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Epi Lepi posted:You had me sweating when I saw your post this morning. Sorry about that. The summation doesn't explain section 461(1) at all so I assumed it was just he part governing business loss deductions. Didn't realize it went deeper than that. My bad.
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Sep 21, 2021 17:04
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There is no mention of limiting 1031 exchanges in the new bill. There is a section of grantor's trust which seems concerning. I sent an email to my affiliate trust attorney but he's in Italy on vacation do I will have to wait in a reply. It says a grantor's trust is put back into a decendent's taxable estate if the deceedent is deemed owner of the trust.
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Sep 21, 2021 17:05
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I generally assume these bills will change a lot before they hit the president's desk.
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Sep 21, 2021 18:53
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MadDogMike posted:Yeah, there are a lot of those going around; swear it's half my drat clients these days. Just really, REALLY hope the experience with this will improve the IRS response on 2021's tax returns with this stuff. teen witch posted:Just a follow up on this but it work! It was accepted! Thank you so much
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Sep 21, 2021 19:20
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Small White Dragon posted:I generally assume these bills will change a lot before they hit the president's desk. That's true and normally don't follow closely but the bill sets the effective date of the captial gains tax increase in September. Now, I can't tell clients it won't be effective until 12/31 so the questions feel more pressing.
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Sep 21, 2021 21:58
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My girlfriend and I splint rent by way of her sending half to me with Zelle and then I send in a single check from my account. She just sent me a video claiming that starting in 2022 zelle will be automatically sending 1099s if you get over $600 per year assuming any money received is income. I haven't been able to find a source that confirms that Zelle specifically is changing, but have seen a few saying sites like eBay and Etsy are. Should we change the way we transfer money?
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Sep 26, 2021 22:27
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I mean no one should use zelle hope this helps. Seriously see if she can literally mail you a check or do an ach deposit. Sometimes it's buried in the bill pay screens because banks are trying desperately to make people use zelle.
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Sep 26, 2021 22:51
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I am in a situation where my late father-in-law owned a number of rental properties (he died in 2019). We are finally getting around to doing the 2018 taxes (long story), and the CPA has asked me to determine the fair market value of the properties as of the date of death of my father-in-law so that he can “step up” the basis for reporting/depreciating on the tax return. He suggested that I should get some sort of professional assessment. What is the best way to go about doing this keeping in mind that: 1. I live in Virginia and the properties are located in South Carolina, 2. There are multiple properties, 3. There is a management company who is in charge of renting out the properties now. Would the management company be the correct 'professional' to do the assessment, or would I need to see a realtor?
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Sep 27, 2021 17:33
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Jose Cuervo posted:I am in a situation where my late father-in-law owned a number of rental properties (he died in 2019). We are finally getting around to doing the 2018 taxes (long story), and the CPA has asked me to determine the fair market value of the properties as of the date of death of my father-in-law so that he can “step up” the basis for reporting/depreciating on the tax return. I would think most real estate appraisers would be able to offer retrospective real estate appraisals. Maybe reach out to a few in the areas around the homes in question. The rental management company would not have valuation information.
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Sep 27, 2021 17:48
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Jose Cuervo posted:I am in a situation where my late father-in-law owned a number of rental properties (he died in 2019). We are finally getting around to doing the 2018 taxes (long story), and the CPA has asked me to determine the fair market value of the properties as of the date of death of my father-in-law so that he can “step up” the basis for reporting/depreciating on the tax return. I would ask an appraiser. It's definitely not a realtor, unless you know one personally who you could ask for their appraiser suggestion. If your dad ever worked with a real estate lawyer this is the person to ask. You could ask the management company if they have anyone they have worked with, but otherwise really anyone is going to be close enough. If your county does tax assessments annually you could also just point to those if they seem close enough to what you're aiming for, and if they're over/way over then I would say they're 100% accurate. (Note you will then want to contest the current years as absurdly wrong.) You just need a sheet of paper for each one that you can staple to the return from a professional. I'm not a tax person. Or a lawyer.
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Sep 27, 2021 17:49
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H110Hawk posted:I would ask an appraiser. It's definitely not a realtor, unless you know one personally who you could ask for their appraiser suggestion. If your dad ever worked with a real estate lawyer this is the person to ask. You could ask the management company if they have anyone they have worked with, but otherwise really anyone is going to be close enough. If your county does tax assessments annually you could also just point to those if they seem close enough to what you're aiming for, and if they're over/way over then I would say they're 100% accurate. (Note you will then want to contest the current years as absurdly wrong.) I do not know what I am aiming for in this situation. I am just the unlucky person who gets to deal with this. I do think there are annual tax assessments - I have the property tax assessments which have a box titled "Appraised Taxable Value". Is this the number I would be looking for? I am also going to check to see if there was a real estate lawyer involved. You are saying that the real estate lawyer my FIL worked with should be the best person to tell me who to use as an appraiser? If I cannot find the real estate lawyer I will look for some appraisers in the area. Would it make sense to have a single person do all of the (8) appraisals since they are all in one city?
