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Kirtan posted:Question that's been hounding me for a couple years, that I was reminded of by reading the OP, plus a new issue I originally came here for: The basic procedure would be to complete a non resident return for South Carolina, pay taxes to them, and then file as a resident of North Carolina and you get a credit for the taxes paid to South Carolina. I don’t know how Turbo Tax handles this situation, but if this is going to be a reoccurring event and if Turbo Tax keeps bungling it, you might want to do a paper return for the states. For this year, you may want to invest in a tax professional to pick through it. They are not that busy right now. What you tell your job on the W-4 only tells them how much money to sent to the IRS. It does not determine your filing status. I guess you could do it now since your filing status is your marriage status on the end of the year and all the income you are earning this year as a single man will go on the joint return, even though you will be married for only 3 months. I don’t think it will make that much of an impact on your withholding though, so its not urgent that you need to do it today.
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May 19, 2011 16:26
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I want to make sure I got this right. Tax stuff is way over my head and I hate dealing with it. I usually just take a standard deduction (dependent status since I started filing) and am done with it. I started my first contract job so I'm a W-9. From all my searching the Web says I need to put aside 25% for taxes. Is this correct? What if I'm working and living in two different states? Also, I haven't paid my taxes for this year (no money) and I saw the IRS will decide to take an automatic deduction on new W-9ers who haven't filed yet?
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May 19, 2011 23:12
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quote:I want to make sure I got this right. Tax stuff is way over my head and I hate dealing with it. I usually just take a standard deduction (dependent status since I started filing) and am done with it. I'm not sure what you mean when you say "[you're] a W-9" - but I'm guessing that you mean you're classified as an independent contractor for tax purposes, and you receive 1099-Misc from those who pay you. How much you should be putting aside for taxes varies with your income, but 25% is recommended probably because you'll also be paying self employment tax. Depending on how much you're making, you may also need to be making estimated tax payments throughout the year (though that's a different subject). The number of states you are working/living in is irrelevant for federal tax purposes. I don't know what you're referring to when you refer to an 'automatic deduction on new W-9ers'. Can you provide a source? What schedule are you reporting your income on? It sounds like it should be schedule C, but your situation isn't very clear.
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May 24, 2011 14:04
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cheese eats mouse posted:I want to make sure I got this right. Tax stuff is way over my head and I hate dealing with it. I usually just take a standard deduction (dependent status since I started filing) and am done with it. Saying you're a W-9 is both uninformative and doesn't make sense. A W-9 is simply a way for whoever is paying you to formally request your SSN/address/etc. If you owed no taxes last year you can get away with withholding nothing and not having to pay a penalty come next April 15. However, this doesn't mean you won't owe anything--it simply means you won't have penalty+interest heaped on because of safe harbor rules.
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May 24, 2011 21:05
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I have approximately $30,000 in student loans that I'm trying to convince my employer to pay off in its entirety. I started a thread a couple of weeks ago about whether or not this is a good idea - based on the responses it looks like there's no way to do that without it counting as additional taxable income for me, so I'm willing to accept the fact that if this goes through, I'd be on the hook for income taxes for that amount. Am I correct in assuming that the income tax on an additional $30,000 of income would be less than paying off the entire principal + interest? From a tax perspective, is this a bad idea? And if it did look like I made an extra $30,000 this year, would it get me into trouble next year when my taxable income "drops" back down to my regular salary?
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May 25, 2011 17:36
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Karthe posted:Am I correct in assuming that the income tax on an additional $30,000 of income would be less than paying off the entire principal + interest? From a tax perspective, is this a bad idea? And if it did look like I made an extra $30,000 this year, would it get me into trouble next year when my taxable income "drops" back down to my regular salary? You will pay more taxes but income tax rates would have to be over 100% in order for you to pay more than $30,000 of direct income taxes. As long as your withholding is correct, I can't anticipate any problems the year afterwards.
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May 25, 2011 18:50
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Mandalay posted:You will pay more taxes but income tax rates would have to be over 100% in order for you to pay more than $30,000 of direct income taxes.
