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MadDogMike posted:Have to do it in 2023 since it’s a return for a full tax year. You can’t file early because what would happen if you did another gift later in the year? No absolutely not
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Jan 20, 2022 01:44
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MadDogMike posted:Question of my own, especially for any of the IRS commentators in the thread. If someone keeps having their dependents falsely claimed by someone else, they can file for an IP-PIN for the dependent(s) to stop that, right? I assume being falsely claimed is the type of fraud those numbers are supposed to stop after all. The IP PINs are generated at the start of the year and the application for one can take at least 120 days (I think the current average right now is actually 210 days) so applying for one now won't provide the protection until next year. If this is an on-going issue it's still a good idea, you'd just want to warn your client that it won't provide an IP PIN for this year. Another important consideration (which is also discussed in the FAQ) is to make sure the client keeps the dependent's mailing address up to date with the IRS as the CP01 with the taxpayer's current filing season's IP PIN is mailed out to the address of record at the start of the year and generally speaking the IRS isn't able to reissue the letter to a new address after that. There is an IP PIN retrieval tool on the IRS website but like all of our online systems the various security features keep even most legitimate taxpayers from accessing their accounts. sullat posted:No absolutely not
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Jan 20, 2022 02:18
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drat standards have slipped after I left the call center. Anyway I can't imagine that having the kids deal with IPPIN for the rest of their lives is going to be easier than paper filing and having the other party get EITC banned for a few years.
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Jan 20, 2022 06:25
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sullat posted:drat standards have slipped after I left the call center. Anyway I can't imagine that having the kids deal with IPPIN for the rest of their lives is going to be easier than paper filing and having the other party get EITC banned for a few years.
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Jan 20, 2022 07:17
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sullat posted:drat standards have slipped after I left the call center. Anyway I can't imagine that having the kids deal with IPPIN for the rest of their lives is going to be easier than paper filing and having the other party get EITC banned for a few years. Uh, well, the problem is while paper filing eventually works (certainly I can tell the client to lay their hands on school records and such to win the tiebreaker rules), it delays their refund substantially, which given this almost inevitably involves EITC has some pretty painful economic impact on the actual custodial parent. Also, in my experience if they do hit the other parent with a block on claiming the EITC I’ve seen the issue happen multiple tax seasons (does the EITC block not stop them from still claiming the kids?) which can mean several years of this crap. It’s certainly a headache tracking down the IP-PIN every year, but having to paper file and submit proof of custody and wait months for desperately needed money is no picnic either.
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Jan 20, 2022 15:20
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Peyote Panda posted:The IP PINs are generated at the start of the year and the application for one can take at least 120 days (I think the current average right now is actually 210 days) so applying for one now won't provide the protection until next year. If this is an on-going issue it's still a good idea, you'd just want to warn your client that it won't provide an IP PIN for this year. You can apply online for an IP PIN and get the number pretty much immediately, if you haven’t yet been a victim of identity theft but wish to protect yourself. I did that last year because I expected that a tax document would be delayed and I wanted to prevent someone from filing for me early.
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Jan 20, 2022 15:55
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Missing Donut posted:You can apply online for an IP PIN and get the number pretty much immediately, if you haven’t yet been a victim of identity theft but wish to protect yourself. I did that last year because I expected that a tax document would be delayed and I wanted to prevent someone from filing for me early.
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Jan 20, 2022 16:20
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Missing Donut posted:You can apply online for an IP PIN and get the number pretty much immediately, if you haven’t yet been a victim of identity theft but wish to protect yourself. I did that last year because I expected that a tax document would be delayed and I wanted to prevent someone from filing for me early. Good to know. Thanks everybody who responded, I appreciate the sanity check since nobody in my office has helped someone apply for the IP-PIN, so I was wondering if there’s issues I wasn’t aware of with applying for one for a dependent.
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Jan 20, 2022 19:25
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Peyote Panda posted:Another important consideration (which is also discussed in the FAQ) is to make sure the client keeps the dependent's mailing address up to date with the IRS as the CP01 with the taxpayer's current filing season's IP PIN is mailed out to the address of record at the start of the year and generally speaking the IRS isn't able to reissue the letter to a new address after that. This just got updated today. We can reissue IP PIN letters to newly updated addresses now. So if you know someone who's already been approved in a prior year for an IP PIN but hasn't received their CP01 notice because they moved and aren't able to get it through the IP PIN retrieval tool they can call the toll-free line to get the letter reissued (toll-free assistors cannot access the IP PIN itself directly).
