|
KYOON GRIFFEY JR posted:there is absolutely no guarantee that this continues to be true at any point beyond today or over any sort of time horizon that includes points in time beyond today Understood. Previous performance is no guarantee of future returns. How about making the question hypothetical so we can get away from the investing side of it: if I wanted to take out a chunk of non-Roth money and put it directly in another investment, how do I do it a tax-efficient fashion?
|
#
?
Aug 16, 2017 19:16
|
|
|
|
| # ? May 24, 2024 04:06 |
|
|
If you flip a traditional IRA/401k to another traditional/401k plan, or a Roth to a Roth, there's no tax consequences at all, especially if you let the institutions handle it without the money coming to you (make sure the institution you're moving the money to accepts rollovers from TSP, investment rules may vary on the company's end). You'll get a 1099-R with a distribution code G you have to enter on the return, but no actual taxable income from doing that. Gets a little more complicated if they pay you the money and you put it in the new account yourself (have to do it within 60 days and only one account per year) but that can be tax free with one other form to report the rollover. If you go traditional to Roth though you have to pay taxes on the amount (no 10% penalty then though) and if you pull the traditional account money to a non-retirement account you get hit with it as taxable income and with the 10% penalty for early distribution like normal.
|
|
#
?
Aug 17, 2017 13:45
|
|
|
If my 5-year IRA CD matures and I put the funds into a traditional IRA, is that a taxable event/subject to penalty? My plan is to keep a traditional IRA open with a low balance so that as I approach retirement, I can start dumping the maturing CD funds into there
|
|
#
?
Aug 17, 2017 14:41
|
|
|
EugeneJ posted:If my 5-year IRA CD matures and I put the funds into a traditional IRA, is that a taxable event/subject to penalty? Just like above, traditional to traditional is tax free to rollover. Just make sure not to do it before the CD matures and as far as I can tell there's no effect. Tell whoever is running your CD the IRA account info and make sure they handle the rollover as a direct rollover between them and the IRA plan, they should be able to do it.
|
|
#
?
Aug 17, 2017 19:45
|
|
|
I've recently been hired to a new job in the tech field, and my employer has spelled out the expectations of owning a high-end cell phone, a reasonably powerful laptop, and necessary upgrades to my home desktop. I'm having a hard time understanding exactly how deductible these items will be, as I will be an employee, and not an independent contractor in this role. I definitely plan to have help preparing taxes this year, as I have also worked Uber-like jobs this year as an independent contractor and will likely be itemizing deductions for expenses in that role, but I'd like to know as much as possible about the situation before I start making these purchases. - Based on what I understand of deducting based on percentage of time used for business, I plan to strictly use the laptop for business purposes only and claim 100% of its cost. However, I am planning on financing the laptop - will that affect my ability to deduct the entire amount? - In regards to both the cell phone and desktop, the situation is a bit different. Overall, it makes more financial sense to me to upgrade each, rather than buying a separate cell phone (and plan) and a second desktop. Based on that, I imagine that I will have to deduct only the percentage of the cost that I use for business purposes. I'm curious as to how exactly to plan this deduction, based largely on the fact that I am only upgrading these items at the demand of my employer. In such a case where I am required to have these items (and have been told in writing), is it possible to deduct their entire cost, regardless of personal usage? - My new employer does pay a monthly stipend to defray the costs of the required technology. The stipend is a flat amount that is not dependent on how much I spend. It is also a permanent stipend, and again not dependent on whether the items are currently being paid off or not. I am not sure how this stipend will appear on paystubs, but I wonder if the stipend will be relevant in regards to how deductible these items are. Thanks in advance for anyone who can help me clarify my situation a bit.
|
|
#
?
Aug 17, 2017 20:00
|
|
|
I'm self-employed outside of the US. My income is 100% covered by the FEIE but I still have to pay self-employment tax. Should I also be making quarterly payments on my SE tax?
|
|
#
?
Aug 17, 2017 20:38
|
|
|
JoeRules posted:Thanks in advance for anyone who can help me clarify my situation a bit. I'm not sure about deductions for cost of yer new comps and phone, but your stipend will essentially be additional income to you; it's not W-2 style income so you don't have to pay Medicare or SS tax on it, but you will have to list it on your 1040 and your employer likely won't withhold income tax from your stipend amounts so it'll bump your tax liability a bit
|
|
#
?
