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Old 05-16-2005, 07:09 PM   #201 (permalink)
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Originally Posted by mandal
Wow, if you could help me I will praise you. I've even tried going to a tax person, but what they calculated seems wrong. PLEASE and I mean PLEASE help, I've looked everywhere for help, but none was out there, here's the situation:

Over the summer I participated in a Research Experience for Undergraduates program funded by the NSF. I hope you are familiar with this as what happened in terms of payment of this program was unique. I basically did research for a university with due dates on papers and such and they paid me in intervals corresponding to due dates. All in all they paid me 3,000 plus 1500 that was supposed to be for housing. so 4500 overalll. So when tax season comes along, I expect a W-2 or something similar, but instead recieve a 1099-misc with 4500 filled in box 7 (non employee compensation). I should note that when i got my money none was taken out for taxes. Anywho, so bascially my parents took it to a guy who calculated that I owe over 700 dollars in state and federal tax. My parents did not explain my situation to them though, they basically just gave him my form and it was a sort of asian ghetto place. It seems that most of the money comes from line 57 on the 1040 federal form, which is self employment tax. So here is my question, is this done right? I mean is it possible they expect me to pay about 750$ now when I have already spent the money and considering the payment was only 4500. It seems crazy to me that they would put students in such a situation, also it seems odd that i'm getting charged self employment tax. ps. I am a dependent. Well, if you could help me out in anyway it would be real awesome. I'd even be willing to pay you if you could as it would save me 750$.

hope you can help a student with very little money.
You're screwed. They considered you an independent contractor, not an employee (not the ghetto place, but the NSF). As such, you're responsible for the federal, state, and local income taxes, as well as self-employment taxes of around 15%.

Self employment taxes are:

If you get W-2 wages, notice that you pay 7.65% between FICA and medicare. What you don't see is that your employee matches this. This combined 15.3% goes into the big social security trust fund/medicare fund you hear about in the news so much today. Being self-employed, you need to cover both the employee and employer portion of that, hence the 15% self employment tax. No way to opt out from it, but there are ways to avoid paying it.

Sorry to bear bad news.
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Old 05-16-2005, 07:13 PM   #202 (permalink)
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Quote:
Originally Posted by Captain Nemo
Gar, quick question for you. I have approximately 2,000 employees working on various engagements throughout the country. These employees perform engagements both in their states of residency, as well as in other states. Ignoring reciprocity arrangements, what are my withholding requirements for pay earned when performing services in a non-resident state. I know every state is different, but I am trying to determine if there is a common "bright line" test that I can apply across the board.

Last week I attended a seminar in DC, and the person who was running it was an old Andersen person who said that it is a "control" issue. I.e., if the services are being controlled from within the non-resident state, then that state can tax the payroll. She claimed that is the position Andersen took after they were sued by the Attorney General in Colorado.

However, after digging into the various state statutes, I don't think it is that simple.

Thoughts?
My thoughs? I hate payroll. Whenever possible, I recommend outsourcing the damn thing.

It's not that simple, and each state is different. Some are much more agressive than others, and also depending on whether the state budget is having trouble will affect whether you hear from the revenue department or not. Not being a payroll guru, the tax term that you might be searching for is whether your company has "nexus" in that state. Like I said, it varies from state to state. Your employees probably won't notice a difference if they aren't spending much time in each state, but your company might be required to file additional reports in each state that you create nexus. Sometimes, nexus is created by simply driving a company van accross the border, othertimes a more solid presence is needed.

