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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furushotakeru: Jul 20, 2004; Your Honor, why am I pink?!

The Aphasian posted:

Just got my second AUR from the IRS this year; the first was for tax year 2010 and was due to the preparer we hired putting my SSN instead of my wife's for her grad school. Annoying and scary, but fixed after working with the IRS.

This one is a different issue. Same preparer (both issues after we filed this year, so we didn't know not to work with him). This one enrages me. He claimed an American Opportunity Credit for me in 2011, which is interesting because as far as I can tell it's only for undergrad and I graduated with a bachelors in 2003. My wife also graduated grad school in 2010, so there were no tuition papers to confuse them. We owe ~$2,600 in unpaid and interest.

Why didn't we catch this? Because we have no idea about taxes and paid the man to do it for us; my wife is a teacher and we just bought a house, so we didn't know what the hell. And, as I said before, the IRS is apparently catching all the mistakes this year.

Looking online, I have no real legal recourse or hope that the preparer will pay this; it is simply money I would have owed if he had filled it out correctly. It only sucks because we just remodeled our bathroom and are trading in our car this weekend (due to boring reasons, it's not something we can delay). We will probably pay half what we owe and do a payment plan for the rest so monthly budget isn't totally destroyed.

So I owe the money, I understand that. It is unlikely (i.e. not gonna happen) that the preparer will cover the difference, even though this is the second gently caress up of his we've dealt with in five months. He loses a customer, I tell everyone I know that he is incompetent.

What I'd like to know is how the gently caress he messed this up? Did he just try to inflate our return?

We just got the letter tonight, so I'm going to call in the morning and try to get his take on it. How should I approach this? What can I do or say to minimize my unhappiness here? I don't want to try to blackmail the guy with the "Form 14157, Complaint: Tax Return Preparer", but there anything I can or should do? I'll probably file a complaint anyway since this seems shady as gently caress to me.

And, slightly related, how do I figure out how much I should be having taxed out of each paycheck in order to come closest to owing $0 at the end of the year? Is that something I pay an accountant a consultant fee for, and what would that be?

EDIT: Whelp, the other AUR was last year, not this year, got broken brain. Guess we went with them again because it got fixed and/or we are morons.

From what you say there is little question that the preparer was trying to artificially inflate your refund to make himself look better. Unfortunately there is little recourse. If he has any integrity ~~he would not have doctored your return~~ he will cover any penalties and interest that are due, but the tax will always remain your responsibility. He might even refund your preparation fee for that year, but I would not expect more than that.

As for recourse, you can for sure report him to the IRS. If enough taxpayers complain about the same preparer they might eventually move against him. Or perhaps they will start a project of looking into other returns he prepared and seeing if other taxpayers had fake credits as well. If he is licensed you can report him to the authority to administrates his license.

# ? Aug 8, 2013 18:40

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# ? May 13, 2024 22:23

AbbiTheDog: May 21, 2007

furushotakeru posted:

From what you say there is little question that the preparer was trying to artificially inflate your refund to make himself look better. Unfortunately there is little recourse. If he has any integrity ~~he would not have doctored your return~~ he will cover any penalties and interest that are due, but the tax will always remain your responsibility. He might even refund your preparation fee for that year, but I would not expect more than that.

As for recourse, you can for sure report him to the IRS. If enough taxpayers complain about the same preparer they might eventually move against him. Or perhaps they will start a project of looking into other returns he prepared and seeing if other taxpayers had fake credits as well. If he is licensed you can report him to the authority to administrates his license.

I've tried turning in preparers to the IRS. I was told "they were too small" even though they probably do around 1,000 returns a year. Interesting thing was the local IRS agents were also trying to turn in the same preparer internally to their own special agents are were blown off for the same reason.

Rumor has it if you get three instances of "preparer penalties" from an audit the IRS opens a file on you, not sure if that's correct though.

# ? Aug 8, 2013 20:21

The Aphasian: Mar 8, 2007; Psychotropic Hops

He's out until Monday, so I'll have to stew until then. I'll probably approach it as "How did this happen? What are you planning on doing to make this right? I suggest paying the interest and refunding the preparation cost, since the former is the result of you mishandling the latter."

I can't find gently caress all about them online, other than a simple website. Which is fine at a glance, but if you actually look at it, appears created in an afternoon for a fake company. There are no email addresses for anyone anywhere. Most of the links just go to relevant pages at the IRS site. Also this nonsense:

Clicking on 2, 3, or 4 does nothing.

