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After reading that I feel like I need to wake up my sociologist SO and show it to her. It's like watching Caesar ponder what it would be like to plow a field. I am not an accountant and I am not qualified to give financial advice, but a couple basic things come to mind: - Why don't you have medical insurance of some kind? Even the shittiest insurance is required to have a max out of pocket of like $8k / year, so your medical bills, while expensive, wouldn't be literally millions of dollars. - Edit: I found out I was slightly wrong about this so I'm editing it - gifts are not considered income so you don't owe taxes on it. If it's a huge amount of money (over 12 million over the course of your mother's life), she will have to pay EXTRA taxes on that amount, but you still won't. That's all on her to put on her taxes though. You don't have to report it. See here: https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes - Because of the above, you are correct that you are legally destitute for the purposes of paying taxes. As such, if you file taxes, the government will give you free money and you can go spend it on your hobbies or blow it on blackjack or whatever. - Your family is hilariously naive if they think that not filing taxes is one weird trick to not owing taxes. Those tax documents you get in the mail are ALSO sent to the government. They know how much you make. They also know how much your family makes (unless they are making that money illegally somehow). There are no secrets from the IRS. The only reason an IRS agent hasn't kicked down your door to ask why you aren't paying taxes is because the government knows you don't owe any and they don't really care if you don't want to claim your free money. - You can claim your free money for prior years, too, and you probably should. But only for so many years back, and then you lose it forever and the government throws it into a burning garbage can while laughing at you. Edit: I'm not joking about the IRS knowing everything. Al Capone didn't go to jail for all the horrible crimes he committed. He went to jail because he didn't pay taxes on the income from all the horrible crimes he committed. Double Edit: I just realized that you do have insurance, it's probably just medicaid (subsidized insurance for poor people, basically). I have no idea how that affects/is affected by your taxes, but not filing your return doesn't change the eligibility requirements. KillHour fucked around with this message at 04:55 on Apr 3, 2022 |
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Apr 3, 2022 04:01
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Working on a return tonight, I was comparing the current return to the one from the prior year in my software trying to figure out why he owes more money on the same AGI. Check the 2020 W-2 and it had 1300 in FWH on 70K income, and I'm like that doesn't make any sense. I check the actual tax document, wages were 18K. I'm like gently caress, pretty sure I was the one who inputted the data last year how did I gently caress this up. Call the client tell him something went wrong last year and we had him overpay federal and state by around 16K. I get off the phone and mention the situation to a coworker and one of us says maybe someone was doing an estimate or test and left the wrong number in. I stop and go look at the printed copy of the 2020 return and.... the correct wages were picked up. I had myself in a tizzy for nothing, and I gave a client hope about a 16K refund that's not coming. I was confident the 70k was the version that was filed because our software shows prior year numbers when looking at a return so 70K was showing but it's just because whoever was playing with the numbers after filing, saved the return instead of reverting their changes. I didn't want to call the client back again so I just sent him an email saying to ignore what I said about amending the return and I'd talk to him Monday. Hopefully he sees the email before getting invested in that money. Not sure what the lesson learned here is, just wanted to vent a little.
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Apr 3, 2022 07:06
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So far as I know my parent's money is legal. My mother's is in medicine in some way or another. My father's dead (thankfully) but he manufactured something or other. Strictly speaking legal, anyway. I know she does some awfully shady poo poo. Oh, good. I was trying to figure out how much she's given me over the years and I just don't know. I'm really not an extravagant person, but it is very probably more than $15,000 a year. If it includes my rent, it's very much over $15,000 per annum. Yeah, I figured that if they sent my 1099 forms to me, they were probably sending them to the IRS, too. I wasn't all that concerned, because I knew I didn't owe anything, but I would like to be legal. I had no idea before filling out a test form on TurboTax that they'd actually give me money. And, yeah, should I use TurboTax, or fill out forms I don't really understand myself, or get a CPA, or... I don't even know enough to list any other alternatives. My medical bills were paid by MaineCare, which I understand is at least partly funded by Medicaid.