And honestly, if you run a company that employs 2,000 people, delegate that payroll stuff on down and run your company!
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Old 05-27-2005, 10:20 PM   #203 (permalink)
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Alright, bit of a complicated tax withholding question for my girlfriend. She is just graduating from college. This summer she's programming for an educational software company and getting paid a lot, and then she goes to grad school and gets a crappy grad student stipend. So her income by month is roughly:

January-April: $150 a month for student job
May: nothing
Jun-August: about $4000 a month from software company
September-December: About $1500 a month from grad school stipend

So the problem is that for three months in the summer her tax withholding will be figured on an annual income of almost 50 grand, far more then she'll actually be making. If she puts in the two withholding exemptions she's supposed to based on the worksheet on a W-4, they'll withhold almost as much in one month as she'll actually owe for the entire year. Can she just arbitrarily claim 6 exemptions so that the amount withheld will be closer to what she'll actually owe?
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Old 05-28-2005, 10:17 AM   #204 (permalink)
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Originally Posted by gar1976
People don't realize - if you're getting a huge refund, it's because you've given the government an interest free loan during the year. You've lost out on the earnings potential of that cash, and Uncle Sam gets to invest it.

D'oH!

Why didn't I ever think of this!? Thanks tax man.
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Old 05-28-2005, 01:32 PM   #205 (permalink)
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Quote:
Originally Posted by iccky
Alright, bit of a complicated tax withholding question for my girlfriend. She is just graduating from college. This summer she's programming for an educational software company and getting paid a lot, and then she goes to grad school and gets a crappy grad student stipend. So her income by month is roughly:

January-April: $150 a month for student job
May: nothing
Jun-August: about $4000 a month from software company
September-December: About $1500 a month from grad school stipend

So the problem is that for three months in the summer her tax withholding will be figured on an annual income of almost 50 grand, far more then she'll actually be making. If she puts in the two withholding exemptions she's supposed to based on the worksheet on a W-4, they'll withhold almost as much in one month as she'll actually owe for the entire year. Can she just arbitrarily claim 6 exemptions so that the amount withheld will be closer to what she'll actually owe?
Yup. Most you can claim is "9," which pretty much eliminates all withholdings.
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Old 05-28-2005, 01:57 PM   #206 (permalink)
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Originally Posted by nothingx
D'oH!

Why didn't I ever think of this!? Thanks tax man.
the key element though is if you do not save it and you spend it you didn't get an further ahead. For that extra hundred or two dollars that I'm missing out on... I'd rather miss out on the little bit then the whole thing squandered each week.
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Old 05-29-2005, 11:35 AM   #207 (permalink)
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Originally Posted by Cynthetiq
the key element though is if you do not save it and you spend it you didn't get an further ahead. For that extra hundred or two dollars that I'm missing out on... I'd rather miss out on the little bit then the whole thing squandered each week.
Ahh, you need to learn fiscal responsibility, Grasshopper.
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Old 05-30-2005, 11:20 AM   #208 (permalink)
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hi -- I'm heading to China in August but getting paid by an American university. i'm earning 34K gross -- a teacher's salary -- but the perks are really good. how will my taxes be effected?

and I suppose some background would be helpful: I'm still considered a student and dependent, i've only posted about $10-12K income this past year, I am a resident of NY but have been living (and will be paid from) California, and I will be on a work visa in China.

thanks in advance!...have fun with this one; I hope it's not too complicated

Last edited by macmanmike6100; 05-30-2005 at 11:28 AM..
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Old 05-30-2005, 04:14 PM   #209 (permalink)
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First and foremost, thank you very much for offering your services (Gar & Nemo)! Here goes:

My question is about Capital Gains tax and inheritances/distributions from a trust, and I guess how to get around it (legally.)
Basically is there a way to get out of paying capital gains tax on recieving inheritances? If not what would be the best way to pay for it and how much should I need to save? I saw somewhere that capital gains tax was 36%. Not really sure what I should do right now, any and all help would be very much appreciated. Thanks in advance!
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Old 05-31-2005, 07:11 PM   #210 (permalink)
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Originally Posted by strife
First and foremost, thank you very much for offering your services (Gar & Nemo)! Here goes:

My question is about Capital Gains tax and inheritances/distributions from a trust, and I guess how to get around it (legally.)
Basically is there a way to get out of paying capital gains tax on recieving inheritances? If not what would be the best way to pay for it and how much should I need to save? I saw somewhere that capital gains tax was 36%. Not really sure what I should do right now, any and all help would be very much appreciated. Thanks in advance!
Hmmm.....I'll answer this one out of order, since you seem a bit confused. And this is a more complicated subject than the others.