A friend referred them to us, but talking to them they stopped using him a couple years ago because he is "Shady as hell".

So, my personal recommendation is don't use SWH Advisory Group out of Maryland.

furushotakeru, how do I figure out how to adjust my withholding on my paycheck to minimize what I owe or get as a refund? Should I email you directly to figure the consulting fee?

# ? Aug 8, 2013 20:30

furushotakeru: Jul 20, 2004; Your Honor, why am I pink?!

The Aphasian posted:

furushotakeru, how do I figure out how to adjust my withholding on my paycheck to minimize what I owe or get as a refund? Should I email you directly to figure the consulting fee?

I can do a workup like that in about an hour. You can email me at russell@barnettaccounting.net if you want to look into this.

Sorry you got burned by a jerk

# ? Aug 8, 2013 21:01

Small White Dragon: Nov 23, 2007; No relation.

Admiral101 posted:

You're only saving 2.9% (roughly) on your income by incorporating with an S-election versus 15.3%, since you're at the social security wage cap.

Actually, if you go the S corp route, you will have to pay FICA up to the cap, and then you can personally get refunded for the employee half.

So, technically, I think you'd lose money by going the S-corp route.

# ? Aug 11, 2013 05:21

Rurutia: Jun 11, 2009

I have a question about side jobs and their impact on deductions. I'm a full time doctoral student with a work stipend. This year, I took on a minor contracting job (about 70 hours for the year). From my understanding, this will be taxed both marginally at the federal income tax level and for an additional 15(?)% for the self-employment tax?

My question is, what deductions can I take for this and most importantly, what kind of documentation should I have ready in case of an audit? We have a work office set up in the attic, I use home internet to communicate with my bosses, I use my phone to communicate with a local liaison, and I use my car and gas to meet up with this liaison. My understanding is, I can deduct the business portion of all of these expenses, but I guess I'm not sure what kind of documentation/proof I will need to keep. In addition, for the home office, can I deduct only utility expenses or does part of the mortgage payment count as well? I'm guessing the furniture and its depreciation does not count.

# ? Aug 11, 2013 12:10

Zeta Taskforce: Jun 27, 2002

I just recently had my front porch on my 2 family property rebuilt. The roof was fine but the foundation and stairs had rotted out from being about 60 years old. The contractors temporarily propped up the roof and ripped everything out, poured a new foundation and built a new porch underneath the roof. The new porch is exactly the same size of the old one. The old porch was beginning to be structurally unsafe.

For tax purposes my house is being used 67% for rental and 33% for personal use. This is considered a repair, not an upgrade. Right?

# ? Aug 11, 2013 21:05

Zeta Taskforce: Jun 27, 2002

Rurutia posted:

I have a question about side jobs and their impact on deductions. I'm a full time doctoral student with a work stipend. This year, I took on a minor contracting job (about 70 hours for the year). From my understanding, this will be taxed both marginally at the federal income tax level and for an additional 15(?)% for the self-employment tax?

My question is, what deductions can I take for this and most importantly, what kind of documentation should I have ready in case of an audit? We have a work office set up in the attic, I use home internet to communicate with my bosses, I use my phone to communicate with a local liaison, and I use my car and gas to meet up with this liaison. My understanding is, I can deduct the business portion of all of these expenses, but I guess I'm not sure what kind of documentation/proof I will need to keep. In addition, for the home office, can I deduct only utility expenses or does part of the mortgage payment count as well? I'm guessing the furniture and its depreciation does not count.

You can deduct all legitimate expenses that were necessary to generate this income. Auto related expenses would very much count. Most people find it easiest to track the mileage and take the IRS standard mileage rate of 56.5 cents per mile driven. If you do that, you can't deduct your gas too. A log book or a spreadsheet keeping track of it is fine.

I'm not sure about anything else though. To take a home office deduction, the area must be used regularly and exclusively in your self employment venture. Meaning the area is both used quite often for your contracting work and and you don't use it for anything else, you don't use it to study for your tests or write your thesis. I'm guessing a 70 hour contracting gig won't qualify you for the home office deduction. Likewise with the internet. I understand you communicate with the bosses, but how do you separate that part of the internet from looking at the forums? It's not like your contracting work made your internet bill more expensive. Same with your phone. I guess you could figure out the percentage you used it personally vs. contracting, but for a 70 hour thing, again, you are probably better off not counting it.

