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Thesaurus posted: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. States don't generally give any credit for foreign taxes, so that might be the issue. Anyway, yes I would usually work to resolve disputes within the terms of the original engagement, but if it progresses to appeals or tax court, obviously that would be out of scope.
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Oct 27, 2021 04:52
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Thesaurus posted: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. State tax agencies vary wildly, but if this were with the IRS I would say: You or your CPA should contact the agency in some form before the deadline runs out, even if just to say that you are working with your CPA on a response and requesting more time. At least with the IRS, ignoring something or complete lack of response is almost always a bad idea.
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Oct 27, 2021 04:54
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Thesaurus posted: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." Would love to find out some day why IRS mail takes so long to arrive overseas. It really is absurd.
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Oct 27, 2021 05:01
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For the purpose of IRA eligibility, do esports winnings count as earned income? What about art contest prize money? Assume I'm not a professional gamer or artist.
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Oct 27, 2021 08:16
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Xom posted:For the purpose of IRA eligibility, do esports winnings count as earned income? What about art contest prize money? Assume I'm not a professional gamer or artist. IIRC it's anything you pay social security and medicare tax on (basically, wages and self-employment income).
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Oct 27, 2021 08:55
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I have a little side gig, and I elected to defer some of my SS tax from 2020 and pay in 2021 and 2022. Well it's getting to be about that time to make the first payment. How precisely do I go about that? I've never used EFTPS before (always just paid on my 1040 return), and directpay doesn't have an option that precisely says deferred SS taxes. Can I use DirectPay to pay a balence due on my 1040 or do I have to go through the hassle of getting a EFTPS account just to pay these deferred taxes?
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Oct 27, 2021 14:21
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PatMarshall posted:States don't generally give any credit for foreign taxes, so that might be the issue. Anyway, yes I would usually work to resolve disputes within the terms of the original engagement, but if it progresses to appeals or tax court, obviously that would be out of scope. incogneato posted:State tax agencies vary wildly, but if this were with the IRS I would say: You or your CPA should contact the agency in some form before the deadline runs out, even if just to say that you are working with your CPA on a response and requesting more time. At least with the IRS, ignoring something or complete lack of response is almost always a bad idea. Thank you. I will try to get something filed via the CPA. I said "State" for simplicity, but it's actually the territory of Puerto Rico, which has a unique tax authority. You get credit for federal taxes paid and vice versa, and they label it a foreign tax credit even though it's not really foreign. The tax situation in PR and it's relationship to the mainland can get very complicated and is hard for me to understand.
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Oct 27, 2021 18:37
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sparkmaster posted:I have a little side gig, and I elected to defer some of my SS tax from 2020 and pay in 2021 and 2022. Well it's getting to be about that time to make the first payment. How precisely do I go about that? I've never used EFTPS before (always just paid on my 1040 return), and directpay doesn't have an option that precisely says deferred SS taxes. Can I use DirectPay to pay a balence due on my 1040 or do I have to go through the hassle of getting a EFTPS account just to pay these deferred taxes? I only did this with one client (who has a business so he can pay by EFTPS) so I'm not as well-versed on this topic as I might otherwise be. Did you receive an IRS reminder letter (CP256V) stating that you have the obligation to make the payment? If so, is there an address given on the letter to make the payment?
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Oct 27, 2021 21:07
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Missing Donut posted:I only did this with one client (who has a business so he can pay by EFTPS) so I'm not as well-versed on this topic as I might otherwise be. Did you receive an IRS reminder letter (CP256V) stating that you have the obligation to make the payment? If so, is there an address given on the letter to make the payment? I have not, but I have moved around a bit over the past year and it's possible one was sent but I have not received. Would I be able to see letters sent on my tax transcript?
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Oct 27, 2021 21:41
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sparkmaster posted:I have not, but I have moved around a bit over the past year and it's possible one was sent but I have not received. Would I be able to see letters sent on my tax transcript? The transcript would note that it was sent but not the content, I don’t think. My client received the letter but I don’t have a copy of it offhand; it was several months ago so I don’t remember the entirety of it. I’ll see if I can dig up a letter.
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Oct 27, 2021 21:54
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The IRS has taken the step recently where you may be able to view copies of letters sent to you on your online account. So maybe try to make one of those and if you’re lucky enough to get in there you may be lucky enough to have a copy of the letter.