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Jan 20, 2022 20:17
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Peyote Panda posted:This just got updated today. We can reissue IP PIN letters to newly updated addresses now. So if you know someone who's already been approved in a prior year for an IP PIN but hasn't received their CP01 notice because they moved and aren't able to get it through the IP PIN retrieval tool they can call the toll-free line to get the letter reissued (toll-free assistors cannot access the IP PIN itself directly). How do you verify the new address, especially for minors? Seems like the aggressive parent could just call and say the kid moved right? They're already in the play dumb games / win dumb prizes mindset right?
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Jan 21, 2022 00:15
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H110Hawk posted:How do you verify the new address, especially for minors? Seems like the aggressive parent could just call and say the kid moved right? They're already in the play dumb games / win dumb prizes mindset right? Assuming the usual way they sort out these false claims, they ask for things like school or medical records that show the kid's address is the same as the parent after they get two returns claiming the same dependent(s). But they are some other factors that weight against that sort of thing happening a lot anyway. The biggest is probably laziness I think; just slapping a kid's name and SSN/DOB on an online return is one thing (I suspect a bunch of them think they CAN claim the kid just by virtue of being the biological parent anyway), going through those kinds of gymnastics involves a level of effort to navigate bureaucracy I doubt a lot of them want. Also having child tax credit/EITC denied in these situations doesn't get pursued criminally (since people have screwed it up before without malice being involved), but filing a false address would be hard to argue as anything other than outright fraud, and easily provable fraud to boot. So that's why I hope you can just IP-PIN the kid(s) to prevent it; make it hard enough, you'll weed out most of them just by making it inconvenient to try lying.
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Jan 21, 2022 02:48
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H110Hawk posted:How do you verify the new address, especially for minors? Seems like the aggressive parent could just call and say the kid moved right? They're already in the play dumb games / win dumb prizes mindset right?
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Jan 21, 2022 03:11
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question about capital gains taxes - So, back in 1995 I was gifted 5 shares of a company as a birthday present. Total purchase price with whatever fees back then was about $100. This stock has had a number of splits over the years, resulting in me having 560 shares in early 2021. I sold 83 shares in March 2021 (to help with buying a new car) for a net of $10,063. I'm single and made $30,500ish last year. Various online calculators I've tried give me results from ranging $0 to over $2k. Any ideas as to how much I might wind up paying in tax on this ?
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Jan 21, 2022 07:33
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At that income level, you are almost certainly in the 0% bracket for Long Term Capital Gains, which ends at $39,475 Adjusted Gross Income (Income minus deductions, notable the $12,400 standard deduction) for 2021.
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Jan 21, 2022 15:01
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Here's a weird situation. I filed my taxes last year via Credit Karma Tax. I'm trying to get the return from them, but I have an email dated Feb 12, 2021 saying "my federal return was accepted", and I seem to recall getting a small refund, which I've now verified: Edit, yes, I have a $96 direct deposit from IRS TREAS 310 TAX REF PPD ID: ########### However, on the IRS's "Get Transcript" page, I only have a verification of non filing for the year 2021. What happened here and how do I get my old return short of installing Cashapp to log into what credit karma tax has become? Edit Edit: I got my 2021 1040 from CK and it looks like the entire second page is blank? Edit Edit: I'm loving stupid, aren't I? 2021's transcript would be the taxes i'm *about* to file. I'm going to leave this here in case anyone else makes the same mistake. Deviant fucked around with this message at 17:21 on Jan 21, 2022 |
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Jan 21, 2022 17:10
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Your basis is going to be almost nothing (14% of shares sold, so like 14 dollars?). So, assume roughly 10000 of long term capital gains. These are taxed at 0% if your total taxable income is less than 40400 (single filers). Not sure what happens if you end up over taxable income limit, but it all happens on the "Qualified Dividends and Capital Gain Worksheet" Edit: Didn't refresh first. If you think you'll have more income in the future, can sell more of the stock each year now (up to that 40k total income limit) to lock in 0% tax rate vs paying 15% later on Jobert fucked around with this message at 17:48 on Jan 21, 2022 |
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Jan 21, 2022 17:44
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Deviant posted:Edit Edit: I'm loving stupid, aren't I? 2021's transcript would be the taxes i'm *about* to file. I'm going to leave this here in case anyone else makes the same mistake. I spent your entire post itching to point this out and you ruined it.