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May 25, 2011 18:55
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Karthe posted:Is there a reliable way of calculating how much more in taxes I'll have to pay on that amount? I guess I could just calculate both federal and state income taxes for my regular salary and (regular salary + $30,000), but is there a better way of doing that? You want to take your marginal tax rate at the federal, state, and local (if applicable) level and multiply it by that number. I imagine it will take you a bracket or two up so you can do a weighted average. In addition, you will owe another 6.2% in medicare and 1.45% in social security, assuming that you haven't maxed out on the former because your compensation is already above ~$106k. However, that is just the direct impact. If you take other tax credits and deductions, they may be limited and/or phased out by your higher adjusted gross income. Disclaimer: I am not a tax professional and this is not tax advice your heart will explode etc
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May 25, 2011 20:04
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How long does it take for the state of NJ to process an adjustment? I received my original refund ($3) before I realized that I forgot to subtract out income earned in NY state. They owe me another $79 and it's been a month, dammit! 
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May 25, 2011 20:20
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Mandalay posted:You want to take your marginal tax rate at the federal, state, and local (if applicable) level and multiply it by that number. I imagine it will take you a bracket or two up so you can do a weighted average. In addition, you will owe another 6.2% in medicare and 1.45% in social security, assuming that you haven't maxed out on the former because your compensation is already above ~$106k. However, that is just the direct impact. If you take other tax credits and deductions, they may be limited and/or phased out by your higher adjusted gross income. http://www.hrblock.com/free-tax-tips-calculators/index.html
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May 25, 2011 20:27
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Pissingintowind posted:How long does it take for the state of NJ to process an adjustment? I received my original refund ($3) before I realized that I forgot to subtract out income earned in NY state. They owe me another $79 and it's been a month, dammit! Generally paper returns are processed within 6-8 weeks. Not sure if NJ specifically is any different.
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May 25, 2011 20:44
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Okay, so I live in New York. I started a new job recently as a remote employee for a company that has officially classified me as working from a New Jersey office (the closest one to the actual areas I'm doing field work at the moment, and to where I live, more or less). Currently, my paychecks are having taxes taken out from both NY and NJ. I know this is normal and that the two states have some kind of arrangement to split up income tax or whatever so that cross-state commuters don't get boned too hard, but I also know that my company does have some NY offices which I could ask to be 'assigned to' on paper. The question is, should I do this? Am I actually being hurt or coming out behind by having a deduction taken out of my paycheck from two states? Or am I going to end up paying the same, or maybe even less with the split taxation nonsense with NJ? A quick google search tells me that going from NY->NJ (like me) at least in 2003, often left people coming out ahead, but I have no idea if that's changed or what sort of numbers it might be based on.
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May 30, 2011 01:34
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So I just got my tax return back. I didn't make much money around ~15000 last year, but the check I got back was for a lot. More than I made. What should I do?
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Jun 1, 2011 02:09
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Regarding the overseas tax exclusion thing, it says on the IRS website (http://www.irs.gov/businesses/small/international/article/0,,id=96817,00.html) you have to either claim residency or just live overseas for 330 days out of the year. If I moved this July and filed next June 15th (the extended deadline for overseas people), would that be ok, or do I have to live abroad 330 days out of the tax year? It sounds like any yearlong period would do, but I'd like to be sure before I go wander off to Canada.
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Jun 3, 2011 18:01
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I was in the emergency room a few weeks ago and as part of the billing process for an uninsured patient the hospital wants a copy of my 2010 tax return. I didn't file for 2010 because I was unemployed the entire year. The stuff I received says that in this case I should call an IRS 800 number and request a "tax account letter" for 2010. The number provided is an automated system that offers me a "tax account transcript" but then informs me one cannot be provided because I have no return on file for that year. The only Google result for "tax account letter" is, in fact, a PDF of the very form the hospital sent me. Does anyone know what paperwork they actually want, if it exists?
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Jun 3, 2011 19:25
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nevermind.
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Jun 4, 2011 00:27
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Pitch posted:I was in the emergency room a few weeks ago and as part of the billing process for an uninsured patient the hospital wants a copy of my 2010 tax return. I didn't file for 2010 because I was unemployed the entire year. The stuff I received says that in this case I should call an IRS 800 number and request a "tax account letter" for 2010. The number provided is an automated system that offers me a "tax account transcript" but then informs me one cannot be provided because I have no return on file for that year. The only Google result for "tax account letter" is, in fact, a PDF of the very form the hospital sent me. Does anyone know what paperwork they actually want, if it exists? Just download a 2010 1040EZ and fill it out for the hospital.
