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Did your wife perform work for her company while she was physically located in the state of California? If the answer is yes, California is going to want their piece. They have a “sourced income” rule on the books. I’m not familiar with the specifics and if there are RSU, or other equity comp it’ll get more complicated. No idea how NY taxes would offset any of that or how that works. You’re probably in need to pay a professional territory tbh https://www.ftb.ca.gov/file/personal/residency-status/part-year-and-nonresident.html#Do-I-need-to-file- If she was on PTO the entire time and performed zero work, the she probably wouldn’t owe CA state tax.
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Mar 7, 2023 02:48
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skipdogg posted:Did your wife perform work for her company while she was physically located in the state of California? "She marked on her work calendar that her "location" was California, so people who be aware for scheduling meetings and working hours. " Although in the poisonous American work culture a lot of people might consider this not performing work.
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Mar 7, 2023 02:54
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Her company has "global flex weeks" where you can work from anywhere remotely instead of the typical hybrid work schedule. Her assigned work location was in NY the entire year and she wasn't in CA on any company business, didn't visit any company offices. Also the reported wages is roughly twice what she would've earned in that 2 week period. My company has the same flex weeks policy but they are very clear you can't visit offices in other states (because that could trigger tax liability) and you have to track your days on businesses in different states in a separate tool so they know when they have to write a W2 for that state. Even then, the threshold is 30 days.
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Mar 7, 2023 03:28
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mrmcd posted:Her company has "global flex weeks" where you can work from anywhere remotely instead of the typical hybrid work schedule. Her assigned work location was in NY the entire year and she wasn't in CA on any company business, didn't visit any company offices. Also the reported wages is roughly twice what she would've earned in that 2 week period. As many of my remote working clients here learn much to their chagrine, wages belong to the place were you physically perform the work. I can't comment on the amount reported though. The stuff about being on company business and visiting offices and 30 days sounds completely like internal company policy and not tax law. Now that California has that W-2 I doubt you're arguing your way out of filing there. The good news is that there's still a MFJ standard deduction in CA of about $10k, so even at $14,000 of reported income the tax shouldn't be much.
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Mar 7, 2023 03:45
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lol I'm just reading about first day tax rules. So if an executive of boeing based in Seattle makes a business trip over to albama to check on a manufacturing thing, he's supposed to deal with Alabama income tax for that? This is the dumbest poo poo I've ever read. https://www.mobileworkforcecoalition.org/problem 
Methanar fucked around with this message at 05:44 on Mar 7, 2023 |
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Mar 7, 2023 05:28
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Methanar posted:lol I'm just reading about first day tax rules. Thats wild. I have to assume there is some kind of exception. My company regularly sends engineers on 1-4 week trips all over the country and we never do any state tax stuff. They do a hard stop at 4 weeks, but I thought that was for benefits reasons not tax reasons.
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Mar 7, 2023 05:40
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Yeah, I used to be 100% travel and I would have owed taxes in like 30 states. Edit: OP, I would file a return that says I didn't work or live in CA and make them prove you did. I am not a lawyer or tax professional, but realistically I can't imagine they would fight you too hard on it. KillHour fucked around with this message at 06:15 on Mar 7, 2023 |
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Mar 7, 2023 06:09
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KillHour posted:Yeah, I used to be 100% travel and I would have owed taxes in like 30 states. They already have proof in the form of the W-2 from the employer. I'm not sure this fight is worth it over <$100 in tax that can be filed completely for free online. Especially considering that the tax is actually owed under the law; it's not some misunderstanding.
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Mar 7, 2023 06:16
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Gabriel Grub posted:They already have proof in the form of the W-2 from the employer. I'm not sure this fight is worth it over <$100 in tax that can be filed completely for free online. Especially considering that the tax is actually owed under the law. Employers gently caress up W2s all the time, but I guess it comes down to "how badly do you want to fight it" By that law, I probably owe CA a ton of money because I've travelled for business there a lot. Come get me CA, you can't do poo poo to me. [goatse] Edit: I think NY has a thing where you can deduct money owed to another state so that might be the easy button here. I had to do that last year for my GF when her company hosed up and said she worked from NJ when she never set foot there, and it was easier to just say she did and deduct that money from the NYS taxable income. Double Edit: https://www.tax.ny.gov/pit/credits/resident_credit.htm KillHour fucked around with this message at 06:24 on Mar 7, 2023 |
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Mar 7, 2023 06:17
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Methanar posted:lol I'm just reading about first day tax rules. I'm pretty sure professional athletes file taxes in each state for their earnings during Away games.