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Jan 21, 2022 22:24
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KillHour posted:I spent your entire post itching to point this out and you ruined it. they really shouldn't put up a verification of non filing for a year who's deadline hasnt even come close yet
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Jan 21, 2022 23:34
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Deviant posted:they really shouldn't put up a verification of non filing for a year who's deadline hasnt even come close yet You might need to prove you haven't filed YET
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Jan 21, 2022 23:43
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Maybe a dumb question, but if I am filing MFS with standard deductions, do I need to file forms (like 1098 for mortgage interest) that would only be used in itemized (or that aren't applicable for MFS fliers, e.g. 1098-E) deductions?
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Jan 24, 2022 17:52
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The Slack Lagoon posted:Maybe a dumb question, but if I am filing MFS with standard deductions, do I need to file forms (like 1098 for mortgage interest) that would only be used in itemized (or that aren't applicable for MFS fliers, e.g. 1098-E) deductions? It depends; when married filing separately, both spouses have two choices; you both do standard deduction or you both do itemized deductions. So if your spouse itemizes, you HAVE to whether or not that's worse than a standard deduction for you. You also can't double-dip on itemized deductions, you don't both get the full mortgage interest on a jointly paid mortgage for example (though you can split in an agree way generally, not just 50-50 if one of you pays more of it for example). You also don't generally need to mess with things that can't be claimed for MFS, though double-check since there are some exceptions that may apply to not claiming them as MFS, particularly if you're MFS and not living together at all during the year. In an unrelated note, was watching a YouTube discussion about the IRS's continuity plans (i.e. what do they do if the US gets nuked or we have other civilization-ending catastrophe) and was amused to discover apparently Atlanta is the first backup site if DC goes boom and, if I can buy the source, supposedly there's some sort of plan to institute a 20% sales tax if income tax collection isn't possible, among other things. Needless to say there were a lot of Fallout jokes in the comments (from how they'd tax bottlecaps to speculating that was the real source of the Enclave).
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Jan 25, 2022 02:38
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In 2021 I contributed to a Roth IRA, then recharacterized it (?) 6 months later as traditional and did a backdoor because I was going to bump up against the income limits. I'm using Turbotax and it asks me if I contributed to a Roth or Traditional IRA. I think the correct answer is just Traditional, and any extra gains while the money was in the Roth account will come out with the 1099-R / Form 8606. Am I wrong?
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Jan 25, 2022 15:34
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MadDogMike posted:In an unrelated note, was watching a YouTube discussion about the IRS's continuity plans (i.e. what do they do if the US gets nuked or we have other civilization-ending catastrophe) and was amused to discover apparently Atlanta is the first backup site if DC goes boom and, if I can buy the source, supposedly there's some sort of plan to institute a 20% sales tax if income tax collection isn't possible, among other things. Needless to say there were a lot of Fallout jokes in the comments (from how they'd tax bottlecaps to speculating that was the real source of the Enclave). lmao, that's awesome. Not surprised it's Atlanta though, that's where W&I is headquartered. Unless there's a secret law that gives the IRS authority to institute taxes after the end, I am skeptical of that second part, but then again, in the wastelands, might makes right.
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Jan 25, 2022 17:05
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Logged in to TurboTax today to get started on '21 and discovered Intuit has updated the site to allow SMS as 1FA.  It doesn't seem like there is anything you can do about this besides turn on 2FA (and they do at least have Google Authenticator as an option there)Yes, I know Intuit is rent seeking on tax prep. My taxes are complicated enough and I have long enough history with TurboTax that it's just easier to continue to give them my annual ounce of flesh
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Jan 25, 2022 17:38
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SlapActionJackson posted:Logged in to TurboTax today to get started on '21 and discovered Intuit has updated the site to allow SMS as 1FA. I used Taxhawk last year and had a good experience, but there's definitely less hand holding than with Turbotax, so I'm thinking about maybe moving back this year.
