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MadDogMike posted:Yeah, pretty sure ISO no longer gets ISO special treatment if you do that, right? Minimum 2 years holding before vesting then hold it 1 year before sale. Hope I'm remembering right considering I'm taking the 1st EA exam in a few weeks and AMT is crushing my will to live studying it (God help me if they ask for me to calculate it, the whole crazy exemption/phaseout/26% vs. 28%/compare to normal tax thing drives me insane trying to do it without a computer handling things). Thanks for trying, thanks for confirming. 
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Nov 29, 2022 03:36
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Peyote Panda posted:First, just a quick primer on what's happening. How it works is that if you did not receive your stimulus payments when they were first being issued (these were the Economic Impact Payments or EIP), you could then get those as the Recovery Rebate Credit (RRC) on the 2020 and 2021 returns (the credit would be the amount listed on line 30 of the federal returns that you mentioned). Hello friend, how is the IRS looking right now when it comes to paper filed returns? E-filing for 1040's has shut down and I still have some stragglers who owe me information to file their returns. The last two years I think it's been actually quicker to wait for e-filing to reopen and submit then instead of trying to paper file. We looking ugly still?
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Nov 29, 2022 06:51
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Hi tax thread. I was told today that I'm being granted P Units in the private equity owned LLC that employs me. My understanding is that they currently have a value of $0, and when the company sells, a ridiculous amount of money (to me) will be transferred to my bank account. When that happens in a couple years, I will owe capital gains on that money, so I need to hold back at least whatever % I'm going to need to pay the IRS before I spend the rest on a house or whatever. That about right?
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Nov 29, 2022 07:19
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Silly Newbie posted:Hi tax thread. No because your company won't unicorn and IPO for stupid amounts of money. Everyone thinks their company will, but it won't. As far as whether those shares are worth "$0" now, I highly doubt it. Normally when a private company gives out equity, you owe taxes as soon as you exercise the options, not just when you sell. Edit: you're the guy in the other thread with the Meraki equipment. Yeah, you ain't going to IPO for squat lol. KillHour fucked around with this message at 07:53 on Nov 29, 2022 |
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Nov 29, 2022 07:44
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Epi Lepi posted:Hello friend, how is the IRS looking right now when it comes to paper filed returns? E-filing for 1040's has shut down and I still have some stragglers who owe me information to file their returns. The last two years I think it's been actually quicker to wait for e-filing to reopen and submit then instead of trying to paper file. We looking ugly still? Yeah, I would seriously wait for the efile to reopen, I’ve had one too many cases where the IRS/state acts like they never even received the mailed returns.
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Nov 29, 2022 20:33
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KillHour posted:No because your company won't unicorn and IPO for stupid amounts of money. Everyone thinks their company will, but it won't. This isn't an IPO situation, the company will never be public. It's a private equity deal where a company owned by a PE firm is going to get sold to another PE firm at some point, and the P Units are a stake in the profits of that sale.
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Nov 29, 2022 22:21
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Epi Lepi posted:Hello friend, how is the IRS looking right now when it comes to paper filed returns? E-filing for 1040's has shut down and I still have some stragglers who owe me information to file their returns. The last two years I think it's been actually quicker to wait for e-filing to reopen and submit then instead of trying to paper file. We looking ugly still? If the choice is between paper file now and efile later, always choose efile.
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Nov 29, 2022 22:27
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Silly Newbie posted:This isn't an IPO situation, the company will never be public. It's a private equity deal where a company owned by a PE firm is going to get sold to another PE firm at some point, and the P Units are a stake in the profits of that sale. You assume it will sell for enough to pay back the original investors and then some left over for you. But still, you're going to have to pay taxes on the value when you exercise your options, and that value is definitely not $0. If they are just flat stock and not options, you will have to pay the tax now. Because it's income. Someone who works in finance and not IT can correct me, but I don't think there's a loophole that big that nobody knows about except your company.