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Apr 3, 2022 07:41
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As I said, you haven't been breaking the law by not filing your tax returns since you don't owe taxes. Nothing about it is "being legal." Your tax returns just say "Here is what I think I owe the government or what the government owes me and here is a check or where to send me a check." It's the check they care about, so if you don't owe them one, you don't owe them a tax return unless you want your free money. The legal system isn't something you opt into or out of - if you were "illegal" up to now, you would be typing those posts from jail. The IRS does not gently caress around.* As for what software to use, the thread likes Free Tax USA (shady sounding, but legit). There's nothing wrong with Turbo Tax per se, except that they spend a huge chunk of the money they make lobbying the government to make/keep tax law lovely and hard to follow so you have to use their product, so we don't really like the idea of giving them more money to keep doing that. You could probably have a CPA do it the first year if you're concerned about it (although you probably qualify for the form literally called EZ, because it's... easy). I think that Medicaid can have clawback provisions where if you ever stop being destitute (or die) they can come after you for that money so maybe check on that? I'm not really sure but I'm sure someone else can weigh in. *Alright, I'm being facetious. They can actually be quite reasonable and they would have first politely told you to give them their money (plus penalties) and would only send you to jail if you refused to do so. It is true that they don't gently caress around when it comes to recovering that money though. KillHour fucked around with this message at 08:22 on Apr 3, 2022 |
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Apr 3, 2022 08:15
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There is probably a good chance you are being claimed on your mother's taxes. From your description it certainly sounds like she meets the requirements to claim you and file as head of household instead of single. Since as mentioned the IRS get copies of any 1099s you get sent, her filing would then include taxes you owned (or refund you were due). edit: and not to get conspiratorial, but it sounds like you are being kept deliberately in the dark. It would be far from unheard of if some portion of your late father's assets were in your name and your mother was managing them "for you" to her own benefit. Xenoborg fucked around with this message at 14:48 on Apr 3, 2022 |
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Apr 3, 2022 14:45
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Epi Lepi posted:Not sure what the lesson learned here is, just wanted to vent a little. Venting is good. If you want a lesson, never call the client so quickly when you don’t understand how you made your mistake. Just let the return sit a day and look at it with fresher eyes. I’m personally very strict on my processes with running tax estimates, but would concede that implementing good processes in a bigger firm generally wouldn’t work because the higher-ups wouldn’t follow them anyway.
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Apr 3, 2022 15:03
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Epi Lepi posted:I get off the phone and mention the situation to a coworker and one of us says maybe someone was doing an estimate or test and left the wrong number in. I stop and go look at the printed copy of the 2020 return and.... the correct wages were picked up. I had myself in a tizzy for nothing, and I gave a client hope about a 16K refund that's not coming. I was confident the 70k was the version that was filed because our software shows prior year numbers when looking at a return so 70K was showing but it's just because whoever was playing with the numbers after filing, saved the return instead of reverting their changes. KillHour posted:As I said, you haven't been breaking the law by not filing your tax returns since you don't owe taxes. Nothing about it is "being legal." Your tax returns just say "Here is what I think I owe the government or what the government owes me and here is a check or where to send me a check." It's the check they care about, so if you don't owe them one, you don't owe them a tax return unless you want your free money. quote:Alright, I'm being facetious. They can actually be quite reasonable and they would have first politely told you to give them their money (plus penalties) and would only send you to jail if you refused to do so. It is true that they don't gently caress around when it comes to recovering that money though.