Most of the time when you inherit property (real or personal) you recieve what's known as a step up in basis. This means your new tax basis is the fair market value at the date of death. For example:

Say Uncle Joe bought microsoft at $5 a share, and it's now worth $100 a share. Should Uncle Joe sell the stock, he'll be taxed on $95 share of capital gains.

Say Uncle Joe dies before he sells it, and you inherit it. Should you sell the stock for $100 a share, you'll have no capital gains, since you recieved a new basis upon inheriting the stock.

Now, it sounds as though you are receiving distributions from a trust that had been set up by a relative. In this case, the assets in the trust are now generating income that is being distributed to you as a beneficiary. This income was not included in the estate of the grantor, and you should be receiving a K-1 showing your portion of the earnings of the trust. Depending on how the trust was set up, the K-1 amounts might or might not equal what you are receiving every year. For example now:

Say Uncle Joe put this stock into a trust, and you receive the dividends from the stock every year.

Based on this assumption, you will be taxed on trust earnings. Yes, taxes suck, but hey, you're getting to benefit from the generosity of a family member. Enjoy it while it lasts.
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Old 05-31-2005, 09:01 PM   #211 (permalink)
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Quote:
Originally Posted by gar1976
Hmmm.....I'll answer this one out of order, since you seem a bit confused. And this is a more complicated subject than the others.

Most of the time when you inherit property (real or personal) you recieve what's known as a step up in basis. This means your new tax basis is the fair market value at the date of death. For example:

Say Uncle Joe bought microsoft at $5 a share, and it's now worth $100 a share. Should Uncle Joe sell the stock, he'll be taxed on $95 share of capital gains.

Say Uncle Joe dies before he sells it, and you inherit it. Should you sell the stock for $100 a share, you'll have no capital gains, since you recieved a new basis upon inheriting the stock.

Now, it sounds as though you are receiving distributions from a trust that had been set up by a relative. In this case, the assets in the trust are now generating income that is being distributed to you as a beneficiary. This income was not included in the estate of the grantor, and you should be receiving a K-1 showing your portion of the earnings of the trust. Depending on how the trust was set up, the K-1 amounts might or might not equal what you are receiving every year. For example now:

Say Uncle Joe put this stock into a trust, and you receive the dividends from the stock every year.

Based on this assumption, you will be taxed on trust earnings. Yes, taxes suck, but hey, you're getting to benefit from the generosity of a family member. Enjoy it while it lasts.

You are correct, I am very confused. Is there any way to predict what the taxes will be? Or will that be determined next year tax time? I didn't mean to sound like I was complaining about having to pay taxes, not at all. I was just curious if I could reinvest it all/portion of it to get around it. Again, I appreciate your help. Very much. Thanks.
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Old 06-01-2005, 05:16 PM   #212 (permalink)
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i posted a question here a little while ago and checked for an answer but, before I did so, went ahead and read most of the rest of the thread. on behalf of all of us, THANK YOU! for your generosity in answering all of these questions.

i wonder how many of them seem mundane to you, since most of them have really enlightened me.
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Old 06-29-2005, 07:51 AM   #213 (permalink)
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I hope this link is still monitored

my girlfriend is in college getting her masters. She completed her taxes but never took the discount for the money she spent on courses.

can she still retroactively get that money back?
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Old 06-29-2005, 07:57 AM   #214 (permalink)
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Originally Posted by pappymojo
my girlfriend is in college getting her masters. She completed her taxes but never took the discount for the money she spent on courses.

can she still retroactively get that money back?
She should be able to refile any deductions or changes for the past 3 years. Most accountants that I have used will want to redo your past 3 years to help better financially plan out tax liabilities.
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Old 06-29-2005, 08:47 PM   #215 (permalink)
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Originally Posted by Cynthetiq
She should be able to refile any deductions or changes for the past 3 years. Most accountants that I have used will want to redo your past 3 years to help better financially plan out tax liabilities.
If your new accountants are continually amending prior returns, than that means that either:

a) All of your prior accountants have screwed up
b) Your new accountants are just churning your fees

In almost all cases, you should only amend to correct errors. Tax liabilities? Sounds fishy.
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Old 07-03-2005, 12:06 PM   #216 (permalink)
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Ok, here's one for ya....