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Nov 29, 2022 22:42
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KillHour posted:You assume it will sell for enough to pay back the original investors and then some left over for you. But still, you're going to have to pay taxes on the value when you exercise your options, and that value is definitely not $0. If they are just flat stock and not options, you will have to pay the tax now. Because it's income. That's the thing, it's neither stock nor options, and their value is specifically 0. I'm pretty sure I just need to file an 83(b) when I take the grant, but I'm asking the tax thread to make sure I don't screw myself. https://insightsoftware.com/blog/the-complete-guide-to-profits-interest/
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Nov 29, 2022 23:22
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You need a cpa because details matter here. Take the LLC member documents to them and pay for a review. No one here can tell you with any certainty what anything means without the docs. Units in an llc are whatever they are defined as, and them being class P (likely) is the same as them calling them class EXXXTREME for all intents and purposes.
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Nov 29, 2022 23:29
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H110Hawk posted:You need a cpa because details matter here. Take the LLC member documents to them and pay for a review. No one here can tell you with any certainty what anything means without the docs. Units in an llc are whatever they are defined as, and them being class P (likely) is the same as them calling them class EXXXTREME for all intents and purposes. Much appreciated, I'll talk to my CPA.
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Nov 30, 2022 00:09
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Epi Lepi posted:Hello friend, how is the IRS looking right now when it comes to paper filed returns? E-filing for 1040's has shut down and I still have some stragglers who owe me information to file their returns. The last two years I think it's been actually quicker to wait for e-filing to reopen and submit then instead of trying to paper file. We looking ugly still? BTW, for any of you with clients who had unemployment income on their return for 2021 and were waiting for the IRS to complete the adjustments for part of that income subsequently being treated as non-taxable, the IRS has completed that systemic process. In some cases the adjustments were not done (haven't heard why that happened) and those taxpayers will now have to file an amended return. The IRS isn't sending out any notices for those taxpayers, so if you or someone you know was expecting to get a refund on that basis and they haven't, they'll want to check and see if the refund's still in processing or if they're one of the unlucky suckers that'll have to file a 1040X.
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Nov 30, 2022 00:29
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Peyote Panda posted:Yeah, paper return processing is still not running so hot. I'd wait until efile reopens if possible. You mean 2020 returns filed in 2021 right? Did I miss them passing a law to also exclude 2021 tax year unemployment? If it's 2020 returns then just lol that the IRS has now finished them in late 2022.
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Nov 30, 2022 04:21
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Epi Lepi posted:You mean 2020 returns filed in 2021 right? Did I miss them passing a law to also exclude 2021 tax year unemployment? quote:If it's 2020 returns then just lol that the IRS has now finished them in late 2022.  at how long it took and they still didn't get them all. And the irs.gov page on the exclusion is still telling people not to file an amended return even though we stopped doing any further adjustments a few weeks back.
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Nov 30, 2022 05:42
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https://www.fidelity.com/tax-information/tax-topics/roth-conversion I am high income. I should be doing a backdoor Roth IRA, right? I don't lose anything by doing it since I'm not getting any pre-tax contributions for my traditional IRA. And this doesn't count as an early withdrawl for the 10% penalty, right?
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Nov 30, 2022 06:23
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Anyone work with Status of Forces Abroad (SOFA) clients? If someone is in a foreign country on SOFA, working on base but employed by a US company rather than directly for the government, can they qualify as having a foreign tax home for the purposes of taking the Foreign Earned Income Exclusion? Many sources say that SOFA status prevents one from creating a tax home as the agreement generally prevents the host country from taxing their wages. However, many seem to think it is possible, including my client's very big and well known military contractor employer, who withheld nothing from his considerable pay and left him with an enormous tax bill. Perhaps he is mistaken that he is under SOFA. However, he is certainly not paying taxes to the host country either. Frankly, I'm only given pause because this is a company that employs a large number of contractors around the world and should certainly know better than me, but I can't find solid support for their position.
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Dec 1, 2022 16:16
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Methanar posted:https://www.fidelity.com/tax-information/tax-topics/roth-conversion Yes and Yes. Note that for optimal benefit, you can't have any existing assets in a trad IRA. If you do, you will need to convert them too when you backdoor (and pay the tax on that conversion) or deal with the pro-rata rule.