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Apr 3, 2022 19:14
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Covok posted:Uh...that's not right. They should amend your W-2 for the remaining income and pay the penalties on the late payroll tax instead of putting the payroll taxes and penalities onto you. They can't just put it on a 1099-NEC, they have to do a W-2-C. You have an employee/employer relationship: you get a w-2. God, why are employers so loving stupid? You can't just put employee wages on a 1099-NEC. I swear half my job as a small business accountant has been explaining that. Residency Evil posted:This is from our accountant. Just wanted to say thanks again. Got an e-mail from our accountant that they've "researched several options," and that the correct thing to do is to issue an corrected W-2.
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Apr 4, 2022 17:39
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Here's a weird one for a new client of mine: Married couple, on their 2017 tax return 1 W-2 was applied to the wrong spouse, causing a refund of overpaid social security tax. Somehow they noticed this last year and decided to do the right thing and amend the return to repay the social security tax. They received a letter in July saying the IRS could not accept the amended return because they were outside of the legal period to charge and collect additional tax for that return and my client's check would be returned to them. Fast forward to a few weeks ago and they got another letter saying that the IRS is now processing the amended return and they do owe the $1,300 bucks plus interest.... I feel like my client got jerked around but is probably stuck with the bill. Any thoughts or ideas to the contrary?
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Apr 5, 2022 04:43
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A quick "hire a professional" or "you can do this easily with Turbo Tax" is what I'm looking for with this question. I've always done my taxes myself, single, no dependents, all income is from my work salary. Couldn't be simpler. This year, my permanent girlfriend and I bought a house. Now, we're thinking we should file jointly. The only notable change is that we got a loan and bought a house. We don't know if that complicates things enough that we should hire someone to do our taxes for us now. I have a little extra time to work things out myself, but my tax knowledge is pretty limited. What do you think?
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Apr 5, 2022 18:05
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Racing Stripe posted:A quick "hire a professional" or "you can do this easily with Turbo Tax" is what I'm looking for with this question. You can do this easily with TurboTax. Or thread favorite taxhawk.
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Apr 5, 2022 18:07
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Residency Evil posted:You can do this easily with TurboTax. Awesome. And thanks for recommending a Turbo Tax alternative.
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Apr 5, 2022 18:23
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Epi Lepi posted:Married couple, on their 2017 tax return 1 W-2 was applied to the wrong spouse, causing a refund of overpaid social security tax. Somehow they noticed this last year and decided to do the right thing and amend the return to repay the social security tax. They received a letter in July saying the IRS could not accept the amended return because they were outside of the legal period to charge and collect additional tax for that return and my client's check would be returned to them. Racing Stripe posted:This year, my permanent girlfriend and I bought a house. Now, we're thinking we should file jointly.
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Apr 5, 2022 18:29
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Peyote Panda posted:If you're not legally married then you're probably not eligible to file jointly unless you meet the criteria for a common-law marriage that began in one of the handful of states that recognize those. It'll have to be separate, then. I'm not sure what I'll have to do about the mortgage interest, though (which I understand is deductible) since she and I are splitting the cost. Do I just claim half of it?
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Apr 5, 2022 19:19
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Racing Stripe posted:It'll have to be separate, then. I'm not sure what I'll have to do about the mortgage interest, though (which I understand is deductible) since she and I are splitting the cost. Do I just claim half of it? I'm going to wager that it's not more than the standard deduction for you, so it doesn't really matter. Ever since they changed the standard deduction it's less common for someone to be able to itemize their deductions. I stopped itemizing after the TCJA passed as my mortgage interest and other deductions were no longer more than the standard deduction. edit: If it happens to work out that deducting the mortgage interest/itemizing your deductions is the way to go, you would claim your portion of the mortgage interest. Are you both on the 1098 form as borrowers on the mortgage? Not a tax pro, but the 1040 instructions cover line 8 https://www.irs.gov/instructions/i1040sca skipdogg fucked around with this message at 22:27 on Apr 5, 2022 |
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Apr 5, 2022 22:20
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Which is more likely, that I did withholding wrong by claiming two personal exemptions (myself and my spouse) or that TurboTax is broken and has just decided I owe money (obviously not a LOT of money) on my IL taxes for no reason. I want to believe it's a TurboTax problem but also me even considering paying this amount of money to do my tax returns makes me pretty suspicious of myself as well.