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Jan 25, 2022 17:49
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Trying to understand my W-2 as I sold ISO shares from my companies IPO this year. This might be too soon to be asking this question before my 1099-B's show. I also am still learning about all this. Box 1 has a reporting of 368k, SS and Medicare is showing 113k, so my earned income. I maxed my 401k. ISO is marked 271k on my W2 but I go into my brokerage account and see 323k of proceeds, 308k costs basis, so a gain of 14k which is the STG I pay taxes on? We had a very generous stock split of I think 13 or 17:1. I had a CPA do estimated payment calculations in November and I had already had most of the short term gain taxes covered from a poor estimate calculation I did earlier in the year. What should I be looking for in the mail from my employer or brokerage for the ISO sale, is it the 3921? As entered from my W2 I'm seeing I owe ~$83k, but this doesn't seem correct or did I self own? I'll definitely be rehiring my CPA to do 2021 and 2022 years taxes. Or did he/me completely gently caress up and I owe a big tax bill and need to find someone else in the future? cheese eats mouse fucked around with this message at 23:05 on Jan 25, 2022 |
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Jan 25, 2022 22:47
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My wife and I usually always file jointly, but circumstances changed a little this year and I'm wondering if filing separately might be advantageous. She's been unemployed since the start of the pandemic and received $15k unemployment assistance in 2021; just ~$500 was withheld for federal taxes. I've been receiving my regular salary. When I enter my W2 and her 1099-G form, with the standard deduction, FreeTaxUSA calculates that we owe about $1000. If we file separately and itemize deductions, I still owe about $900, but she gets the withheld $500 refunded, leaving us with just $400 owed on balance. Does that make sense, or am I missing something? I'll probably go through the full process for both scenarios before filing just to be sure, but just wanted to check first.
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Jan 26, 2022 17:28
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Toebone posted:My wife and I usually always file jointly, but circumstances changed a little this year and I'm wondering if filing separately might be advantageous. She's been unemployed since the start of the pandemic and received $15k unemployment assistance in 2021; just ~$500 was withheld for federal taxes. I've been receiving my regular salary. I think you’re missing at least something. Having one spouse with that little income and one spouse working usually means that filing jointly saves a lot of income tax. You mention that you take the standard deduction jointly but are itemizing when you’re doing the separate returns. That seems odd. Are you taking the same deductions on both returns or are you splitting them up based on who paid them? Are you in a community property state?
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Jan 26, 2022 18:27
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Missing Donut posted:I think you’re missing at least something. Having one spouse with that little income and one spouse working usually means that filing jointly saves a lot of income tax. My itemized deductions (mostly medical expenses, property taxes, mortgage interest, all in my name) add up to just under the $24k standard deduction. No deductions on my wife's side, but her income is low enough that it doesn't really matter. We're in NJ, pretty sure it's not community property. I haven't looked at my state taxes yet so maybe it's moot Toebone fucked around with this message at 19:19 on Jan 26, 2022 |
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Jan 26, 2022 19:15
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cheese eats mouse posted:Trying to understand my W-2 as I sold ISO shares from my companies IPO this year. This might be too soon to be asking this question before my 1099-B's show. I also am still learning about all this. Im not entirely following the sequence of facts. Two questions: 1) What is the amount of the fed withholding on your W-2? 2) How much did you pay in estimated taxes in 2021? 83k sounds like your fed tax liability, which implies you withheld and paid in very little?
