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I'm trying to get a head start on my taxes. 2022 was a weird year and I have to file a bunch of extra forms, not just the 1040. Many forms, like Schedule D, Form 8863 and others, ask you to fill in the amount from some line or other of form 1040 (form 8863 expects line 11, for example). Form 1040 values usually get modified by other forms, so it's sometimes hard to get a sense of when those numbers are "set". Is there a recommended order for what forms should be done before moving on to any other line of section 1040? I'm using FreeFillableForms, if it changes anything. It might end up being that I have to go with a preparer, but I'd like to give it a try by myself, first.
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Jan 29, 2023 00:30
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Winged Orpheus posted:Are you married to partner? we are currently unmarried - should have provided that clarification! Epi Lepi posted:Not this year you can't. None of them will count as a qualifying relative because they did not live with you for the full year. If they all live with you for the entirety of this year and you continue to provide "more than one half of the support" for the household then you will be able to claim all three and also qualify as head of household. If you get married then you will file jointly and you can claim the kids because they're your now spouse's blood relatives. this helps clear things up for my tax returns. i thought i read somewhere that living in the same home for at least 50% of the year qualified, which seemed funky to me. thank you! would this also apply to my withholding elections? or should i go ahead and update now to 3 + HoH?
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Jan 29, 2023 01:32
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spammy davis jr posted:this helps clear things up for my tax returns. i thought i read somewhere that living in the same home for at least 50% of the year qualified, which seemed funky to me. thank you! quote:would this also apply to my withholding elections? or should i go ahead and update now to 3 + HoH? One thing to keep in mind is that if you go from Single, no Dependents to HoH with 3 Dependents, that will likely lower your withholding significantly. That's great for extra take-home pay but if things don't go as planned and you make that withholding adjustment but do end up for whatever reason filing Single with no dependents after all you'll likely end up owing or at least having a substantially reduced refund compared to what you normally get on next year's return.
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Jan 29, 2023 02:11
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Quick question on the Gift Tax Form 709. Would a cash gift to my son be categorized under:
Based on what I read online and within the IRS Gift Tax instruction PDF, it will fall under Part 1.
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Jan 29, 2023 08:46
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If I have a property that I rented out 2017-2019, lived in it 2020-2021, and rented out again in 2022, does the depreciation clock get "reset"?
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Jan 29, 2023 17:48
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dpkg chopra posted:If I have a property that I rented out 2017-2019, lived in it 2020-2021, and rented out again in 2022, does the depreciation clock get "reset"? No. Depreciation reduces your basis permanently. You had 0 allowable depreciation the years you used it as a residence (assuming you moved in at the start of the year and moved out at the end), but the depreciation available to you during those years it was rented already reduced your basis. Also I just realized you're the same person who asked about free fillable forms. For the love of all that's holy don't try to do the forms/math yourself on a rental. Use something like freetaxusa if you absolutely must keep costs down, but realistically you're at least in proper tax software territory if not "hire a professional" territory
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Jan 29, 2023 18:13
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Winged Orpheus posted:No. Depreciation reduces your basis permanently. You had 0 allowable depreciation the years you used it as a residence (assuming you moved in at the start of the year and moved out at the end), but the depreciation available to you during those years it was rented already reduced your basis. Thanks for the advice. Is there anything in particular about the forms/math that worries you? My rental agreement is very simple. I essentially shifted any and all costs to the tenant (with some exceptions that have not materialized) at the expense of lower-than-average rental price. This made sense to me because I would not be around to handle things myself, and the rental is a stop-gap until I decide whether to sell the property or not, next year. So really I only have X income per month, and one expense: depreciation. Filling out Schedule E seemed fairly straightforward in this scenario, and I already filed 4562 in 2017 when I first put it into service. Edit: to clarify, I own the property outright, so no mortgage interest either.
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Jan 29, 2023 19:01
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dpkg chopra posted:Thanks for the advice. Is there anything in particular about the forms/math that worries you? My rental agreement is very simple. I essentially shifted any and all costs to the tenant (with some exceptions that have not materialized) at the expense of lower-than-average rental price. For starters, that's not how rentals work on taxes. If your tenant is paying expenses that would otherwise be borne by you, that's taxable income to you and you have to include those amounts paid in the "rents received" amount. You are still able to claim the amounts paid as expenses, but if you're not documenting anything you're opening yourself up for potential challenges in an audit. I strongly recommend not using free fillable forms because honestly, the odds of you making a math or transcription error somewhere isn't worth the $15 FreeTaxUSA charges. I'd recommend using a professional because you're in a fairly complicated tax situation with a property that has both rental and personal use, as well as some amount of investment income it sounds like. There's various things that may have carryforward (potentially from prior years as well) that someone who doesn't work in tax likely wouldn't be familiar with. You absolutely can do taxes on this level yourself, but it's not a great idea imo.
