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.

Mattism: May 22, 2007

Hartman posted:

I have a question about the timing of contributions to a HSA.

I qualified to start an HSA last year, but never got around to it. I opened up one about a month ago, and put in a small contribution. I saw where you can keep contributing for last year up to Tax Day in April. Can I max out my contribution ($3050) for 2010 and use it for an above the line deduction in 2010, even though I didn't open the account until 2011?

Yes.

irs.gov posted:

When To Contribute

You can make contributions to your HSA for 2010 until April 18, 2011. If you fail to be an eligible individual during 2010, you can still make contributions, up until April 18, 2011, for the months you were an eligible individual.

# ¿ Mar 13, 2011 23:17

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# ¿ Apr 28, 2024 23:43

Mattism: May 22, 2007

kaishek posted:

Any love at all on this, even just to tell me I'm screwed, pay up?

http://forms.marylandtaxes.com/current_forms/Resident_booklet.pdf

Appears that way. Per the form instructions, you're supposed to add back what amounts to whatever you put in box 34 on your 1040. That's a really strange policy.

Next year you might try taking whichever education credit is applicable instead of the adjustment to your income. Assuming, of course, there's no add back for the credit as well.

Mattism fucked around with this message at 05:17 on Apr 2, 2011

# ¿ Apr 2, 2011 05:12

Mattism: May 22, 2007

zer0spunk posted:

As a freelancer, if a client chooses to pay me in cash or a personal check, and it's under the amount required by the 1099-MISC, if I report it and it adds to my gross income, but they don't, what exactly happens?

The person who paid you looks like a fool for not taking a deduction for contract labor or similarly named expense.

# ¿ Apr 8, 2011 03:57

Mattism: May 22, 2007

bimmian posted:

I entered the wrong school district code when doing my state taxes, however both my current district and the one I was living in most of last year have a tax rate of 0%. Do I need to file an ammended return?

No.

# ¿ Apr 10, 2011 17:01

Mattism: May 22, 2007

Enigma89 posted:

I am doing my taxes for my first time, generally my parents have been doing it for me, but I am starting to do it.

I filed my tax return and I forgot to sign it. It went back to my home for a signature, and after I reviewed my tax return with my parents, my Father told me about Obama's college education tax return. It is pretty much explained here:

http://www.investingblog.org/archives/742/obamas-2500-college-education-tax-credit-explained/

I was wondering, if I want to take advantange of it, will I be able to do it via a tax return done on turbo tax? Or will I need to take extra special steps to do it? I didn't really make an income last year, so I won't be needing to file a big tax return, I won't owe any money. My father thinks that I may get $2,000 or so back from the government, but I can't imagine getting a huge paycheck like that in the mail.

Can someone explain this? And to pre-empt any of the obvious questions. I did attend a univeristy last year and paid the tuition, it was up in the tens of thousands.

You should have received a 1098-T from whatever school you attended that lists your qualified tuition expenses. I'm not at all familiar with Turbo Tax, but I'm sure it will calculate your credit (if any) once you plug in the information from that form.

# ¿ May 7, 2011 23:25

Mattism: May 22, 2007

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?

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?

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.

You can probably find the land value on your local county assessor website. Don't depreciate that amount.

# ¿ Jun 12, 2011 21:13

Mattism: May 22, 2007

Pokkahn posted:

I was hired through a contracting service for another company. I was led to believe I would be an IC. I just got my first check and they have taken taxes out. The taxes look off to me.
Check was $1000
Federal was $12
Medicare was $15
Soc Sec was $40
State tax was $45

The federal income tax looks way off to me. Does anyone have any idea whats going on there? I plan to ask the HR person tommorow but does anyone have any idea why the federal is so low?

Did you put the maximum amount of allowances on your W-4?

Mattism fucked around with this message at 13:51 on Jun 23, 2011

# ¿ Jun 23, 2011 13:47

Mattism: May 22, 2007

furushotakeru posted:

Infinity?

You know very well what I meant. Though now that I think about it, that would be quite a few allowances to only have $12 withheld.

Mattism fucked around with this message at 03:40 on Jun 24, 2011

# ¿ Jun 24, 2011 03:37

Mattism: May 22, 2007

Tai-Pan posted:

I have been doing freelance consulting for a couple of years on the side, never making enough to declare it as anything other than "other income". I am operating without a business structure or tax id.

However, this year I will probably make about $15,000 net.
I am looking for tax opportunities to reduce my payroll tax (which I have never paid) and additional income tax.

I have an un-rented studio in rental triplex I own that I would not mind using as an office. It is near enough to my house that this would be okay. Can I rent this from myself ($385 a month in rent, + 1/3 of utilities, etc), or would the likelihood of getting audited outweigh the benefits?

I am vaguely familiar with Keogh retirement plans, would that be a good solution in addition to my Roth?

My fixed costs will be about $10,000 (advertising) and some negligible amount of meals.

Are there any other obvious things I should be doing?

Contact a CPA. I think you have enough going on here to warrant paying someone for advice. Not that anything you're trying to accomplish is tremendously complicated, there are just a variety of different ways to approach this.

