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Busy Bee fucked around with this message at 11:01 on Jul 10, 2023 |
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Jul 10, 2023 08:30
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Missing Donut posted:You are not reading that right. The 8952 is only when the employer wants to correct its behavior, voluntarily and unprompted. An employee who wants to challenge the 1099 files Form 8919 and SS-8, and if the employee is found to be correct, the employer is liable for the full half of the social security and Medicare taxes. My first job misclassified me this way. Being the naive weirdo I was, I simply didn't pay the self-employment tax when I filed (because in my mind I didn't owe it), and I also filed an SS-8. For two years, every six months, the IRS sent me a "we're looking into it" letter, and eventually followed up with "after our investigation your employer is reclassifying you so there's nothing more to do." I never tried to reclaim any back taxes because I never paid them, and the IRS never complained to me about any of it. My employer did reclassify me, but it was a huge bureaucracy and I never suffered any personal blowback.
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Jul 17, 2023 18:56
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Not sure if this is the right place but is this a good place to ask about some confusion on some nonsense IRS has told me regarding refunds? If not point me please! I'll try to make this short. Some background information, I changed my legal name about a year or two ago. My W-2's showed this updated name no problem. So I E-Filed right at the very start of tax season. The refund tracker hasn't given me any more info beyond, "being processed". I've called the IRS multiple times on what's going on with my refund. The first time I called they say they don't see my name under my SSN. I tell them the old name, shows up just fine. They say, "that means it's not updated in the SSA's system, call them, we just get the names from their lookup" I call the SSA and explain the situation, "yeah we have no idea what they're talking about, it's been updated in our system for 18months". Cool... Call the IRS back, "yeah nothing we can do, someone needs to go in and review it, otherwise you'll need to contact the SSA" already did this. I figure I should just wait a few months, it'll get flagged and ask me to send in some paper or something, nothing happens. So I call them again, same deal, "that name isn't in our system, ssa's problem, we'll have to review it". So at this point I guess I'm wondering what the hell I'm supposed to do? IRS isn't being helpful beyond shrugging, SSA has nothing more to do with it. Kinda needed this chunk of change for a while now.
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Aug 9, 2023 04:07
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I did a quick search of the thread and didn't see this specific thing answered- I received a small life insurance payout from my grandmother. The letter it came with says that $3,698.33 of it is taxable- how do I figure out what the taxes on that will come out to? Will the insurance company send a tax form? I live in Iowa and Grandma lived in Illinois if that part matters at all.
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Aug 9, 2023 06:51
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raminasi posted:My employer did reclassify me, but it was a huge bureaucracy and I never suffered any personal blowback. Sounds like you were fortunate. I guess I usually see blatant misclassifications in small businesses without professional HR departments where blatant retaliation is common. Grey Cat posted:So at this point I guess I'm wondering what the hell I'm supposed to do? I can’t remember seeing a client have problems between the IRS and SSA on a name change before. My gut says that the next step is the Taxpayer Advocate Service, or perhaps your Congressman, but I’m not positive on which is better in this situation — hopefully one of the other professionals here has seen this before and can chime in Zeth posted:I did a quick search of the thread and didn't see this specific thing answered- I received a small life insurance payout from my grandmother. The letter it came with says that $3,698.33 of it is taxable- how do I figure out what the taxes on that will come out to? Will the insurance company send a tax form? I live in Iowa and Grandma lived in Illinois if that part matters at all. You will receive a 1099 from the life insurance company and it will be added to your income. If you are receiving the money due to her passing, it will be a 1099-INT and you generally will not have taxes withheld from the payout, so it will reduce your refund or increase a balance due.
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Aug 9, 2023 15:16
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Hypothetical: Person A pays copays for their doctor visits with a FSA card. Due to some weird billing problem, their healthcare system ends up consistently overcharging and sends back one or two refunds a year (so maybe $40 across the whole year). Person A deposits these checks in their normal bank account. Do the refunds become taxable income? Is there a way to deposit them back in the FSA?
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Aug 9, 2023 15:54
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Badger of Basra posted:Hypothetical: What if your friend stops asking dumb questions and just not realize the correlation here? 
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Aug 9, 2023 16:13
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Missing Donut posted:Sounds like you were fortunate. I guess I usually see blatant misclassifications in small businesses without professional HR departments where blatant retaliation is common. I'm pretty sure that the misclassification was my boss trying to save budget without HR knowing he was doing it. Once it came to their attention they made him fix it, but they never said "the IRS is making us do this because of a complaint" because he was breaking internal rules. At the time, he grumbled about the paper-pushers making him do it correctly but he never found out that I instigated the change in the first place. (I'm also pretty sure he never understood that he did anything wrong, because understanding and following rules was never exactly in his wheelhouse. His thinking was "if I do this one way the budget hit is less so that's how I'll do it.")