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Jan 30, 2023 02:35
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edit
Busy Bee fucked around with this message at 14:02 on Jan 30, 2023 |
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Jan 30, 2023 09:45
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Does anyone here have experience with the IRS tax withholding estimator? I plugged my numbers in and the topline "Expected tax withholding" number doesn't equal the sum of the estimated withholding for each income source I entered. The difference is approximately equal to the supplemental withholding I expect for a bonus payment I'm receiving this year. Could this just be a bug in the software? Am I missing something else? e: oh I think I'm dumb. I'm switching jobs, and obviously the new job isn't going to know about the old job's bonus or salary, so it won't withhold correctly. Jeez I need a ton of extra withholding to avoid a big tax bill 
raminasi fucked around with this message at 16:10 on Feb 1, 2023 |
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Feb 1, 2023 16:05
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It's an exceptional year when you switch jobs, so I'd probably rather just plan to save the money for the tax bill rather than loving about with withholdings. It is, after all, the same money and same obligation. It just depends on whether you want to hold on to it or you want the government to hold on to it for you.
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Feb 1, 2023 16:16
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KYOON GRIFFEY JR posted:It's an exceptional year when you switch jobs, so I'd probably rather just plan to save the money for the tax bill rather than loving about with withholdings. It is, after all, the same money and same obligation. It just depends on whether you want to hold on to it or you want the government to hold on to it for you. The difference is potentially enough to put me below the safe harbor threshold, and I don't want to pay an underpayment penalty.
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Feb 1, 2023 16:23
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raminasi posted:The difference is potentially enough to put me below the safe harbor threshold, and I don't want to pay an underpayment penalty. Slap that amount into an estimated payment. Grab last year's return and multiply the Tax line by 1.1. Make sure you are tracking to be at or above that number by Dec 31. If not, top up.
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Feb 1, 2023 16:31
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The underpayment penalty is so negligible, I don't know why people bug out about it so much.
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Feb 1, 2023 17:16
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Epi Lepi posted:The underpayment penalty is so negligible, I don't know why people bug out about it so much. It's generally preferable to avoid any penalties if possible.
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Feb 1, 2023 17:19
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It's nice to avoid it if it's easy. Also we don't know what scale our poster is talking about, they could owe hundreds or in an extreme case thousands.
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Feb 1, 2023 17:27
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H110Hawk posted:It's nice to avoid it if it's easy. Also we don't know what scale our poster is talking about, they could owe hundreds or in an extreme case thousands. Even on thousands of dollars I don't think I've ever seen an under-withholding penalty that was more than a few hundred bucks. And I'm talking about cases where the balance was north of $50K. Time value of money says you can do something with that money to earn more than your penalty, not to mention the time and effort spent calculating your correct balance may not be worth the savings. It's just one of those things to me where if you owe enough to have a non-negligible penalty you've got bigger issues to deal with.
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Feb 1, 2023 17:42
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The real sweaty palms are the 5471 violations that are $10k a piece per year and the IRS is real cagey about how they enforce it.
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Feb 1, 2023 17:55
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The tool is estimating underpayment of about $28000. The suggestion to just calculate based on the safe harbor threshold after a couple of paychecks from the new job is a good one though.
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Feb 1, 2023 18:33
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My accountant just told me she's retiring (little late!). So I'm back to searching for someone to help me out with what, 6 weeks to go till I have to get a corporate extension filed (it's just a fairly dormant-ish S-corp, but still) Any recommendations on how to find someone that isn't just "hey bro you got a good tax guy?", or a google search? Would be nice to find someone who will give some tax strategy advice. Not just the person cranking 400 returns through some software as fast as they can for 1K apiece.
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Feb 1, 2023 18:54
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I find people in similar situations and ask them who they use. You will find patterns that you can use to interview them. No chance of your accountant staying on to transition you over? They don't have suggestions?
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Feb 1, 2023 19:06
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H110Hawk posted:I find people in similar situations and ask them who they use. You will find patterns that you can use to interview them. No chance of your accountant staying on to transition you over? They don't have suggestions? Everyone I know seems to be unhappy with their people! My prior is in a different state, her recommendations are there.... wasn't a great situation for more complicated stuff.
