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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Epi Lepi: Oct 29, 2009; You can hear the voice
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IRS posted:

Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller.

You should be able to figure out if you'll have to pay a penalty from that info. The penalty won't be that much though, probably less than $100, and it can be decreased by filing early this year.

Orange_Lazarus posted:

edit:
Back on cell-phones, my boss calls me on my cell sometimes after-work. Can I deduct the bill?

You're allowed to deduct a portion of your cell phone bill equal to the portion of time you use it for work in your Schedule A deductions. If your Schedule A were to be audited, proof of your payments, a written statement of the percentage of use for business and a letter from your employer saying you don't get reimbursed for such expenses would be enough for the IRS to accept it.

# ¿ Nov 28, 2012 18:23

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# ¿ Apr 27, 2024 17:32

Epi Lepi: Oct 29, 2009; You can hear the voice
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Ramadu posted:

I posted earlier in the thread wondering whether I could deduct a laptop I'd bought for school and was told I couldn't. However I have 2 online jobs that I primarily use the laptop for that I found in the online money making thread. I was wondering if that was a business expense I could have. I remember not putting anything on the turbotax forms last year about business expenses because I frankly didn't have any, but I was wondering if I could this year since I've been using it about 35 hours a week to do work related activities.

You could, to the extent that the laptop is used for work, but it probably won't end up affecting your tax return unless you have other expenses to go with it, along with other Schedule A deductions so that itemizing is actually worth it.

I would probably argue that it would count as an education expense, but those deductions have caps that you might be able reach with just what's on your 1098-T.

# ¿ Dec 14, 2012 00:00

Epi Lepi: Oct 29, 2009; You can hear the voice
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scribe jones posted:

A lot of this post is wrong. If it were a business expense, it would go on Schedule C, not Schedule A, so the standard deduction threshold isn't relevant. And the only deductible education expenses are tuition and fees that are a prerequisite to enrollment--you can't deduct computers, textbooks, etc.

No. Unreimbursed job related expenses go on Schedule A. You would not fill out Schedule C unless you had self employed income and I'm assuming he's a W-2 employee for his online jobs.

The American Opportunity Credit allows for related expenditures that aren't included in your tuition as shown on 1098-T. I'm pretty sure I've been able to successfully argue with the IRS for those types of expenses on clients who have taken one of the other credits but I may be misremembering.

EDIT: I've been working at a small tax practice for two years now after getting my BS, and I follow this thread to help educate myself on a lot of the issues that get brought up. I'm not confident enough to answer a lot of the questions I've seen but these are two issues that I see a lot in my responsibilities at the office I work at.

Epi Lepi fucked around with this message at 07:29 on Dec 14, 2012

# ¿ Dec 14, 2012 07:16

Epi Lepi: Oct 29, 2009; You can hear the voice
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scribe jones posted:

"Online moneymaking thread" = 1099-MISC

Ah, okay then, I don't follow that thread.

# ¿ Dec 14, 2012 07:36

Epi Lepi: Oct 29, 2009; You can hear the voice
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Orange_Lazarus posted:

I have a bunch of computers I bought off the government a long time ago that turned out to be a bad investment. I want to unload them for a tax deduction. How do I go about evaluating their fair market value and can I just dump them off at a Goodwill or do I need to find another place to donate?

Thanks.

Goodwill and the Salvation Army have information available on their websites to give you an idea of what the value of your donation would be. I think all the charities tend to stay around the same value ranges for the items they accept so I don't see any reason why you wouldn't be able to just dump them off at Goodwill, just make sure you get a receipt.

socketwrencher posted:

Thanks so much, this is really helpful. I'll make sure to keep an accurate mileage log. My concern is that I won't have much 1099 income but will have a lot of expenses if I can 179 the car (if I understand things correctly, there is a max deduction of $11,060 for vehicles). So I'll have about $3k income and $15k expenses for 2012.

A loss like that has a chance of triggering an audit, but if you have all of your backup information organized you should be fine. Just make sure you hang on to all of your logs and receipts for at least 3 years.

One thing to keep in mind, and someone correct me if I'm misremembering any of the facts about this, is that you have to show income on a Schedule C business for 3 out of the previous 5 years otherwise the business becomes considered a hobby and hobby losses are only deductible as far as your income from the hobby is. Your loss this year won't be an issue, but keep this in mind for future years.

