US Income Tax Thread: Bank error in your favor! GO DIRECTLY TO JAIL.

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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AbbiTheDog: May 21, 2007

furushotakeru posted:

That's good to know. I had wondered about that but apparently never enough to actually research the matter. I withdraw my previous statement then.

It's been awhile since I've taken it (getting old), but some of the finance questions are hopelessly obsolete.

It's nice to understand the theory behind amortizing a loan payment, but making someone do one manually is a bit dumb.

I've heard the LTC test is harder than the CPA exam for tax questions, but who knows.

# ¿ Jun 13, 2011 23:28

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# ¿ May 14, 2024 04:11

AbbiTheDog: May 21, 2007

TraderStav posted:

Thanks for the information. My former boss is an investment advisor, so he works with a lot of them who work with people more in my wealth level. I may be barking up the wrong tree for a pure-CPA, so I will have to explore a CFP/CPA combo to meet what I'm looking for. I have a decent to good grasp on my personal finances, just looking to beef up the tax-counsel aspect. I actually run a small registered investment advisory (fee-only), but don't do any planning whatsoever, strictly investment management.

I've been meaning to get to some NAPFA conferences to network and find some like-minded kin who manage their clients in the same philosophy that I do to work with and that would be a great place to find someone for myself.

Thanks for the advice.

It might be better to have a CPA for your taxes and a CFP/investment advisor for your finances - then you can avoid getting screwed when the CFP's advice is "buy what I'm selling." Have a second set of eyes. Plus, the CPA/advisor can work together to help manage your tax planning (utilization of capital losses, expected income for the year, etc.).

# ¿ Jun 13, 2011 23:30

AbbiTheDog: May 21, 2007

Missing Donut posted:

You have to admit that the CPA designation has been well-marketed, especially compared to the EA designation.

Hey, I don't pay $400 in dues to the AICPA every year for nothing!

# ¿ Jun 14, 2011 17:23

AbbiTheDog: May 21, 2007

furushotakeru posted:

No but apparently I pay some $330 a year to the national and state EA associations for not very good brand recognition. Oh well, I mostly pay the dues because they advocate in the local and national legislatures to make sure those rear end in a top hat CPA's and attorneys don't succeed in taking away (or limiting) my right to practice

In CA some salvos have been exchanged between EA's and CPA's in recent years over the right for EA's to serve as professional fiduciaries, at least in the same capacity that CPA's can. There has also been some scuffling at the national level regarding the new preparer regulations. CPA's and Attorneys seem to think for some reason they should be grandfathered in for a lot of things but that EA's should not get that same treatment.

That's because you only have two initials, I have three. I'm 50% awesomer.

# ¿ Jun 14, 2011 19:06

AbbiTheDog: May 21, 2007

Admiral101 posted:

Essentially what is happening here is that your dad is giving you 14,000$?

I don't see any tax implications for you for this. Is there a reason that you think there would be?

If OP is a US citizen, he should look into Form TDF 90-22.1 (due very soon as well).

His bank should have already alerted the Feds/IRS for the transfer (they don't tell you about this. And don't ask, because if you do, then all your wires are reported).

The OP should let us know if his father is a US citizen or not, there are separate forms for gifts from nonresidents.

Here's another forum answer, did not research it for accuracy though.

http://www.askmehelpdesk.com/taxes/gift-non-resident-alien-us-citizen-397931.html

# ¿ Jun 20, 2011 21:16

AbbiTheDog: May 21, 2007

Missing Donut posted:

You figured it out. You cracked the code.

Based on your history in these threads, I have to ask: do you apply any common sense or critical thinking skills in regard to tax law?

In his defense, I hear that all the time from my clients. I have quite a few that demand extensions based on this and file in October every year.

# ¿ Jun 27, 2011 17:09

AbbiTheDog: May 21, 2007

furushotakeru posted:

I'm sure the IRS doesn't mind. Gives them six extra months on the back end to audit the return and lets them space out their return processing resources some.

All the audits we see push the three year time limit. Are they faster down south?

# ¿ Jun 27, 2011 21:45

AbbiTheDog: May 21, 2007

Cyrezar posted:

Also that thing about the timely filed (non-extended due date) returns is completely false.

That sounds like something we'd expect The Man to tell us.

