Teggy wrote:This year I found out that the calculation on the W-4 is really screwed up for married people with no kids. Oh boy.
I think they are screwed up for many groups. My wife claimed 4 dependents and they with held only $290 out if almost $30k of income. Not what we wanted.
Even with my wife at more than half the year at 0/0 and me at 1/1 the whole year, plus a full year of mortgage interest deduction, my first pass came back with us owing near $5,000. So frustrating the way they can't give married people guidance on how to set up their taxes. This can't be a new problem.
Last year my wife started her own business as a S Corporation selling curio items on the internet (for a single product line in a maket narrower than Curio City). Doing her taxes is not going to be worth the effort (since she probably made no money), except that I need to make sure it's done right for professional reasons.
"A lie can run round the world before the truth has got its boots on." -Terry Pratchett, The Truth "The presence of those seeking the truth is infinitely to be preferred to those who think they've found it." -Terry Pratchett, Monstrous Regiment
Taxes are done. Went to check the mail and had both W-2s. 1098-E Information was already posted by the current holder of my student loans.
Refund is about typical, but I had to go look up MAGI to figure out why they weren't counting all the interest paid as a deduction. Looks like the new job had a tax impact that I wasn't expecting.
On the other hand, there's a good possibility if the wedding is by the end of the year as currently planned, I'll get it all back once I move to married filing jointly.
Zarathud wrote:Last year my wife started her own business as a S Corporation selling curio items on the internet (for a single product line in a maket narrower than Curio City). Doing her taxes is not going to be worth the effort (since she probably made no money), except that I need to make sure it's done right for professional reasons.
If she did her bookkeeping in Quickbooks, it will be easy to whip up the business return. Every spring I give my accountant $550 and my QB file, and he gives me a bewildering quarter-inch printout of forms and worksheets. Even though I know he's just plugging my QB info into the proper schedules, I wouldn't dream of trying to do it myself...and my business is quite small and straightforward.
I finally created my W-2 today. Couldn't log on to my SS web account, and it wouldn't let me create a new account. After 20 minutes on hold, a SS representative walked me through requesting a snail-mail copy (!) of my password and then suggested that I simply create a new account under my wife's SSN and start over. That worked.
Bah, almost broke even this year. Owe federal $655. Getting back from State $585. Time to adjust my federal withholding. I usually get $1500 back between the two and use it for vacation. Guess vacation this year will have to be cheaper.
The only reason people get lost in thought is because it's unfamiliar territory.
Looks like I get to file an amended return. Turns out the "bonus" that I got from Chase for opening a checking account with them got tasked as interest income and generated a 1099-INT for me.
And the Feds haven't finished the form for the amended return yet, so I get to wait and try to not forget to report that amount at some undetermined point in the future.
Doing your part to accelerate the debt ceiling crisis.
"A lie can run round the world before the truth has got its boots on." -Terry Pratchett, The Truth "The presence of those seeking the truth is infinitely to be preferred to those who think they've found it." -Terry Pratchett, Monstrous Regiment
I got mine submitted for this year, but they are being delayed because of the hold up on education tax credits. The stupid part is that when the formulas all run, I don't actually get any credit for my school expenses, but my free-file software says I can't change it now that it's submitted.
Turbotax is supposed to have the amended functionality up within the next week so that I can report that "interest" income that I accidentally left out. First time I've had to file an amended return. I hope it's painless.
I got a letter from my employer about how I may be eligible for the earned income tax credit (I think) I open up the included IRS document with eligibility guidelines of something like household income under 36k. I guess they don't want to make assumptions, but my employer knows what I make.
As far as filing goes, I don't think we have half the documents we require to file at this point. Maybe another month.
Isgrimnur wrote:Turbotax is supposed to have the amended functionality up within the next week so that I can report that "interest" income that I accidentally left out. First time I've had to file an amended return. I hope it's painless.
I don't have any amendments but I didn't like the extra form they wanted me to fill out, so I'm waiting until everyone else has there ducks in a row before I pay TT for the privilege of filing my returns for me. I claim 0. They still want nearly an extra two grand from me between state and federal and it's only going to get worse as I get closer and closer to paying my mortgage off. So much so, that I'm going to head off and start looking at getting strong armed into an IRA and start moving some of my (emergency) savings over to get some tax relief. It's crazy how much of your check is taken when you are lower middle class but single with no kids and essentially no reason to deduct much of anything.
Isgrimnur wrote:Turbotax is supposed to have the amended functionality up within the next week so that I can report that "interest" income that I accidentally left out. First time I've had to file an amended return. I hope it's painless.
Is there a statute of limitations on this sort of thing? I'd mention something similar from 20+ years ago, but I probably shouldn't.