I'm a pilot. Therefore I have certain expenses that relate to my job and are required for my job. One of which being, I am required by the FAA (federal aviation administration) to hold a medical certificate in order to keep my position. That medical certificate states that I meet certain medical standards in order to fly aircraft. Now, in order to keep that medical certificate, I have to keep fit. I have a gym membership in order to do that. Can I deduct the cost of my monthly dues?
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Old 07-03-2005, 06:20 PM   #217 (permalink)
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Originally Posted by gar1976
If your new accountants are continually amending prior returns, than that means that either:

a) All of your prior accountants have screwed up
b) Your new accountants are just churning your fees

In almost all cases, you should only amend to correct errors. Tax liabilities? Sounds fishy.
Actually it was because I had never used accountants the first time and went to H&R Block, then the second one that I moved to readjusted my deductions because I had not claimed things that I should have being a "corporate professional" and not included IT training. The final accountant that I'm with now redid my taxes because I had been working for an entertainment company and had not been taking deductions that I should have such as cable TV and other media related expenses.
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Old 07-05-2005, 07:51 AM   #218 (permalink)
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Originally Posted by NoSoup
I have a question for you, if you don't mind.

I am about to begin making a relatively high income, and have absolutely no tax shelters other than my retirement accounts.

I am 20 years old and live in an apartment. Within the next year, I will probably make 150k-250k, and I am unsure as to what I can write off.

I will be using my personal money for business expenses, as well as my own vehicle, and I believe that I can write that off, but other than purchasing real estate, do you have any suggestions?


Also, to write off utilizing my personal funds for business expenses, how exactly would I go about doing that? Do I keep reciepts? Log the mileage on my car?


Thanks in advance!

Amazing how much things change

Well, this time around, I now own a home - specifically, a duplex.

I am currently living in half and renting out the other half. Now that I own a home, I'll have a whole slew of tax deductions, but I have a couple of questions about them...

As it is technically a rental property, I can write off pretty much whatever as long as it is being used for the home, correct? So far I have been saving receipts for materials for improvements, tools needed to make those improvements that I didn't have, furniture (it is a furnished duplex) washer/dryer, ect.

I assume I am required to claim the rent as income, but it should be offset by the amount of interest/taxes that I pay - at least that's what I am hoping.

In addition, I am paying for all of my business expenses out of pocket, including business lunches, advertising, and equipment. That comes up to a couple of thousand dollars a month. I also have been using my vehicle for business, but have not yet kept a log for mileage. Can I estimate useage prior in the year, or should I just start logging it now? If my vehicle were to need repairs down the road (it is still covered by warrenty now) would those be able to be deducted?

Also, I am investing heavily in my 401(k) as well as maxing out my ROTH Contributions... Anything else you can think of for me to do?

I will likely be picking up a couple more rental properties within the next year or two - I will probably live in the home I purchased for a minimum of two years before I decide to sell it - From my understanding, as long as I live in it two out of the past 5 consecutive years, I can sell it as my homestead without tax implications - unless I make a ridiculous amount of money from it. Is that true?

Thanks again for all your help
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Old 07-22-2005, 10:56 AM   #219 (permalink)
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what happened to the tax guy?
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Old 08-02-2005, 10:46 AM   #220 (permalink)
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Hardknock, here's your answer in a nutshell: Nondeductible as a business expense.