# ¿ Dec 18, 2012 17:04

Epi Lepi: Oct 29, 2009; You can hear the voice
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dreesemonkey posted:

I had a general question about the "Fiscal cliff" tax stuff, I'm sorry if this is a shut-the-gently caress-up-about-it-already topic in here, but my questions is a little more specific.

Q: If our FICA/SS increase returning to the previous tax rates, how does that effect the "standard deduction" amount?

My guess is that the standard deduction amount would also change, correct?

Deets: Filing jointly with my wife, I think the standard deduction has been around $10,500? We'll probably end up itemizing this year thanks to a full year of daycare expenses.

The standard deduction amount for MFJ in 2012 is $11,900.

# ¿ Dec 20, 2012 17:20

Epi Lepi: Oct 29, 2009; You can hear the voice
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Small White Dragon posted:

State and Local Income Tax *OR* State and Local Sales Tax. (You can't take both.)

Isn't one of these deductions going away this year or next or did they extend it?

# ¿ Jan 4, 2013 06:42

Epi Lepi: Oct 29, 2009; You can hear the voice
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razz posted:

Tax return question coming from a Graduate student!

AbbiTheDog posted:

The 1098-T might be inaccurate. I'd just put in the actual number you paid in eligible costs.

Edit: I've never had the IRS send a matching a notice for putting the actual number.

Even if they did send a notice, if you have the appropriate backup all you have to do is send copies of those papers back to the IRS, maybe with an explanation letter for good measure and you should be fine. Just hang on to those backup documents for at least 3 years and you should have no worries.

# ¿ Jan 7, 2013 20:26

Epi Lepi: Oct 29, 2009; You can hear the voice
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smashthedean posted:

This is going to be my first year filing taxes since getting married and having a mortgage for a full year. I've been thinking that this is going to be A Big Deal that is going to make filing my own taxes a lot more difficult, but the more I'm looking at it, I might just be better off taking the standard deduction as usual rather than itemizing my mortgage stuff in there and making it complicated.

We paid $1700 in property taxes in 2012 and my best calculation of the interest I would have paid on my mortgage comes out to about $7000 (haven't gotten a form from my mortgage company yet or my wife shredded it accidently, but this number is from using a loan calculator that I'm confident of). I'm not sure if PMI is deductable or not, but my calculations show that would have been around $1800 paid. I don't really have anything at all else that I would consider deductable since we're pretty much just both regular W2 earners with nothing else going and no kids or anything.

Am I missing something big that would make itemizing a better idea, or do I have this figured out right? $11900 standard deduction better than $10500 or $8700 (if no PMI), yes?

State and local income taxes or state and local sales taxes are also deductible in your itemized deductions. Those are the most likely things to push you over the standard deduction amount.

# ¿ Jan 10, 2013 01:55

Epi Lepi: Oct 29, 2009; You can hear the voice
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smashthedean posted:

We're in Washington state so there are no state or local income taxes. We didn't save all of our grocery receipts and stuff to add up sales tax either so I'm guessing we'd be out of luck there.

IRS posted:

If you didn�t save all your receipts, you can still choose to claim state and local sales taxes. You could fill out the worksheet and use the optional general sales tax tables in the Instructions for Schedule A (Form 1040) , but why not take the easy route and use the Sales Tax Deduction Calculator!

http://www.irs.gov/Individuals/Sales-Tax-Deduction-Calculator

Use that to figure out how much you can deduct. This is one of those instances where the IRS is really nice about something.

EDIT: I just tried to run it myself and the calculator hasn't been updated for 2012 yet. Someone earlier in the thread said that the state and local sales tax deduction has been renewed though so you're gonna have to wait until the IRS gets their poo poo together.

Epi Lepi fucked around with this message at 02:13 on Jan 10, 2013

# ¿ Jan 10, 2013 02:09

Epi Lepi: Oct 29, 2009; You can hear the voice
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shodanjr_gr posted:

If you deduct state/local INCOME tax, you are not allowed to exempt sales tax AT ALL? Or are you just not allowed to use the "calculator" method?

Can't deduct both at the same time. It's an either/or thing. The reason the sales tax deduction was implemented was to give a hand to people in states with no income tax.