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Mar 7, 2023 06:48
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KillHour posted:Employers gently caress up W2s all the time, but I guess it comes down to "how badly do you want to fight it" Yes, but once a government has the W-2 in their hands, the onus is on you to prove that something is wrong with it. Maybe the exact salary amount is wrong, but not the fact that salary was earned in CA. If a deduction for tax in another state is possible, it will be taken in the state where the wages were not earned, i.e. their state of residence.
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Mar 7, 2023 06:50
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Ancillary Character posted:I'm pretty sure professional athletes file taxes in each state for their earnings during Away games. Yep. Also visits to other countries. Performers as well. Brad Pitt visits Tokyo to promote Bullet Train? He filed a Japan tax return, or at least ate some withholding tax.
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Mar 7, 2023 06:52
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Gabriel Grub posted:Yes, but once a government has the W-2 in their hands, the onus is on you to prove that something is wrong with it. The “proof” can just be filing a state tax return and saying the amount of CA income was actually $0 so give me back my withholding. I had to do that when I started this remote job because they had the wrong work location for a few weeks. It was funny filling a whole column with $0 and submitting it but NY gave me money back.
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Mar 7, 2023 13:45
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When I worked for a big 4 accounting firm and was 80% travel I filed returns most years in CA, MA, RI and CO for less than a few hundred dollars each, despite living in a tax free state. The firm had an arrangement with TurboTax to provide all the state modules for free which simplified things quite a bit. I'm pretty sure filing a return saying you didn't work in CA would be fraudulent, and CA can be very aggressive about this.
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Mar 7, 2023 17:46
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mrmcd posted:- How to unfuck this. We were never California residents at any time, even by California's own guidelines published by their tax authority. I'd assume we can file a return with CA asking for the tax back, but the company has already published a W2 saying there were $X amount of CA taxable wages. Based on what you've said, you have a California filing requirement. File a nonresident return with California. Whatever California taxes you pay should be available to offset your NY income tax which will effectively eliminate being taxed by two states on the same income. Ancillary Character posted:I'm pretty sure professional athletes file taxes in each state for their earnings during Away games. Yes, that is generally true. There are exceptions -- for example, Arizona exempts nonresident preseason earnings from state taxation, and states often have agreements with other nearby states (called reciprocity agreements) so that a player in one state doesn't pay taxes if they play in the other state. If they're on a team sport, it's easier because it's reported on W-2s with taxes withheld.
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Mar 7, 2023 19:34
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BabyJebus posted:When I worked for a big 4 accounting firm The irony here is hilarious.
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Mar 7, 2023 20:07
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I've only done the "no actually I have $0 of income despite the W2 saying otherwise" with the NYC tax on a NY state return. But that's pretty clear, only residents pay that tax and I was not a resident. Somehow payroll departments have a hard time understanding that not all of NY is NYC and would withhold it on the first paycheck.
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Mar 7, 2023 21:59
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Missing Donut posted:Based on what you've said, you have a California filing requirement. File a nonresident return with California. Whatever California taxes you pay should be available to offset your NY income tax which will effectively eliminate being taxed by two states on the same income. NY Tax preparer here and this is correct, non-resident CA return, get a credit on your NYS return for taxes paid to CA. Missing Donut posted:Yes, that is generally true. There are exceptions -- for example, Arizona exempts nonresident preseason earnings from state taxation, and states often have agreements with other nearby states (called reciprocity agreements) so that a player in one state doesn't pay taxes if they play in the other state. I did a return for an MLS player last year and he had like $50-$100 due to about 5 different states based on his W-2 because of his away games. The W-2 made it simple though.