Rev. Rul. 58-382, 1958-2 CB 59


SECTION 162.--TRADE OR BUSINESS EXPENSES


A taxpayer, employed as a flight agent, is required by his employer to hold an Airline Transport Pilot Certificate and a current medical certificate. A medical examination, required before the employee can receive the certificate, must be taken twice a year at his own expense. The failure of the employee to secure the medical certificate would result in the termination of his employment. Held, under the circumstances in the instant case, the cost to an employee of securing periodic, routine, physical examinations sufficient to establish his physical fitness to retain his position may be deducted as ordinary and necessary business expenses under section 162(a) of the Internal Revenue Code of 1954. However, any additional expenses incurred by an employee for the purpose of securing medical aid or physical correction required to enable him to maintain the physical fitness necessary to retain his position may not be claimed as a business expense, but only as a medical expense deduction within the limitations of section 213 of the Code. See O. D. 1032, C. B. 5, 172 (1921), holding that amounts expended by a professional singer for required treatments by a throat specialist was a personal expense, rather than an ordinary or necessary business expense, and nondeductible, and Madge H. Evans v. Commissioner, Board of Tax Appeals Memorandum Opinion, entered March 8, 1939, holding that the cost of a necessary tonsillectomy was likewise not deductible by a motion picture actress.

Last edited by Captain Nemo; 08-02-2005 at 10:52 AM..
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Old 08-02-2005, 11:36 AM   #221 (permalink)
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I'm beginning a free lance photography business and would like some pointers about deductions. I'm keeping all photography related receipts and logging mileage. I will pay for the business license soon since I just landed a contractor job with a magazine. Can I deduct all receipts which predate my business license? What about travel expenses (lodging, meals) incurred where I do a lot of photography not related to the magazine position? In addition to the magazine I also sell photographs to individuals (and keep receipts showing payment). May I deduct a portion of rent and utilities too? Any help is appreciated. Nice photo under your user name by the way!
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Old 10-06-2005, 09:21 AM   #222 (permalink)
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Question about W-4 and the Foreign Income Earned Tax Credit.

I have a contract to go work in the Middle East, and am stuck at the W-4 form. I've heard many different hearsays about the Foreign Income Earned Tax Credit, and am wondering how I should file my W-4 for this position? Should I put Exempt; I'm really not sure. Does anyone know where I could read up on more information on the Foreign Earned Income Tax Credit?
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Old 01-04-2006, 08:33 PM   #223 (permalink)
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if someone didnt do their taxes for the past 2 years can they still file them / should they? or would it be best to just get it done profess?
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Old 01-16-2006, 09:07 AM   #224 (permalink)
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I have a question. I am currently employed and making about $60,000 a year, but I'm very unhappy with my job and I want to make a career change. I have interviewed with a company that is looking to fill a contract position. The position pays $80,000 a year, but they don't pay taxes or provide any benefits. So I will also have to pay for health insurance and fill out at 1099 tax form.

Is the salary difference enough to compensate for the out of pocket expenses? Will I need to ask for more money?
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Old 01-16-2006, 06:17 PM   #225 (permalink)
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If I udnerstand, the $60k you make now is gross, not net? If that is correct, then the difference will just about come clean, especially if you are trying to convert a 401(k) to an IRA and have similar amounts going in (whatever your employer would be matching before). If the $60k is net, you'll see a pretty huge difference after taxes. Also note that health insurance in the US is not cheap, especially for people who are not part of an employer group plan.
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Old 01-21-2006, 05:58 PM   #226 (permalink)
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anyone know typically how long does it take to get your money if you file your return electronically assuming no mistakes were made?
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Old 01-23-2006, 11:58 AM   #227 (permalink)
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2 questions for ya...

1- I claim "0" or "1" on my tax for for deductions which is supposed to mean they take the most out of every check. I take an additional $20 out per check just to be sure I don't have to pay at the end of the year. Why do I still end up owing?

2- I currently contribute 3% to my pension. If I understand correctly pension comes out pretax, additionaly the amount you get taxed depends on your tax bracket. Can I contribute more to my pension to the point that i lower myself into the next tax bracket and take home equal or the same amount of money each check?

Tres
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Old 01-23-2006, 12:25 PM   #228 (permalink)
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Originally Posted by tres
2 questions for ya...

