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furushotakeru posted:It's not any contributions. It's deductible contributions. Good point! On an unrelated question, my office covers 100% of my health insurance premiums, but I have to pay all of the premiums for anyone else we add to our plan. So I have my wife on there, to the tune of $400 a month on a so-so plan through the "cafeteria plan" thing. I think I can (and have seen quotes for) better insurance for her through other private insurers, but this would mean it was not coming out of my paycheck anymore and thus not "pre-tax". Her premiums would not be deductible, unless they go above 7.5% of income and we itemize, right? Is there any way to have private insurance and use pre-tax money? It may actually still be worth it, because we'd be saving $150 a month on premiums.
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Jun 19, 2013 22:38
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furushotakeru posted:No, there is no way for an individual to pay for health insurance premiums using pre tax dollars if your total out of pocket medical costs don't exceed 7.5%. Even if your wife was self employed it would not be eligible for SEHI treatment since she CAN be covered under your employer, even if she chooses not to be. Thanks a lot, Obamacare. I guess I can still do the math: I think $250/mo of post-tax money still beats $400 a month of pre-tax, am I right? I'm on the upper edge of the 15% bracket but not over it. Hufflepuff or bust! fucked around with this message at 18:40 on Jun 20, 2013 |
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Jun 20, 2013 18:38
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furushotakeru posted:Depends on what your state tax rate is. The $400 is pre SS and medicare as well as pre income tax. If you are in a non income tax state, then this would mean your total savings would be 22.15% of $400, or about $89. So $250 post tax is indeed better than $311 (net) pre tax, but a state income and/or SDI tax might tip it the other way but it seems unlikely. Hahah yes, facetious. I've been using that line recently for everything. Store's outta milk? Thanks a lot, Obamacare. Either way, you are right - I had neglected state tax (DC) as well as SS/Medicare payments in my calculations. Cutting the difference down to like $50 a month makes it a lot less appealing, given the difficulties involved with figuring out how to be a married couple with two separate insurers - who covers any future kids, etc.? I'll leave it put for now and bother HR about getting a better plan.
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Jun 20, 2013 20:43
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Ignoring the fact that this is the US tax thread, does anyone know anything about UK taxes? I am trying to figure out the tax band system. As far as I can tell, it works the same as US tax brackets. If you make less than 32,010, all of your income is taxed 20%. If you make 35,000 pounds, say, the first 32,010 is taxed at 20% and the remainder (2990 pounds) is taxed at 40%. Just making 32,011 pounds doesn't cause the entire amount to be taxed at 40% right? I'm fairly sure I have it right but once they start driving on the wrong side, all bets are off.
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Aug 23, 2013 16:46
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Jealous Cow posted:Don't forget national insurance, which has different brackets and rates on top if income. Other than that, yes they use marginal rates like us. Thanks! MY WIFE was talking to some expats who were seemingly convinced that if you made a dollar over the limit, oh man, you'd be bumped into that terrifying next tax bracket!
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Aug 24, 2013 17:52
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I am regularly employed (W2 style) doing research and writing for a non-profit. I will be doing a one-time side consulting gig for a payment that comes in over the reporting limit for self-employment. I presume I will get a 1099-MISC for the payment. I was trying to think through what I could deduct from this income to minimize the tax I'll owe on this - I am a member of a professional association that deals with this subject, and have paid subscriptions to publications that deal with this subject also. Are these deductible despite the fact that these memberships and publications also apply to my regular work? Are there any other things I might be neglecting? No home office and they are reimbursing me for my travel but not my food. Thanks!
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Dec 8, 2013 00:25
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I've been having trouble with this, so I wanted to confirm: If I had $85,000 in gross income for 2013 (including W2, contract income, stock sales, and conversion from a 403(b) to a Roth IRA). If I'm married filing jointly, that means $20,000 in deductions/exemptions, which would put me squarely below the $72,500 cutoff for the 15% bracket, meaning I would pay 0% capital gains tax. I would have to gross $92,500 between my wife and I to fall into the 25% bracket (and thereby have to pay capital gains tax). Do I have this right?
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Dec 21, 2013 00:58
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If I'm in the 15% bracket and am expecting to owe taxes this year, not receive a refund, does it make sense for me to try to postmark a check to pay my wife's tuition of ~$1800 today (in 2013) vs. just waiting till next year and taking the Lifetime Learning Credit for it in 2014? Would it be a big difference (other than reducing my taxes this year vs. next?)