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Mar 7, 2023 22:28
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 tax question:So I've got these dividends from VUSXX, and they're on a 1099-DIV, and I have duly included it in line 3b of my 1040 because it came on a DIV and not an INT. And that is all well and good, because I know I have to pay federal tax on it. The problem is when I get to my 540CA, where it's time to remove that income from my state taxes. The instructions allow for the subtraction of US Tbill interest from line 2, but not line 3. What do?
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Mar 7, 2023 23:49
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Which line on the 1099-div is the income on? If they aren't qualified you probably owe tax.
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Mar 8, 2023 03:06
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H110Hawk posted:Which line on the 1099-div is the income on? If they aren't qualified you probably owe tax. I'm not sure I understand the question. The VUSXX income is box 1a, ordinary dividends. The best source I have for VUSXX being exempt from state income tax is Vanguard GOIN, "This fund meets the threshold requirements for California, Connecticut, and New York, which require that 50% of the fund’s assets at each quarter-end within the tax year consist of U.S. government obligations." The relevant section from 540CA instructions:  (Item #2) I'm pretty confident it's excluded, but it came in on the wrong line to subtract out.
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Mar 8, 2023 03:30
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I'd like to retract my question: following the instructions exactly, it works. It merely feels wrong to report way, way more excluded interest than reported interest.
Skinnymansbeerbelly fucked around with this message at 06:24 on Mar 8, 2023 |
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Mar 8, 2023 06:17
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Question about estimated tax payments: My wife has some RSUs vesting. She actually had some vest last year that she sold, but they were trivial. This year they're more along the amount of a yearly bonus (about 6% of her salary). In both cases they are being sold pretty quickly. Thing is, I don't believe the RSUs she sold last year had taxes withheld. Not sure if this is normal or not. In any case, we got a refund for last year regardless because we wildly miscalculated our withholding for a variety of reasons. But I had read recently that RSU sales are subject to estimated tax payments? Can't remember where I saw that. So do we need to do something here for 2023? We can easily adjust our withholding to accommodate the actual tax burden, but I have no idea if that's sufficient or if a separate estimated payment is required.
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Mar 8, 2023 15:40
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The employer should withhold when the RSU shares vest, by selling some of the shares immediately, Then your wife gets the remaining shares and anything after that is just treated like a normal stock holding. Selling immediately would generally mean very little gain so not much tax impact.
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Mar 8, 2023 16:06
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They will withhold at 22% per law. So if you are in say the 24% bracket you will owe 2% more on the vest date value plus 24% of any spread between vest and sell price assuming it goes up. These may all be rounding off and eaten up by whatever refund you usually get.
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Mar 8, 2023 17:34
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smackfu posted:The employer should withhold when the RSU shares vest, by selling some of the shares immediately, So would any of this be shown on the tax forms, or would she have to dig in to her account to see that info? I ask because on the 1099-B she got, the cost basis is listed as 0, but it also shows that $0 was withheld. Annnnnd now that I'm scrolling through the document again, there's another section with what I think are boxes w, x, y, z that have different numbers from what we put in our taxes, which shows a different basis. Which is odd because her basis should be $0 since these weren't purchased, they were awarded. OK so now I'm confused. So we didn't get the official 1099-B, we got a summary 1099-B from Fidelity. It's called the "Tax Reporting Statement." Seems like it has the same info, but it's in tabular form (presumably for people who have multiple transactions). It has columns for boxes 1a-1g, 4, 14, 16. Importantly, box 4 is blank, and as I mentioned above the cost basis 1e is $0.00. The 2nd page has the amount listed under "Short-term transactions for which basis is not reported to the IRS." This line shows $0 for federal taxes withheld. Now if I scroll down further to the "Supplemental information" section, it shows under short-term transactions slightly different numbers (marked as w, x, y, z as I mentioned). The "Proceeds" is the same as above, but it shows a different basis, and a total "Short-term adjusted realized gain" as a positive amount (let's say $100). So do we pay taxes on the $100, or on the entire amount listed in 1d? I mean, we already filed and we used box 1d for the amount, so I suppose worst case we overpaid here and can amend and get some money back. I double checked and the physical check she cashed was for the exact amount listed in 1d. And then follow-up: how do we know that the awards that vest this year have had taxes withheld properly? DaveSauce fucked around with this message at 18:38 on Mar 8, 2023 |
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Mar 8, 2023 18:36
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I am not entirely following, but when I look at my "confirmation of release" for my RSU's which had shares withheld to cover taxes I show like: Shares released: 100 Shares withheld: 60 Shares issued: 40 Then on the other side it has all the taxes paid broken out. This is in e-trade. I would go digging further in Fidelity and figure out what the gently caress, or ask your stock plan administrator (at work) to show where the withheld shares are accounted for in fidelity.