Aug 17, 2017 20:56
|
|
|
JoeRules posted:I've recently been hired to a new job in the tech field, and my employer has spelled out the expectations of owning a high-end cell phone, a reasonably powerful laptop, and necessary upgrades to my home desktop. I'm having a hard time understanding exactly how deductible these items will be, as I will be an employee, and not an independent contractor in this role. I definitely plan to have help preparing taxes this year, as I have also worked Uber-like jobs this year as an independent contractor and will likely be itemizing deductions for expenses in that role, but I'd like to know as much as possible about the situation before I start making these purchases. As an employee, first off the rules are different for deducting expenses vs. deducting them as a contractor. You're only going to take them if you itemize, which depends largely on whether the itemized amount exceeds the standard deduction, and only the amounts in excess of 2% of your adjusted gross income count for employee expenses, so it may not even have an impact on your final tax numbers. These items do seem to fit the rules for claiming as employee business expense (they are done at the employer's convenience and are a condition of employment), but you are going to have to be tracking the actual percentage of business usage, because even though you're buying them because of your employer you only get credit for the percentage they're actually used for business. You'd need records in case of dispute too, so you'd need to actually keep track of your time used for both personal and business use. The laptop being used 100% for business use is OK of course, honestly not sure on the financing thing but I'd lean towards "what you actually paid during the year is what you're allowed to claim". So anything paid next year goes towards next year's employee business expenses. The employer stipend is not an accountable plan (i.e. where you turn in your bills and they specifically reimburse you) so I imagine it's treated as taxable income; it won't affect any employee expenses you claim since by law they'd have to treat the stipend as de facto wages since they aren't really putting any limits on how you spend the money. I would assume they should just fold it into your W-2 wages but... black.lion posted:I'm not sure about deductions for cost of yer new comps and phone, but your stipend will essentially be additional income to you; it's not W-2 style income so you don't have to pay Medicare or SS tax on it, but you will have to list it on your 1040 and your employer likely won't withhold income tax from your stipend amounts so it'll bump your tax liability a bit ... if they do this, they'll report it on a 1099-MISC form and you have to put it on the "Other Income" line 21 on your 1040. Cross your fingers they don't do this, because too many lazy businesses keep putting the income in box 7 of the 1099-MISC (for "nonemployee compensation") instead of box 3 ("other income"), and I've seen too drat many IRS letters lately where they assume that's self-employment income and demand SE tax on it for Social Security/Medicare. I'll be honest, it's such a pain to document everything well enough and it's going to be hard enough to get enough to be worth adding to your taxes that this may wind up being kinda pointless for you. But in case I'm wrong you should make sure to record the cost paid during the tax year for each item and work out the specific business use percentage on them, and if you go to a preparer that should be sufficient. For Uber be sure to check your account on their webpage, they usually have a nice tax document that spells out their expenses and your recorded millage, though it might not be a bad idea to back that up with your own records (at a minimum keep track of how many miles you do total since you generally have to list your total non-business miles on the Schedule C along with the actual business miles). Ur Getting Fatter posted:I'm self-employed outside of the US. My income is 100% covered by the FEIE but I still have to pay self-employment tax. Yes, withholding/estimated payment requirements are still the same even when it's only SE tax owed, gotta pay 90% of current year's tax bill or enough to cover all of last year's bill if you want to avoid penalties.
|
|
#
?