Did you need to buy special software for this project, hardware or equipment? If so, the same concept applies. If you bought a new laptop at the start of it, you will have a hard time proving that you only used it for this 70 hour project, buy maybe you did have to rent a high capacity printer for a month and you burned through a $50 ink cartridge, in which case you just need your receipt.

# ? Aug 11, 2013 21:25

scribe jones: Sep 17, 2008; One of the key problems in the analysis of this puzzling book is to be able to differentiate a real language from meaningless writing.

Zeta Taskforce posted:

I just recently had my front porch on my 2 family property rebuilt. The roof was fine but the foundation and stairs had rotted out from being about 60 years old. The contractors temporarily propped up the roof and ripped everything out, poured a new foundation and built a new porch underneath the roof. The new porch is exactly the same size of the old one. The old porch was beginning to be structurally unsafe.

For tax purposes my house is being used 67% for rental and 33% for personal use. This is considered a repair, not an upgrade. Right?

Yup.

# ? Aug 11, 2013 23:21

Zeta Taskforce: Jun 27, 2002

scribe jones posted:

Yup.

I figured, :unsmith:

wanted a second opinion, especially since I get to wait 27.5 years to write off my furnace.

# ? Aug 12, 2013 01:32

Omits-Bagels: Feb 13, 2001

I've had a few websites for the past three years that have never made any money. But earlier this year I started making a bit of money from them. It isn't a huge sum but I've probably made about $8,000 since February. Should I be doing anything special about taxes? Do I just report the income at the end of the year? I've read somewhere that I should be setting aside 30% for taxes (which I am doing). The amount I get each month does vary �it can be anywhere from $500-$3500.

Additionally, I don't have another job at the moment and I'll be a full-time student starting this month.

I just want to make sure I'm doing everything by the book. Any other tips about reducing my tax burden would be great, too.

Omits-Bagels fucked around with this message at 16:55 on Aug 12, 2013

# ? Aug 12, 2013 16:48

furushotakeru: Jul 20, 2004; Your Honor, why am I pink?!

Zeta Taskforce posted:

I figured, wanted a second opinion, especially since I get to wait 27.5 years to write off my furnace.

A furnace doesn't have an expected life of 27.5 years though. I would have used 10 at most.

# ? Aug 12, 2013 17:43

scribe jones: Sep 17, 2008; One of the key problems in the analysis of this puzzling book is to be able to differentiate a real language from meaningless writing.

furushotakeru posted:

A furnace doesn't have an expected life of 27.5 years though. I would have used 10 at most.

Furnace is a "structural component" so he's on the hook for the full 27.5, per Pub 527.

# ? Aug 12, 2013 17:52

Zeta Taskforce: Jun 27, 2002

furushotakeru posted:

A furnace doesn't have an expected life of 27.5 years though. I would have used 10 at most.

I figured that a replacement furnace, being a capital improvment, became the same class of property that it was installed in. That said, the furnace it replaced was about 70 years old, no joke.

# ? Aug 12, 2013 17:52

Rurutia: Jun 11, 2009

Zeta Taskforce posted:

I guess you could figure out the percentage you used it personally vs. contracting, but for a 70 hour thing, again, you are probably better off not counting it.

Thanks for all the information. I was mostly asking because I'm looking into expanding my contracting to be a more substantial side business so all of this information is important.

I did read most of what you've said elsewhere, but a lot of it seems odd to me and there are so many potential holes. For example, the car log is really just based on an honor system? And what should be in the log? Purpose of the trip, date, odometer readings for the trip? The last thing I want is to be audited and told that I need X documentation for Y deduction that I don't have, or that my X documentation isn't detailed enough.

# ? Aug 12, 2013 17:53

Zeta Taskforce: Jun 27, 2002

Rurutia posted:

Thanks for all the information. I was mostly asking because I'm looking into expanding my contracting to be a more substantial side business so all of this information is important.

I did read most of what you've said elsewhere, but a lot of it seems odd to me and there are so many potential holes. For example, the car log is really just based on an honor system? And what should be in the log? Purpose of the trip, date, odometer readings for the trip? The last thing I want is to be audited and told that I need X documentation for Y deduction that I don't have, or that my X documentation isn't detailed enough.