Zarathud wrote:Last year my wife started her own business as a S Corporation selling curio items on the internet (for a single product line in a maket narrower than Curio City). Doing her taxes is not going to be worth the effort (since she probably made no money), except that I need to make sure it's done right for professional reasons.
If she did her bookkeeping in Quickbooks, it will be easy to whip up the business return. Every spring I give my accountant $550 and my QB file, and he gives me a bewildering quarter-inch printout of forms and worksheets. Even though I know he's just plugging my QB info into the proper schedules, I wouldn't dream of trying to do it myself...and my business is quite small and straightforward.
I finally created my W-2 today. Couldn't log on to my SS web account, and it wouldn't let me create a new account. After 20 minutes on hold, a SS representative walked me through requesting a snail-mail copy (!) of my password and then suggested that I simply create a new account under my wife's SSN and start over. That worked.
My accountant loves QBs. He has been trying to get me to switch to it for years but I have another program that I understand and am comfortable working with.
I had a little trouble with the SSA running W-2's this year. Their system crashed twice while I was on it. I ended up having to make a phone call so they could re-set my account. The third time things worked fine.
Isgrimnur wrote:Turbotax is supposed to have the amended functionality up within the next week so that I can report that "interest" income that I accidentally left out. First time I've had to file an amended return. I hope it's painless.
Is there a statute of limitations on this sort of thing? I'd mention something similar from 20+ years ago, but I probably shouldn't.
10 years on most things unless they can prove fraud. If they can prove you did something intentionally they can go back to your birth.
OK Turbo Tax, why can't you really be more friendly.
"Hey, you owe a shit ton of money. You know you can contribute up to $5,000 retroactively into a tax deductible IRA? So why not, go ahead."
... OK so let's say here's $5,000 out of my rainy day savings that I don't plan on touching. What does that do my taxes?
"Well, not as much as you'd hope. You see, you also contribute to a 401k that is tax deductible. Our magic 8 Ball says you can only deduct $1880 of $5000 IRA. Are you sure you want to enter all $5000 on your taxes?"
... Wait so if I contribute the other $3120 into an IRA I'll see no tax savings at all on that money and still I'll be subject to a penalty if I am forced to withdraw that money early? Well, then better make that only $1880.
"My magic 8 ball says that if you only enter $1880 into an IRA, then you get additional tax deduction of $0."
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Here's an idea. Tell me how much I need to contribute of that up to $5000 to get the maximum deduction or at the very least show me the math you're using so I can make an informed choice.
Suddenly, entering the world of tax incentivized IRAs in an attempt to cut back on the crazy amount of money they are taking now doesn't seem like such a good idea any more.
Isgrimnur wrote:Deductability of IRA contributions appears to be based on your income level as well as whether you have a tax-free work retirement plan.
I will be going over it tonight. I don't get why TT couldn't put up the same thing you did and instead makes you trial an error until you get a result you like. If I can retroactively take advantage of a break and you are recommending I do so, wouldn't it make the most sense to show me how to best take advantage? Especially when your advertisements claim that this is precisely the sort of thing they do?
Isgrimnur wrote:Deductability of IRA contributions appears to be based on your income level as well as whether you have a tax-free work retirement plan.
I will be going over it tonight. I don't get why TT couldn't put up the same thing you did and instead makes you trial an error until you get a result you like. If I can retroactively take advantage of a break and you are recommending I do so, wouldn't it make the most sense to show me how to best take advantage? Especially when your advertisements claim that this is precisely the sort of thing they do?
Just looking at the table, I suspect that TT did tell you what to do. I think to get to deduct the 1880 , you will have to contribute the full 5000 because of what it does to you AGI. Just a SWAG, though.
TT is a dumb piece of software, and sometimes appears to encourage dangerous behavior. While it may look like simple math, TT has no judgment. That's why tax professionals still have value.
That said, I still use it to handle some basic return preparation to make my life easier.
Got a nice bonus today for last year's work, but it would have been better if they had paid it to me on 12/31.
"A lie can run round the world before the truth has got its boots on." -Terry Pratchett, The Truth "The presence of those seeking the truth is infinitely to be preferred to those who think they've found it." -Terry Pratchett, Monstrous Regiment
Teggy wrote: Even with my wife at more than half the year at 0/0 and me at 1/1 the whole year, plus a full year of mortgage interest deduction, my first pass came back with us owing near $5,000. So frustrating the way they can't give married people guidance on how to set up their taxes. This can't be a new problem.
They do give multi-income families guidance on how set up your withholding. Turn the W-4 over and fill out the multi-income worksheet. What typically happens in that scenario is that the lower income files married with 0 deductions, and the higher income files what it tells you (when I did it years ago, it told me married with zero deductions and to then take an additional $X per paycheck).