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Dec 31, 2013 20:45
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Does anyone have any recommendations for a free or inexpensive online Tax service that can deal with investments? Or am I stuck paying $49.99 for TurboTax Premier because I sold 3 stocks last year?
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Jan 14, 2014 20:07
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AbbiTheDog posted:Sometimes you gotta pay to play, hoss. I am the kind of person that would do it by hand just to save $20, but TaxACT will work pretty well for me (including the state filing is a nice perk). Thanks!
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Jan 15, 2014 21:50
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If I rolled over a Traditional IRA to a Roth IRA with the same financial company (no change of trustee), and I received a 1099-R that showed the entire rollover amount as taxable with code "2" in box 7, is that correct? Shouldn't it be "G"?
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Jan 18, 2014 05:38
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furushotakeru posted:No, it is correct because you moved money from a pre-tax account to a post-tax account and therefore need to pay tax on that amount. Code 2 means the rollover isn't subject to early withdrawal penalties. OK, thanks! I got a 1099-R from a rollover of a 403(b) to the same Roth that was categorized 'G', and I thought that both transactions were basically the same thing but got different codes.
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Jan 20, 2014 01:05
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LeftistMuslimObama posted:She made 30k after you remove deposits to her pre-tax 401k, and I made 40k afer you remove deposits to my pre-tax 401k. I paid about 2600 in mortgage interest, 2400 in property tax, and we paid about 10k in student loan interest together. Did you pay 10k in student loan interest, or 10k in student loan payments? I suppose it is possible, but that sounds high. Only the interest is deductible.
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Feb 4, 2014 16:52
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New Leaf posted:My wife and I are used to getting fairly substantial tax returns. This year, we're getting back $4. Last year, we got $1400. What gives? If it matters, we bought a house last year.. but I kind of would have thought that would have led to MORE of a return, not LESS. TurboTax seemed to indicate that we were getting a nice deductible when we put in the fact that we bought a house, but it didn't change the number on the side at all. I got all the way to the end of the accuracy check and it didn't spot any fatal errors. Vote to change the thread title to "US Income Tax Questions Megathread: Where's my refund"
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Feb 5, 2014 05:41
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New Leaf posted:Thanks, super helpful. Heh, sorry - anyways, there a million different things that could affect why your tax situation changed. Saying "I usually get back X but this year I got back Y" is sort of meaningless - there are only two numbers that matter, how much you owe (calculated based on your income, type of income, amount of deductions, and amount of any credits) and how much you've already paid (how much was withheld from your paycheck or paid in quarterly estimated payments). If the latter exceeds the former, you get a refund. If it doesn't, you don't or you owe. So in this case yes, it means that your withholding was right. If you get +/- $100 or so (either owing or getting), that's pretty good. But either way, there are many reasons why you could have gotten a refund previously - a handful of tax credits have expired so you might be missing one of those. The house won't help you if, as someone else pointed out, it doesn't exceed the standard deduction. Maybe one of you changed status as a student? Paid less in student loan interest? Contributed or didn't to a retirement account? Someone could probably spend some time and figure out exactly what reason you got a bigger refund last year, but it would basically require re-doing two years of your taxes. In this case as long as you're sure you've filled out all the boxes correctly than the result is probably correct. Turbotax will tell you everything is great because they want you to believe you'll get a huge refund. In reality the only reason you'd get a huge refund is if you have not optimized your withholding. Everyone should aspire to getting no refund, meaning that they paid their taxes correctly during the year.
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Feb 5, 2014 21:47
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AbbiTheDog posted:What kind of nonsense is this?!?!? Sorry, sorry: huge refund! Free money from the government! Whoo hoo gonna buy a new truck.
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Feb 6, 2014 01:46
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The people that work at H&R Block are, by and large, seasonal workers that essentially have Turbotax open in front of them and just ask you the questions out loud and type your answers into the computer (apologies if anyone here works at HRB). I'd be surprised if they were able to give you a good answer.