Aug 18, 2017 00:59
|
|
|
MadDogMike posted:As an employee, first off the rules are different for deducting expenses vs. deducting them as a contractor. You're only going to take them if you itemize, which depends largely on whether the itemized amount exceeds the standard deduction, and only the amounts in excess of 2% of your adjusted gross income count for employee expenses, so it may not even have an impact on your final tax numbers. These items do seem to fit the rules for claiming as employee business expense (they are done at the employer's convenience and are a condition of employment), but you are going to have to be tracking the actual percentage of business usage, because even though you're buying them because of your employer you only get credit for the percentage they're actually used for business. You'd need records in case of dispute too, so you'd need to actually keep track of your time used for both personal and business use. The laptop being used 100% for business use is OK of course, honestly not sure on the financing thing but I'd lean towards "what you actually paid during the year is what you're allowed to claim". So anything paid next year goes towards next year's employee business expenses. The employer stipend is not an accountable plan (i.e. where you turn in your bills and they specifically reimburse you) so I imagine it's treated as taxable income; it won't affect any employee expenses you claim since by law they'd have to treat the stipend as de facto wages since they aren't really putting any limits on how you spend the money. I would assume they should just fold it into your W-2 wages but... Thank you for the response. In regards to upgrading my desktop - I'm likely only upgrading processor, motherboard, RAM, and HD - given that all are components of a working desktop, I would imagine that I don't need to account for them as being (as an example) 80% of my desktop (considering my current monitor and video card), I can simply account for the time used for business vs. the time used for personal. My next question relates to 2% of AGI - if the purchases together equate to 2% (or greater), I imagine I would be able to deduct them. Would you expect any issues if each part does not equate to 2% of AGI, given that they are all purchased together to meet my employer's requirements? For example, a $100 processor + $100 motherboard + $90 RAM + $150 SSD individually failing to meet the requirement of 2% AGI causing issues? JoeRules fucked around with this message at 06:12 on Aug 18, 2017 |
|
#
?
Aug 18, 2017 06:09
|
|
|
JoeRules posted:My next question relates to 2% of AGI - if the purchases together equate to 2% (or greater), I imagine I would be able to deduct them. Would you expect any issues if each part does not equate to 2% of AGI, given that they are all purchased together to meet my employer's requirements? For example, a $100 processor + $100 motherboard + $90 RAM + $150 SSD individually failing to meet the requirement of 2% AGI causing issues? It's the amount of the expenses in total exceeding 2% of your AGI, and then you can only deduct the amount exceeding 2% of your AGI. For example, if 2% of your AGI is $1000 and you have non-reimbursed employee expenses of $1200, you can only deduct $200. If all of your itemized deductions do not exceed the standard deduction, then for all intents and purposes, these costs are not deductible.
|
|
#
?
Aug 18, 2017 16:19
|
|
|
MadDogMike posted:If you flip a traditional IRA/401k to another traditional/401k plan, or a Roth to a Roth, there's no tax consequences at all, especially if you let the institutions handle it without the money coming to you (make sure the institution you're moving the money to accepts rollovers from TSP, investment rules may vary on the company's end). You'll get a 1099-R with a distribution code G you have to enter on the return, but no actual taxable income from doing that. Gets a little more complicated if they pay you the money and you put it in the new account yourself (have to do it within 60 days and only one account per year) but that can be tax free with one other form to report the rollover. If you go traditional to Roth though you have to pay taxes on the amount (no 10% penalty then though) and if you pull the traditional account money to a non-retirement account you get hit with it as taxable income and with the 10% penalty for early distribution like normal. Thanks for the help. I guess that money is going to sit in the TSP for while. 10%+taxes is too much to pay for convenience.
|
|
#
?
Aug 19, 2017 19:28
|
|
|
MadDogMike posted:Gets a little more complicated if they pay you the money and you put it in the new account yourself (have to do it within 60 days and only one account per year) but that can be tax free with one other form to report the rollover. While we're on the subject, how hard is it to transfer "manually" like this? I have a small SEP IRA that I want to transfer to Vanguard and then convert to Roth. However, I can't get Vanguard to send the paperwork to the current holding company (American Funds) to execute the tranfer, so I'm stuck at step 1. What paperwork would I need to tell the IRS "I didn't keep the money in my checking account, I put it in my IRA"?
|
|
#
?