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Feb 1, 2023 20:06
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What state? e: are you in not your prior
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Feb 1, 2023 20:12
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itskage posted:What state? Colorado
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Feb 1, 2023 20:13
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Epi Lepi posted:Even on thousands of dollars I don't think I've ever seen an under-withholding penalty that was more than a few hundred bucks. And I'm talking about cases where the balance was north of $50K. Time value of money says you can do something with that money to earn more than your penalty, not to mention the time and effort spent calculating your correct balance may not be worth the savings. Yeah, I have had clients who just take the underpayment penalty as the cost of not paying until April. And, to be fair, if they keep paying everything due by April I haven't seen the IRS ding them on it (only time I've heard about them screwing with your withholding is if you keep getting large balance dues every year you don't pay), they got worse things to worry about. Baddog posted:Would be nice to find someone who will give some tax strategy advice. Not just the person cranking 400 returns through some software as fast as they can for 1K apiece. I regret to inform you most people who can handle business returns are cranking a lot more than 400 returns through as fast as they can in an effort to not drown under their workload. God knows I do, and I ain't getting 1K a return for it either. I do try to offer actual tax advice for what it's worth (and I even spill a bunch for free here!  ).
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Feb 1, 2023 23:10
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MadDogMike posted:
Maybe I should have been an accountant! Man, I didn't mean to sound dismissive, sorry if that's how it read, just frustrated! Good tax advice is worth a *lot*! Just seems like it's so hard to find someone accepting new clients and who isn't just cranking those returns out, but at cadillac rates. Baddog fucked around with this message at 00:18 on Feb 2, 2023 |
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Feb 1, 2023 23:46
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Saw a letter from the IRS in the mail yesterday, and was dreading what the hell was inside. Turns out it was a 1099-INT, since apparently my refund (which arrived months late) accrued interest. That's a new one to me, making money from the IRS. Guess I better not forget to put that one on the Schedule B.
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Feb 1, 2023 23:46
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MadDogMike posted:Yeah, I have had clients who just take the underpayment penalty as the cost of not paying until April. And, to be fair, if they keep paying everything due by April I haven't seen the IRS ding them on it (only time I've heard about them screwing with your withholding is if you keep getting large balance dues every year you don't pay), they got worse things to worry about. I see the same, although I wonder if the increased interest rates coming through will start to change behavior. Like you, I've never seen the IRS get mad at people not making estimates (unless the balance due wasn't paid or returns were not being filed, obviously) Baddog posted:Would be nice to find someone who will give some tax strategy advice. Not just the person cranking 400 returns through some software as fast as they can for 1K apiece. The better track is to budget a billable hour or two with your professional in May or June. It's not that we can't help out during tax season, but even if your professional isn't a tax prep machine, you're not getting the best of our brains in the middle of busy season.
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Feb 2, 2023 00:50
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Baddog posted:Maybe I should have been an accountant! Man, I didn't mean to sound dismissive, sorry if that's how it read, just frustrated! Good tax advice is worth a *lot*! Just seems like it's so hard to find someone accepting new clients and who isn't just cranking those returns out, but at cadillac rates. No no, wasn't feeling insulted, just noting by the time you're good enough to handle business returns reliably in my experience you've been working long enough to build a large client base. As for cost, admittedly my rates are set by H&R Block so they get some mileage out of high volumes of customers when it comes to pricing, but even "cheap" is a relative term considering the simplest federal + 1 state return is $155 here. It does blow my mind how high the fees elsewhere can go since all mocking about H&R Block I hear aside, I don't know that I've seen several thousand dollars worth of difference between us and and the high price folks when it comes to quality. Just had one client who was paying $3500 a year for something we charge around a thousand for total (S-Corp + personal return), they were also insanely happy with me since I was a lot less grumpy about actually explaining what I'm doing to boot. From my perspective, if I don't tell you enough to be comfortable with how I did your taxes I've kinda failed my job! Just so long as they actually listen to my explanation anyway; I've had a lot of clients arguing with me where I've been tempted to reply "You're right, what do I know? I've just had years of training and do more tax returns in a year than you'll do in your life!"  . I suppose even rocket scientists probably have to deal with people trying to tell them about THEIR jobs though.Agronox posted:Saw a letter from the IRS in the mail yesterday, and was dreading what the hell was inside. Yeah, there have been a BUNCH of those thanks to Covid delays the last few years, and yes, it's gotta go on the Schedule B. Wonder if the debt ceiling shenanigans are gonna get a bunch more thanks to delays this year too. Missing Donut posted:The better track is to budget a billable hour or two with your professional in May or June. It's not that we can't help out during tax season, but even if your professional isn't a tax prep machine, you're not getting the best of our brains in the middle of busy season. Also gives us more time to research too, really, because boy questions can get really wild and second opinions might be needed. Hell, I've got an actual research department I frequently have to hit up; boy is it disturbing to throw a question to them and get a "drat if any of US knows that one" back.