I haven't prepared taxes for paying clients for about 4 years, but pretty much everyone who came in had a box of random recipts, their bank statements with 5 months missing, half of them were from the wrong year, no mileage records about anything, and we were just guessing. When you do contracting/self employment stuff, a surprising amount is based on the honor system. Chances you will never be audited, especially if your expenses are in line with what other contractors in the same line of busines take.

If this gets to be a regular thing, you can open up a seperate bank account and run all the business transactions through it.

# ? Aug 12, 2013 18:25

kefkafloyd: Jun 8, 2006; What really knocked me out
Was her cheap sunglasses

Zeta Taskforce posted:

If this gets to be a regular thing, you can open up a seperate bank account and run all the business transactions through it.

Not a tax professional, but do this right away. It just makes things a lot easier.

I keep track of my mileage using Quicken (its tracker is pretty good) but it's not that great for keeping track of my books. It's good for expense tracking, but it's geared heavily towards invoicing, which I don't really do since most of my non-photo income is from a cash business. I use Excel to keep track of my per-show expenses and income as well as inventory. I keep all my receipts organized in envelopes for each trip/show/gig that I do.

I learned my lesson last year. I wasn't audited but I did my own schedule C and it was very tough without someone to bounce questions off. This year I'm having someone do it for me and I figured I would make their life as easy as possible.

# ? Aug 12, 2013 18:32

furushotakeru: Jul 20, 2004; Your Honor, why am I pink?!

kefkafloyd posted:

This year I'm having someone do it for me and I figured I would make their life as easy as possible.

Bless you, kind soul

# ? Aug 12, 2013 18:44

kefkafloyd: Jun 8, 2006; What really knocked me out
Was her cheap sunglasses

furushotakeru posted:

Bless you, kind soul

I saw that episode of It's Always Sunny where Frank gets back at someone by filing their taxes so they get audited. :tinfoil:

# ? Aug 12, 2013 18:49

AbbiTheDog: May 21, 2007

Small White Dragon posted:

Actually, if you go the S corp route, you will have to pay FICA up to the cap, and then you can personally get refunded for the employee half.

So, technically, I think you'd lose money by going the S-corp route.

It's hard to tell without seeing the OP's numbers. That's the problem with random, anonymous internet forums, they aren't the best places for detailed tax advice.

# ? Aug 14, 2013 00:11

Q-sixtysix: Jun 4, 2005

Guys, I just got an unexpected tax bill for $15,000 that I'm not sure is correct. The particulars touch upon a promissory note that I signed with a former employer to the tune of approximately $48,000. I left the firm that I was working with and arbitration years later resulted in that amount be rewarded to the firm, which I later discharged in bankruptcy (in 2011).

Today I got a letter imputing that $48,000 as taxable. I am freaking out right now for a lot of reasons that I would prefer to discuss over PMs. It's 9pm here and I can't call an attorney and I don't know how I'm going to make it through the night. Please help.

# ? Aug 15, 2013 02:02

skipdogg: Nov 29, 2004; Resident SRT-4 Expert

There's nothing you can do about it tonight, so it's pointless to stress out about something you can't change. You'll be OK.

Not a lawyer, not a tax expert, but usually debts discharged in bankruptcy are not taxed as income by the IRS. This can all probably be straightened out with some paperwork.

http://taxes.about.com/b/2007/02/13/canceled-debts-are-not-taxable-income-in-bankruptcy.htm

# ? Aug 15, 2013 03:23

rentilius: Apr 21, 2010

SixtySix posted:

Guys, I just got an unexpected tax bill for $15,000 that I'm not sure is correct. The particulars touch upon a promissory note that I signed with a former employer to the tune of approximately $48,000. I left the firm that I was working with and arbitration years later resulted in that amount be rewarded to the firm, which I later discharged in bankruptcy (in 2011).

Today I got a letter imputing that $48,000 as taxable. I am freaking out right now for a lot of reasons that I would prefer to discuss over PMs. It's 9pm here and I can't call an attorney and I don't know how I'm going to make it through the night. Please help.

I have little experience with this but my research tells me that debt that was discharged in bankruptcy is non-taxable. If you read the following IRS publication, it talks about excluding debt that is canceled in a bankruptcy case under Title 11.