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Jun 4, 2011 12:06
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I've just been offered a job in France (I'm an American) but they aren't going to pay for my plane ticket. What steps do I need to go through to see if I'm eligible to deduct the cost of a plane ticket (I looked over the first post but I'm still confused)? I'll have made/will make about $16,500 + €6500 (about $9500) during the 2011 year and I don't own a home or anything like that.
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Jun 6, 2011 06:45
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I just purchased a new home and am renting out my existing. I have a question on how the rental income is treated. Do I add the gross amount to my taxes, or would I only be adding the difference between what I receive, and what I pay to the mortgage company? I also have set up an LLC (State of Michigan) for the property management to take advantage of deductions and such. Does this change the answer to the question asked above?
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Jun 6, 2011 15:57
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Just curious, who advised you to set up an LLC to 'take advantage of deductions and such' and what deductions and such are you anticipating taking advantage of under the LLC that you couldn't otherwise? If you bring up a Schedule E, you will get an idea of what types of expenses are deductible. Assuming that you didn't set up a LLC taxed as a partnership or corporation, you will use that schedule to calculate your net income or loss from the rental to flow through the rest of your income tax return.
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Jun 8, 2011 00:27
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Omits-Bagels posted:I've just been offered a job in France (I'm an American) but they aren't going to pay for my plane ticket. In your situation you will probably take the standard deduction, so you can't deduct your plane ticket.
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Jun 8, 2011 03:13
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Missing Donut posted:Just curious, who advised you to set up an LLC to 'take advantage of deductions and such' and what deductions and such are you anticipating taking advantage of under the LLC that you couldn't otherwise? 
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Jun 8, 2011 14:50
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Missing Donut posted:Just curious, who advised you to set up an LLC to 'take advantage of deductions and such' and what deductions and such are you anticipating taking advantage of under the LLC that you couldn't otherwise? I am sorry, I should have phrased that better. While I am taking the wise legal decision to protect my personal assets through the corporate shield, I want to take advantage of the various deductions and such through it. (no fees to set up an LLC for me, so no swindling lawyer)
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Jun 8, 2011 16:13
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TraderStav posted:I am sorry, I should have phrased that better. While I am taking the wise legal decision to protect my personal assets through the corporate shield, I want to take advantage of the various deductions and such through it. I think what people are trying to tell you is that your LLC does not magically give you access to more deductions than you could have already claimed as a sole proprietor. In other words, you can take advantage of the same "various deductions" with or without your LLC. The deductions were inside you all along!
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Jun 8, 2011 17:14
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entris posted:I think what people are trying to tell you is that your LLC does not magically give you access to more deductions than you could have already claimed as a sole proprietor. Beautiful, either way, how does the rental income flow through on my taxes? Do I put the gross collected as my income and then toss the mortgage costs in the expenses, or just the difference in income?
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Jun 8, 2011 17:17
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TraderStav posted:I just purchased a new home and am renting out my existing. I have a question on how the rental income is treated. Do I add the gross amount to my taxes, or would I only be adding the difference between what I receive, and what I pay to the mortgage company? Be careful, if your old home (new rental) is worth more than you paid for it, and you rent it for too long, you might lose the home gain exclusion when you sell it.
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Jun 8, 2011 19:58
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AbbiTheDog posted:Be careful, if your old home (new rental) is worth more than you paid for it, and you rent it for too long, you might lose the home gain exclusion when you sell it. No chance of that happening, that's why it's a rental.  But thank you for putting it on my radar.
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Jun 8, 2011 20:09
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Alright, so I'm one of those goons who got a job in the legit online moneymaking thread (Butler Hill) and as a result got me a nice ol' 1099 last year to file with. It's close to the deadline for filing estimated taxes quarterly so naturally I'm realizing I should probably get on that. I worked through the 1040-ES over the last hour or so and, following it to a letter, I get that I don't need to file quarterly. With that said, I have two jobs, one retail with normal taxes and this one, and I only started the online one with a 1099 last Octoberish, so naturally making an estimation of this year's finances based on last year's full year won't be accurate, given that I'm working both jobs all year this year. So I re-did the 1040-ES redoing Line 14b basing it not on last year's taxes, but my estimated earnings for this year, and with that I do indeed have to pay quarterly. I guess my question boils down to, knowing I'm going to owe this money either way, should I hold onto it (I have a separate savings account I set aside tax money where it gains interest) and just file at the end of the year, or file quarterly now even though it looks like it's not entirely necessary?