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Sep 27, 2021 18:18
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Jose Cuervo posted:I do not know what I am aiming for in this situation. I am just the unlucky person who gets to deal with this. I'm sorry. This sucks. Re: what you're aiming for - I mean valuation. Basically what's it look like in Zillow? Is the tax number close to that? If so would you accept it? That might be all you need. If they're way off, then an appraiser is who you want. If you don't want to deal with looking it up for all 8 properties and want to spend money (from the estate) to make it go away? Then you want an appraiser. Presumably, hopefully, your FIL had a real estate attorney they were using to setup all these rentals. I'll pause for laughter because people are real bad at that. If they did, call them up and ask who they would refer out to for appraisal services. Yes, I would ask a single person to do all 8. One invoice to submit to the estate.
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Sep 28, 2021 01:17
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Jose Cuervo posted:I do not know what I am aiming for in this situation. I am just the unlucky person who gets to deal with this. I don’t know that I’d trust just the county tax appraisal (though it might stand up before the IRS, it’s not terribly firm), I’d definitely go with an actual appraiser’s valuation/advice. Only exception I know is if you sold the properties in question within six months of his death, the IRS will usually accept the sale price as the FMV at time of death so long as it’s a business transaction (i.e. you didn’t sell it to a family member for a bargain or the like), though that’s ideally only if you can’t find out from an appraisal.
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Sep 28, 2021 19:37
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MadDogMike posted:I don’t know that I’d trust just the county tax appraisal (though it might stand up before the IRS, it’s not terribly firm), I’d definitely go with an actual appraiser’s valuation/advice. Only exception I know is if you sold the properties in question within six months of his death, the IRS will usually accept the sale price as the FMV at time of death so long as it’s a business transaction (i.e. you didn’t sell it to a family member for a bargain or the like), though that’s ideally only if you can’t find out from an appraisal. In theory the IRS wouldn't care if you sold it extremely cheaply if it's well below the value on the tax rolls when dad died. You wouldn't owe money on the spread for it being non-arms-length given your basis would be higher. This assumes that the IRS accepts the tax roll number as the value. Or would this screw up depreciation / write offs from the property being a rental in a way that I don't understand? (In a way that causes you to owe money.)
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Sep 28, 2021 19:57
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Going to go with the appraiser route as that seems like the most straightforward way to get the valuations (even if it will cost money). Thanks for the advice.
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Sep 30, 2021 02:37
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Jose Cuervo posted:Going to go with the appraiser route as that seems like the most straightforward way to get the valuations (even if it will cost money). Thanks for the advice. Remember that this is paid by the estate, not you. Even if you wind up being the one writing the check you should submit it for reimbursement. Are you working with an estate attorney? Because if not, start.
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Sep 30, 2021 03:18
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H110Hawk posted:Or would this screw up depreciation / write offs from the property being a rental in a way that I don't understand? (In a way that causes you to owe money.) Fortunately previous depreciation on inherited property is irrelevant; you just use the stepped up basis period and if you rented it yourself you'd start from scratch if memory serves.
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Sep 30, 2021 07:09
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If I've been using the entire upstairs of my home as an office due to covid, and my wife uses 10 percent of the downstairs, do we really get to claim our home is 55 percent office space? Form 8829 makes it sound like that's the case, but it just seems so strange to me that my lovely, poorly temperature controlled cape cod square footage is worth the same as the part of the house that's nice to live in.
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Sep 30, 2021 07:36
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H110Hawk posted:Remember that this is paid by the estate, not you. Even if you wind up being the one writing the check you should submit it for reimbursement. Are you working with an estate attorney? Because if not, start. Yeah I know it is being paid by the estate. Things are complicated because my MIL is still alive but not able to make any decisions. However the trust in which the rental properties now reside was set up with an attorney (in the two months my FIL had before he died), so I am going to try and get in contact with them. This is all the more complicated because my BIL was named as the executor of the estate and the trustee of the trust and was supposed to be taking care of the taxes, but did not, which is why I am now having the CPA do 2018 taxes in October of 2021.
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Sep 30, 2021 15:53
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Jose Cuervo posted:Yeah I know it is being paid by the estate. Things are complicated because my MIL is still alive but not able to make any decisions. However the trust in which the rental properties now reside was set up with an attorney (in the two months my FIL had before he died), so I am going to try and get in contact with them. This is all the more complicated because my BIL was named as the executor of the estate and the trustee of the trust and was supposed to be taking care of the taxes, but did not, which is why I am now having the CPA do 2018 taxes in October of 2021. Uggghh I'm really sorry. This sounds awful. The attorney can be a huge resource here. Seriously. Call them up and ask how you can convert money into solutions. Assuming these properties are above water and not leveraged to the hilt there is money around to pay them.