# ¿ Jan 10, 2013 03:28

Epi Lepi: Oct 29, 2009; You can hear the voice
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Oxford Comma posted:

When does a former employer need to send me my 1099? I thought it was Jan 31st but they're claiming its been extended to Feb 15th.

Pretty sure they're right and it's the 15th.

# ¿ Jan 30, 2013 07:35

Epi Lepi: Oct 29, 2009; You can hear the voice
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Darko posted:

I've got a question about old taxes.

Apparently, I somehow missed filing my state taxes in 2007 (probably from doing them online and not paying to do the state as well, then forgetting about it). The state waited till now to contact me about it, and are charging me the max possible amount, as if I had no withholding at all taken from that.

Because it was so long ago, I can't locate a W2 from that year. This is the issue I'm running into:

- A transcript of my taxes from that period from the IRS does not include state info
- My previous employer at that time refuses to return calls or emails regarding this

Who the hell can I contact to get that old info? It has to be SOMEWHERE, since my employer obviously would have filed it with the state, but no one I call is able to give me anything, and that employer is ignoring me (because it's a bad company, which is why I don't work for them anymore).

I don't know what state you're in but here in New York the state is completely happy with not keeping withholding records and throwing the burden of proof at you. The federal government doesn't keep track of that either so unfortunately to the best of my knowledge, the only way you'll be able to get the info you need is through your old employer. It's a lovely situation I know.

The only other thing I can think to try is if you itemized and took your state taxes as a deduction that year, you might be able to try and talk your way into providing that as proof. I have no idea if that will hold water with the state but if it's you're only option it's probably worth a shot.

# ¿ Jan 31, 2013 16:46

Epi Lepi: Oct 29, 2009; You can hear the voice
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sellouts posted:

Why would getting a credit card cause this to be any different than normal?

Or out differently, don't you have to always save receipts no matter how you pay for what you write off or does the credit card make it different?

A lot of people think their credit card statements are good enough back up that they don't need to save their receipts.

Depending on what kind of expense it is a credit card statement can be good enough though. IRS asks you to back up meals and entertainment claims? Receipts wouldn't show much if any more info than your credit card statements so no problem. IRS asks you to back up computer expenses? Credit card statements full of Best Buy purchases are harder to get accepted, legit or not.

# ¿ Feb 1, 2013 18:15

Epi Lepi: Oct 29, 2009; You can hear the voice
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Gaspy Conana posted:

Tomorrow I'm going to be helping my dad do his taxes online. He has a few confusing issues that I'll relay here as well as I can possibly remember them:

Issue 1:
His company was bought out at the end of 2012. The 401K account was closed and rolled into an IRA managed by the old company. He has a 1099 from them only showing the distribution. They said he'd received a form in May to document the rollover - but that's a little too late for filing taxes. He's worried that the IRS will see the distribution, think that he went hogwild with it, and mess him up.

The company's employee line told him not to worry about it.

Check the distribution code on the 1099, that might give you a better idea of whether to be worried. If you want to wait for the rollover form your dad could always file for an extension, assuming he doesn't think he'll owe anything when he does file.

# ¿ Feb 9, 2013 08:33

Epi Lepi: Oct 29, 2009; You can hear the voice
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Zenzirouj posted:

I'm not sure if it's cool to ask about refunds in here, but it seems like mine is really low. I'm using TurboTax freedom since I make 30k. I'm finishing up with it and it's telling me that I'm getting back $195 from federal and $20 from state. Isn't that really low? It seems like I got that much last year when I had been working at this job for barely a month. For reference, I'm renting from my friend who owns a condo, I'm not making any car payments, I'm single and have no dependents, and I'm not making student loan payments (I give my parents money since it's simpler for them to just keep making the payments). No debt or anything. My federal income withholding was $1800, $1000 for social security, and $350 for medicare.

I thought that you end up getting the majority of withheld stuff back and that it was basically a zero-interest loan for the government? Did I do something wrong here?

Unfortunately those refunds sound about right for the amount of withholding you have. Check how you filled out your W-4 when you started working for your company. I'm betting you put Single/1 which is why you ended up almost breaking even. If you want a larger refund next year, change it to Single/0, but of course you'll get less in each paycheck. It's really a question of, do you want the money now or later.