1- I claim "0" or "1" on my tax for for deductions which is supposed to mean they take the most out of every check. I take an additional $20 out per check just to be sure I don't have to pay at the end of the year. Why do I still end up owing?

2- I currently contribute 3% to my pension. If I understand correctly pension comes out pretax, additionaly the amount you get taxed depends on your tax bracket. Can I contribute more to my pension to the point that i lower myself into the next tax bracket and take home equal or the same amount of money each check?

Tres
not the tax guy but can answer some of these... (tax guy correct me if I'm wrong or please clarify items better)

1. which do you claim? 1 or 0? 0 is the most they will take out, 1 is claiming 1 deduction is = $3,200 which is what I got from the IRS.gov website.

Some people don't like the idea of claiming 0 since they say that it's like giving the money to the government as an interest free loan. Okay I see that but I'd rather personally give them something that I don't miss than have to dig into my pockets. I claim 0 at all jobs I've held.

2. yes, that's the point of the pretax advantage. it's supposed to reduce your level somewhat especially if you are near the border of a tax bracket. There is a limit on the pension contribution, 401k is $15,000, IRA $4,000. You cannot double dip and contribute to a 401k and an IRA and expect to get the tax dedcution on both.
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Old 01-23-2006, 12:42 PM   #229 (permalink)
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I have a two tax questions. They're probably simple answers, but this is the first time I'm doing taxes without the help of my parents' accountant, so I'm a bit wary whether I'm doing this correctly.

1) I lived in California all my life until this summer, when I moved to Massachusetts for graduate school. Regarding MA state taxes, there are forms for non-residents as well as partial year residents. First, what makes me a resident (eg. a MA drivers license, just a MA mailing address?) Second, would it be beneficial to declare myself/become a MA resident? I have a CA drivers license which I recently renewed, does this automatically disqualify me from being a MA resident?

2) I have earned interest on a number of CD's and savings accounts from different banks: i) a small amount of interest from a bank in Washington state, and ii) about $300 in interest from an online bank. Does the interest earned need to be reported under the state the bank is located? Or the mailing address I gave for the account. For example, for the online bank (ING) I have listed my mailing address as California, but the bank's mailing adddress is Minnesota. Does that mean I report the interest earned under my CA state tax? or do I need to fill out a state tax form for MN? Lastly, is there usually a dollar amount threshold that if you earn under a certain amount in interest, you don't have to pay state taxes, or fill out a state tax return. In other words, I've only earned a small amount of interest from the Washington bank. If it's under a certain amount, am I no longer required to either pay taxes or even fill out a state tax form?

I'd be grateful to anyone who can help answer my questions. Thanks for your help
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Old 01-10-2007, 06:09 AM   #230 (permalink)
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1099A tax question

Acquisition or Abandonment of Secured Property. I have a rental property that may get foreclosed on if I can't short sale before then. I understand I will get a 1099A from the lender. If the balance is 300K and the FMV (Fair Market Value) of the property is 250K, will I have to pay tax on 50K?
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Old 01-22-2007, 11:02 AM   #231 (permalink)
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Is the income tax legal ?
http://video.google.com/videoplay?do...955&q=ed+brown
Here is a man who asked the IRS about this and got no answer for 8 years. Now he is surronded by agents of the IRS who are about to break into his house ,same thing as Waco
http://cryptogon.com/?p=251

No it is not legal
Check this out : http://video.google.com/videoplay?do...3&q=income+tax

Last edited by pai mei; 01-22-2007 at 02:53 PM.. Reason: Automerged Doublepost
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Old 01-31-2007, 08:50 AM   #232 (permalink)
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Real Estate Tax deduction question...

I have one question regarding using Real Estate taxes as a deduction:

I closed on my first home mortgage on September 1, 2006. I was informed by a representative of our mortgage company that real estate taxes are paid in November and in May.

She informed me that the previous homeowner paid the taxes for the first half of 2006 (which was covered by the November payment). The taxes for the second half of 2006 will be payed out of my account, but not until this coming May (2007). The money is all there (we were given a credit in Escrow at closing for the taxes for July and August of 2006, and the Sept, Oct, Nov, and December came out of our mortgage payment), but does not show up on the tax documentation for 2006 because they (our mortgage company) haven't paid it yet.