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Oct 27, 2021 23:43
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PatMarshall posted:States don't generally give any credit for foreign taxes, so that might be the issue. Anyway, yes I would usually work to resolve disputes within the terms of the original engagement, but if it progresses to appeals or tax court, obviously that would be out of scope. As far as the CPA and expected support goes, at least at H&R Block we have a standard guarantee that says if you get a letter related to a return we did you can bring it in for review and usually assistance with a response, and we don't generally charge for that support unless as mentioned it's progressed to a more complicated problem, but those are pretty rare letters compared to the typical "bad boo-boo pay lots of money without questioning us" notices. If the issue was due to a mistake in tax prep on our end at minimum I would feel obligated to provide any amendment required for resolving the issue without charge; we do have a at least partial reimbursement setup for such situations ourselves, but the rules to that depend on circumstances enough that I wouldn't necessarily count on it from every tax prep agency (understand it's some sort of insurance thing with us, we may have enough volume to justify the premiums that somebody smaller wouldn't). But a certain amount of support for tax notices is expected by us (it's the majority of what I do this time of year normally) and I would expect most tax prep people open year round should have some form of that too. Thesaurus posted:Thank you. I will try to get something filed via the CPA. Oof, yeah, I know just enough about that kind of thing to be glad I don't mess with it. Can't, really, only people actually licensed to practice in Puerto Rico can do their returns I believe and I think we actually dumped our previous setup where we could send stuff on to our Puerto Rico offices to let them do it too. So I don't think any H&R Block office outside Puerto Rico does those hacienda returns now.
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Oct 28, 2021 08:18
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I posted this in the chat thread but this is probably a better place: Does anyone have ideas on where to get started as far as finding a decent tax advisor/CPA? I've managed my own money OK until now but hosed up my taxes for the first time ever this year thanks to having to file in multiple states and it's been a nightmare. I'd like someone to talk to this year so I can maximize my charity and nieces' 529 contributions, and preferably local [I live in San Francisco]. What kinds of ballpark fees should I be looking at for the advice and if I have them do my taxes? My situation isn't super complex just beyond my limited ability to manage.
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Oct 28, 2021 19:27
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qirex posted:I posted this in the chat thread but this is probably a better place: I looked around on Nextdoor and picked a good option there after 2 personal recommendations never answered my email requests.
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Oct 28, 2021 19:47
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Epi Lepi posted:The IRS has taken the step recently where you may be able to view copies of letters sent to you on your online account. So maybe try to make one of those and if you’re lucky enough to get in there you may be lucky enough to have a copy of the letter. That is a nice upgrade to the system; thanks for letting me know about that. sparkmaster posted:Can I use DirectPay to pay a balence due on my 1040 or do I have to go through the hassle of getting a EFTPS account just to pay these deferred taxes? I was doing a continuing education seminar today and the topic came up. Direct pay does not seem to be set up for this. If you want to send a check, according to the person doing the seminar, you would send it to the address where you would send your payment based on your address (look at the last page of https://www.irs.gov/pub/irs-pdf/i1040gi.pdf). Make sure your check states that it is for deferred social security taxes on your social security number. Do not include a payment for anything else on the check and cross your fingers that everything gets applied correctly. There is no form or voucher for this payment. Given the state of both the IRS and the USPS these days, I'd be a bit nervous mailing a check without an IRS standard voucher hoping that it gets applied correctly, but that seems to be the option.
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Oct 29, 2021 17:40
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sparkmaster posted:I have a little side gig, and I elected to defer some of my SS tax from 2020 and pay in 2021 and 2022. Well it's getting to be about that time to make the first payment. How precisely do I go about that? I've never used EFTPS before (always just paid on my 1040 return), and directpay doesn't have an option that precisely says deferred SS taxes. Can I use DirectPay to pay a balence due on my 1040 or do I have to go through the hassle of getting a EFTPS account just to pay these deferred taxes? I think "the side gig" does the payment right? Don't they have an EFTPS portal account?
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Oct 29, 2021 18:05
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I am trying to lower my AGI to make sure I get full advantage of the Child tax credit / COVID stuff that declines over 150k AGI. Are the following ways to lower AGI to ensure I get the full amount of relieve? Increase money put into an HSA Change from Roth 401(k) to traditional 401k Create 401k for my wife who does not have a company plan and contribute $6k.
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Oct 29, 2021 18:36
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My sister rents out her apartment in Florida and due to the insanity of the market right now, her newest tenant decided to pay 6 months in advance just to beat out another candidate (yes, she should've just asked for more money, idk why she did this either). While this sounds good on paper, is she going to have to pay income tax on all 6 months come tax season? My hunch is yes, and obviously she has her own accountant, but I figured I'd give her a friendly heads up if this was the case so she can adjust her quarterly payments.