One thing to check though, are you claiming yourself or are your parents claiming you? If you're claiming yourself you can still take the student loan interest deduction even though they're paying for the loan as long as the loan is in your name.

# ¿ Feb 15, 2013 19:54

Epi Lepi: Oct 29, 2009; You can hear the voice
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BRB MAKIN BACON posted:

ok. Does this mean I need to redo my redo of my taxes?

edit: Can I contact the local IRS office and work with them?

Are you saying you tried to file your regular 1040 twice? Or did you already file a 1040X?

# ¿ Mar 3, 2013 03:14

Epi Lepi: Oct 29, 2009; You can hear the voice
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i am not so sure posted:

So I have been trying to get help from NY State on the phone but apparently they have zero patience for someone with an obvious stutter and nobody will help me. They just bounce me around.

I worked for Starbucks in 2012 all year. I worked for them as a CT resident from Jan-May, then transferred and worked in NY from May to the rest of the year. They sent me two W-2 forms, but the wages are not divided between states, they simply list my full income for the year on both forms. The CT one is blank aside from the state income tax.

CT told me I have to get a partial residency form from NY and get an estimation on the wages I earned in each state. I called Starbucks before all of this happened and asked them and they said their forms are correct and they don't really have ability to help me.

NY told me I have to do full residency under them and incorporate my entire wages for the year under NY, which means I would file partial residency under CT but declare no wages, which also seems like bullshit.

I don't really know anyone to ask who would know and I can't nearly afford someone to file for me, so what is my process here?

Your story is not exactly clear. Where did you actually live and for how long? If you moved from or to NY during the year you'd have to fill out a partial year resident tax return. If you only lived in CT but started working in NY then you'll want to file a non resident tax return for NY.

# ¿ Mar 20, 2013 19:27

Epi Lepi: Oct 29, 2009; You can hear the voice
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i am not so sure posted:

Worked in and lived in CT from January to May. Worked in and lived in NY from May to December. Both for the same company. I'm confused because the wages aren't divided by state in the W-2, they just sent me two forms and both of them have my yearly income. So I don't know how much I made in each state so I can file accordingly.

It seems like what makes sense is filling out two partial resident forms for each state and getting on Starbucks to give me numbers on my wages in each state.

Yes, that is what you should do, at least on the NY side. Whoever told you to do full year in NY was wrong. Double check where it lists your withholding from each State, normally that's where your W-2 would show how much income you have in each state.

# ¿ Mar 20, 2013 21:44

Epi Lepi: Oct 29, 2009; You can hear the voice
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i am not so sure posted:

This is what confuses me. My copy for CT filing is left blank except for my State Wages, which is my full year wage and the same number as NY's State Wages. Also there's the state income tax. That's it. No division of wages.

That is odd that they didn't split it up. I think the only thing you can do is harass Starbucks until they give you the information you need.

# ¿ Mar 21, 2013 16:54

Epi Lepi: Oct 29, 2009; You can hear the voice
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Jealous Cow posted:

I mailed my partial year resident return to New York about 7 weeks ago after having it rejected electronically with no reason given, despite passing H&R Blocks checks. I haven't received anything, and the online return status has no record of my return.

How long should I wait until I assume they lost it (I know it was delivered, sent it certified)?

There's no reason not to call tomorrow or Monday. It's been 7 weeks, it can't hurt to try to get some peace of mind. Try this number, 518-457-5181, and try to do it in the morning so you spend less time on hold.

# ¿ Mar 29, 2013 22:01

Epi Lepi: Oct 29, 2009; You can hear the voice
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Have any of you other preparers had any clients who's federal refunds have been held up because of the 5405 Repayment of First-Time Homebuyer Credit form? I'm not 100% sure that's what's holding up my clients return but they've received their state refund already and there's no other odd forms on their return. If you've encountered this were you able to find out a way to speed up the processing of the return? How long did your client's return end up being delayed?

# ¿ Apr 9, 2013 22:01

Epi Lepi: Oct 29, 2009; You can hear the voice
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AbbiTheDog posted:

You have no idea how many times I have to stop clients from trying to deduct their boob jobs.

Was it here that I saw an article linked about a stripper that was able to get depreciation on her implants accepted as an allowable business deduction?