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Aug 9, 2023 16:22
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Grey Cat posted:So at this point I guess I'm wondering what the hell I'm supposed to do? Missing Donut posted:I can’t remember seeing a client have problems between the IRS and SSA on a name change before. My gut says that the next step is the Taxpayer Advocate Service, or perhaps your Congressman, but I’m not positive on which is better in this situation — hopefully one of the other professionals here has seen this before and can chime in I agree with reaching out to Taxpayer Advocate. They basically exist to help get things unstuck.
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Aug 9, 2023 17:22
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Missing Donut posted:I can’t remember seeing a client have problems between the IRS and SSA on a name change before. My gut says that the next step is the Taxpayer Advocate Service, or perhaps your Congressman, but I’m not positive on which is better in this situation — hopefully one of the other professionals here has seen this before and can chime in. Zeth posted:I did a quick search of the thread and didn't see this specific thing answered- I received a small life insurance payout from my grandmother. The letter it came with says that $3,698.33 of it is taxable- how do I figure out what the taxes on that will come out to? If you`re working a job where you already have withholding taken out, you could increase the withholding to make up the difference, the advantage to this is that it spreads out the tax payment over the rest of the year. You can use the Withholding Calculator at IRS.GOV to determine how to adjust your W4 with your employer if you want to go that route. If that's not an option or you just want to pay the taxes now in one lump sum, you can download the form 1040-ES and its instructions from the same IRS website. It will help you calculate how much tax you owe and you could then use the form to mail in the payment or submit it as an Estimated Tax payment for 2023 using Direct Pay on the IRS website.
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Aug 9, 2023 19:35
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Missing Donut posted:I can’t remember seeing a client have problems between the IRS and SSA on a name change before. My gut says that the next step is the Taxpayer Advocate Service, or perhaps your Congressman, but I’m not positive on which is better in this situation — hopefully one of the other professionals here has seen this before and can chime in incogneato posted:I agree with reaching out to Taxpayer Advocate. They basically exist to help get things unstuck. Alright I'll try this and report back, thank you.
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Aug 9, 2023 20:09
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Is this the "gently caress id.me" thread? Because I am so loving done with that site. I've tried 4 times now to upload my docs, and each time they're just like "nope lol." Contacted support and got a robot back. Who knows if they're actually going to follow up.
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Aug 10, 2023 21:00
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H110Hawk posted:Is this the "gently caress id.me" thread? Because I am so loving done with that site. I've tried 4 times now to upload my docs, and each time they're just like "nope lol." Contacted support and got a robot back. Who knows if they're actually going to follow up. The first time I tried to make my ID.Me account it didn't think my DL looked like me and but I was able to call and do a video chat with one of their agents who was pretty much just like "yep that's you, carry on." I'm surprised you're only getting support robots.
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Aug 10, 2023 21:23
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Yeah I picked the video option and it forces you through the same workflow that is rejecting my documents before you can talk to a human.
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Aug 10, 2023 21:48
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Lol you should try ID.me as an overseas resident. It's truly insane real life Catch-22 bureaucracy.
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Aug 11, 2023 05:59
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Have you tried a different browser? I couldn't get id.me to do anything unless I was using an unmodified OS-supplied browser. Anything civilized with safety add-ons would cause it to fail. Still sucks!
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Aug 11, 2023 06:20
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Tricky Ed posted:Have you tried a different browser? I couldn't get id.me to do anything unless I was using an unmodified OS-supplied browser. Anything civilized with safety add-ons would cause it to fail. They're getting the pictures just fine because my 4th try I got mad and wrote them a note about it not working as the picture. The support human told me my document didn't match the selected type and to try again.
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Aug 11, 2023 15:34
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Peyote Panda posted:If that's not an option or you just want to pay the taxes now in one lump sum, you can download the form 1040-ES and its instructions from the same IRS website. It will help you calculate how much tax you owe and you could then use the form to mail in the payment or submit it as an Estimated Tax payment for 2023 using Direct Pay on the IRS website. This is exactly what I wanted, thank you.
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Aug 11, 2023 20:21
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I am not sure if this should go in the investing thread or here, but it feels like more of a tax question than an investing one. If i need to move it, I will. Last year, I purchased shares in a mutual fund. That mutual fund at the end of 2022 paid me approximately $30k as long term/short term gains as well as dividends. That was pretty cool. But, as mutual funds are wont to do, that payout (collectively, to the shareholders) dropped the value of the shares, which on paper created an approximately $30k decrease in the value of my investment. For the last eight months, I've been debating how to handle this paper loss. It currently sits at about an 11k 'loss'. I am considering selling the security in order to take the loss, to apply it to future taxes ($3k/year). My question is: how much of the security do I have to sell to realize that loss? Is it the entire position? Is it 1 share? Is it everything but the 400odd shares I received when I autoreinvested my lt/st/dividend gains? I've not been able to find a straight answer on this, and am curious if anyone knows the actual rule.