Then I got a too-expensive house and had kids, and now I file with 11 deductions and I still get a (albeit small) refund. It's all there on the back of the W-4.
And in banks across the world
Christians, Moslems, Hindus, Jews
And every other race, creed, colour, tint or hue
Get down on their knees and pray
The raccoon and the groundhog neatly
Make up bags of change
But the monkey in the corner
Well he's slowly drifting out of range
I refuse to believe that I actually owe the state of NJ money this year, but my accountant is telling me that's not the case. I owe less to the feds than last year, but man do I hate writing checks.
I finally finished my first pass through the CPA's questionnaire today, which means (I guess) that taxes are about 3/4 done. I need to comb my credit card statements and check register to make sure I didn't miss anything, then turn it over to my wife for her business expenses. When she's done with that and I get my K-1, we can turn the whole thing over to the accountant for compiling and filing. And then we'll know if we're taking a vacation this summer or not.
Wife had a lot more 1099-MISC income this year than usual and I didn't withhold as aggressively as I have done, so I'm not real optimistic.
Just did mine and looks like I owe about $3500 Fed and State. Not a big surprise considering some IRA shenanigans pursued when I bought my house but still hurts the same no matter how much I prepared for it.
Our returns arrived today. I overwithheld federal by $47, which is the closest I've ever come to getting it exactly right, and overwithheld state by about $500. Since we owe a $550 estimated payment to the feds next week, I'm going to call that break-even.
Pretty good since I just take a straight percentage of my wife's teaching and freelance checks. I'm glad that's over for another 9 months.
Saw our guy on Saturday. Got him the final info yesterday. Looks like we'll write a wee check to the IRS, which is fine by me.
" Hey OP, listen to my advice alright." -Tha General "“I like taking the guns early...to go to court would have taken a long time. So you could do exactly what you’re saying, but take the guns first, go through due process second.” -President Donald Trump. "...To guard, protect, and maintain his liberty, the freedman should have the ballot; that the liberties of the American people were dependent upon the Ballot-box, the Jury-box, and the Cartridge-box, that without these no class of people could live and flourish in this country." - Frederick Douglass MYT
Well, my taxes are done. My adjusted tax rake is 17.9%. Holy Shit! So glad that the Obama tax increase only hit wealthy Americans. I just noticed that his tax rate is 18.4%. It's nice to know I'm in the same tax bracket as someone making over 600k a year. Now, if I was only making 600k a year.
Are you guys using the "Total Income" line to figure your effective rate? If so, ours was 10.8%. It was higher if you're using Adjusted Gross Income as the top line.
And as the White House likes to point out, they also donated almost a quarter of their income, some $150,034, to 33 different charities, lowering their tax rate.
Nonetheless, almost all of the Obamas’ income was subject to the top tax rate of 39.6 percent in 2012, according to Reuters.
Still, even the president himself appears to think his tax rate is too low, and he’s using his own tax return to promote the Buffett Rule, a minimum tax rate for the wealthy.
Kraken wrote:Are you guys using the "Total Income" line to figure your effective rate? If so, ours was 10.8%. It was higher if you're using Adjusted Gross Income as the top line.
I'm using the total income figure. I just feel something is wrong with a calculation somewhere. Been on hold with Turbotax for over an hour. I suppose that April 15th probably isn't the best day to be trying to figure this out. It is just sooo much high than I have ever paid before and I'm not making a lot more money than I've ever made before.
It's the self employment tax that's killing me. For example, if I had $50,000.00 in income that is from self-employment that is an additional $7,065.00 tax liability on TOP of the normal tax liability I have on the 50k to begin with. It's absolutely crushing if not planned for.
Cortilian wrote:It's the self employment tax that's killing me. For example, if I had $50,000.00 in income that is from self-employment that is an additional $7,065.00 tax liability on TOP of the normal tax liability I have on the 50k to begin with. It's absolutely crushing if not planned for.
True, but it's only ~$3500 more than non-self employment tax, and those are just wages that the rest of us aren't being paid either.
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"To wield Grond, the mighty hammer of the Federal Government, is to be intoxicated with power beyond what you and I can reckon (though I figure we can ball park it pretty good with computers and maths). Need to tunnel through a mountain? Grond. Kill a mighty ogre? Grond. Hangnail? Grond. Spider? Grond (actually, that's a legit use, moreso than the rest)." - Peacedog
Even with my wife at more than half the year at 0/0 and me at 1/1 the whole year, plus a full year of mortgage interest deduction, my first pass came back with us owing near $5,000. So frustrating the way they can't give married people guidance on how to set up their taxes. This can't be a new problem.
