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The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > US Income Tax Thread: Bank error in your favor! GO DIRECTLY TO JAIL.
 
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ShadowHawk
Jun 25, 2000

CERTIFIED PRE OWNED TESLA OWNER
I did some contracting and the 1099-MISC form I was sent

1) has the wrong social security number
2) includes reimbursements as nonemployee compensation


Am I correct that 2 is a mistake? I shouldn't pay income taxes on money that was solely used to buy parts for a client.

Can 1 and 2 be fixed at the same time? I assume the client will have to file an amended form.

* # ¿ Mar 11, 2011 11:37
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# ¿ Apr 28, 2024 20:41
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ShadowHawk
Jun 25, 2000

CERTIFIED PRE OWNED TESLA OWNER

Captain Beans posted:

1) Yea you want your employer to know they made a mistake so that they can file an ammendment to the IRS. Considering you were a 1099MISC I doubt they will even bother because most places I see are terrible at fixing anything for 1099MISC.

2)When you fill out your schedule C you will list those parts you buy as expenses so you reduce that income by the ammount you were reimbursed. You won't be paying tax on it.
Regarding 2, do you mean a deduction? I'm concerned about the self-employment equivalent of payroll taxes here.

* # ¿ Mar 15, 2011 05:46
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ShadowHawk
Jun 25, 2000

CERTIFIED PRE OWNED TESLA OWNER

alnilam posted:

Here's a question that's perhaps so basic, I'm having trouble finding a basic enough answer.

I just got a new job where they withhold no taxes whatsoever. If you're curious, I was on a grad student stipend "salary" that was, well it was weird, but at least it was reported and taxes were withheld and I got a W2 and it made taxes pretty straightforward. Now I'm getting paid 3x as much as a post-doc "independent contractor," but I'm having nothing at all withheld and there's no reporting and no W2 :confused:

So I guess there are two options.

Option 1. I live my merry life and in April I gather my pay stubs and fill out forms and determine the fairly large sum of money I owe the IRS, and I pay it.
You don't know me so you have no reason to trust me on this, but please just assume for option 1 that I'm a good saver and I'll have no trouble with saving enough for the large yearly payment.

Option 2. I pay the IRS monthly, or quarterly, or whatever, based on an estimated amount of what I think I'll owe in April. Then in April, I compare what I did pay to what I should have paid and get a refund or I owe a little.

I know option 2 is a thing that it seems most people do (though I have no idea how to do it, paperwork-wise). But is there anything wrong with option 1? Would I get any penalties for doing option 1? Is there any reason not to do option 1, other than the danger of not saving enough?
Some things about underpayment that might apply to you:

1.) You are exempt from the penalty if you withheld or made estimated tax payments greater than what you paid in taxes last year. This means that if you suddenly make a lot more money this year (eg a job that triples your income), the amount you need to withhold to avoid the penalty is rather low.
2.) If you do owe an underpayment penalty, there is a difference between paying your taxes on tax day and paying them on January 1st (or earlier). Don't procrastinate, figure it out now!

* # ¿ Oct 21, 2015 04:29
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ShadowHawk
Jun 25, 2000

CERTIFIED PRE OWNED TESLA OWNER

AbbiTheDog posted:

therobit posted:

Sounds kind of like lending fraud to me.
Is it a felony to mislead a lending institution for the purpose of obtaining credit? Maybe try googling that.
It sounds like the lender is trying to make the mortgage look better than it is (possibly because they resell it after signing it). At best it's a scummy agent worried about his quota, at worst it's a rotten organization similar to the ones that caused the financial crisis.

You should consider reporting them.

* # ¿ Jan 23, 2016 08:25
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ShadowHawk
Jun 25, 2000

CERTIFIED PRE OWNED TESLA OWNER
If I am filling out a schedule E for rental income (or loss) can I still take standard deduction or do I need to itemize all the non-rental stuff too?

* # ¿ Feb 6, 2016 12:14
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The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > US Income Tax Thread: Bank error in your favor! GO DIRECTLY TO JAIL.