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Oct 29, 2021 20:33
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If she reports her schedule E on a cash basis (most small time landlords do) then yes, it's all taxable in the year received.
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Oct 29, 2021 21:31
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Missing Donut posted:I was doing a continuing education seminar today and the topic came up. Direct pay does not seem to be set up for this. If you want to send a check, according to the person doing the seminar, you would send it to the address where you would send your payment based on your address (look at the last page of https://www.irs.gov/pub/irs-pdf/i1040gi.pdf). Make sure your check states that it is for deferred social security taxes on your social security number. Do not include a payment for anything else on the check and cross your fingers that everything gets applied correctly. There is no form or voucher for this payment. Make sure specifically your SSN is on the check, worst case that ensures it gets applied to the correct account (i.e. you) so if the payment gets mis-identified it's easier to clear up later. Spook posted:I am trying to lower my AGI to make sure I get full advantage of the Child tax credit / COVID stuff that declines over 150k AGI. For the middle one, if you mean switch to funding a traditional 401K that works, if you mean converting your Roth to a traditional that does not (and creates an unnecessary mess later on dealing with the after-tax contributions to a trad IRA anyway; you can have both a traditional and Roth IRA, you just can't contribute more than the usual contribution limit TOTAL (i.e., $6k among all IRAs this year) to IRAs in a year for each person). Also, make sure your earned income is over the total amounts you want to sock into retirement plans. Otherwise you seem to have the general idea OK. Ur Getting Fatter posted:My sister rents out her apartment in Florida and due to the insanity of the market right now, her newest tenant decided to pay 6 months in advance just to beat out another candidate (yes, she should've just asked for more money, idk why she did this either). Yes, for most people income and expenses count specifically when they're paid, not for the period they're paying for.
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Oct 29, 2021 23:08
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What do you guys use for tax planning etc Just a spreadsheet, or do you plug stuff into TurboTax and see what number pops out etc? Turbo tax is very streamlined towards doing your actual taxes for that year, rather than as a planning tool We're trying to figure out/model tax implications for renting out our current house while my wife pursues a new career opportunity, vs starting a business locally
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Oct 30, 2021 14:06
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Hadlock posted:What do you guys use for tax planning etc You could check and see if TurboTax maybe has a calculator function for working out estimated tax payments for the next year, that might let you work out the difference. Otherwise not sure what to tell you unfortunately. I have an estimate function built into my stuff but that only really works if we did the return (and H&R Block is about to get psychotically busy pretty quick thanks to one thing we do starting on the 11th so can’t recommend dropping in to try us anyway, could take forever to hear back). A question of my own since we have a bunch of IRS people in the thread. I have someone who was supposed to get a refund when the IRS corrected their 2020 return because of the unemployment taxable income reduction. They got a letter saying the additional refund would be sent but it never was. Was trying to send in Form 3911 to start a trace but no actual instructions with form, does it just get mailed to the regular service center where the taxes are filed for their location?
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Oct 30, 2021 15:12
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MadDogMike posted:A question of my own since we have a bunch of IRS people in the thread. I have someone who was supposed to get a refund when the IRS corrected their 2020 return because of the unemployment taxable income reduction. They got a letter saying the additional refund would be sent but it never was. Was trying to send in Form 3911 to start a trace but no actual instructions with form, does it just get mailed to the regular service center where the taxes are filed for their location? However, it may be worth the time to call the Refund line (800-829-1954) and speak to an agent. The Refund line does offer an automated trace option but it would be for the original refund rather than the adjustment so it wouldn't help in this case and you'd want to speak to a live assistor instead if possible. It is admittedly difficult to get through right now. The benefits of this are A) finding out if the refund has actually been issued yet (a lot of the refunds for this have not actually gone out on schedule and if that's the case here the 3911 won't make a difference) and B) in most cases if the refund has been issued and it's past the timeframe for receipt the assistor can usually input the refund trace over the phone, which saves both the hassle of filing the 3911 and the delays the IRS is still having for processing print forms in general since the asssistor's inputs get routed directly to the Refund Inquiry Unit electronically.
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Oct 30, 2021 17:03
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Hadlock posted:What do you guys use for tax planning etc Out of possibly morbid curiosity, did you figure out the 199a stuff? For your question, renting out plus new job seems like a tax situation you can get a pretty good estimate for. The starting a business one seems a lot harder. Like wouldn't you need to have a pretty clear business model, good estimates of revenue and expenses, etc? How much effort are you going to spend on those things, for a venture you aren't very committed towards?
