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I am a newbie small business owner. 2009 was a loss, 2010 we had a profit and I had not been filing any estimated tax because everything looked like it was going to be near break-even. I am going to be paying estimated tax for 2011. Is there a disadvantage to increasing the withholding on my W-4 instead of filing estimated tax (1040-ES) quarterly? The withholding method seems like it would remove a quarterly headache from my life, but there must be some kind of downside, right?
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Apr 15, 2011 16:09
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| # ¿ Apr 28, 2024 20:45 |
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^^ I get a W-2 and a K-1.AbbiTheDog posted:No. In fact, it's better, because no matter when you make the withholding it's treated as being paid in all year, as opposed to the estimates, which are date-dependant. Wow. That sounds much better. Do I need to file new W-4(s) to raise/lower the withholding throughout the year or can I just withhold more/less as I feel is needed? I assume I need to make the withholding at least near what I come up with from the worksheet, or is that not necessary as long as I get the money in by the end of the year?
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Apr 15, 2011 17:03
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I don't know the answer, but in your situation are you: getting a refund, waiting on bankruptcy proceedings, or giving up the money as a loss?
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Oct 12, 2011 14:39
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LorneReams posted:More the reason to have an HSA (which is being gimped as well) What is changing on for HSAs?
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Dec 1, 2011 19:33
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LorneReams posted:Limits dropping, and more exclusions. Is this for 2013? When I searched for "HSA changes 2012" I found pages saying the individual contribution limit is increasing by $50.
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Dec 1, 2011 20:04
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entris posted:Hahahaha turns out that yes my client purchased several million dollars of Iraqi dinars ("million dollars" in Iraqi dinars, not US dollars). A friend of mine bought $500 worth of dinar at some point, causing much laughter. I think he got it on ebay.
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Dec 2, 2011 18:12
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AbbiTheDog posted:Side note - underpayment penalties and interest are not that steep. You're dorking around to avoid a (usually) small charge with a huge potential for messing it up. Is there any danger to getting an underpayment penalty every year? Like increased chance of audit or something?
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Dec 12, 2011 18:17
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furushotakeru posted:You have a near 100% chance of paying an underpayment penalty but there is no additional risk for audit that I am aware of. Ya, I'm not trying to do anything fancy with retirement accounts. I got an underpayment penalty last year and have been withholding more this year to avoid a penalty (in lieu of estimated payments). Turns out I withheld way too much because our profit is much lower this year. So my plan is to go back to normal withholding next year and just pay the penalty (gladly since we made a nice profit) if needed.
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Dec 12, 2011 20:27
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Admiral101 posted:Avoiding underpayment penalties doesn't need to be a guessing game. I have been withholding enough to equal the amount from last year, as in "the total of your withholding and estimated tax payments was at least as much as your 2010 tax " But, our tax from last year was higher than what it will be this year, so I have withheld more than I actually had to. If we had made a big profit this year, there would be no penalty. But, we didn't, so a bunch of my money is locked up at the IRS. Am I mistaken about this?
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Dec 12, 2011 21:15
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Admiral101 posted:Most in your situation handle most of their withholding through a year end bonus of some flavor, though (as opposed to withholding evenly throughout the year). Which is a good idea. I was worried about the situation where there wasn't enough cash flow to do it all at the end of the year and decided to spread the withholding out evenly over the year. I think I was planning on adjusting it if the outlook wasn't so good, but I never did until a couple weeks ago. It seems like this whole thing just isn't really worth worrying about. My father just told me that he used to take the penalty every year and did no estimated tax or additional withholding. :themoreyouknow:
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Dec 12, 2011 22:55
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AbbiTheDog posted:For our pass-through clients, if they are unsure of how their year is going to go we contact them in August so we can get the planning going and they can make their third and fourth quarter payments timely, and we can "catch up" the first two payments. As long as they haven't spent the money. First, thanks everyone for the help. Is this something that you would bring up or does the client have to request this type of service? I feel like our tax accountant acts like a machine that takes our books and some money and spits out a tax return. How proactive do I need to be? Should they be alerting us when we are doing things in the wrong way? Is there another category of "full service" accountants I should be looking for?
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Dec 12, 2011 23:13
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My K-1 from my S-corp includes a general business credit from the Small Business Healthcare Tax Credit. The value of the credit is larger than my tax liability for 2015, so I would like to carryback the credit to 2014. It looks like I can file a form 1045 to do that, because it is within 1 year of the credit being generated. Am I supposed to use the 2014 or 2015 version of form 1045? Do I file the 1045 separately from my 1040 and associated forms? Do I have to carryback 2 years or can I just do last year if the entire credit will be used up? e: Found the 2nd part in the 1045 instructions "Do not include Form 1045 in the same envelope as your 2015 income tax return." e2: And a new question: On page 3 of the 1045 instructions, in the section for Line 1b, it says "If you claim a tentative refund based on the carryback of an unused general business credit, attach a detailed computation showing how you figured the credit carryback and a recomputation of the credit after you apply the carryback." What do I actually need to attach? taqueso fucked around with this message at 21:54 on Apr 6, 2016 |
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Apr 6, 2016 20:58
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Admiral101 posted:I know $600-800 is a lot of money, but pay someone who knows what they're doing to do the form for you. What about a 1040X? That might be easier, assuming it is like filling out a 1040 I should mostly know what is going on. I started on a 1045 because I read it was simpler. My 1040 isn't very complicated.
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Apr 7, 2016 04:04
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