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Jun 9, 2011 05:38
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Can someone help me with figuring out 1099 taxes. I have a job offer for 25 dollars an hour. So I assume a monthly income of 4000. I went through a tax calculation to try and figure out my take home after I have to figure all the taxes myself. The number I get following this formula is 2240 take home. That seems brutal is that right? Can someone link me to a proper formula for quickly figuring this out please?
Pokkahn fucked around with this message at 16:51 on Jun 9, 2011 |
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Jun 9, 2011 16:40
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TraderStav posted:Beautiful, either way, how does the rental income flow through on my taxes? Do I put the gross collected as my income and then toss the mortgage costs in the expenses, or just the difference in income? Look at the Schedule E. You can deduct interest but not principal.
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Jun 10, 2011 01:31
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quote:In your situation you will probably take the standard deduction, so you can't deduct your plane ticket. He could deduct the cost of the plane ticket as an adjustment to arriving to AGI (as moving expenses). He doesn't have to itemize to do this. See line 26 of page 1. quote:
You would separately report the income and mortgage interest on schedule E. Don't forget about depreciation, any utilities you pay for, property taxes, etc. Also keep in mind that any depreciation you take may need to be recaptured when you sell it. quote:Can someone help me with figuring out 1099 taxes. I have a job offer for 25 dollars an hour. So I assume a monthly income of 4000. I went through a tax calculation to try and figure out my take home after I have to figure all the taxes myself. The number I get following this formula is 2240 take home. That seems brutal is that right? Can someone link me to a proper formula for quickly figuring this out please? $25 an hour on a 1099? Are you a legitimate independent contractor (as in, do you do "work" for several different clients) or are you actually an employee and your employer is just trying to weasel his way out of paying payroll taxes. It sounding like the latter, and this is very illegal. Not to mention you're getting screwed here from a tax perspective. If you're receiving a 1099 instead of a W-2, you'll have to report the income on a schedule C. This income net of expenses will be subject to self employment tax (15.3%). Unlike a W-2, any job expenses you may have is fully deductible against your income. So, pretending you have 48,000 in income, and 5,000 in job expenses (licenses, tools, whatever): you would multiply 43,000 times 15.3%. This would be 6579. This number would be reported on line 56 of the 1040. Because you are paying what technically should be the employer's portion of payroll tax, half of this 6579 will be deductible on line 27 of the 1040. In this case, it would be 3290. Do you pay for your own health insurance? If you do, this may be deductible as well. You will also have to pay your regular state, local, and federal income taxes. Assuming you are single, use the standard deduction, and have no dependents: (with 2010 numbers) 43,000-3290-5700-3650=30360 = your taxable income. From this, 4138 would be your tax liability for federal income, assuming you had 5000 in work expenses and no other income. 4138 + 6579 = 10,717 as total federal tax liability excluding any credits you may be eligible for (such as Making Work Pay). I don't know what your state or local tax rates are. Keep in mind that for 2011, some of the numbers change. Self employment tax will be 13.3% for 2011 and the Making Work Pay credit won't exist, for example. But this is a rough example to explain how this works. It sounds more complicated than it is, but I recommend spending 50$ on a copy of turbo tax. Don't do your taxes by hand. Also, I can't really overemphasize how shady it is to be paid through a 1099 when you're effectively an employee. You're getting screwed from a tax perspective. Admiral101 fucked around with this message at 14:15 on Jun 10, 2011 |
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Jun 10, 2011 14:13
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Admiral101 posted:
Not really sure why you're getting worked up about this, small businesses do this all the time to their employees and generally they get away with it because employees won't report them for fear of getting fired. Sure, it's illegal, but it's also incredibly common.