# ¿ Jun 24, 2013 16:52

Epi Lepi: Oct 29, 2009; You can hear the voice
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EugeneJ posted:

If my medical debt for 2013 exceeds 10% of my income and I itemize deductions, but the collective amount of the medical debt is still less than the standard deduction, I can only claim the standard deduction, right?

Or can I somehow deduct both the medical debt and the standard deduction together?

I'm trying to figure out if it's worth it to pay a medical bill in full now, but my medical expenses for the year thus far don't exceed the standard deduction.

Your medical bills exceeding 10% of your income also has to exceed the standard deduction or it provides no benefit to you. You cannot deduct medical bills and still take the standard deduction.

# ¿ Aug 1, 2013 19:54

Epi Lepi: Oct 29, 2009; You can hear the voice
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Admiral101 posted:

Too trivial for the IRS to be concerned with capitalizing $150 and amortizing it. If it was $1,500 it would be a different story.

If you resell the backpack you would have to report the proceeds as income. But if you're buying a product to review without using it for personal use, you may deduct it as an expense.

How do you prove to the IRS that something is or isn't being used for personal use in the case of an audit?

# ¿ Dec 17, 2013 20:53

Epi Lepi: Oct 29, 2009; You can hear the voice
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Admiral101 posted:

Are we talking stuff like backpacks here, or stuff like cars?

Items that lend themselves more frequently to personal use, such as cars, tend to require more substantial proof.

I was just asking generally. I work in a tax accounting office and I'm more interested from the perspective of being able to assist a client if one ever started making money from a reviewing-items-blog. I like to be knowledgeable of potential audit defenses.

# ¿ Dec 18, 2013 07:16

Epi Lepi: Oct 29, 2009; You can hear the voice
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scunish posted:

So taxes are suddenly complicated and I can't imagine that what I've come up with is right. Any help is HUGELY appreciated! I got married in 2008 when gay marriage was legal for a second in CA. With the removal of DOMA, I am planning to go back to 2010 to amend all of our tax returns. In the past we've had to file single for our federal, and married for our state. HUGE hassle.

I'd always heard that married couples got tax breaks, but lo and behold, I've redone 1040s for 2010 and 2011, and came up with us still getting refunds, but WAY smaller refunds than we got as single people. For the record...

2010 - between the two of us, our federal refund was $3587. Redoing it as a couple, it's $2916.
2011 - refund WAS $3275. Redoing it, it looks like it would be $1459.

I haven't even touched 2012, this was so discouraging. If I filed these bad boys we'd owe the IRS a crapload of money that we don't have...can't be right. I typically do our taxes each year and itemize (we are homeowners, pay student loans back, give lovely amounts to charity), and as far as I can tell - I've done it twice for each year - I haven't screwed anything up. Can you guys tell me if it's normal to pay more in taxes when filing married? I'm trying to figure out whether ornot I'm making some dumb mistakes and should go pay to get it done right. This bites, we were hoping for some kind of crazy tax windfall.

Unfortunately you're probably not making any mistakes. http://en.wikipedia.org/wiki/Marriage_penalty

# ¿ Jan 4, 2014 05:47

Epi Lepi: Oct 29, 2009; You can hear the voice
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Actie posted:

Can someone explain how in the world it's possible that (according to TurboTax) I owe a bunch of money to the state even though I'm getting a somewhat bigger bunch of money back from the feds?

I'm a NYC resident. 97.5% of my income came from my W-2 job (the rest came from dividends, capital gains, and a tiny bit of Schedule C business income). I claimed zero state allowances on my W-4, so underwithholding cannot be the culprit. My AGI is ever so slightly higher in the eyes of the state than it is in the eyes of the IRS, but this alone does not account for the difference (my balance due to the state is much greater than the difference in AGI).

Is there something obvious I'm missing that could explain this?

EDIT: OK, looks like TurboTax has decided I should take itemized deductions for the federal return but only the standard deduction for the state return�presumably because some federal deductions don't apply at the state level? I guess that could explain it, but it doesn't seem like enough. Plus, weirdly, I did slightly overpay on my NYC (local) taxes; it's only at the state level that I somehow owe money.