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Aug 17, 2023 14:28
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BUG JUG posted:I am not sure if this should go in the investing thread or here, but it feels like more of a tax question than an investing one. If i need to move it, I will. There's not really one straight answer - you're going to have to learn about tax lot accounting and then figure out what specifically you want to do, and what your broker supports. It's not hard but if you're not unloading your entire position it's not trivial either.
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Aug 17, 2023 14:40
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The term to google is "tax loss harvesting" and the long term investing thread can help you out. Often when people do is cycle all lots showing a loss into something different enough to not trip the wash sale rules. Say, Total Stock Index into S&P 500.
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Aug 17, 2023 14:56
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H110Hawk posted:The term to google is "tax loss harvesting" and the long term investing thread can help you out. Often when people do is cycle all lots showing a loss into something different enough to not trip the wash sale rules. Say, Total Stock Index into S&P 500. yeah that's what is tripping me up. I want to keep the security long term. I think what I'll do since Vanguard's money market is on fire right now is just dump it in there for the 30 days, collect interest, then rebuy. eta: I've also looked into that Hawk, I could probably swing it if I wanted to do some math but....eh, easier to just do a dump and re-buy since the rules are unclear. BUG JUG fucked around with this message at 15:36 on Aug 17, 2023 |
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Aug 17, 2023 15:32
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Do you actually have a loss? Your cost basis should be adjusted for the dividend/distributions. Or am I totally misunderstanding how that adjustment works? Guy Axlerod fucked around with this message at 21:47 on Aug 17, 2023 |
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Aug 17, 2023 21:44
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Guy Axlerod posted:Do you actually have a loss? Your cost basis should be adjusted for the dividend/distributions. No, that's not right, unless the distribution was a return of capital (which isn't the case from what OP posted).
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Aug 17, 2023 23:36
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Guy Axlerod posted:Do you actually have a loss? Your cost basis should be adjusted for the dividend/distributions. My understanding -- and I am a novice with this so please correct me if I'm wrong -- is that the large LT/ST gains that were given out last year allowed me to increase my equity in the fund. I.e.: before I had ~3300 shares, now I am at ~3800. But the outflow of money from the fund itself dropped the price of the stock. So, while for last year's taxes I had a $30k capital gain, had I sold the entire position right away it would have been evened out by a similar loss in the price of the fund. Since the dividends were given out in late December, and I was not entirely aware of how this worked, I got stuck with a 30k addition to my tax bill BUT ALSO a comensurate lowering of the 'value' of the securities I had before. The price of the fund has fluctuated since then, which is why now the paper loss is only 11k, whereas at the moment of disbursment it was 30k. After looking at the last few days though I am happy to get out now while I'm ahead from gains made in June and July. Should have cut losses earlier in the week, but hopefully it drops a percent or so more so I can scoop up some more shares when my 30 day timeout is over.
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Aug 18, 2023 02:31
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Agronox posted:No, that's not right, unless the distribution was a return of capital (which isn't the case from what OP posted). Yeah, that's what I was thinking of. Thanks.
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Aug 18, 2023 02:59
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My sister is American but lives in Sweden now. She hasn’t filed/paid her US taxes in seven years and is panicking a little about it now but doesn’t know what to do. Is her best bet to find a tax preparer here in the US to help her? Or is this something that’s easy enough for her to handle on her own, while not being a person especially adept at finances?
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Sep 5, 2023 16:45
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She is likely fine. She should have been filing US tax returns all along, but it is unlikely she owes anything. A tax pro can help, but basically she should look into filing three years of tax returns and 6 years of fbars under the offshore streamlined procedures. https://www.irs.gov/individuals/international-taxpayers/us-taxpayers-residing-outside-the-united-states
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Sep 6, 2023 00:42
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Seems like it would be worth it to hire someone just to get it all trued up "just in case" since we don't know (but can assume) details.
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Sep 6, 2023 00:56
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Thank you both. She doesn’t make a lot of money so I wouldn’t think she could owe much but it’ll be good to get it straightened out one way or the other
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Sep 6, 2023 01:01
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PatMarshall posted:She is likely fine. She should have been filing US tax returns all along, but it is unlikely she owes anything. A tax pro can help, but basically she should look into filing three years of tax returns and 6 years of fbars under the offshore streamlined procedures. https://www.irs.gov/individuals/international-taxpayers/us-taxpayers-residing-outside-the-united-states The procedures aren't really necessary unless there are taxes owed on foreign source income. You can just back file and if necessary file the FBARs with the excuse that you were unaware of the filing requirement.