Aug 19, 2017 21:44
|
|
|
Harveygod posted:While we're on the subject, how hard is it to transfer "manually" like this? I have a small SEP IRA that I want to transfer to Vanguard and then convert to Roth. However, I can't get Vanguard to send the paperwork to the current holding company (American Funds) to execute the transfer, so I'm stuck at step 1. Generally the way I see indirect rollovers reported is by putting the whole amount of the distribution on line 15a/16a (as appropriate), writing "Rollover" on the line next to it and then the actual amount (if any) kept out written on 15b/16b for the taxable amount. Most software will prep it for you, I know TurboTax at least will with you answering the questions in the retirement income section appropriately and telling it you did a rollover. The actual distribution of money gets reported to you on a 1099-R. In your case, however, since you're converting a SEP IRA to a Roth, you need to use Form 8606; the money will be treated as taxable income (i.e. you pull $20,000 out of the SEP and convert it, it's treated as if you made $20,000 more for the year) but there's no 10% penalty for the conversion to Roth. There's general information about rollovers here on the IRS website if you need more info. One issue with an indirect rollover is they may withhold taxes (I know it's required/default in most circumstances unless it's a small distribution, don't recall specifics though), and you need to make up any amount withheld for taxes to avoid taxation. So, if you take $10,000 out and the bank withholds $1,000 for taxes, you need to make sure you put a full $10,000 into the target retirement account; if you just put the remaining $9,000 in the account the government will treat it as if you pulled $1,000 out and charge tax/10% penalty on that amount. I *believe* you can opt out of withholding with an IRA distribution though, just make sure American Funds is aware when you pull the money and be prepared to potentially pay tax when you file since you'll have whatever amount you convert to Roth as taxable income and no withholding to cover that part of the tax bill.
|
|
#
?
Aug 20, 2017 06:11
|
|
|
My mom is preparing to retire in a few years (she's 62, so above the 10% early penalty) and is looking at buying some retirement property down in Texas in the next few months with the intention of building a house and then moving down there in about 2-3 years when she retires for good. She's got a sizable 401k, a pension, and ~50% equity in the house she is currently living in. Currently she's in a very high AGI bracket (definitely ineligible for most optional tax deductions) and will remain there until retirement. What is the best place, financially, for the down payment (or outright purchase of ~50k) of property to come from? I see three options: Withdrawal funds from her 401k to pay for a down payment or purchase outright (would definitely not be more than 50% of her vested amount) Open a HELOC on the current house to pay for the same Get a loan against her 401k for the same The first option seems to be right out due to distributions being considered income and contributes directly to her AGI The second's only downside seems to be additional credit checks and origination fees. It's not considered income and all interest is tax deductible (up to 100k) and there seems to be no additional difficulties in selling houses with HELOCs on them The third option's downside seem to be that it's more complex to set up and generally has to be paid back upon termination so she would have to re-arrange things in 2-3 years when she leaves, but instead of the interest being tax deductible it's sheltered completely. Option two seems to be the best option but maybe there are also other options I haven't considered? While on the subject, any good recommendations for books or advisors to guide her through the retirement process, financially speaking? Transfers, re-balancing, tax implications, distribution scheduling, other things to think about, that sort of thing? There are a few links on the bogleheads wiki but she doesn't really need a beginner's hand holding pamphlet; she used to be a tax preparer at at an accountant's office (it's just all her tax info is 30 years out of date). Bhodi fucked around with this message at 16:00 on Aug 24, 2017 |
|
#
?
Aug 24, 2017 15:45
|
|
|
if she's in a super high AGI bracket and is only buying land have you considered straight cash homie
|
|
#
?
Aug 28, 2017 18:10
|
|
|
Of your choices listed the home equity loan probably is the best tax-wise; you can only claim mortgage interest on two houses but that covers any number of loans on said homes including HELOCs. I can't speak to investment advice in general though, my expertise is tax preparation not financial advice.
|
|
#
?
Sep 1, 2017 15:29
|
|
|
I'm confused when calculating state vs. federal adjusted gross income. Federal: Gross income - ([Traditional 401k] + [# of Exemptions * $4050] + [standard deduction]) Trad. 401k = $18,000 # of exemptions = 1, so 1 * $4050 = $4050 $6350 standard deduction Federal AGI = Gross Income - ($18,000 + $4050 + $6350), right? For California State, the standard deduction is only $4,129, and the exemption is $111 for single (rather than $4050 in federal for single). Do I get to count my traditional 401k deposit as a state AGI reduction as well here? State (CA): Gross income - ([Traditional 401k deposit] + [Exemption] + [Standard deduction]) trad. 401k = $18k exemption = $111 (single) standard deduction = $4129 so my AGI for state is Gross Income - ($18,000 + $111 + $4129). Am I doing this right?
|
|
#
?