# ¿ Jul 1, 2011 15:21

AbbiTheDog: May 21, 2007

Pfffffffffft posted:

If i was getting paid under the table could i fill out a replacement w2 with my earnings and file a tax return for 2009? Im getting requests for it because the BSIS in California says i was self employed and estimated i earned 28k in 09 when i only made around 5k. I was mostly unemployed and moved back home with my mother and would only work around 12 hours a week for a security company.

No need to do a W-2, just fill out schedules C/SE on your 1040 and file it with your income/expenses.

# ¿ Jul 11, 2011 16:39

AbbiTheDog: May 21, 2007

furushotakeru posted:

If you file a state return like that they will require that you attach a copy of your federal return, so yes.

It's California, so prepare yourself for three years of letter writing, levy threats, and hassle.

# ¿ Jul 12, 2011 16:40

AbbiTheDog: May 21, 2007

furushotakeru posted:

It was meant as a sort of inside joke for the professionals in the thread. IDR = Information Document Request, which is, as Kaishek surmised, an audit document. It's what auditors use to let taxpayers know what records are being ~~demanded~~ politely requested.

Only the nerds snickered at that one.

# ¿ Jul 14, 2011 23:21

AbbiTheDog: May 21, 2007

Hillridge posted:

Thanks. So if the payment is under 600, we aren't required to do anything with regards to the instructor? It'll be in our financial records since it's technically money we spent, but I expect we'll have a decent number of under $600 payouts, and not having to deal with paperwork (collecting SSNs, etc.) would be great.

If I were you I'd collect them no matter what at the beginning of the contract. If, at the end of the year, you do wind up paying a contractor over $600 and you didn't plan to (and thus, didn't collect the info) and then the contractor tells you to "shove off" when you ask for their SSN, you can get into trouble (fined) should you get caught. Not worth it.

Just make them all fill out an W-9 form and staple it to their contract when they start.

http://www.irs.gov/pub/irs-pdf/fw9.pdf

# ¿ Jul 26, 2011 17:45

AbbiTheDog: May 21, 2007

stubblyhead posted:

I am starting a new job soon. It's a 100% remote position, and since I don't have a home office, I plan to use a coworking space in my city for $250/mo. My new employer is going to reimburse me for this expense. Would this be taxable income?

I currently live in Washington, where there is no state income tax. Since I'll be able to take my job with me, I'm probably going to move to the Portland area. If I live and work in Washington I'll still not have to pay any state income tax. However, the only coworking spaces I can find in that area are in Oregon, where there is an income tax. Would working in a coworking space like that require me to pay Oregon state income tax? My employer is based in New Jersey if that makes any difference.

A) No
B) Yes, your employer should probably slap this on your W-2 though for the state to trace you. If the state box is still listed as OR then they won't be able to track you.

# ¿ Jul 27, 2011 19:33

AbbiTheDog: May 21, 2007

scribe jones posted:

For 6 months I have been trying to get a nonprofit I volunteer for to take out the line from their newsletter about "volunteer and get a tax deduction for your time!"

Come on, you get the awesome cents per mile deduction. What more do you need?

# ¿ Aug 4, 2011 15:12

AbbiTheDog: May 21, 2007

Zewle posted:

Would there be an issue if I don't make any profit or have any sales yet? I'll be taking theory and professional audio tech lessons, and building website and imagery for band, but that's as professional as it would be by then. Should I be worried that that might not be seen as a legit tax... thing?

I'd say no. Education expenses to train for a new profession are not deductible as business expenses. See IRS Publication 970.

And you're going to have audit flags all over the place with a schedule C with no revenue and nothing but expenses for a few years.

# ¿ Aug 16, 2011 16:09

AbbiTheDog: May 21, 2007

Zewle posted:

So basically, unless I manage to actually make a profit or some kind, don't try deducting expenses?

Is there a line where lessons/classes go from being training for new profession to business expenses?

A) No, you can still claim expenses and lose money, but the burden of proof shifts from the IRS proving you're a hobby to you proving you're attempting to make a profit.

B) Tough call, depends on the facts and circumstances. Pay someone for some advice, you cheap musician. :banjo:

# ¿ Aug 16, 2011 20:17

AbbiTheDog: May 21, 2007

furushotakeru posted:

My point is that the IRS doesn't know your gain was $4k unless you report it to them.