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Feb 2, 2023 04:22
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Well we provide tax planning as part of the price and have at least two meetings in person per year, not to mention we don't generally charge for phone calls if you have a question or issue throughout the year. We also have specialists in every area, which can really matter if you need a nexus study or need to know how to report a PFIC. Penalties can be huge for all international forms, and most small firms and Block cannot handle these, not to mention structuring, reputation, business contacts, audit., there are many reasons to go with a bigger firm. 2500 is not that much money in the grand scheme of things. Anyway, I'm an international specialist, so my practice is very different, as is my client base.
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Feb 2, 2023 14:54
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As someone who until very recently worked for Block and just struck out on their own, Block can vary wildly in quality on returns. There are definitely great preparers who really know their stuff, but there are also a lot who've done the ITC and lots of offices aren't super picky about who gets sat with who. They definitely try to match complex returns with more experienced preparers but if the better preparers are overloaded work is gonna get shunted around. That dynamic might exist at the non chain firms as well, no real experience with those.
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Feb 2, 2023 15:41
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Its 2023, why do I still have to mail my state tax returns? Missouri even has a nice fillable PDF that calculates it and prints a 2D barcode with the whole return encoded in it. Why can't I then submit that? I assume the answer is lobbying by the tax prep industry.
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Feb 3, 2023 05:03
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I don't know why my brokerages need more time to spit out a form. Currently looking at Feb 15th dates. They make money hand over fist, spend an extra 18 cents on spitting out my stupid form in January.
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Feb 3, 2023 05:36
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H110Hawk posted:I don't know why my brokerages need more time to spit out a form. Currently looking at Feb 15th dates. They make money hand over fist, spend an extra 18 cents on spitting out my stupid form in January. Hello fellow TD AMERITRADE user.
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Feb 3, 2023 05:45
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H110Hawk posted:I don't know why my brokerages need more time to spit out a form. Currently looking at Feb 15th dates. They make money hand over fist, spend an extra 18 cents on spitting out my stupid form in January. I swear they are worse and worse every year and they always end up sending a corrected one once we get to March.
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Feb 3, 2023 06:03
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I don’t even bother doing my taxes until mid March. There’s always something that takes forever to trickle in.
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Feb 3, 2023 06:07
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H110Hawk posted:I don't know why my brokerages need more time to spit out a form. Currently looking at Feb 15th dates. They make money hand over fist, spend an extra 18 cents on spitting out my stupid form in January. They need until at least Feb. 1st to be able to get wash sale basis calculations right.
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Feb 3, 2023 07:16
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Xenoborg posted:Its 2023, why do I still have to mail my state tax returns? Missouri even has a nice fillable PDF that calculates it and prints a 2D barcode with the whole return encoded in it. Why can't I then submit that? I assume the answer is lobbying by the tax prep industry. Do the tax programs have online submissions for Missouri or do you have to print those out too? Connecticut has web forms since our state taxes are pretty simple for most folks. Some years I’ve just hand copied the numbers into the website to save on the cost of e-filing.
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Feb 3, 2023 14:08
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H110Hawk posted:I don't know why my brokerages need more time to spit out a form. Currently looking at Feb 15th dates. They make money hand over fist, spend an extra 18 cents on spitting out my stupid form in January. "Your form is delayed because we're waiting for information from VANGUARD SMALL CAP VALUE ETF(VBR). We'll email you as soon as this form is available." Vanguard! To be fair looking back at previous returns, VBR's dividends are weirdly complicated and I probably shouldn't have been holding this ETF in a taxable account. VBR's dividends seem to be split between qualified, unqualified and section 199a (REIT) dividend components.
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Feb 3, 2023 15:31
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Agronox posted:They need until at least Feb. 1st to be able to get wash sale basis calculations right. I hadn't thought of that so I Iooked. Dec 12 is the last time I transacted in the account. Some dividends posted but nothing was reinvested. Fidelity actually has me at Feb 7 or something which I guess is reasonable if late December is the last date they had to process transactions in. Etrade I haven't looked at the dates but I don't think there were any transactions in December. Feb 15th. dpkg chopra posted:Hello fellow TD AMERITRADE user. Nope, but I think we're all in the same boat. Subvisual Haze posted:My Fidelity Tax Forms section at least handily tells me who is currently holding up the process. There you go. They are not calling anything out because I'm 100% fidelity funds.
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Feb 3, 2023 16:31
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