Sep 3, 2017 00:10
|
|
|
Blinky2099 posted:I'm confused when calculating state vs. federal adjusted gross income. Exemptions and the standard deduction are subtracted from your AGI to arrive at your taxable income, they shouldn't come into play when calculating your AGI. If you're not eligible for any other above-the-line deductions: Federal AGI = Gross Income - $18,000 (from Traditional 401k contributions) State AGI = Gross Income - $18,000 (from Traditional 401k contributions) Federal AGI and state AGI are often the same. They tend to be different usually in cases where a state allows certain deductions that federal does not, or vice versa. EDIT: I forgot to mention that a lot of states use your Federal AGI as a starting point on their tax forms to base their calculations. So if your starting point for calculating State AGI is Federal AGI, you would not subtract the 401k contribution a second time. Another thing to consider is that your gross income stated on your W-2 often already accounts for the 401k and that's another case where you would not subtract it again, for Federal or State. You usually don't have to subtract your 401k contributions from gross income yourself unless you have a 401k associated with self-employment income. Ancillary Character fucked around with this message at 00:36 on Sep 3, 2017 |
|
#
?
Sep 3, 2017 00:26
|
|
|
Ancillary Character posted:Exemptions and the standard deduction are subtracted from your AGI to arrive at your taxable income, they shouldn't come into play when calculating your AGI. For taxable income I basically do what I listed above, but in 2 steps (AGI first, then subtract exemptions/standard deductions, right?) Federal taxable income = AGI (from your post above) - [# of exemptions * $4050] - [standard fed deduction of $6300] CA state taxable income = State AGI (from your post above) - [$111 exemption for being single] - [standard CA deduction of $4129]
|
|
#
?
Sep 3, 2017 00:29
|
|
|
Blinky2099 posted:Ahh, ok. I'm mixing up AGI and taxable income, then. Yeah, I don't think I have any other above-the-line deductions that I know of. Yes, taxable income is usually that simple. It only starts to get complicated when you're itemizing deductions or have an income high enough where exemptions or other things start to phase out. Look at my edit to make sure your 401k contributions aren't already accounted for in your gross income numbers.
|
|
#
?
Sep 3, 2017 00:43
|
|
|
If I'm single filing with a gross income of 200k and am maxing out both 401k and an IRA, when would it make sense to use a traditional IRA instead of Roth IRA? If I understand correctly, contributing to a 401k and having a MAGI over 61k makes a traditional IRA nondeductible. To me this sounds like I'd be contributing post-tax dollars on an IRA which would then be taxed again on distributions. If I'm already stuck contributing post-tax dollars to an IRA, why wouldn't I just do a backdoor Roth IRA so I don't get taxed on distributions as well?
|
|
#
?
Sep 6, 2017 15:02
|
|
|
Ancillary Character posted:Yes, taxable income is usually that simple. It only starts to get complicated when you're itemizing deductions or have an income high enough where exemptions or other things start to phase out. yergacheffe posted:If I'm single filing with a gross income of 200k and am maxing out both 401k and an IRA, when would it make sense to use a traditional IRA instead of Roth IRA? If I understand correctly, contributing to a 401k and having a MAGI over 61k makes a traditional IRA nondeductible. To me this sounds like I'd be contributing post-tax dollars on an IRA which would then be taxed again on distributions. If I'm already stuck contributing post-tax dollars to an IRA, why wouldn't I just do a backdoor Roth IRA so I don't get taxed on distributions as well? Edit: oh yeah, backdoor roth IRA. I forgot about that. I think that's actually what I did this year to protect for the roth IRA income limit issue. Pretty sure that's your only option (outside of the mega backdoor roth IRA if your employer allows it). Mine doesn't due to income inequality or whatever, but the regular backdoor roth IRA seems good enough. Blinky2099 fucked around with this message at 18:06 on Sep 6, 2017 |
|
#
?
Sep 6, 2017 18:01
|
|
|
Blinky2099 posted:Ahh, ok. I'm mixing up AGI and taxable income, then. Yeah, I don't think I have any other above-the-line deductions that I know of. CA can get screwy - for example they don't allow deductions for HSA plan contributions, so if you're deducting those on your 1040, you need to add them back to the CA 540.
|
|
#
?