Furu, why don't you get power of attorney for this poor soul and call New York and the IRS for him and see what's going on? I mean, they won't talk about this stuff to the taxpayer, and he's too busy to notify them on his own to see.

# ¿ Aug 22, 2011 16:39

AbbiTheDog: May 21, 2007

furushotakeru posted:

If you can find an office open at this time of year they should e able to help you file.

Subtle.

# ¿ Aug 30, 2011 16:00

AbbiTheDog: May 21, 2007

furushotakeru posted:

You should be able to deduct 90% of the cost.

In all honesty, the IRS would have an insane time trying to prove this if they even bothered to at all.

# ¿ Sep 1, 2011 21:58

AbbiTheDog: May 21, 2007

Chin Strap posted:

My girlfriend just received a notice from Maryland that her 2008 tax return she filed showed that the amount listed for the federal return was higher than the amount listed for the state return on that year, and now they want 700 bucks in back taxes. She doesn't have records from that far back. Is there any way we can get copies of those records? Or will she just have to suck it up and pay it?

She can call the IRS and request a "wage and income transcript." She can then compare this to the Maryland notice (she might need to call and get a copy of it from them first) to see where she went wrong.

# ¿ Sep 6, 2011 16:46

AbbiTheDog: May 21, 2007

Sharkface posted:

Many states (and the IRS) have a 3 year statute of limitations on tax return errors like this. Was this the return filed IN 2008 or FOR 2008?

It also depends on the date the return was filed as well. If she filed it late, the three years will be based on the date of the filing.

# ¿ Sep 10, 2011 17:22

AbbiTheDog: May 21, 2007

Oceanlife posted:

I'm interested in learning about US taxes on international companies so I'd welcome recommendations to websites or books. Here's the kind of question I'd be looking to have the knowledge to answer.

Your client is an American citizen. He runs a company that does various technical consulting for other companies. So for instance a company may give him their sales data and his team of economists will determine how the prices should be adjusted to maximize their profits. He finds that his company can do their job regardless of the physical location.

He asks if he expatriated to the Cayman Islands and established a corporation there would he still be liable for US Taxes.

Now first, I actually am interested in the answer to that sample question if you know it. But more importantly I where I can get the knowledge to answer questions like that aside from grinding through IRS.gov.

Research your own class homework!

# ¿ Sep 15, 2011 01:08

AbbiTheDog: May 21, 2007

Oceanlife posted:

I was asking for a book I could read on the subject and giving an example to highlight the subject area I'm looking for. If you know one great, I'd appreciate a recommendation.

Google it first, there's tons of examples about how Ireland/carribbean accounting works.

http://taxprof.typepad.com/taxprof_blog/2010/07/crs.html

And my google search probably has the IRS all over me now, thanks.

# ¿ Sep 15, 2011 18:27

AbbiTheDog: May 21, 2007

furushotakeru posted:

In other words "the IRS is way ahead of you"

It's not like you're going to find anything new that hasn't been tried yet. You don't think the big companies don't have herds of tax lawyers wandering around whose sole job it is to get around the tax laws? We only hear about this stuff years after they start and it finally gets worked through the courts.

# ¿ Sep 19, 2011 17:06

AbbiTheDog: May 21, 2007

furushotakeru posted:

My head almost exploded this morning when I heard two different morons blathering on about how taxing capital gains is double taxation. I don't think they know what a capital gain is.

It's going to be a long election campaign.

They should scrap the capital gains rates, but if you hold the asset more than one year, you get to adjust the original cost basis for inflation.

# ¿ Sep 19, 2011 22:32

AbbiTheDog: May 21, 2007

Oliax posted:

Ok, let's see if I can shed some light on this.

First of all, do you know what tax form your employer will be giving you? The choices are W2 or 1099. If he is not witholding any taxes from what he pays you, and you make anything more than about 10K per year, then he is probably treating you as an independent contractor and should be giving you a 1099. The bad news about this is that you will need to pay "self-employment tax" (see below). The good news is that this means your boss considers you an "independent contractor" which means you can and should deduct al kinds of business expenses against the income reported on your 1099. I won't go into the details of all the things you can deduct if you are self-employed, but it is a shitload and I hihgly recommend that you pick up a tax guide and take a look at the details of all the things you can deduct. This will make a massive impact on your taxes (in a good way) but you need to keep records and receipts. :-( In general, the IRS will "help" you to report all your gross income, but they will leave it up to you to figure out what you are allowed to deduct.