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Nov 1, 2021 21:55
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Unfortunately my wife makes too much drat money so we sit just outside of the 199a so I've given up on that on the short term. For business tax modeling I was looking at agriculture, where there's (assuming price stability! Good luck with that) pretty good how-to models on dollars in vs dollars out. Kind of looking at getting 20 acres and 11 cows. The economics on this are pretty well understood so tax planning on a 7-10 year horizon seems possible Previously I was looking at developing some land as vineyard and then using the tax advantaged infrastructure (power, well) to much later turn the property into a ranchette/vacation home/Airbnb. Since we sit just outside of the 199a we wouldn't be able to reap much benefit for probably 10 years or more Micro cattle ranching seems like a less risky business? Hard to know without penciling out the numbers/tax law more than a year out. Farms can do crazy things like retroactively apply losses to past tax returns, plus if you're in a disaster zone farms get preferential (forgivable) government loans etc I can model my W2 income on a spreadsheet, but short of writing a bunch of custom python I can't think of how to model all this stuff and see if any of it qualifies as better than a pipe dream
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Nov 2, 2021 00:14
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Question about filing a late return after a late payment. This is for 2018 in California as a part time resident - the person didn't file a state return after moving there and making about $2k post move. CA FTB naturally sent them a love letter to the tune of, say, $1200 in state tax and $500 in penalties/interest for their full $50k in federal AGI for all of 2018. I'm pretty sure they actually owe zero since the CA standard deduction is above their California income of $2k, but they are going to go ahead and pay the bill to avoid a lien/accruing more interest/penalties. The question is about what to put into the state form 540NR that they haven't yet filed for 2018.  Do they go ahead and put in $1800 for the 2018 payment for tax/penalty/interest they just made? And then carry that over to the "refund" line?
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Nov 2, 2021 04:39
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I have a self-employment side job that usually brings in a few thousand per year. Instead of estimated payments, I've just withheld a bit extra from my primary job. That's covered it in the past. My  problem is that I got like a year's worth of business in October, so now by my spreadsheet (which has been pretty accurate over the years), I'm on track to owe about $1200. That's even after shutting off the advanced child tax credit for the rest of the year.Is it a problem to make an estimated payment even if I haven't been doing it all year long? I'm also in Massachusetts and have the same situation on the state side if that matters (suddenly looking at owing $500).
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Nov 2, 2021 15:10
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Hadlock posted:I can model my W2 income on a spreadsheet, but short of writing a bunch of custom python I can't think of how to model all this stuff and see if any of it qualifies as better than a pipe dream Ya, doubt there's a simple way. "See an accountant" seems gratuitous, and the more you understand yourself the better anyway. If you put in the effort to create an app that does the calculations, you can sell that too (and further complicate your taxes, and get sued when it screws up someones return). It might help to play around with the forms themselves, e.g. 8995a (and look, 199a is for high earners too, trumps not a socialist). Also visit the primary text, e.g. Sec. 195, not just explainers by for-profit entities that are trying to sell you something. Like, before it seemed maybe you had 195 and 199a confused. Also, 199a is scheduled to go away in 4 years, we better vote trump back in to keep the gravy train rollin
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Nov 2, 2021 19:36
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Harveygod posted:I have a self-employment side job that usually brings in a few thousand per year. Instead of estimated payments, I've just withheld a bit extra from my primary job. That's covered it in the past. Not at all. Especially not the first time. Just make the payment now based on the income and no one will care. It just has to be "not foreseeable" which is basically a huge gimme for anyone not committing outright fraud. If any variable changes then guess what, who could have foreseen that. Look up the safe harbor provisions too, you're likely inside of them.
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Nov 2, 2021 20:09
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H110Hawk posted:I think "the side gig" does the payment right? Don't they have an EFTPS portal account? To clarify, this is my own side gig, and I pay my taxes when I file that schedule c every year. I've never had to use EFTPS since I've always paid quarterlies. Missing Donut posted:I was doing a continuing education seminar today and the topic came up. Direct pay does not seem to be set up for this. If you want to send a check, according to the person doing the seminar, you would send it to the address where you would send your payment based on your address (look at the last page of https://www.irs.gov/pub/irs-pdf/i1040gi.pdf). Make sure your check states that it is for deferred social security taxes on your social security number. Do not include a payment for anything else on the check and cross your fingers that everything gets applied correctly. There is no form or voucher for this payment. This is good information, thank you. I think I might just bite the bullet and try to get an EFTPS account, just to make sure this is all on the up and up. E: The instructions mention that I can pay with credit card. If directpay isn't set up for paying the deferred taxes, would the credit card system be any different? sparkmaster fucked around with this message at 22:34 on Nov 2, 2021 |
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Nov 2, 2021 22:26
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sparkmaster posted:To clarify, this is my own side gig, and I pay my taxes when I file that schedule c every year. I've never had to use EFTPS since I've always paid quarterlies. You can totes make a payment towards an estimated tax payment through direct pay. Just select the option "Estimated Tax" for payment reason and the year that you want to make the payment for.