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Sep 30, 2021 16:50
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I'm work in loving sales, and so in addition to being too stupid to develop any real skills I also get to be paid in a weird complex way that my pea brain can't figure out. I make a 40k base. This I assume is taxed in the normal manner. I get paid Commission, which is calculated and paid out once a month. This totals to 60-75k a year. That bonus/Commission is taxed at a flat 22% if I'm reading everything correctly. Will the fact that my total income is more than 40k impact the tax rate I pay on it?
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Oct 1, 2021 01:16
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Marxism posted:I'm work in loving sales, and so in addition to being too stupid to develop any real skills I also get to be paid in a weird complex way that my pea brain can't figure out. I guess it's true, pimpin' ain't easy.
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Oct 1, 2021 01:39
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Marxism posted:I'm work in loving sales, and so in addition to being too stupid to develop any real skills I also get to be paid in a weird complex way that my pea brain can't figure out. Your tax rate is just your total income from all sources (so, $75k) less the standard deduction, less traditional 401k/traditional ira contributions, and then plugged into the tax tables. Work WITHHOLDS at a fixed 22%. This is just a guess. You subtract this from the amount of tax you owe from above. If the number remaining is positive you owe money. If it's negative you get a refund. It's that simple. It's more complicated than this, but this is close enough for order of magnitude estimation.
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Oct 1, 2021 01:41
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22% is a good amount for them to withhold for federal since thats how much you own on each additional dollar you make in the 22% bracket, which for single is $40,526 to $86,375 of adjusted income. You'll probably get a $500-$1000 refund given your numbers. Do make sure they are withholding 22% though. Its suggested, but not usually required and some places withhold less. It makes it seem like you get paid more, but you''ll get a big tax bill at the end of the year.
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Oct 1, 2021 01:48
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Enshoku posted:If I've been using the entire upstairs of my home as an office due to covid, and my wife uses 10 percent of the downstairs, do we really get to claim our home is 55 percent office space? Form 8829 makes it sound like that's the case, but it just seems so strange to me that my lovely, poorly temperature controlled cape cod square footage is worth the same as the part of the house that's nice to live in. Rule is basically that you must use the space regularly and exclusively (i.e. for absolutely nothing else) for business, and while I doubt they do it in the current viral apocalypse the IRS would actually send people to knock on doors and inspect the space to be sure. You can check here if you want a more detailed discussion about the rules. The square footage thing is mainly a "fair way" to split expenses like utilities that effectively apply to the home as a whole rather than needing separate meters or the like for the office portion (so don't claim things like painting a room that's not in the office space as an indirect expense, although conversely if you painted the office area you could claim the whole thing as a direct expense rather than applying the square footage percentage because it's obvious the whole expense applied to the business portion). Honestly I've noted most of the more complicated business rules out there in taxes I frequently need to help with tend to relate to preventing people from mixing business and personal expenses, since that's the kind of thing your average person is likely to screw up. H110Hawk posted:Your tax rate is just your total income from all sources (so, $75k) less the standard deduction, less traditional 401k/traditional ira contributions, and then plugged into the tax tables. And at least they are treating it like salary and withholding on it; get a little irritated by proxy with all the employers I see cut a 1099-NEC and leave the employee to get an unpleasant surprise at tax time. Marxism posted:I'm work in loving sales, and so in addition to being too stupid to develop any real skills I also get to be paid in a weird complex way that my pea brain can't figure out. If it's any consolation my drat pay setup is a weird complex way for tax season, and even having the training to do taxes (and molecular biology) it confuses the hell out of ME sometimes. Sort of a commission set-up but I get a set amount of hourly wage no matter what and basically get whatever amount my commission exceeds that hourly salary by as sort of a bonus at the end of season. Technically I think it applies to off-season as well, but given the relative paucity of returns after the season I'm basically just getting my hourly rate in reality.
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Oct 2, 2021 01:24
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I thought they got rid of the “work from home” deductions? At least according to my brother, who is an accountant, but not a CPA, so he may be incorrect.
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Oct 2, 2021 02:13
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Cacafuego posted:I thought they got rid of the “work from home” deductions? At least according to my brother, who is an accountant, but not a CPA, so he may be incorrect. Only as an itemized deduction. Meaning if you're a W-2 employee your work from home expenses are not deductible*, if you're an independent contractor filling out a Schedule C you can still deduct those expenses. *Certain states such as NYS still allow you to itemize miscellaneous and job expenses.