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Feb 7, 2014 02:43
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I received $1074 in "consulting" income for taking part in a day-long study. This event was more or less related to my general career field. Unfortunately, this is forcing me to fill out Schedule C for self employment. $74 of that was reimbursement for my transportation to and from - I know I can deduct that as travel expenses. I attended an academic conference during the year that was related to this field - it was not for work, and I paid for it myself. You could consider this as part of my consulting work, networking, learning skills and conducting research. TaxACT tells me I can deduct the per diem for the location (San Fransisco) but at that rate, my earnings are over 100% used up and I basically record a loss. If I do that, does that basically guarantee an audit? What about reporting no income/no loss? What about reporting expenses that amount to ~90% of my income? Is there a way to deduct some of this conference travel (registration fees, etc.) but not the full per diem (to leave at least some of the income reported)?
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Feb 8, 2014 05:30
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Bloody Queef posted:Report all of your income and expenses. Having a loss on your Schedule C doesn't automatically trigger an audit. Why wouldn't you want to use every legal avenue to legitimately reduce your tax liability? I wouldn't but nor would I want to unduly invite hassle. I think these expenses can legitimately be counted, but this "self employment" is kind of a weird thing because it is similar to my W2 work. If my wife is a PhD student, I am correct that she cannot deduct materials she purchased to conduct her dissertation research? They were not "required for a course" but were needed for her to do the work.
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Feb 9, 2014 04:55
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Deep Winter posted:So last year (2013) I only worked like two weeks. I got married in December, and recently got a job (a year after I lost my old one" You can file a corrected 1040 to include it, but if you owe anything you could also just wait for the IRS to send you a matching notice which will say "you failed to include this W2, you owe us $35" and mail them a check. Personally it would bother me not to have it corrected but with that low amount of money it is really not a big deal because you likely had withholding already so you either a little overpaid or slightly underpaid.
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Feb 11, 2014 23:28
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kaishek posted:I attended an academic conference during the year that was related to this field - it was not for work, and I paid for it myself. You could consider this as part of my consulting work, networking, learning skills and conducting research. TaxACT tells me I can deduct the per diem for the location (San Fransisco) but at that rate, my earnings are over 100% used up and I basically record a loss. Are expenses deductible only in the year they were incurred? For example, a $60 membership in a professional association that I paid in 2012 for 2013? If I paid that same membership in 2013 for 2014, can I deduct them both as long as I don't deduct that same expense next year? I realized that my new employer wound up reimbursing most of my expenses for the travel to the academic conference, except for meals/incidentals. So I probably shouldn't deduct those expenses separately from my Schedule C, given that they were reimbursed. However, I did attend an educational trip to the region I study. I paid for flights and program fee out of my own pocket. It was pretty intensely focused on meetings, with definitely less than 25% of time spent on "enjoyment" - can I take these as deductions from my consulting earnings? Sigh - this one check is creating more trouble than it's worth!
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Feb 13, 2014 05:50
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kaishek posted:Are expenses deductible only in the year they were incurred? For example, a $60 membership in a professional association that I paid in 2012 for 2013? If I paid that same membership in 2013 for 2014, can I deduct them both as long as I don't deduct that same expense next year? I'm sorry to repost this question so quickly, but is travel deductible in the year it was paid for or the year it was taken? (thank you for helping all of the clueless taxpaying goons)
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Feb 14, 2014 02:43
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SiGmA_X posted:Year it was paid for. Crapshit. If there's no exceptions for that, sounds like I'm out of luck other than maybe the per diem rate for the time I was there. Thanks. edit:^^^^^^muchos gracias. Leaving off the reimbursed expenses but including (50% of) meals and incidentals that were not reimbursed. Hufflepuff or bust! fucked around with this message at 05:53 on Feb 14, 2014 |
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Feb 14, 2014 04:27
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Unkempt posted:My wife's starting a business but it hasn't produced any income yet; meanwhile she has a couple of part-time jobs. Can stuff she's bought for the business be used as deductibles on her income, or doesn't it count? Yes, as long as she can demonstrate that she intends it to be a business (and that it doesn't fall under the hobby loss rules).
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Feb 23, 2014 21:06
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Admiral101 posted:Whoa whoa whoa - what kind of "stuff" are we talking? What business is this? You haven't given nearly enough info to determine if this is deductible in the 2013 tax year or not. Is this "stuff" inventory? Sorry if I provided incomplete info - I read "starting" as "started" which clearly changes things re: 2013
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Feb 24, 2014 04:42
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Defghanistan posted:I have a fairly general question. You could each contribute the max to your 401(k)s, but for planning ahead purposes you should be able to estimate your taxes owed at the end of the year and then just check your withholding on your paychecks (assuming you make W2 wages) - if the withholding times number of paychecks per year doesn't add up to your tax bill at the end of the year, ask your employer to increase your withholding. You'll have less per paycheck but less surprise come tax time.