NY withholding charts are pretty bullshit, if you overstate your exemptions even the slightest you should expect to owe. I practice out on Long Island and people owing to the State when they're getting refunds from the IRS is something I see everyday. Depending on the size of your Schedule C income that could be the culprit, particularly if it's kicking you up into a higher bracket. The bottom line is probably just that NYS is a dick. The standard vs itemized deduction thing is probably correct though, since state taxes are obviously not included in NYS itemized deductions.

# ¿ Mar 2, 2014 06:17

Epi Lepi: Oct 29, 2009; You can hear the voice
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DrSunshine posted:

I'm 26 this year, and have just gotten a full-time job this year, so I won't be countable as a dependent. However, due to various circumstances, I plan on continuing to live with my parents so that we can share expenses; we're a close-knit Asian-style family. How should we file our income taxes-- jointly or separately? Would my income be counted along with my mother and father's as combined household income?

You file your own return separate from them, claiming yourself. The fact that you live with your parents is irrelevant.

# ¿ Apr 12, 2014 23:26

Epi Lepi: Oct 29, 2009; You can hear the voice
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flowinprose posted:

The fees they normally take off are not included by them on the 1099 that they send her at the end of the year. So we have just been reporting her 1099 income on line 1 of schedule C. If she did also take those fees as an expense, then it would be doubling the deduction.

To be clear, normally they just send her a 1099 with the income they pay her less the fees they deduct? And this year she has to pay some fees out of pocket? If that's the case then she can deduct those extra out of pocket fees as an expense.

# ¿ May 1, 2014 17:19

Epi Lepi: Oct 29, 2009; You can hear the voice
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Juanito posted:

Hi guys,

I got a CP2000 notice for 2012. And I need help in knowing how to respond.

They are saying that I owe thousands of dollars, and this is because of a sweepstakes win that I forgot to include when I filed taxes. I intended to do an amended filing but I forgot to actually file it.

The sweepstakes was a trip for 2 to a movie premiere in LA. The win only included the airfare and the hotel room for 2 nights. It was for 4 people max, but I only took my wife. ARV $4500. This was a 1099-MISC form.

So my income took a $4500 increase, which eliminates certain credits that I had received, including Additional Child Tax Credit and EIC. Ouch. If I were to get that reduced, even $1000, that would be enough to get me the credits back, and not have me owe the IRS thousands.

So, the organizers of the sweepstakes haven't answered my emails (no surprise). But I've got the original email that shows exactly how much they paid for our airfare, $1705.20, and I was able to get a copy of our hotel bill too, $635.59. That means they only spent $2340.79 on our prize, that's $2159.21 that's on my income that shouldn't be.

Now when I spoke to someone from the IRS over the phone, he pretty much said that I shouln't bother filing an amended Form 1040X, instead if I'm disputing things, I should just write a response, and include my evidence.

Is he right? Do you think that writing out an explanation (including a copy of my itinerary, which includes the airfare, and also a copy of the hotel receipt), would be enough to get this resolved? I expect that I'll owe a few hundred dollars in taxes, but not thousands.

Thanks!

They also want to verify education credits that we had claimed. We got 1098-T statements from our schools that year, but my wife's school didn't put a value in the first field (which is where it should show how much she actually paid). So I found our old credit card statements, and have the exact amounts. I was planning on just including all of these statements, and highlighting the payments to her school. Is this an okay response?

He's right that you don't have to amend, writing a letter, including your backup and highlighting the relevant numbers is enough for both of the issues and is what my boss has me do for our clients all the time. The only thing I don't know is whether the IRS will accept your valuation of your trip without a corrected 1099. Be sure to mention that the sweepstakes holder has not responded to your efforts to contact them. Good luck!

# ¿ Nov 20, 2014 07:31

Epi Lepi: Oct 29, 2009; You can hear the voice
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And you're doing what it wants

AbbiTheDog posted:

You would need to file an amended return (Form 1040X). Not sure if Turbotax does that, but you can always print it out from the iRS website and do it by hand. Read the instructions, it makes you mail in attachments and you mail it all to a different address. Efile of amended returns is not allowed.

State will need to be amended as well.

Oooorrrrrr......

Take the lazy way and wait 10 months. The IRS computers will issue you a CP2000 notice where they correct your mistake, re-run the taxes for you, and tell you the difference to pay. As long as you haven't moved between now and then you'll get the notice. They'll helpfully notify your state as well who will also send you a corrected tax bill.