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Oct 2, 2021 02:24
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Epi Lepi posted:Only as an itemized deduction. Meaning if you're a W-2 employee your work from home expenses are not deductible*, if you're an independent contractor filling out a Schedule C you can still deduct those expenses. Ahh ok, thank you. I work from home and have a primary W2 job, but I also have a side contract gig (1099-NEC), which will be half of my primary salary (a third of my total pay for the year), so I don’t if I would still have that ability, or if it would even matter. I’m still in the process of finding a CPA, so I’ll make sure to ask.
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Oct 2, 2021 13:32
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Cacafuego posted:Ahh ok, thank you. I work from home and have a primary W2 job, but I also have a side contract gig (1099-NEC), which will be half of my primary salary (a third of my total pay for the year), so I don’t if I would still have that ability, or if it would even matter. I’m still in the process of finding a CPA, so I’ll make sure to ask. It would only be for the side gig income (1099-NEC is business income), and the "exclusive use" thing means the office space in question would have to be used solely for the side gig stuff, not the W-2 work, but if that applies you could indeed take it for that portion of your income. And as mentioned some states still have a work expense deduction for employee (i.e. W-2) expenses even if the federal no longer counts them, so even an office for W-2 income might affect state income tax.
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Oct 3, 2021 18:50
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So I started a new higher paying job this year and I was bored and just sort of checked in where we were tax wise so far this year, and it looks like I haven't been withholding enough at all... by a significant amount. I'm almost positive I filled out my W4 at the beginning of the year properly, but maybe I screwed up. I just updated it at work to make sure. A couple of online tax calculators and the IRS app have all come to similar conclusions... Our total tax bill should be around 17,500 after credits and deductions (21.5 minus 4K for the 2 kids). We're on track to have to have about 9K deducted this year, leaving us owing somewhere around 8500 bucks. My main priority is to avoid any penalties and fees. I can write a check to cover the taxes now if needed, but I'd prefer to wait until next March or so if possible (it'd put a decent dent in my savings and I rather pay with my bonus next year if possible). How bad am I turbofucked? We're both just normal W2 employees, so no business income or anything like that. I'm also unsure how all new tax credits and things affect our tax liability. We're getting 500 a month for the kids right now in the advance child credits (I'm just socking that away), and we got all the stimmies.
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Oct 15, 2021 22:05
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What was your tax bill last year. One of the exemptions (and the only one you are near) for underpayment fees was witholding more in 2021 than your total bill was in 2020.
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Oct 15, 2021 22:14
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Xenoborg posted:What was your tax bill last year. One of the exemptions (and the only one you are near) for underpayment fees was witholding more in 2021 than your total bill was in 2020. 10,635 after the 4K child tax credit. Line 16 on my 1040 is 14,635. Line 24 is the 10,635.
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Oct 15, 2021 22:19
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I believe line 24 "Total Tax" is what its compared against. Either way, you are below that as well so you will need to either make an estimated payment or increase your withholding for the rest of the year.
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Oct 15, 2021 22:28
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Thanks. I'll increase my withholding so I make sure we're over 10.6 for the year. I appreciate your help.
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Oct 15, 2021 22:34
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Another exception is if this was the first year it happened too.
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Oct 16, 2021 02:01
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Yeah this is the first year. I’m still trying to figure out how the hell I let this happen. I had to have screwed up the W4 I guess. I also should have caught this way earlier this year. Maybe I should review a pay stub once in a while. 
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Oct 16, 2021 03:09
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Most likely cause would be not filling out the multiple jobs/spousal income section correctly (or using the calculator wrong when doing so) or claiming the kids on both W-4s. Do keep in mind that if you're receiving advance child tax credit payments, the amount of child tax credit on your return will be lower (since you already got a hefty chunk of it)
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Oct 24, 2021 17:40
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Thats exactly what I did. I went back in workday and looked at my old form. I didn’t check the multiple jobs/ spouse works box. Whoops.
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Oct 24, 2021 19:08
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My taxes were prepared by a CPA. A state is now saying that there was a mathematical error and that I owe a bunch of money. I suspect that the state is wrong and that it can be sorted out. I can't say for sure, because it's a complicated situation involving foreign tax credit that is beyond me, which is why I hired a CPA in the first place. Is it expected that the CPA would work to fix this dispute as something within the scope of the tax preparation I already paid for? Either he made an error or he can prove to the state that he didn't. I'm reaching out to the guy, but I wanted to gauge what the usual professional practice is in case he asks me for more money etc. I'm kinda stuck with the CPA either way at this point, because the letter saying I have 60 days to appeal the decision somehow arrived 55 days after it was "issued." I'm just hoping he can make the deadline. This is the first stressful tax issue I've had, so I'm nervous to see what happens. Thesaurus fucked around with this message at 04:00 on Oct 27, 2021 |
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Oct 27, 2021 03:57
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Thesaurus posted:Is it expected that the CPA would work to fix this dispute Yes. 100%
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Oct 27, 2021 04:03
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