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Jun 10, 2011 15:00
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Admiral101 posted:Also, I can't really overemphasize how shady it is to be paid through a 1099 when you're effectively an employee. You're getting screwed from a tax perspective. The job is a 3 month contract and after the contract is up they will hire me as a full time employee or we will go our seperate ways. That is the only reason I took this job for the potential of a full time position. Thank you for the numbers I will adjust them down to 3 months for a more accurate #
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Jun 10, 2011 19:13
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Admiral101 posted:He could deduct the cost of the plane ticket as an adjustment to arriving to AGI (as moving expenses). He doesn't have to itemize to do this. See line 26 of page 1. Also, if you're working overseas and not making a bunch of money, I think you can effectively exclude that income. Not sure what effect that might have.
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Jun 10, 2011 20:49
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Small White Dragon posted:This is a long-term and not a short-term job, right? I think you have to stay a certain length of time to qualify for that deduction. The overseas job will last for 11 months and 29 days—it could go longer but it will be at least that long. I know there is some rule about working overseas for 300+ consecutive days out of the calendar year but I leave in August so my timing isn't right.
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Jun 10, 2011 22:30
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TraderStav posted:No chance of that happening, that's why it's a rental. The basis of your property is the lower of fair market value at the time of conversion (from personal use to business use) or your adjusted basis. The correct way to do this would have been to get an appraisal at the date of conversion (doubt that happened). You need to break apart the building and the land as well on your asset listing.
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Jun 11, 2011 01:06
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catman posted:The basis of your property is the lower of fair market value at the time of conversion (from personal use to business use) or your adjusted basis. The correct way to do this would have been to get an appraisal at the date of conversion (doubt that happened). You need to break apart the building and the land as well on your asset listing. This I find very interesting. We are only planning to rent the property for two years as the tenants wish to purchase it following the lease. How would this work to benefit me, is the benefit worthwhile in such a timeframe? Granted, we don't have a sale pending in two years, so it could fall through and be landlords again, but am interested to hear how the depreciation would work. Is it straight line? Over what life?
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Jun 11, 2011 18:43
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TraderStav posted:This I find very interesting. We are only planning to rent the property for two years as the tenants wish to purchase it following the lease. How would this work to benefit me, is the benefit worthwhile in such a timeframe? You can probably find the land value on your local county assessor website. Don't depreciate that amount.
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Jun 12, 2011 21:13
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Mattism posted:Income tax depreciation on residential real estate is straight-line over a 27.5-year useful life. I think you have use the mid-month convention too, but I might be confusing that with non-residential real estate. So let's assume my home was appraised at 137,500, this means I can deduct $5,000 off of my taxes each year? (savings of my tax rate * 5,000) What occurs if I sell in two years for less than the depreciated amount (127,500)? What about more? Sounds as if the savings is worth the appraisal cost after one year...
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Jun 12, 2011 22:18
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quote:So let's assume my home was appraised at 137,500, this means I can deduct $5,000 off of my taxes each year? (savings of my tax rate * 5,000) First question: Not necessarily. You'd be deducting the depreciation against your rental income. If your rental expenses/depreciation exceeds your rental income (as in, you have a rental loss), you'll have a passive loss because rental activities are passive activities. You would only be able to deduct this loss against other passive income (as in, rental income from other properties or income from businesses that you dont materially participate in). In other words, this loss is not particularly beneficial. The vast majority of rental properties operate at a loss. Second question: Keep in mind, if you sell the property after two years, you may still take the homeowner's exclusion presuming that the property was your primary residence for at least three years out of 5 years prior to date of sale. However, the homeowner's exclusion will not exclude depreciation - so any depreciation you take will have to be recaptured (as in, reported as income). If you sell it at a loss, you may still have to recapture some of the depreciation. For example, if the value is 127,500, and you depreciate 10,000, and then sell the property for 125,000 - you'll have to recapture 7,500 of that depreciation. If you sell it after three or more years, you won't have the homeowner's exclusion, and you'll have to report the sale as a normal sale of a rental property (as in, report the total gain). And keep in mind that you should only worry about an appraisal if you reasonably believe the FMV is less than what you paid for it. That sounds like the case here, but just restating. Admiral101 fucked around with this message at 14:34 on Jun 13, 2011 |
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Jun 13, 2011 14:32
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