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Dec 1, 2022 19:35
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https://archive.ph/2022.12.01-050848/https://www.washingtonpost.com/business/2022/11/30/paypal-1099-cash-gifts/ How big of an issue is this. We have been using PayPal as a crutch sending each other at bill paying time for years because it's easy
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Dec 1, 2022 20:06
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Hadlock posted:https://archive.ph/2022.12.01-050848/https://www.washingtonpost.com/business/2022/11/30/paypal-1099-cash-gifts/ So far from what I've seen you anyone sending money needs to actively designate the transaction as a business transaction. On Venmo there's a button to hit that says something like "Flag this as a purchase in case you need a refund." The default assumption seems to be that transactions are nontaxable gifts unless these items are flagged. Paypal/Venmo etc should not be sending out 1099Ks that include transactions that were not explicitly flagged that way. If there are mistakes in their system that categorize things wrong, expect a headache getting paypal to fix it but it should be fixable.
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Dec 1, 2022 20:43
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This is the kicker for us. I regularly paypal my wife every month $600 just for daycare monthly, and she sends me a similar or greater amount later in the month for HOA and mortgagewapo posted:Before the reporting change, the app companies were required to submit a 1099-K only for transactions totaling more than 200 a calendar year with gross payments exceeding $20,000. Now a single transaction or multiple payments that exceed $600 can trigger a 1099-K. fake edit: looks like clickbaiting, here is the disclaimer deep in the article. So only need to worry about this if we accidentally sent it as a "for goods or services". Thanks wapo more wapo posted:If, however, there’s a mistake and personal payments get misclassified, the IRS says to sort it out with the app company.
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Dec 1, 2022 20:55
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Hadlock posted:https://archive.ph/2022.12.01-050848/https://www.washingtonpost.com/business/2022/11/30/paypal-1099-cash-gifts/ Going by this year’s training on the 1099-K stuff, it’s fairly straightforward to report “this amount isn’t taxable income” when we efile, so I assume everybody else will have a similar setup where you acknowledge the 1099-K’s existence (so the IRS doesn’t claim it was ignored) but let them know it’s not actually taxable exchanges being reported. Don’t know anything about the payment company marking it as non-business income (which you probably need to MadDogMike fucked around with this message at 21:16 on Dec 1, 2022 |
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Dec 1, 2022 21:13
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Hadlock posted:This is the kicker for us. I regularly paypal my wife every month $600 just for daycare monthly, and she sends me a similar or greater amount later in the month for HOA and mortgage Why are you doing this? I only ask because my wife works in Anti Money Laundering for a large bank and this back and forth stuff using 3rd party systems like PayPal and CashApp sets off all sorts of alerts and requires someone to investigate your accounts. They can see EVERYTHING. Just get a joint account at a bank and deposit appropriate sums to cover household expenses if you have to keep your finances separate for whatever reason.
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Dec 1, 2022 21:55
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skipdogg posted:Why are you doing this? Or even just a once a month "settlement" amount. Or write a check and electronically deposit it.
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Dec 1, 2022 22:03
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Yeah we have a joint account, set it up this year finally, it gets used sparingly. Our life has been.... unusually busy, the past three years and paypal is really convenient. And free. I'm sure our accounts are flagged to the moon and back but everything always goes through and it's all legit and tracible with no hard cash in/out so hasn't been a problem. You can PM me if you want the gritty details but not going to post about it here edit: Pro tip if you're going to set up a joint account, make sure they have physical branches in any states you might end up moving to
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Dec 1, 2022 22:10
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Nah I don't need any details, was just giving you a heads up. For 99% of people it's not an issue, just something I never thought about until my wife started working in AML. The main issue is tracing the source of the funds. Paypal and cashapp etc hide the true source of the funds, so having say a 600 dollar paypal come into your account, and then a 600 dollar paypal go out of your account shortly after is going to set off an alert. You'll never know about the alert, and it won't go anywhere, so it's not really a big deal at all. Every couple seems to handle their finances differently. Whatever works for you works for you.