Source: http://www.irs.gov/publications/p525/ar02.html#d0e4790

Gather up the documentation supporting your claim that it was discharged in bankruptcy. You will probably end up drafting up a quick letter explaining what the situation is, letting them know the full story. They're usually pretty good about abating penalties, too.

# ? Aug 15, 2013 03:27

Q-sixtysix: Jun 4, 2005

Thanks guys. I panicked, and feel somewhat better now. I'll get with the IRS first thing in the morning.

# ? Aug 15, 2013 10:46

seymore: Jan 9, 2012

Omits-Bagels posted:

I've had a few websites for the past three years that have never made any money. But earlier this year I started making a bit of money from them. It isn't a huge sum but I've probably made about $8,000 since February. Should I be doing anything special about taxes? Do I just report the income at the end of the year? I've read somewhere that I should be setting aside 30% for taxes (which I am doing). The amount I get each month does vary �it can be anywhere from $500-$3500.

Additionally, I don't have another job at the moment and I'll be a full-time student starting this month.

I just want to make sure I'm doing everything by the book. Any other tips about reducing my tax burden would be great, too.

You are going to owe Self Employment ( SE ) tax on your net earnings at a 15.3 % rate . Also, depending upon your total income for the entire year you may owe income tax. We would have to know both your prior year's tax situation as well as this year's complete facts but you possibly should be making estimated tax payments on a quarterly basis. At the very least set aside enough cash for your SE tax. Setting aside 30 % may be prudent.

# ? Aug 18, 2013 20:48

shodanjr_gr: Nov 20, 2007

So i had a number of returns audited and I missed the original audit report because I had moved. I filed amended returns (most/all of which went through audit reconsideration) after receiving CP22e notices showing a balance due + penalties.

One of amended returns just posted (the rest are still in reconsideration) as an adjustment to my account but apparently the penalty associated with the original audit is still there (even though my liability was zeroed out). Is this something that I have to suck up and pay or will it get cleared out automagically? I'll give em a call on Monday to sort this out, but I figured maybe some of the tax-goons here could chime in.

# ? Aug 19, 2013 02:56

furushotakeru: Jul 20, 2004; Your Honor, why am I pink?!

shodanjr_gr posted:

So i had a number of returns audited and I missed the original audit report because I had moved. I filed amended returns (most/all of which went through audit reconsideration) after receiving CP22e notices showing a balance due + penalties.

One of amended returns just posted (the rest are still in reconsideration) as an adjustment to my account but apparently the penalty associated with the original audit is still there (even though my liability was zeroed out). Is this something that I have to suck up and pay or will it get cleared out automagically? I'll give em a call on Monday to sort this out, but I figured maybe some of the tax-goons here could chime in.

All accuracy related penalties (as well as non payment penalties of course) are based on the amount of tax due. If there is zero tax due, there should be zero penalties.

# ? Aug 19, 2013 17:18

john mayer: Jan 18, 2011

Sorry if this is a really obvious question. I have a few hundred bucks in an IRA from an old job. It's losing more than its making because of fees, so I'm trying to decide what to do with it. My husband is in school half time, and I know I can withdraw it for his tuition and books without the 10% penalty. My question is what kind of proof do I need of how it was spent? I'm a little confused by the IRS website and don't want to end up owing more than I thought over such a small amount.

# ? Aug 19, 2013 18:51

shodanjr_gr: Nov 20, 2007

furushotakeru posted:

All accuracy related penalties (as well as non payment penalties of course) are based on the amount of tax due. If there is zero tax due, there should be zero penalties.

So they said that I might have to file a "Request for penalty abatement" when I get the notice that my case is closed. What's interesting is that the 2011 tax year didn't go through recosinderation and that 2010 and 2009 are still stuck in reconsideration limbo...

# ? Aug 20, 2013 00:11

AbbiTheDog: May 21, 2007

shodanjr_gr posted:

So they said that I might have to file a "Request for penalty abatement" when I get the notice that my case is closed. What's interesting is that the 2011 tax year didn't go through recosinderation and that 2010 and 2009 are still stuck in reconsideration limbo...

It's random. I've sent in three-four amended returns at a time for people, and some will get picked, some will sail on through.

# ? Aug 20, 2013 16:49

Sundae: Dec 1, 2005

I have a waged-employee day job which, including bonuses, makes me just a hair over the SS/Medicare wage cap. I have two self-employed night jobs which will likely produce a combined total of about $55K extra this year. Starting in 2014, I'll be making estimated quarterlies.