Can/should we claim the amount set aside for taxes in our escrow account as a deduction on our 2006 taxes? Are we supposed to wait until the end of next year to claim the real estate taxes paid to cover the second half of 2006?
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Old 02-03-2007, 03:56 PM   #233 (permalink)
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Location: Boulder Baby!
hey i just won a $1000 artist grant, will I get taxed on this? and if so, how much and what do i go about claiming it as such?
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Old 03-21-2007, 04:50 AM   #234 (permalink)
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Quick question. This is the first time I'm filing by myself and I have a mutual fund account that my mother is the custodian of. I got a consolidated 1099 form in the mail and under Form 1099-Div I have listed Total Ordinary Dividends as $47.30.

My question is do I claim this when I file? I was going to use the 1040EZ since I made less than $15k this year, but I'm not sure how these dividends complicate things. Any advice please? Thank you!!
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Old 10-08-2007, 08:44 PM   #235 (permalink)
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Question: I am giving money to a friend to invest along with his greater amount. He will be paying taxes on the proceeds, including my portion. However, when he gives me my portion, do I still need to claim in on my income tax form? Is there a special clause for this? So I do not have to pay the income taxes a second time. Thanks.
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Old 02-18-2008, 06:53 PM   #236 (permalink)
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Tax Question

Hello, I have no idea if I am in the right place for this but I have a question on how to pay artists for work done on my website. I have a website where users contribute there material and the members vote, the winner is then going to be paid by my newly formed LLC. Thats where I am stuck, how much taxes do I have to take out and how do I do it.
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Old 02-27-2008, 04:50 PM   #237 (permalink)
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I made a thread a while back asking why my friend who makes less than me got way more back for his refund than I did. Fast forward to this week. My sister just did her taxes and got 3k back. She makes 10k less than me and the only thing she wrote off were her student loans and 401k. So I am quite perplexed. I make 10k more than she does and also wrote more off for my student loans as well as my 401k. How the hell does she get 3k back and I only get 400 back?
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Old 02-28-2008, 06:08 AM   #238 (permalink)
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Quote:
Originally Posted by Lubeboy
I made a thread a while back asking why my friend who makes less than me got way more back for his refund than I did. Fast forward to this week. My sister just did her taxes and got 3k back. She makes 10k less than me and the only thing she wrote off were her student loans and 401k. So I am quite perplexed. I make 10k more than she does and also wrote more off for my student loans as well as my 401k. How the hell does she get 3k back and I only get 400 back?
what do you fill out as your W4?

http://www.irs.gov/pub/irs-pdf/fw4.pdf?portlet=3



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Old 02-28-2008, 03:54 PM   #239 (permalink)
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Quote:
Originally Posted by Cynthetiq
what do you fill out as your W4?

http://www.irs.gov/pub/irs-pdf/fw4.pdf?portlet=3



Basically filled out 1 for A and B and put 2 for H. Left everything else blank.
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Old 02-28-2008, 07:32 PM   #240 (permalink)
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Quote:
Originally Posted by Lubeboy
Basically filled out 1 for A and B and put 2 for H. Left everything else blank.
You are taking the deduction right up front, and not letting the government withhold the maximum amount of withholding.

I fill out 0 at the higher single rate instead of married, which as I explained in the other thread, I'd rather get the money as a lump sum at the end of the year. The "smarter" (no umbrage meant to them, I just don't have their discipline) folks suggest that you take your claim as 2 and save about $20-$40 per pay period and you should wind up with a few thousand dollars at the end of the year.

Ask your sister what she files, she more than likely files 0.

Again, I'd be more inclined to spend the $20-$40 on crap. But when I get a large lump sum, I'm more inclined to spend a portion of it, and then bank the rest.

If I was to select 2 as my withholding rate, I'd take home a larger paycheck and get a smaller refund at the end of the year.
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