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Dec 1, 2022 22:40
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it's more like, wife paypals me $500 for boat expenses, then I go pay the boat mortgage and slip fee, or I paypal her $650 and as soon as that hits her account she pays the daycare $1300 or whatever. in relation to our income it's proportional. I'm sure red klaxon alarms  would be ringing at AML HQ if my paycheck was $500 a week for Domino's pizza or something
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Dec 2, 2022 03:46
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At least you don't have the nightmare of Japanese gift taxes. Anyone who receives gifts over ~$10,000 in a year, even from a spouse, is taxable on that in the year it is received. And while spousal transfers for the purpose of paying living expenses are not taxable, joint bank accounts don't exist, so it is on the tax payer to justify large amounts of bank transfers to a household member during the year as being something other than a gift.
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Dec 2, 2022 04:29
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Hadlock posted:it's more like, wife paypals me $500 for boat expenses, then I go pay the boat mortgage and slip fee, or I paypal her $650 and as soon as that hits her account she pays the daycare $1300 or whatever. in relation to our income it's proportional. I'm sure red klaxon alarms The solution is to sell your boat. And your kid.
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Dec 2, 2022 05:01
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Hadlock posted:it's more like, wife paypals me $500 for boat expenses, then I go pay the boat mortgage and slip fee, or I paypal her $650 and as soon as that hits her account she pays the daycare $1300 or whatever. in relation to our income it's proportional. I'm sure red klaxon alarms Yeah, you can see why IRS tightened reporting requirements on this stuff...and why all the companies like paypal have been trying to make it seem horrendous to their users so that they can weaponize them against it.
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Dec 2, 2022 05:12
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KillHour posted:The solution is to sell your boat. And your kid. Now that you mention it the boat is cheaper than the kid 
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Dec 2, 2022 05:39
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Gabriel Grub posted:At least you don't have the nightmare of Japanese gift taxes. Anyone who receives gifts over ~$10,000 in a year, even from a spouse, is taxable on that in the year it is received. And while spousal transfers for the purpose of paying living expenses are not taxable, joint bank accounts don't exist, so it is on the tax payer to justify large amounts of bank transfers to a household member during the year as being something other than a gift. Huh, wonder if they don't do "joint" filing for other things also if they're that strict about spousal exchanges, though I suppose even in the US spouses have to file separate returns for gift tax. Also kind of curious how they handle foreign banks that do allow joint accounts to exist.
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Dec 7, 2022 21:25
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MadDogMike posted:Huh, wonder if they don't do "joint" filing for other things also if they're that strict about spousal exchanges, though I suppose even in the US spouses have to file separate returns for gift tax. Also kind of curious how they handle foreign banks that do allow joint accounts to exist. Most people in Japan don't file taxes because wage income taxes are settled within payroll. But for those who do need a filing, there are no joint returns. The tax office may have visibility issues with overseas accounts (although these days countries are sharing more information on foreign nationals than people realize), but the trick is you're usually eventually going to repatriate your overseas holdings. Unless you are managing some kind of generational wealth. There's a home mortgage deduction similar to the US, and if both spouses want to claim, they need separate mortgages in their own name.
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Dec 8, 2022 02:39
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Gabriel Grub posted:Most people in Japan don't file taxes because wage income taxes are settled within payroll. But for those who do need a filing, there are no joint returns. Are there no small businesses in Japan? There's a lot more types of income than just wage income so I'm always a little suspicious when people tout Japan's tax system.
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Dec 8, 2022 03:09
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Epi Lepi posted:Are there no small businesses in Japan? There's a lot more types of income than just wage income so I'm always a little suspicious when people tout Japan's tax system. Small businesses file the equivalent of a Schedule C, or a corporate return if incorporated. If your income is mainly wages, you can have side business income up to ~$2,000 before you have to file a tax return on it.