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Feb 24, 2014 17:52
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It might be useful to add that NYC is a particular case where there is a fairly sizeable local tax in addition to state and federal tax. When you said you were confused, you had originally said that your income was only taxable in one state, which is incorrect. The clarification was pointing out that you will likely only PAY taxes to one state due to receiving credit for taxes paid to the other state, but the income is TAXABLE by both states.
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Apr 10, 2014 05:05
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lolercoasterrr posted:I have a question about the 401k to roth 401k conversion. Since I'm going to be in business school next year I'm thinking of converting my 401k to a roth and paying the taxes since I'll only be making my MBA internship salary (~$10k which should be in roughly the 15% tax bracket). Yes, it will be taxed as normal income would be (which it basically is, just deferred), so if you change 100k it will put you in the tax bracket for 110k. I actually don't know the answer to this - could you roll over the whole amount to a traditional IRA, move some of that money in the traditional IRA to a separate traditional IRA account, and then convert that IRA into a Roth? That way you could move ~100k into one account, split that account into a 75k account and a 25k account, then convert the 25k account to a Roth. Total taxable income would then be 35k, just under the 15% bracket. Or if you don't mind paying 25% on some of it, you could convert the 75k account instead.
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May 1, 2014 17:35
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Huxley posted:I have a question, hopefully confirming how I understand stuff. I think you have this correct although you put it in a very complicated way. Think about this from an end of year tax-time scenario: Her W-2: +$1000 Your W-2: -$600 Net extra W-2 income: $400, taxable. You may want to double check your withholdings (at both jobs) because her work paying her an extra grand per month may wreak havoc with how they withhold her taxes based on expectations of what bracket she'll be in. Do the math and figure out how much needs to be withheld to come in even.
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May 12, 2014 20:15
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Leperflesh posted:In my wife's case, she is building a robot that carries a garden of native plants on its back, walking around on articulated legs. I don't have anything useful to add here but I wanted to say that this is loving awesome.
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Sep 3, 2014 20:17
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I'm pretty sure I know the answer, but I'm pissed nonetheless. I had a simple return this year, and could free-file: a few education credits, student loan interest, nothing fancy. Then I got a 1099-B from selling a note on Prosper.com to close out my account. It shows a sale of $13.92 with the basis not reported to the IRS (but it does list the basis on the form) for a long-term capital gain of $0.09. In order to correctly report the basis, I have to file a Schedule D which will require paying for filing my taxes, correct? Could I not report that sale and then if the IRS gets mad over taxes they think I owe of $2 just send them the 1099-B that reports the basis? Or does the fact that the 1099-B that they presumably sent to the IRS include the basis on it take care of it?
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Feb 11, 2015 16:53
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Ballz posted:tl;dr: I want a 1095-A Willing to be proved wrong here, but insurance premiums paid outside of an employer-sponsored plan are not tax deductible except in limited circumstances (self employed with no employer-sponsored insurance available, or if you itemize and premiums+medical expenses exceed 10% of your total income). But in that last case, you'd only be able to deduct the amount over 10% of your income. A major reason that I have not ditched my crappy, expensive employer plan is that without a tax deduction "comparably priced" plans are actually more expensive.
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Mar 14, 2015 18:33
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Washington, DC has a weird filing status "Married Filing Separately on the Same Return" - because Married Filing Jointly does not change any of the tax brackets, so usually results in a huge penalty for married filers. MFS-SR lets you allocate your exemptions/deductions and, I think, income between the two filers to take advantage of the brackets for individuals. It is not clear to me if, for example, my wife had a Traditional IRA deduction, but I had all the income for the family, if I can simple divide everything between my wife and I, including income. If I had income of 60k, for example, I would allocate it so that we each had 30k of the income, and each had one of the two child deductions, and split all the other deductions 50-50. That should make our taxes the lowest possible. Is that correct?
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Mar 23, 2015 22:50
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If I move abroad, and I last lived in DC, will I have to continue paying DC state income tax even if I have no income earned in DC and don't own a house, etc.? The only thing connecting me to the state would be a driver's license, and possibly a storage unit. I know that some states apparently keep taxing you even if you move out of the country.