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Apr 6, 2022 00:05
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Racing Stripe posted:It'll have to be separate, then. I'm not sure what I'll have to do about the mortgage interest, though (which I understand is deductible) since she and I are splitting the cost. Do I just claim half of it? If you're splitting the cost then yes you are supposed to claim only your portion of the mortgage interest (and possibly mortgage insurance premiums) and real estate taxes that were paid by your half. If one or the other of you were paying the full cost, in general, it's more effective for the higher earner of the two of you to claim the entire expense, higher income leading to higher tax rate, so greater savings from deductions.
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Apr 6, 2022 01:51
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Residency Evil posted:Just wanted to say thanks again. Got an e-mail from our accountant that they've "researched several options," and that the correct thing to do is to issue an corrected W-2. Translation: We didn't expect you to call us on our bullshit so we'll do the right thing now.
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Apr 6, 2022 11:44
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Covok posted:Translation: We didn't expect you to call us on our bullshit so we'll do the right thing now. Honestly, thanks again. FYI: I referred to you as "my accountant" in the e-mail to the other accountants.
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Apr 6, 2022 16:11
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Have any of y'all ever been a VITA volunteer? How was it? I've been thinking about signing up (although I know it's outside the recruitment period until next year).
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Apr 8, 2022 00:55
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Residency Evil posted:Honestly, thanks again. hell at least buy the man an avatar
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Apr 8, 2022 01:28
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Getting at this a lot later than I probably should, but I'm working taxes for the first time on my own when they weren't just my normal W-2; I now have to capture SSDI and a retirement pension as well, and found out that both don't automatically withhold any federal income tax. As a result, I have an underpayment penalty to take care of this year. The penalty isn't huge and I can pay it off easily, but I'm trying to avoid any trouble next year. Does the IRS track my taxes owed from each source, or just aggregate everything? I can't easily request a tax withholding of my SSDI, but I can of my military pension, so my thinking was to just leave the SSDI with no tax withholding but pump up my pension withholding to cover. Would this work?
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Apr 8, 2022 06:52
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PageMaster posted:Getting at this a lot later than I probably should, but I'm working taxes for the first time on my own when they weren't just my normal W-2; I now have to capture SSDI and a retirement pension as well, and found out that both don't automatically withhold any federal income tax. As a result, I have an underpayment penalty to take care of this year. The penalty isn't huge and I can pay it off easily, but I'm trying to avoid any trouble next year. Does the IRS track my taxes owed from each source, or just aggregate everything? I can't easily request a tax withholding of my SSDI, but I can of my military pension, so my thinking was to just leave the SSDI with no tax withholding but pump up my pension withholding to cover. Would this work? I'm not an expert but as a person with one income source that doesn't withhold, I just added a small extra withholding to my W-4 last year and it seemed to work fine. I don't think they care about where your tax payments come from so long as you cover whatever you owe once it all gets put together.
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Apr 8, 2022 14:55
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Source doesn't matter. Timing can, but if you have steady income and steady withdraw you're good there too. I underpaid, and am trying to estimate the penalty. Form 2210 is hilariously convoluted, even for a tax form. Is this saying I owe 3% late fee, but if it's still outstanding the next quarter it becomes 6% then 9% then 12%? The bit I'm confused by is page 7 here https://www.irs.gov/pub/irs-pdf/i2210.pdf Epitope fucked around with this message at 15:40 on Apr 8, 2022 |
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Apr 8, 2022 15:37
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KYOON GRIFFEY JR posted:hell at least buy the man an avatar If he wants to replace the excellent avatar he already has, I'm happy to pay for it!