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Sep 6, 2023 01:22
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Gabriel Grub posted:The procedures aren't really necessary unless there are taxes owed on foreign source income. Would foreign source income mean her salary in Sweden? quote:You can just back file and if necessary file the FBARs with the excuse that you were unaware of the filing requirement. She had filed for the first few years she was there so that might not work
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Sep 6, 2023 02:42
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Snowy posted:Would foreign source income mean her salary in Sweden? Yes, but either the Foreign Earned Income Exclusion or the Foreign Tax Credit would likely wipe out any tax liability making it moot. The streamlined procedures are an amnesty program that forgives penalties on late filed foreign source income, but if there is no tax liability, there are no penalties to forgive. You can just back file to get into compliance + claim stimulus and get student loan payments down to 0, etc. The procedures only have an effect in certain situations such as if you live in a low tax country and owe the difference to the US, you own a foreign corporation and need to get into compliance with your reporting, or you are so far behind on FBARs that doing just the six necessary for streamlined procedures is preferable to doing them all the way back.
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Sep 6, 2023 06:10
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Thanks again, that helps a lot and I’ve passed all that info to her, she feels less stressed already. 
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Sep 6, 2023 18:57
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I just ran into a investment weird tax scenario. In 2022 I was paid qualified dividends on a stock I owned which I then paid appropriate taxes on. However recently the company in question has announced that like 30% of the dividends they paid out in 2022 were not actually dividends but have been reclassified to "return on capital". Reading online a return on capital would generally not be taxed as income during the distribution, but instead adjust the cost basis of my stock for later capital gains/losses purposes. Does this mean I would need to amend my previous year tax return with this new info? In theory less dividends received would mean less taxes were owed. I wonder if my broker (Fidelity) would issue me an updated 1099 form for last year to reflect that change.
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Sep 23, 2023 02:49
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Subvisual Haze posted:I just ran into a investment weird tax scenario. In 2022 I was paid qualified dividends on a stock I owned which I then paid appropriate taxes on. However recently the company in question has announced that like 30% of the dividends they paid out in 2022 were not actually dividends but have been reclassified to "return on capital". Reading online a return on capital would generally not be taxed as income during the distribution, but instead adjust the cost basis of my stock for later capital gains/losses purposes. They should ideally give you a corrected 1099-B with the changes, yes. If nothing else it prevents the IRS arguing with the change.
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Sep 23, 2023 15:05
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So I'm going to have a weird tax situation starting this year, and I don't know where I should start looking to make sure I'm handling everything properly. I've been providing money to a buddy who has a vending machine business. There was an initial one-time investment when he wanted to upgrade a machine at one of his locations. I wrote a check out to his company (which is just a dba) and a month later he paid me back 175% of the initial investment. Now we're going in on a new location. I'm providing the cash to buy the machine. He will be running the location (stocking the machine, collecting the money, etc), paying for his time/materials/sales tax from the gross, and then I'll get the 90% of the net (the other 10% going to the store where the machine is located). Now, despite being a vending machine business, this isn't a cash-under-the-table situation. Everything is pretty well documented (it pretty much has to be, since nowadays almost everybody uses credit cards). How do I go about reporting the money to the IRS? How much should I be holding back when they get their piece? What type of income would this even be considered?
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Sep 28, 2023 17:03
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See, labor wants capital. It needs it. Owning the means of production is a burden, let money carry it (and 100% of the profit). Anyway, probably schedule C and SE. Pay quarterly with 1040 ES. It's business income
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Sep 28, 2023 17:34
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Who will have legal ownership of the vending machine, and what is the nature of the written agreements you have entered into with this person? I'm not going to lie; all I see are red flags. The amount of interest you got paid for a one month loan is so high it makes me think that this is a scam. You create trust in making the first repayment, you create hype based on the HUGE RETURNS and then you take the money and run.
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Sep 28, 2023 17:58
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Yeah, I'm aware that it can look suspicious. Legal owner of the machine will be his business. The checks I'm writing for the investment are to his business, and the payments I'll be getting back will be checks from his business. We had an investment agreement written up for the first loan, and are writing up the new one now for this current situation. It's informal and not reviewed by a lawyer, partially because the amount of money involved is small enough that it wouldn't be worth taking legal action even if he did end up scamming me. Also, he was pretty clear that the first situation was pretty unique (he was really slow to adopt CC-enabled machines and needed the cash to upgrade a machine at his most profitable spot once he saw how much more they pulled in) and that this opportunity is not going to be anywhere near that same level of return (he's estimating the location netting about 5% of what I put in per month). I've also known this guy for over five years so it's not like I've been approached out of the blue. If he does decide to burn me I'll be more sad that he decided to throw the friendship away than upset over the money. EDIT: I will promise now, though, that if it goes wrong I will make a thread here with all the details so everyone can point and laugh.
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Sep 28, 2023 18:27
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