Method B will incur some interest charges, but they might be worth it instead of having you screw around with it.

I've never seen a letter from the IRS telling a client that they're entitled to a bigger refund than they claimed.

# ¿ Feb 11, 2015 21:10

Epi Lepi: Oct 29, 2009; You can hear the voice
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And you're doing what it wants

ashgromnies posted:

I owe $8300 this year... when people talk about using deductions to make these situations better, what do they mean? That's a crap-ton of money, I entered "2" for my allowances on my W-4 because I'm single and that's what it directed me to do... I profited ~$15K off stock sales, but that should only have been about $5k in tax. Why do I always wind up owing so much money? Last year I owed $1000, but this year is ridiculous. How can I fill out my W-4 to break even?

First make sure you're only taxing yourself on the gains on those sales. Even if the 1099-B doesn't have your cost basis for the stocks, you still must have paid something for them and so you have to record that on your return. Second, unless you have a dependent or a mortgage 2 is likely too many allowances. In a perfect world, Single 1 will get you to a break even, though if you're in a state like NY you're gonna want to put one less allowance for State than you do for federal.

Beyond that, consult a tax professional, there are a lot of different reasons you could be owing so much money every year.

# ¿ Feb 20, 2015 17:46

Epi Lepi: Oct 29, 2009; You can hear the voice
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It's the voice of MK Ultra
And you're doing what it wants

DNova posted:

Why do I have to pay NYS taxes on all of my income, even though only a small percentage of it has anything to do with that state, and I was only there for about 2 weeks in 2014?

Make sure you're filling out your part year resident information correctly on whatever tax software you're using.

Alternatively, NYS hates you, me and everyone else. God bless my great state!

# ¿ Apr 3, 2015 17:08

Epi Lepi: Oct 29, 2009; You can hear the voice
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It's the voice of MK Ultra
And you're doing what it wants

Nephzinho posted:

Helping girlfriend do her taxes through Turbo Tax. Get everything in following prompts, she had a few months of freelance expenses but it seems like she falls well under the standard deduction (and doesn't have the records to itemize anyway). We finish up and she owes a fairly significant amount. About 20% of her income for the year came in on 1099s. In past years she claims to have had a similar W2 to 1099 income ratio and still managed to get a sizeable return. Can't seem to find a copy of her 2013 return right now so I can look and see if there was something done drastically different then (maybe she made less freelance income than expected, or maybe her accountant played some games with the deductions). Trying not to get accusatory here, but trying to retrace her steps to find what happened last year vs what happened with filing now. Not filing tonight, trying to find a copy of last year's filing to review, not sure what kind of help we can even get this close to the deadline.

Did her accountant make crazy deductions last year that we're not making now?
Is she misremembering the ratio of freelance to employee income she made last year?

I mean, there really aren't that many things that can go wrong with Turbo Tax copying poo poo from W2's and 1099's and these are pretty much the only two possibilities I can think of for the drastic difference between 2013 and 2014 numbers.

Couple things here. First, if she had more W-2 earnings and less 1099 earnings in previous years and that flipped this year, then that is the reason she owes more. W-2's have withholding and aren't subject to Self Employment taxes, which 1099 income generally is.

Second, if her freelance expenses are related to her 1099 income, then those belong on the Schedule C to offset that income. Expenses related to her W-2 income would be included in itemized deductions. If she has difficulty separating what expenses go with what income then go see an actual accountant and work through it.

# ¿ Apr 13, 2015 18:16

Epi Lepi: Oct 29, 2009; You can hear the voice
Telling you to Love
It's the voice of MK Ultra
And you're doing what it wants

scribe jones posted:

Yeah, I had a few get caught too, which is nice. Like, yes, the taxpayers with an average AGI of $400,000 over the last three years aren't suddenly eligible for EITC, good job guys, well spotted.

My office had one of those and at least 3 others rejected due to SSN's being used to file a return already. I'm glad I only had to tell 1 client about it myself, my coworkers had the rest.