Sep 6, 2017 22:47
|
|
|
Bhodi posted:My mom is preparing to retire in a few years (she's 62, so above the 10% early penalty) and is looking at buying some retirement property down in Texas in the next few months with the intention of building a house and then moving down there in about 2-3 years when she retires for good. She's got a sizable 401k, a pension, and ~50% equity in the house she is currently living in. Currently she's in a very high AGI bracket (definitely ineligible for most optional tax deductions) and will remain there until retirement. I agree with the above advice, if she is as you say in a super high tax bracket, then saving $50,000 for a real estate transaction over the course of 2-3 years should not be a big deal for her. When she owns the land that she intends to build on, a conventional construction loan is likely her best option from both a tax and retirement savings perspective. That all being said, it is almost always more financially advantageous to purchase a pre built home than it is to custom build, unless you really need some specific, particular location or features in a home.
|
|
#
?
Sep 7, 2017 16:07
|
|
|
I'm filling out a W-4 for a new job (link). It looks like that I should get an allowance for B (I'm single and only have one job), but my step-dad tells me that I don't want to take it. For reference, I live alone, don't own a home, would otherwise get an allowance for A.
|
|
#
?
Sep 11, 2017 15:11
|
|
|
BEHOLD: MY CAPE posted:I agree with the above advice, if she is as you say in a super high tax bracket, then saving $50,000 for a real estate transaction over the course of 2-3 years should not be a big deal for her. When she owns the land that she intends to build on, a conventional construction loan is likely her best option from both a tax and retirement savings perspective. That all being said, it is almost always more financially advantageous to purchase a pre built home than it is to custom build, unless you really need some specific, particular location or features in a home. Sure would be nice to have those sorts of problems myself! Maybe someday...
|
|
#
?
Sep 11, 2017 15:22
|
|
|
SirPhoebos posted:I'm filling out a W-4 for a new job (link). It looks like that I should get an allowance for B (I'm single and only have one job), but my step-dad tells me that I don't want to take it. Yup, you want both. Your stepdad is wrong. Only reason you wouldn't want both is if you have issues saving money that you earn. Like people that are happy they get tax refunds instead of getting the same money throughout the year.
|
|
#
?
Sep 11, 2017 15:39
|
|
|
Can anyone help explain the W-4 two earners worksheet? My fiance started a new job and we went to the calculator because we are filing jointly this year. The calculator says we should withold an additional $7,000ish from her paycheck, however, if I just go by the tax brackets or the NY times "marriage penalty" calculator, our additional liability should be like $400. What am I missing? We both still get 2 standard deductions and personal exemptions right?
|
|
#
?
Sep 11, 2017 15:42
|
|
|
Fuzzie Dunlop posted:Can anyone help explain the W-4 two earners worksheet? My fiance started a new job and we went to the calculator because we are filing jointly this year. The calculator says we should withold an additional $7,000ish from her paycheck, however, if I just go by the tax brackets or the NY times "marriage penalty" calculator, our additional liability should be like $400. What am I missing? We both still get 2 standard deductions and personal exemptions right? The marriage penalty has nothing to do with actual withholding - it is comparing the two actual tax bills at the end of the year. Withholding is more complicated to figure out. If you actually want to do it right and equitably, you can figure out an estimate for your federal tax burden for the year and then dig up the withholding tables on the IRS website somewhere. I suggest you start from the baseline of "single, 1 allowance" and see how close that will be to the total tax you both owe, and tweak it from there as necessary.
|
|
#
?
Sep 11, 2017 15:53
|
|
|
I think I'm misunderstanding something. First off I want my withholding to equal or be near equal to my tax liability. This additional withholding of $7,000 makes it seem like we are having $7,000 additional in withholding/liability by filing joint married vs. single. Also is there a recommended liability estimator? And I can't seem to find any withholding tables on the IRS website. I guess it sounds like I should rely on some online calculator for a total liability then just make our withholding match regardless of the calculator on the W-4?
|
|
#
?
Sep 11, 2017 17:01
|
|
|
Fuzzie Dunlop posted:I think I'm misunderstanding something. First off I want my withholding to equal or be near equal to my tax liability. This additional withholding of $7,000 makes it seem like we are having $7,000 additional in withholding/liability by filing joint married vs. single. The $7000 extra probably comes because it assumes filer 1 (you) is set to married filing jointly. If you are actually still single, then the calculator won't work at all. If you both have withholding set to single with 0 or 1 allowance, you can probably just leave it that way forever and be pretty close. Basically, the married filing jointly withholding only works if only 1 person has a job. There are lots of federal tax estimators all over the web. As far as the withholding tables, it's the first link in Google when you search for "paycheck withholding tables". https://www.irs.gov/pub/irs-pdf/p15.pdf. The tables start on page 47.
|
|
#
?