# ¿ Oct 20, 2011 03:07

Mattism: May 22, 2007

flowinprose posted:

Have a question about how stock options apply to wash sales...

Lets say I purchased 100 shares of stock ABC at a cost of $100/share on 10/6/2011 (so the stock purchase and option purchase/sale all happen within 30 days).

So the stock price declines to $95/share, and I purchase a put contract with a strike price of $100 for a total cost of $500.

Now, the stock price drops to $80/share, and I sell my put contract for $2000, but I keep owning the stock. So I've experienced a realized gain of $1500, but I have unrealized losses of $2,000 from the stock I still own.

If nothing else happens until the end of the year, will I owe taxes on the $1500, or is that subtracted from the basis of the stock? If next year the stock price is still at $80, and I sell it, will I have a $2000 loss for 2012 taxes or only $500 ?

Not sure how the wash rule factors in to your scenario here.

For the other stuff, that sounds like a straddle, though you might have to declare it as such. You might read through whatever publication on the IRS website that discusses capital gains and losses, but I'm inclined to say you would owe tax on the gain from selling the option contract with no netting against the unrealized loss.

Were you to flip your gains and losses (i.e. $2000 realized loss, $1500 unrealized gain) the loss would be deferred and limited to $500.

# ¿ Oct 26, 2011 02:36

Mattism: May 22, 2007

Wagonburner posted:

OK. she was KS if that matters.

Hey, another OK goon. Your grandmother more than likely wasn't reporting the increase in redemption value as income each year, so there is no federal tax effect until you sell the bonds. The bank will also issue you a 1099-INT whenever you do sell them.

Also, the bonds are non-taxable in Oklahoma.

# ¿ Dec 5, 2011 02:24

Mattism: May 22, 2007

striking-wolf posted:

I've got a situation that is confusing me a bit and am hoping for some guidance. I had four sources of income this year:

1) Approx. $16,000 in wages from my university for four months of teaching. They withheld in taxes as if I was on track to make $64,000 for the year, which is to say somewhere around $4,000 of that $16,000.

2) $1,500 single-check payment for independent contracting work for an academic workbook I wrote. Nothing withheld and I made no quarterly estimated income payments on it.

3)$4,000 single-check payment from non-profit scholarship organization for archival research overseas as part of my PhD program. Nothing withheld, no estimated payments. Spent all of it on research expenses and living expenses while abroad at my research site and have receipts for it.

4) $12,500 in a single-check payment for a six-month academic fellowship to support research overseas and the writing up of that research back in the US. The fellowship is for 1 September 2011 to 31 January 2012. Spent about $9,000 on it on research and living expenses overseas and for purchasing a new laptop after mine was stolen overseas; have receipts for these expenses. Remaining $3000 on living expenses in the US while I wrote up my research. Nothing withheld, no quarterly payments.

Do I need to declare #3 and #4 as fellowship income, or can I not declare it since it was intended for an spent on something necessary for my degree (archival research expenses)? If I do need to declare it, do I need to declare the full $12,500 of #4 or just 5/6ths of it? And what expenses can I deduct? The IRS webpage on fellowships and scholarships really seems intended for undergrads, not for PhD students for whom overseas archival research is literally a requirement for degree completion listed in our program handbook.

If I don't need to declare #3 and #4, then I should get back most of that $4,000 that was withheld, right? If I do, will I be able to avoid a penalty for not paying quarterly taxes on my estimated income since I had that $4,000 withheld?

You'll probably need to report all of #3 and #4 as income, and because you're a cash basis tax payer, you'll report it all in 2011. Research, room and board, and travel aren't qualified educational expenses.

The $1500 from #2 will go on a Sch C, and I'm sure you can kind at least that much in expenses to offset it (e.g. that laptop). I'm not absolutely certain on the underpayment penalty. Probably not.

Here's some light reading Pub 970

# ¿ Dec 24, 2011 01:17

Mattism: May 22, 2007

ChineseBuffet posted:

I was thinking about something earlier this week and was curious if this is right.

Say I made my living buying things on craigslist that I felt were priced too low and then reselling the exact same items for more, and that this was my only source of income. Let's also say I wanted to pay my taxes, as I'm guessing a lot of people in this line of work don't bother.

Would this all be classified as capital gains and avoid Social Security, Medicare, and SE tax? Would I qualify for the long-term gains rate on things I held for over a year? Would I be able to take a capital loss on items that I eventually sold for less than what I paid, given that these weren't purchased for actual use?

It seems like if all of these are true, they could be a pretty big advantage of this type of income (assuming you don't care about ever getting SS or have a spouse that can get you in).

The stuff you were buying would be your inventory, and the profit you made from reselling it would be ordinary income.

# ¿ Mar 4, 2012 17:15

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# ¿ Apr 28, 2024 23:43

Mattism: May 22, 2007

Unicorn Vomit posted:

If you're filing as a self-employed person and didn't send in the quarterly payments, what kind of penalties are you looking at if you try to do it all at once at the end of the year?

Underpayment penalties.

# ¿ Jan 15, 2013 01:45

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