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Nov 3, 2021 00:57
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Epitope posted:put in the effort to create an app that does the calculations, you can sell that too (and further complicate your taxes, and get sued when it screws up someones return). Aww yiss, this is some next level trolling right here, fraudulent business planning software
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Nov 3, 2021 01:00
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sullat posted:You can totes make a payment towards an estimated tax payment through direct pay. Just select the option "Estimated Tax" for payment reason and the year that you want to make the payment for. I'll also note since you made the money in the last quarter, making an estimated payment in that quarter should be fine for avoiding any underwithholding penalty. The calculations for that are supposed to take into account when the money was actually earned, so to deal with spikes like that. sparkmaster posted:This is good information, thank you. I think I might just bite the bullet and try to get an EFTPS account, just to make sure this is all on the up and up. Uh, word of warning with credit card; they usually tack on a processor fee of a percentage of the amount owed if you use that to pay taxes, so that option is more expensive than direct debit of an account which has no processing fee. Think debit cards just have a flat $ amount charge though that's not too bad last time I helped a client do it. I'm pretty sure the credit card payment wouldn't be any better for making sure the payment gets accounted correctly either.
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Nov 3, 2021 03:09
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H110Hawk posted:Not at all. Especially not the first time. Just make the payment now based on the income and no one will care. It just has to be "not foreseeable" which is basically a huge gimme for anyone not committing outright fraud. If any variable changes then guess what, who could have foreseen that. Thanks! Ill take care of that tomorrow.
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Nov 3, 2021 03:28
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MadDogMike posted:Uh, word of warning with credit card; they usually tack on a processor fee of a percentage of the amount owed if you use that to pay taxes, so that option is more expensive than direct debit of an account which has no processing fee. Think debit cards just have a flat $ amount charge though that's not too bad last time I helped a client do it. I'm pretty sure the credit card payment wouldn't be any better for making sure the payment gets accounted correctly either. Right, but it seems like directpay isn't set up for paying deferred social security tax from 2020. The IRS instructions for paying deferred tax specifically references paying with a credit card. So I'm just a bit confused why the credit card system *seems to be* set up to pay deferred SS tax but directpay is not. It seems like my choices are A) Send a check and hope it doesn't get lost in IRSland, B) Pay the credit card processing fee and hope it gets allocated correctly, or C) Get and EFTPS account for the singular purpose of paying 2020 SS tax in 2021 and 2022.
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Nov 3, 2021 15:48
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sparkmaster posted:Right, but it seems like directpay isn't set up for paying deferred social security tax from 2020. The IRS instructions for paying deferred tax specifically references paying with a credit card. So I'm just a bit confused why the credit card system *seems to be* set up to pay deferred SS tax but directpay is not. It seems like my choices are A) Send a check and hope it doesn't get lost in IRSland, B) Pay the credit card processing fee and hope it gets allocated correctly, or C) Get and EFTPS account for the singular purpose of paying 2020 SS tax in 2021 and 2022. I'd suggest EFTPS because it has a specific option for indicating a payment is for the 941. You can find more information on paragraph 29 of this page if you haven't looked there already.
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Nov 3, 2021 16:45
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Did the proposed tax rate and IRA changes make it into this infrastructure bill that was just passed, or is that a different bill?
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Nov 6, 2021 23:01
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It’s in Build Back Better which hasn’t passed yet.
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Nov 7, 2021 14:42
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Build Back Better at this point is going to be a $3,300,000 package to mail every American a Snickers bar and tiny novelty size American flag I really want that thing to pass but an extremely skeptical at this point
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Nov 7, 2021 16:48
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smackfu posted:It’s in Build Back Better which hasn’t passed yet. Given the current way tax laws seem to go it'll be passed late and have retroactive changes that force you to correct things later probably. Boy, and I thought the one time I was doing my continuing ed on tax updates while watching Congress debate making a bunch of the class obsolete was annoying, I never expected they'd be forcing me to change tons of things during the season proper. Kind of sad seeing them just introduce the first practice version of next year's software at work and knowing that thing's gonna have to be MASSIVELY patched probably.
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Nov 7, 2021 21:45
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