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Apr 7, 2015 04:50
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Tyro posted:Kaishek - Awesome resource! quote:There are many criteria used in determining which state is a citizen’s domicile. One of the strongest determinants is prolonged physical presence, a standard that Foreign Service personnel frequently cannot meet because of overseas service requirements. In such cases, the states will make a determination of the individual’s income-tax status based on other factors, including where the individual has family ties, has been filing resident tax returns, is registered to vote, has a driver’s license, owns property, or where the person has bank accounts or other financial holdings. In the case of Foreign Service employees, the domicile might be the state from which the person joined the Service, where his or her home leave address is, or where he or she intends to return upon separation. If I legitimately intend to return home to Texas, will move out of my rental property in DC (and own no property in DC), sell my DC-registered car, adopt the mailing address of my parents in TX and use that address for home leave, will register to vote in Texas, and have family ties in TX (both mine and my wife's), have my checking accounts based in TX...but have a DC drivers license (that I could theoretically switch to a TX license before I move), have voted and paid taxes in DC for the past ~7 years, and will have a storage unit full of whatever stuff we leave behind in DC (although I could possibly avoid having the storage unit here by moving everything with me)...could I make the case that I have switched my domicile to Texas right before moving?
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Apr 8, 2015 22:44
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Tyro posted:You could make the case and those are some compelling points. I'm far from an expert, and I don't think DC is as bad about chasing people down as VA is. If it was me, I would probably switch the driver's license, and send a certified letter to whatever local DC office handles taxation informing them of your intent to switch your domicile to TX as of XYZ date (and save a copy). But I don't know where the bar is as far as what needs to be done, it's a gray area. I am always glad I don't live in VA. But the certified letter is a good idea. Thanks! I think we're going to try to avoid the storage unit left behind, so we will have literally nothing physically tying us to the District.
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Apr 9, 2015 01:34
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Do any goons do expat taxes? Just moved to Abu Dhabi, and need a quick (I think?) consult to figure out my withholding for a partial-year Foreign Income Exclusion and Foreign Housing Exclusion. Edit: thanks to scribe jones who was quick on the PMs. Thanks tax goons for the invaluable service you provide! Hufflepuff or bust! fucked around with this message at 20:58 on Jul 6, 2015 |
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Jul 6, 2015 20:09
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Both my wife and I will be working for a foreign company in the Gulf (where there is no personal income tax, but I am aware of the requirement to file in the United States). Until 12/31 of this year, I'm employed by a US company living abroad. 1/1 I'll change over and she'll start. I'll be a salaried regular employee of a foreign company and she'll be a contractor, possibly for only a 6-month project. Is there any benefit to either myself or her establishing an LLC or Sole Proprietorship or other legal entity to receive/report this income? I'm thinking primarily in terms of either a) deferring some of the collection of income for me (which will exceed the foreign income exclusion) b) allowing me to create a Solo 401k to increase our ability to contribute to retirement accounts. It may be the case that there's no benefit - her income will be under the exclusion, so entirely tax free. Mine will be significantly over (yay absurdly expensive housing) but I'll be an employee so I may not be able to tell them "write the checks out to Kaishek Consulting please".
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Oct 29, 2015 09:47
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Admiral101 posted:You're an employee. So no. Gotcha. I wasn't sure if it being for a foreign company made any difference. My wife, however would be a contractor. Does the fact that her income would all fall under the foreign exclusion mean that we'd derive no benefit from giving her a Solo 401k/anything else?
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Oct 29, 2015 12:30
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Admiral101 posted:How long have you and your wife been living in this foreign country? When do you anticipate returning to the US? Thanks - I know this veers into "pay someone" territory. We've been here since May, and are planning on staying indefinitely. I'll meet the requirements for the foreign income exclusion by spending the required number of days in the year period out of the country. For the upcoming year, beginning on January 1, both of us will be working for a foreign company. That's where I wasn't sure if being an "employee" of a foreign company really matters for how I recognize that income in the United States (to a sole proprietorship, for example). It would be useful to be able to open up a Solo 401k both to transfer previously deductible IRAs into and to have a 401k, which I'll lose when I switch from a US company to a foreign one. Expat thread: everything is harder.
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Nov 3, 2015 09:35
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