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Dec 8, 2022 03:23
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Form 709 for Gift Tax - https://www.irs.gov/pub/irs-pdf/f709.pdf I made two simple cash gifts to my son this year that I would need to fill out and submit a Form 709 for next year. This will be my first Form 709 that I will submit. I'm confused on how I can calculate the tax on Line 4? For example, let's say the amount in Line 3 is an even $100,000. Based on the "Table for Computing Gift Tax" here - https://www.irs.gov/pub/irs-pdf/i709.pdf Would the taxable amount be 28%? Also, would Line 7 be $4,769,800 for 2022? Busy Bee fucked around with this message at 14:23 on Dec 10, 2022 |
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Dec 10, 2022 13:34
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Busy Bee posted:Form 709 for Gift Tax - https://www.irs.gov/pub/irs-pdf/f709.pdf No, it’s a tax bracket setup. The amount in column C is the tax on the minimum amount in column A, and then you take the amount of gift over column A and multiply it by the percentage in column D. So, to use your example, the tax on $100,000 is $18,200 (minimum tax on $80,000) + (($100,000 - $80,000) x 28%), or $23,800. You’ll note that’s the minimum tax on the next row down for that reason. quote:Also, would Line 7 be $4,769,800 for 2022? Correct.
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Dec 11, 2022 19:29
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MadDogMike posted:No, it’s a tax bracket setup. The amount in column C is the tax on the minimum amount in column A, and then you take the amount of gift over column A and multiply it by the percentage in column D. So, to use your example, the tax on $100,000 is $18,200 (minimum tax on $80,000) + (($100,000 - $80,000) x 28%), or $23,800. You’ll note that’s the minimum tax on the next row down for that reason. Makes sense - thank you for your help. Am I also required to submit any other documents besides Form 709? For example - proof of the wire?
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Dec 12, 2022 17:10
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I typically do my own taxes via freetaxusa and just claim standard deduction, file my W2, very simple stuff. This year I've spent a boatload on healthcare (about 45k after insurance reimbursements, would have been 110k without) and a few grand on travel/lodgings to recuperate after the procedure. Is deducting all this stuff via the schedule A form fairly straightforward or is this the type of thing that I should leave up to a preparer?
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Dec 12, 2022 18:54
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Busy Bee posted:Makes sense - thank you for your help. Nope, but maintain a permanent copy of your 709 since you're using your lifetime exemption to get out of paying tax this year.
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Dec 12, 2022 18:59
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Uhh so fun one We lived in California married filing jointly paying one of the top tax rates, I think near or above 9% We then moved to NC in ~Feb 2022, which has a... 4.99 or 5.00% flat income tax. This was due to my wife's job being in person and in NC. I got, I guess verbal* authorization from my boss to move as I had been full time remote in CA since starting in 2021, as I updated my "address" in ADP. On my ADP "earnings statement" it shows my NC address, but then I see lines "CA State Income Tax" and "CA SDI Tax". Doing napkin math 10% state income vs 5% is a chunk of change. Also need to set the record straight for employment verification on visas, mortgages etc down the road. Now, my office DOES have an office in NC in 2022 so shouldn't be a problem to fix this correctly? Getting push back from payroll because, well I've never had a functionally useful conversation with a payroll analyst and they refuse to escalate. Now, we have a lease, utility bills in our name here at the NC address, vehicle registration, daycare bills, plus a boatload of correspondence and documentation of the cross country move. This wasn't a "I am 'moving' for tax reasons, lol", this was a we are actually moving, moving, will not have any trouble proving this beyond a doubt. So do I claw back the thousands of dollars from the state government in April, or am I screwed or what. Or can I convince the payroll manager & his buddy the CFO to restate my earnings for the correct state. Presumably they're going to lock down 2022 payroll soon for EOY accounting. We have a very good tax guy, and I'll be calling him, but curious what I am in for and what options I have here. *I know it's not in writing, that's why I'm specifying, in case it matters Hadlock fucked around with this message at 20:44 on Dec 12, 2022 |
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Dec 12, 2022 20:41
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