If for some reason your employer will be giving you a W2 at the end of the year (if you don;t know, ASK now) that basically means you are an employee and tax should have been witheld from your paycheck all year long. In that case, you should ask your employer for a W4 form (which is used to calculate how much tax should be witheld from each paycheck), fill it out and give it your employer (make sure you keep a copy). The IRS frowns on employers and employees who don;t withold taxes throughout the year, and if this is your situation, you need to get this straightened out ASAP or you will be paying interest and fines at year-end.

Ok let's assume you are indeed self-employed and your employer gives you a 1099 and you are able to deduct lots of business expenses. You will then need to pay taxes on whatever is left over, your net income. You will need to pay two types of taxes. 1. "Income tax" which is assessed by both the federal gov't and the state as a % of your net income, which increases as your income increases. I.e. you pay a smaller percentage of tax on your 1st 100K of income than you would on the secone 100K, et. 2. "Payroll taxes" which are used specifically to fund Social Security and Medicare, these are both federal taxes, so what state you live in doesn't matter. When you are an employee, these taxes are split 50/50 between you and your employer. In other words each of you pays 1.45% of your net income for Medicare and 6.2% of your net income for Social Security. So as an employee, you would see 7.65% of your paycheck being witheld and going to these two items (sometimes this is referred to as FICA). At the same time, an employer has to pay an additional 7.65% of your gross salary for these two programs. However, when you are self-employed, you are responsible for both the employer and employee portion, which means you need to pay the full 15.3% to the government. :-( But at least its with pre-tax dollars.

Hope that helps clarify things.

Look at the new guy, kicking rear end and taking names! Nice work.

The following link can answer 75% of the questions asked in this thread as well, if the posters would bother trying it first.

https://www.google.com

# ¿ Sep 29, 2011 17:26

AbbiTheDog: May 21, 2007

hello internet posted:

It's more complicated than that and is much more innocent than it sounds but that is besides the point.

The first year I was just waiting until tax time to pay the taxes since there is no penalty. I was told if I took 20% out of each paycheck I would be fine and I just wanted to make sure because like I said before I've seen 13.3%, 15.3%, 20%, and 25% and am just trying to figure out my out the door tax costs but I can't seem to get the same answer twice.

SE tax is based on your net business income (roughly 15% of the $50k in the above example). If you have health insurance (SEHI) you can use that as a 1040 deduction as well as reducing your SE tax.

Your federal (assuming no state?) income tax would be based on the $50k, adjusted for any other income/deductions (SEHI), less your standard/itemized deductions, spousal income (if any), child credits, personal exemption, blah blah blah.

I tell my clients in income tax-free states to save around 35% for federal taxes - it's a high number, but at least you won't have an unpleasant surprise come 4/15.

# ¿ Oct 6, 2011 16:57

AbbiTheDog: May 21, 2007

furushotakeru posted:

The issue is that there are about 100 different things that can influence your tax rate. Are you married? Do you have any dependents? Do you itemize deductions? Do you have other income besides from 1099 work? Are you a student? Are you planning to contribute to a retirement account? Do you pay for your own health insurance while you are consulting? Do you have business expenses to deduct? If yes, how much (always the $64,000 question!)? Does your city charge a local tax rate like most in OH do? How much?

These are some of the variables that need to be quantified before you can determine what your taxable income is expected to be. After that it is just a matter of Googling "2011 income tax rates" for IRS and OH. It isn't that no one here wants to help you, it's just a much more complex question than you might think and it is impossible to answer simply.

GIVE ME AN EXACT NUMBER NOW.

# ¿ Oct 10, 2011 22:56

AbbiTheDog: May 21, 2007

furushotakeru posted:

42

That's it?

# ¿ Oct 11, 2011 20:30

AbbiTheDog: May 21, 2007

furushotakeru posted:

This would be a theft loss, which is treated the same as a casualty loss. Reduce the loss by $100 and then 10% of your adjusted gross income for the year, and if there is anything left over it goes on schedule A.

If this is for a business (you pay for inventory and your supplier goes broke) I'd just write it off in full.

# ¿ Oct 12, 2011 16:36

AbbiTheDog: May 21, 2007

zantar posted:

Is this too complicated for Turbo Tax?