# ¿ Apr 21, 2015 17:38

Epi Lepi: Oct 29, 2009; You can hear the voice
Telling you to Love
It's the voice of MK Ultra
And you're doing what it wants

It's probably due to your exemptions. In a perfect world Single 1 would make you have a small refund or small balance due. Single 2 guaranteed that you'd have to pay as I doubt you have deductions worth itemizing. 4200 for just IRS seems high possibly but if you are including state too it makes sense. Especially if you're in a dick state like NY.

# ¿ Apr 27, 2015 18:50

Epi Lepi: Oct 29, 2009; You can hear the voice
Telling you to Love
It's the voice of MK Ultra
And you're doing what it wants

DogsCantBudget posted:

My FIL just got a notice from the IRS, telling him he owes them ~10k from 2010. He hasn't held a job since 2003/2004 due to a debilitating stroke and lives on Social Security. He is very fixed income. He did at one point get a ~30k inheritance when his father passed away(but not in 2010, we don't think), and also get a settlement from an accident he was in (we're not sure the year). What could he owe taxes for? Estate tax doesn't kick in till 1million, right? And settlements like that aren't taxed AFAIK? What's the deal? Who should he get in touch with?

This is very much blood from a stone, he doesn't have any money, gets ~1k a month from SSI and doesn't own a house or car. What's the deal here?

The letter should indicate what the source of the tax is. If it doesn't then it's not actually the first letter he's gotten and he probably threw out the original. There should be a number on the letter to call and a case id number or something to that effect so that you can get someone to look it up. Be advised the IRS agent will give you very limited if any information if you don't have a POA or your FIL isn't in the room with you to confirm that he lets you speak for him.

# ¿ Jun 23, 2015 03:04

Epi Lepi: Oct 29, 2009; You can hear the voice
Telling you to Love
It's the voice of MK Ultra
And you're doing what it wants

ma i married a tuna posted:

I have a pretty specific question. I am starting work as a tutor, and I am an independent contractor for a tutoring company. It's in NYC, so I use the subway to get to clients. I'd like to deduct my transportation costs. But, like anyone who needs to go places in NYC, I have an unlimited metrocard ($Now, anyone who uses the subway more than a little gets an unlimited ride card, which costs $116.50. Is there a way to reasonably claim a portion of this cost?

Just figure out how many times you use your card and how many times those uses are work related and take that percentage of the cost. Keep a calendar for back up. It's up to you whether that's too much effort to be worth it or not.

# ¿ Oct 3, 2015 05:02

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# ¿ Apr 27, 2024 17:32

Epi Lepi: Oct 29, 2009; You can hear the voice
Telling you to Love
It's the voice of MK Ultra
And you're doing what it wants

DaveSauce posted:

So we did something dumb.

We got married in August of 2013, and a few weeks later we realized that oh poo poo, the IRS considered us married for the entire year. So we scrambled to adjust our withholding for the last 5 paychecks so we didn't have to pay back too much...at the time we would have owed about $2,000, so not only would we have had to cut a check but we would have been penalized as well.

That worked well. In January, we re-ran the numbers from the IRS's calculator and the W-4 forms and found that we should be withholding extra beyond what the normal allowances showed. So we did...boy did we ever.

Now last week we re-ran the numbers to make sure we didn't have the same problem as last year...and holy poo poo we've overpaid by $2k so far, and if we don't make changes then we'll end up getting a refund of $5,000. So we overcorrected...by a lot.

So will we get in trouble over this? I know there's an under-withholding penalty, but is there a penalty for over-withholding? I know technically we're doing the IRS a favor, but I suspect they don't like giving money back much.

And follow-up: with 3 paychecks left, and the next one possibly too soon to take effect, is it worth changing anything? Obviously we're going to have to make changes in January anyhow, but it seems that the changes we would make would put us at $0 withheld for the next 3 checks...which makes me a little nervous because if we aren't fast enough, we'll start 2016 by under-withholding and have to do more math to figure out how to fix it.

You're allowed to withhold as much as you want, I'm surprised you're so paranoid. Haven't all of your friends and relatives salivated over their big refunds to you every year? I mean over withholding is pretty much giving the government an interest free loan. Who doesn't love interest free loans?

The financially efficient choice is to try as hard as possible to break even so that money can work for you during the year, but you aren't being a dummy and won't get in trouble for over withholding.

# ¿ Nov 21, 2015 08:42

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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