My question is this: How on earth do I handle the self-employed SS / Medicare taxes now that I'm exceeding the cap on the waged-employee day job? Do I send payments as if I'm paying said taxes for the side jobs and then try to get the money back at the end? Do I adjust downward for non-payment? (That seems dangerous, since depending on how you treat the earnings, it changes the total percentage I'd owe. If it's treated as primary income, it'd be subject to the 15.3% versus the 7.65% rate I'd have if the day job was the primary income.) I have no idea how the income gets handled now.

How can I expect that to be handled? I'm having trouble figuring out how the income is treated.

# ? Aug 20, 2013 17:38

Kinson: Nov 25, 2007; Working hard for the money.

Wow, Abbi and Furu are still at it.

# ? Aug 20, 2013 19:58

furushotakeru: Jul 20, 2004; Your Honor, why am I pink?!

Kinson posted:

Wow, Abbi and Furu are still at it.

We can't all spend our time plowing the garden and still pay our bills :mad:

# ? Aug 20, 2013 22:38

cstine: Apr 15, 2004; What's in the box?!?

I'm not sure if this should go here, or the investing thread - but since the question is more about the tax implications than anything...

I've got a fair amount of money sitting in my S-Corp (in excess of $35,000) due to having a better year than typical.

What I'd like to do is take out whatever the maximum tax-deferred amount is for married couples this year $12,000-something.

What's the 'proper' way to take this money and put it into a retirement account, without causing myself any headaches with the IRS at the end of the year?

If it matters, my wife and I are the only directors, and I'm the sole shareholder of the S-Corp - what I'm trying to accomplish is to a) actually do a decent job funding my retirement finally and b) reduce my tax burden at the end of the year.

# ? Aug 21, 2013 00:03

furushotakeru: Jul 20, 2004; Your Honor, why am I pink?!

cstine posted:

I'm not sure if this should go here, or the investing thread - but since the question is more about the tax implications than anything...

I've got a fair amount of money sitting in my S-Corp (in excess of $35,000) due to having a better year than typical.

What I'd like to do is take out whatever the maximum tax-deferred amount is for married couples this year $12,000-something.

What's the 'proper' way to take this money and put it into a retirement account, without causing myself any headaches with the IRS at the end of the year?

If it matters, my wife and I are the only directors, and I'm the sole shareholder of the S-Corp - what I'm trying to accomplish is to a) actually do a decent job funding my retirement finally and b) reduce my tax burden at the end of the year.

You can put up to 25% of your W-2 wages from the S-corp into a SEP IRA. Same for your wife. Or, you can defer up to $17K of your salary into a solo 401(K) and then the corp can contribute up to 25% of your W-2 wages from the S-corp, up to a maximum total of $50K. Same for your wife.

# ? Aug 21, 2013 00:11

AbbiTheDog: May 21, 2007

furushotakeru posted:

You can put up to 25% of your W-2 wages from the S-corp into a SEP IRA. Same for your wife. Or, you can defer up to $17K of your salary into a solo 401(K) and then the corp can contribute up to 25% of your W-2 wages from the S-corp, up to a maximum total of $50K. Same for your wife.

I'd make sure he doesn't have any other employees before he sets up something like that. If he starts company matching for himself he might need to cover the other employees too.

# ? Aug 21, 2013 16:58

AbbiTheDog: May 21, 2007

Kinson posted:

Wow, Abbi and Furu are still at it.

I leave the estimate questions for Furu. Those just drive me crazy and have been asked at least once on every page.

# ? Aug 21, 2013 17:01

cstine: Apr 15, 2004; What's in the box?!?

AbbiTheDog posted:

I'd make sure he doesn't have any other employees before he sets up something like that. If he starts company matching for himself he might need to cover the other employees too.

I don't - and the wife isn't actually being paid anything. She's a director because that was required to ensure she'd have easy access to corporate funds if something should happen to me.

# ? Aug 21, 2013 17:03

Hufflepuff or bust!: Jan 28, 2005; I should have known better.

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.

# ? Aug 23, 2013 16:46

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# ? May 13, 2024 22:23

Jealous Cow: Apr 4, 2002; by Fluffdaddy

kaishek posted:

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.

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.

http://www.scopulus.co.uk/taxsheets/

# ? Aug 23, 2013 18:49

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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