Me: one job all year, 401k contributions
Wife: 2 jobs + unemployment + Student Loan payments + 401k contributions

AND we got married this year (October)

It seems pretty straightforward if I write it out like that.... We rent our house so we don't have a mortgage and I don't have student loans.

No, TT should do fine.

You'll file as married filing joint (probably) all year. The 401(k) is done through your W-2 input screen, and the unemployment shows up on a form as well. Your wife will get a 1098 for the student loan interest, and that's about it.

# ¿ Oct 13, 2011 18:32

AbbiTheDog: May 21, 2007

furushotakeru posted:

This is me blowing you the worlds biggest raspberry

I don't know about you, but when I hear new clients in particular refer to themselves as "low-end" I tend to back away slowly.

# ¿ Oct 20, 2011 20:38

AbbiTheDog: May 21, 2007

Tai-Pan posted:

I said that in the sense that I don't know anyone that has a business accountant that does not have them as a full time employee.

Most of my small business clients do not have a full-time accountant (owner/spouse does the accounting). That makes no difference to me in terms of approaching the client, except I can't criticize the bookkeeper then.

The tone I got was in reference to paying for the work, which you can tell sent a few shivers down our spines.... :nyan:

# ¿ Oct 20, 2011 23:39

AbbiTheDog: May 21, 2007

Tai-Pan posted:

Right, but I don't really know anyone that uses an outside accountant. So I cannot really ask around.

Also, is there a hybrid person/agency that might be able to do this stuff? Obviously, how this all is treated ties pretty closely into my personal finance. A hybrid accountant and financial planner would be ideal. For instance, I am having a hard time determining if it would make more sense to hire my wife and reduce the gross profit or if the payroll tax+incorporation costs would wipe out the benefit given the low level of income I am producing.

Gah, so complicated.

Someone that's a credentialed tax preparer (LTC, CPA) and financial planner is going to run you $$$$.

Get a part-time bookkeeper in there to shore up your accounting and meet with a financial planner once a year or so. There are some that do "flat fee" financial planning for retirement.

# ¿ Oct 24, 2011 17:13

AbbiTheDog: May 21, 2007

jai Mundi posted:

Should I get a PO box and just prevent the gubment from asking questions.

FYI, all above-board paid tax preparers will slap you for this. And an IRS agent does frequent these forums.

If you were my client, I would make you claim the rental income and turn your "personal residence" into a Sch. E rental.

# ¿ Nov 8, 2011 23:02

AbbiTheDog: May 21, 2007

furushotakeru posted:

Your primary residence is wherever you live. I think you are worrying about your homestead exemption, which is a county property tax issue not an income tax issue.

What does 40 acres and a mule have to do with anything?

#OCCUPY HOMESTEAD

# ¿ Nov 9, 2011 00:53

AbbiTheDog: May 21, 2007

Admiral101 posted:

To elaborate on this:

There is no problem with paying in cash. You don't -need- an invoice to report the credit, though documentation is always nice.

What is needed is the woman's social security number and address (or the EIN number if she's through a business). If she's not reporting the child care on her taxes, however, she may get a notice from the IRS.

*cough* http://www.4nannytaxes.com/faq/ *cough*

# ¿ Nov 9, 2011 17:26

AbbiTheDog: May 21, 2007

flowinprose posted:

This situation isn't really the nanny tax, since the person taking care of his child does it in her house, not the parent's house.

Missed that part.

What he's going to find is when he asks for her SSN, she's going to stop watching his kid suddenly. The child care credit is essentially a paid snitching program for the IRS, since the credit is really pretty small and gets phased out fast.

# ¿ Nov 9, 2011 18:33

AbbiTheDog: May 21, 2007

furushotakeru posted:

I got something you can occupy right here bub

Sorry Furu, I don't accept advances from women over the internet.

# ¿ Nov 9, 2011 20:12

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# ¿ May 14, 2024 04:11

AbbiTheDog: May 21, 2007

furushotakeru posted:

Some probably gently caress off after 4/15, I just don't have my practice structured that way. In other words, I can't afford the staff to handle all this poo poo for me so I get to do it myself.

Long island iced teas all year long over here.

In all reality, I do 75% of my work January - April. July and November are my firm's slowest months (holidays, no tax deadlines really).

Looking for a tax season temp right now, I don't need the overhead of another staff all year long.

# ¿ Nov 10, 2011 00:08

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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