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Mar 8, 2023 18:57
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Yeah that's a lot of confusing words.... which is because I'm utterly confused. We've never had to deal with RSUs before so this is new to us. I guess the summary is: She got a check for $X because she sold RSUs within a few weeks after they vested. The 1099-B we received states that the proceeds were $X, and that the federal withholding was $0.00 and the cost basis was $0.00. So on the surface, nothing was withheld and we owe income tax on $X. The only oddity is there is a "supplemental information" section that says the gains were $Y. It is for some reason a different breakdown of the transaction that shows the $X being the total value, but the basis was $X - $Y. Still shows nothing withheld in this section, though. So I guess I have no idea what's going on. If they did withhold some for taxes, shouldn't that be recorded somewhere? I mean, it's kind of important for us to know for our taxes... I would expect it should be on the 1099-B, but it's not that I can find.
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Mar 8, 2023 21:20
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Go find the confirmation from when she vested the rsu's. This is probably 3 days prior to when she sold them. See if there is anything there which itemizes out any taxes and such. If so, this might help you true up the numbers in the tax forms.
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Mar 8, 2023 21:30
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DaveSauce posted:Yeah that's a lot of confusing words.... which is because I'm utterly confused. We've never had to deal with RSUs before so this is new to us. I guess the summary is: There are 2 separate events. 1. The RSUs vested. The value of the stock that was granted is reported as income on her W2. The withholding is done by her company and also reported on the W2. 2. You sold the stock. Fidelity typically would not withhold anything on this transaction, it's functionally the same as selling any other stock in your taxable brokerage account. If Fidelity is reporting the cost basis as $0 then you will need to look up the actual cost basis (the price of the share when #1 took place) and use that instead of $0 to calculate any capital gains owed on the sale. If that cost basis is $Y and the total value of the stock increased by $100 from #1 to #2, you will owe capital gains on that $100.
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Mar 8, 2023 23:36
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BabyJebus posted:There are 2 separate events. What he said, on her W-2 in box 14 should be the RSU vested amount that was included in her wages in box 1. On the Fidelity statement in the supporting documents there will be a statement for the sold units that has their actual cost basis based on the vesting price, they'll have like code "e" or "z" or some poo poo and that's the amount you put in your cost basis on the tax return.
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Mar 9, 2023 02:31
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Epi Lepi posted:What he said, on her W-2 in box 14 should be the RSU vested amount that was included in her wages in box 1. There's nothing in box 14 of her W-2  OK so I think we figured it out. For some reason, everything was buried. The places Fidelity said it was supposed to show up were missing, it only showed what we already saw on the 1099-B. We tried to math out some stuff to figure out what was withheld, but it didn't make sense. So we had to dig in to transaction statements to find the actual withholding numbers. What we eventually figured out is I think that they can only withhold whole units of stock, which is why my math wasn't working. Even then it took a couple tries because the percentage withholding didn't match the dollar amount that was listed, but I think they just dump the remainder in to federal (i.e. they figure the 22% + FICA + state withholding, round up to the nearest unit, and then dump any excess in to federal to make it higher than 22%). We did also find that on her pay stubs the entire value of the award was listed as income. Couldn't find anywhere that listed the amount withheld, but theoretically the amount was listed as earnings. We need to double check that this was reflected on her W-2, but that's the last thing I think... as long as it shows up as wages on her W-2, we just need to amend our taxes to add the actual basis to get taxed on the gains instead of the whole check... which should get is a few hundred bucks back. gently caress me it took the both of us over an hour to sort this out. DaveSauce fucked around with this message at 04:11 on Mar 9, 2023 |
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Mar 9, 2023 04:01
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Taxes are like a take home exam, middle school algebra material at sophomore weeder class difficulty
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Mar 9, 2023 05:21
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Epitope posted:Taxes are like a take home exam, middle school algebra material at sophomore weeder class difficulty So in other words, completely impossible for me to do.
