign services income is neither. He should not pay US tax on his income. The location of the client or his bank account is not relevant. I would not recommend a US c-corp for John as the corp would pay 21% tax on the income, and he would then be subject to 30% withholding on dividends (unless reduced by treaty). Likely not efficient. Better off just paying tax in his home country. The W-8BEN should be sufficient to document that John is an NRA. He might consider documenting in his invoice that all services are provided outside the US, but this is not strictly necessary. Is the client trying to withhold? Frankly, too many US tax professionals who do not practice international tax get this stuff wrong. It is a specialty for a reason.
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Aug 1, 2021 03:42
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PatMarshall posted:Frankly, too many US tax professionals who do not practice international tax get this stuff wrong. It is a specialty for a reason. A significant portion of my business is expats who went to a non-specialist and got their poo poo hosed up and need it fixed.
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Aug 1, 2021 04:12
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I would like to ask you guys a question. I have been stuck in the middle of a very very stupid legal fight between the Hatfield's and McCoys. There is a partnership bank account the partnership has a EIN, and a DBA only. There is no proper legal entity. Income is generated from a 15 unit apartment building. One of the patriarchs of this family business died 2 years ago. The Hatfields have 70% and the McCoys 30%. But the McCoys over drew on their interest and barrowed funds for other businesses ventures as well as using company funds for person exsenses like Truck and Auto, Fuel and Oil, Meals and entertainment. etc. Saying they were just drawing compensation in a mannor to avoid taxes. Some poo poo hit the fan two months ago and old Mr McCoy drained the partnership account from almost 100,000 to 900. He drew 2 cashier checks made payable to himself. ideally one was for a distribution while the other he claims is to just put the money into a place of "safe keeping" so Mr Hatfield cant just take it. (I think the trigger was mr hatfield having some work done on the property or something) The Hatfields seem to be staying cool and accepting that the correct course of action is to just have the CPA amend the accounting report to claw back the money in the forum of a judgement. However one member of the Hatfield suggested just 1099, Mr McCoy for the 100000 and let the state and feds deal with it. Question is that purpose of a 1099? my only experience with 1099 was when I did some basic free lance work for an office here and there.
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Aug 1, 2021 20:51
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