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Apr 8, 2022 15:38
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Epitope posted:I underpaid, and am trying to estimate the penalty. Form 2210 is hilariously convoluted, even for a tax form. Is this saying I owe 3% late fee, but if it's still outstanding the next quarter it becomes 6% then 9% then 12%? You'll notice that on each area of figuring the penalty you multiply everything by the number of days divided by 365, and then multiply it by 3%. The math might seem weird but it's an annualized 3% rate, as if it were interest. The IRS used to have a simplified method of calculating the penalty on Form 2210 but they seem to have gotten rid of it. If you aren't using an alternative method to calculate your penalty, you could let the IRS figure out the penalty and bill you for it. They'll add a little interest for what you didn't pay by 4/18, but unless you owe a lot of money the interest isn't going to be that much.
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Apr 8, 2022 16:13
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Missing Donut posted:You'll notice that on each area of figuring the penalty you multiply everything by the number of days divided by 365, and then multiply it by 3%. The math might seem weird but it's an annualized 3% rate, as if it were interest. Thanks, that's what I thought, I just like it when the form spits out something that matches my expectation. I see what I was doing wrong, I was short each quarter so I thought 1b was me paying it off today, but I see it applies the next payment first. The simple method was a lot less loop the loops.
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Apr 8, 2022 17:43
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YanniRotten posted:Which is more likely, that I did withholding wrong by claiming two personal exemptions (myself and my spouse) or that TurboTax is broken and has just decided I owe money (obviously not a LOT of money) on my IL taxes for no reason. Exemptions were removed from the federal tax code with the TCJA, and every employer (should) have removed them from their payroll systems as well. Either your employer is severely miscalculating your withholdings (likely due to using old, non valid formulas) or you marked down that you had 2 dependents instead of 2 exemptions
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Apr 8, 2022 18:10
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Badger of Basra posted:Have any of y'all ever been a VITA volunteer? How was it? I've been thinking about signing up (although I know it's outside the recruitment period until next year). I did it in 2018 and liked it a lot. Training was a couple weeks iirc and our site asked for a minimum 20hr/wk committment for the season, which I think is pretty standard, so make sure you're aware of how much time you'll need before you get into it. Honestly the only reason I didn't do it for subsequent years was because I went back to school and we ended up moving overseas. I'll probably go back to doing it when I'm back in the US and available. It's rewarding and not too hard if you're a nerd who would consider doing a bunch of strangers' taxes for free. I think it will vary by site, but at our site we did the whole return with the client present and the coordinator reviewed everything later before final submission, and we could also do our own returns and have them reviewed by our coordinator. I'm sure it varies by site, but we were pretty heavily booked so there were basically no breaks during a shift. It's volunteer work, so if you need breaks I'm sure you won't have too much trouble getting accommodations.
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Apr 8, 2022 20:02
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Winged Orpheus posted:Exemptions were removed from the federal tax code with the TCJA, and every employer (should) have removed them from their payroll systems as well. Either your employer is severely miscalculating your withholdings (likely due to using old, non valid formulas) or you marked down that you had 2 dependents instead of 2 exemptions I'm talking about backwards state taxes, I would rather have credits or a standard deduction or something but... eh. I moved most of the way through the year (from a state with no income tax) and told my employer about it (that's good). I put two exemptions on my IL W4 (actually should be 4 due to the small people I own but... whatever) for my employer. TurboTax recognizes that I'm married filing jointly with two dependents, and takes that over to my state return. I haven't punched in my credit card yet so I can't see the actual filled tax forms but it is at least aware of the exemptions when I pull up a summary view. My gross income is greater than the amount that IL should be taxing by an amount greater than the exemptions... so I think it's just going "yes some of your income is exempt, this income you made in another state." It's a couple hundred dollars I owe and won't be a problem next year since I'll be a resident the entire year. I'm not 100% it's correct but I don't think it's going to be worth becoming a tax expert on.