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Mar 9, 2023 06:09
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the sad part is we're both engineers  But at least now we know how to handle it for 2023, and we know where to check to make sure taxes get withheld properly. I'm honestly not worried about the total amount, I'm just worried about getting penalized for not paying estimated taxes or something, which was why I was so annoyed that I couldn't easily find a simple piece of paper that told us, flat out, what was withheld. The fact that we got a 1099-B with the post-withholding only numbers on it was the main source of confusion, I think. I mean, Fidelity knows good and drat well what was withheld. It's in their transaction statements, they have it written down! So it boggles my mind as to why they gave us only half the picture on that form.
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Mar 9, 2023 13:24
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DaveSauce posted:the sad part is we're both engineers Fidelity doesn't send you a W2 (unless you work for Fidelity) which is where withholding at vesting is reported. That wouldn't be on a 1099-B and you wouldn't even get a 1099-B if you hadn't sold the stock. It's annoying that they didn't include the correct cost basis but in my experience every RSU servicer is shitbad terrible in their own special way. The broker for my company's RSU program one year sent me 5 different 1099-B forms with all my autosell on vest transactions scattered randomly between them. They said they could only do it this way because of "backend record upgrades" but it was only for that year we pinky promise. There was a rumor that another year they sent thousands of people corrected 1099-B forms in mid March after many people had already filed because they put the wrong cost basis in. Also don't worry about the estimated penalty. Iirc you get an automatic pass if you had any refund the previous year or your tax owed this year is < 10% of your total tax.
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Mar 9, 2023 14:05
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I think this happened to me too. I ended up with a tax bill of like $5k last year, presumably due to RSU vesting counting as income on the W2. However, I paid the tax withholding with cash up front in the brokerage account. It was like $20k in cash up front. This year I have another tax bill, presumably from the same situation. 1) How should I check that the tax withholding/payment from the RSU is correct this year? Do I look at the brokerage statement and manually adjust some numbers somewhere? 2) If I made a mistake and overpaid last year (I paid the $5k to the IRS, though I’m not sure if it was correct now), what should I do? I may have made this mistake the year before as well.
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Mar 9, 2023 18:09
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One thing to remember is if your marginal tax rate is >22% (which for 24% is just $89k for a single filer) you owe 2% on your RSU vesting value at the end of the year no matter what. They withhold at 22% due to law, not due to math. It's intensely stupid. (Our whole tax code.) If you are in the 37% single bracket, earned $539k in salary (withheld appropriately) and made $500k in RSUs in the year you would need to add $75,000 in estimated tax payments over the course of the year. I'm casually ignoring deductions for the point I'm trying to drive home. $500,000 * (37% - 22%) = $75,000. Assuming you were perfectly going to get a $0 return outside of your RSU's you would need to write a check for $75,000 on April 15th. It is well worth hiring this out if you do not think the math is adding up. You have to double check the math. You know how much salary, rsus, options, etc you made in a year, and you should double check your gross income line on your 1040 that it's not double counting things. Most commonly it's ESPP, then RSUs, then ISO Options, then NQ Options.
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Mar 9, 2023 18:22
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Do I just grab a random CPA if I want to hire this out? Any idea what it would cost? Aside from the RSUs, it’s all W2, no deductions, no other income, nothing weird.
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Mar 9, 2023 20:20
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You want to look at your paystubs before and after the RSU vesting, and that should give you an idea as to whether they were handling it correctly or not.
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Mar 10, 2023 00:37
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