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Jan 26, 2022 23:55
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cheese eats mouse posted:Trying to understand my W-2 as I sold ISO shares from my companies IPO this year. This might be too soon to be asking this question before my 1099-B's show. I also am still learning about all this. It sounds like one of two things is happening: You grossly underpaid your estimated - you haven't told us that number - or you're double counting the ISO stock sales. Assuming you exercised and disposed (sold) of the ISO shares entirely inside calendar year 2021: $368,000 - $19500 (401k) - $12,550 (single standard deduction) ~= $336k. Looking at the tax tables[1] you owe a total of $92,144 in federal income tax. This is a super basic analysis and is basically the maximum you could possibly owe with the facts presented. Subtract from that number the amount of federal taxes you've paid (Box 2 + Estimated payments) and you get the amount you +$owe or -($are due a refund). Now if you were "close" as you said, BUT that ISO money is being double counted by $271,000 we get $336k + $271k -> Tax tables -> $188k total, less $92,144 is $96,519 extra taxes. This sounds pretty plausible as it's within spitting distance of that $83k depending on your estimated taxes lump sums. This is how I knew I needed to fire my last accountant, they were double counting my ESPP proceeds in a similar way. Wait until you get all the forms (1099-B, whatever the ISO basis form is, etc) because you probably have to adjust the basis manually because everything is terrible. [1] https://www.irs.gov/pub/irs-pdf/i1040tt.pdf Page 15
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Jan 27, 2022 01:03
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I just filed my 2021 returns, and about an hour later I got an email from my folks about two 1099-Rs they had received. I moved two separate 401k accounts into a consolidated Rollover IRA last year, and both closed accounts were pretty old and had my parent's address associated with them, and since this wasn't really a taxable event it completely slipped my mind and I wasn't keeping an eye out for any more 1099s. Should I go ahead and file an amended return now? FreeTax USA's FAQ on amended returns suggest sitting tight for a while and only filing the 1040x after the initial return is processed because the IRS may fix the issue by referencing their own records or reaching out for more information.
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Jan 27, 2022 03:17
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Toebone posted:My itemized deductions (mostly medical expenses, property taxes, mortgage interest, all in my name) add up to just under the $24k standard deduction. No deductions on my wife's side, but her income is low enough that it doesn't really matter. The problem is somewhere in there. If you take itemized, so does your wife when you file separate. So she has $15k in income but next to nothing in deductions so she’d have a tax liability around $1600 or something against $500 paid in. She wouldn’t get everything refunded. GhostofJohnMuir posted:Should I go ahead and file an amended return now? FreeTax USA's FAQ on amended returns suggest sitting tight for a while and only filing the 1040x after the initial return is processed because the IRS may fix the issue by referencing their own records or reaching out for more information. There is no reason to rush to amend. Not just the IRS not yet processing your return, but in case there are other “surprises” out there.
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Jan 27, 2022 14:59
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Did a first pass of my taxes, and holy poo poo, for the first time in like 6-7 years, we will have a refund. Usually I sulk from about now until April 15th. I have no idea what I'm going to do with myself.
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Jan 27, 2022 19:41
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I just got a CP80 stating that the IRS did not recieve my 2020 tax return. I have a copy of the cancelled check that was included with my 2020 return. I can only assume this stems from the backlog of reviewing paper returns. What do I do?
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Jan 27, 2022 19:43
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Skinnymansbeerbelly posted:I just got a CP80 stating that the IRS did not recieve my 2020 tax return. I have a copy of the cancelled check that was included with my 2020 return. I can only assume this stems from the backlog of reviewing paper returns. What do I do? You're probably right about what happened as the IRS just sent out a raft of those notices triggered precisely because there's a payment on file but no return processed yet and almost all of them are in your boat. An easy way to check on that is to pull up an account transcript on IRS.GOV for the 2020 tax year and see if there's a TC (Transaction Code) 610 Remittance Received with Return for the payment amount. That would indicate that the processing center did receive the return with your payment and it's just delayed in processing, in which case there's no need for you to do anything other than wait unless you receive other notices indicating a specific issue. BTW, if you're wondering there's no need to delay filing for 2021 as each return is handled separately anyway.
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Jan 27, 2022 20:53
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Deviant posted:they really shouldn't put up a verification of non filing for a year who's deadline hasnt even come close yet
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Jan 27, 2022 21:02
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Yeah if you see a 610 that means they've received your payment (but you already knew that) so is your return in a stack of paper somewhere, is it on someone's desk, or is it lost into the void? I've seen plenty of instances where the payment is received but the return never got to where it needed to go because payments go one way and returns go another way. Honestly there's no way to tell from here, you'll probably want to call and ask for guidance about whether to resubmit it or not.
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Jan 28, 2022 00:10
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This is not strictly an income tax question but I figured people in here would know. Has the IRS really not posted any new Form 990s online since TY2019? That seems pretty loving bad for 501c transparency.
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Jan 28, 2022 00:16
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KOTEX GOD OF BLOOD posted:This is not strictly an income tax question but I figured people in here would know. Has the IRS really not posted any new Form 990s online since TY2019? That seems pretty loving bad for 501c transparency. The extended deadline for 2020 990s was only 75 days ago plus nobody works at the IRS anymore
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Jan 28, 2022 01:58
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