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Apr 8, 2022 23:25
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BonerGhost posted:I did it in 2018 and liked it a lot. Training was a couple weeks iirc and our site asked for a minimum 20hr/wk committment for the season, which I think is pretty standard, so make sure you're aware of how much time you'll need before you get into it. Honestly the only reason I didn't do it for subsequent years was because I went back to school and we ended up moving overseas. I'll probably go back to doing it when I'm back in the US and available. Cool. I should definitely try next year then, I’m a nerd who would do my friends’ taxes for free if they asked.
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Apr 9, 2022 01:12
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Badger of Basra posted:Cool. I should definitely try next year then, I’m a nerd who would do my friends’ taxes for free if they asked. Hey cousin, let’s go bowling!
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Apr 9, 2022 01:45
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YanniRotten posted:
This is most likely what's causing the issue. A lot of withholding calculations take stupid shortcuts that work fine when someone has a consistent tax situation for an entire year, but fall apart if something varies. For example, if IL does something like picks the marginal tax bracket for your partial year resident income based off your full year income, while your employer's withholding software based it off just what you made in IL or vice versa, a discrepancy will arise. You could look up the state income tax calculation for IL and do it by hand for your IL income to see if the amount your withholding is off by is in the same ballpark as what TurboTax is saying. This: https://www2.illinois.gov/rev/research/taxrates/Pages/income.aspx suggests IL charges a flat rate of 4.95%.
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Apr 9, 2022 16:17
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I wonder when my accountant is gouging let me know what sort of horrifying number I owe the IRS.
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Apr 9, 2022 17:42
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Ancillary Character posted:This is most likely what's causing the issue. A lot of withholding calculations take stupid shortcuts that work fine when someone has a consistent tax situation for an entire year, but fall apart if something varies. For example, if IL does something like picks the marginal tax bracket for your partial year resident income based off your full year income, while your employer's withholding software based it off just what you made in IL or vice versa, a discrepancy will arise. I mean it's really just going "beep boop pay 4.95% on the number in this box on your W2". I (or the software) may be missing some subtleties but none of it seems horribly wrong.
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Apr 9, 2022 22:21
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I'm finally getting around to doing my taxes and have a question about my backdoor Roth conversion. I converted as soon as the funds were actually available to do so. I have a 1099R and when entering the info from it, it shows it as income and counts it against me. What am I loving up here? I just established it last year, is that the issue? fknlo fucked around with this message at 23:39 on Apr 9, 2022 |
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Apr 9, 2022 23:19
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You need form 8606 to document the nondeductible contribution. That will cancel out the tax liability from the 1099R
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Apr 9, 2022 23:46
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fknlo posted:I'm finally getting around to doing my taxes and have a question about my backdoor Roth conversion. I converted as soon as the funds were actually available to do so. I have a 1099R and when entering the info from it, it shows it as income and counts it against me. What am I loving up here? What code is in Box 7? If it is a 2 that means it is an exempt conversion. https://www.irs.gov/pub/irs-pdf/i1099r.pdf Be warned I don’t know what I’m doing. I only did my first back door Roth this calendar year. My understanding is that you shouldn’t blindly enter 1099-R data on your 1040. If this is the usual back door Roth stuff the IRS uses the 1099R to verify the information you enter on 8606. https://www.marottaonmoney.com/qa-do-i-need-to-pay-tax-on-this-1099-r/
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Apr 10, 2022 00:07
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The nondeductible stuff was added later with the stuff I'm using. Thank you for the help.
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Apr 10, 2022 00:32
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I moved from DC to MD midway through the year, but didn't end up changing my withholding state from DC to MD until this year. I change my address with my company, but I didn't realize I had to fill out a separate form to change my withholding information. I ended up vastly overpaying my DC withholding didn't pay any MD tax, so I am being hit with a substantial interest penalty for my MD state taxes (at least, that's what TurboTax is saying). Is this just something I'll have to suck up and pay?
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Apr 10, 2022 20:45
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