Sep 11, 2017 17:21
|
|
|
My wife is about to receive some money as inheritance from a foreign relative. It is quite a bit of money but less than the $100,000 that triggers the requirement to fill out a form and report it to the IRS. Still, she is about to receive a pretty nice sum in her checking account from a foreign source. Is there something we have to do to avoid looking suspicious to the IRS? Or, better yet, will the IRS even bother with someone receiving a 5 digit transfer from abroad, since they don't even require a form unless its over $100,000?
|
|
#
?
Sep 13, 2017 05:01
|
|
|
I think I'd recommend not trying to skirt the rules by splitting your transfer in to smaller transfers.
|
|
#
?
Sep 13, 2017 11:50
|
|
|
Maybe I'm misreading but I don't think it's multiple transfers, it's just one transfer under $100,000. As far as I know, it's not taxable. This is coming from an individual (or their estate), yes? Not a trust or a foreign corp? As a foreign gift it shouldn't be included in your gross income for income tax purposes, and it's under the threshold for F3520, so I think you're good. Not my area though so maybe someone else will say different. black.lion fucked around with this message at 13:03 on Sep 13, 2017 |
|
#
?
Sep 13, 2017 13:00
|
|
|
KYOON GRIFFEY JR posted:I think I'd recommend not trying to skirt the rules by splitting your transfer in to smaller transfers. If it *looks* like you're trying to skirt reporting rules by splitting transfers into small accounts, you bank will flag you as suspicious and report everything to the IRS. If you even *ask* your bank about reporting to the IRS, you're now flagged and they will report it all to the IRS. Just take the lump sum and fill out the form.
|
|
#
?
Sep 13, 2017 17:44
|
|
|
I clearly missed the part about splitting the sum up to avoid reporting rules. Definitely don't try to avoid reporting rules by breaking up a transaction. The gain is nowhere near worth the risk.
|
|
#
?
Sep 13, 2017 18:25
|
|
|
To clarify, there's no splitting. It is one lumpsum, one time, of an amount greater than $10k and smaller than $100k. The 5 digit was about the amount, not the number of transfers. The point of the question was whether there was anything I needed to do to avoid looking suspicious to the IRS given that we'd be receiving a substantial amount. I know that technically she wouldn't have to report it, but I wanted to know if there was anything else to do to avoid an audit or looking suspicious.
|
|
#
?
Sep 13, 2017 19:54
|
|
|
Ur Getting Fatter posted:I'm self-employed outside of the US. My income is 100% covered by the FEIE but I still have to pay self-employment tax. To add to this, if you reside in a country that has a totalization agreement with the US and you are participating in their social insurance system, you can get a certificate of coverage which excuses you from self-employment tax.
|
|
#
?
Sep 14, 2017 15:23
|
|
|
I have a consulting LLC with my wife and I as joint owners 50/50. We are both employees and receive reasonable salaries, and elected taxation as an S-Corp. I know that health insurance premiums paid by the company are reported as income (done via our payroll software) and then deducted later on our returns. I have read conflicting things about whether or not the business can pay "educational expenses" - in this case, a cybersecurity training course - that would improve my ability to do my job (and not prepare me for a new trade). If there are only two employees, my wife and I, and the opportunity is equally available to both of us, can the business expense up to $5,250 without reporting it as income? Or is this disallowed because the only recipients would be the shareholders.
|
|
#
?
Sep 19, 2017 01:31
|
|
|
|
| # ? May 24, 2024 04:06 |
|
|
Hufflepuff or bust! posted:I have a consulting LLC with my wife and I as joint owners 50/50. We are both employees and receive reasonable salaries, and elected taxation as an S-Corp. Take this with a grain of salt since I'm not doing S Corps yet, but based on my reading you may be conflating two separate things. The $5250 thing is for general education assistance (i.e. you offer college aid as a fringe benefit) and you wouldn't be eligible for that as more than 5% owners. Continuing education expenses are something else. If you take a class that either "maintains or improves skills required in your trade or business", OR "is required by law or regulations to maintain your license to practice/status/job", it's a business expense and no real limit per se on that. It just can't be any classes for a new occupation, only your current one. Seems like cyber security training should qualify under that.
|
|
#
?
Sep 19, 2017 21:05
|
|