Octopus Overlords

i kinda half-heartedly did mine last night, but after entering all the forms (just for me, three different W-2s and a 1099-G for three-months of unemployment) i quit in the middle because i have a question! i got a W-2 from an employer i had three years ago for "ESPP' - i'm assuming it's because of the stock i sold, but doesn't form 1099-B from the broker handle that?

$1500 refund

Effective Tax Rate
2019 - 10.31%
2018 - 11.31%
2017 - 10.16%
2016 - 10.33%
2015 - 11.65%
2014 - 11.03%
2013 - 13.47%
2012 - 15.81%
2011 - 13.10%
2010 - 12.85%
2009 - 12.87%
2008 - 12.35%
2007 - 9.82%
2006 - 9.42%
2005 - 10.66%

I finished my input today. Now it's up to Wife, and then the CPA. Wife only needs to fill in half a dozen line items for home office deductions. An organized person could do that in an hour or two, but it will take her most of a weekend because she lives in a permanent state of chaos. The home office lets us deduct 20% of our property taxes, mortgage interest, utilities, and repairs & maintenance without invoking Schedule C.

We see the accountant this afternoon. Not expecting any surprises, unless the $1600 wife made on YouTube videos somehow doesn't get washed out by increased 529 deposits for the kids education.

Edit: the 529 deposits didn't do squat since only 3 vendors is approved for exempt status in Illinois and Merrill Lynch is not one of them. Fortunately, the You Tube income was such that every expense we could think of counted against it, so instead of a profit, she showed a larger loss. Next year she won't have as much write-offs against it though, which is concerning that without the loss we'd have paid a bunch this year.

five hours to do simple taxes. Blech. Stupid Schedule K and I have pay so much extra for the privilege of that nightmare.

2019 - 10.31%

Mine was 13... something, but that it says my income more'n twice what I take home.

I also discovered I have an 800 Credit rating because I don't have enough credit accounts. And I gotta wonder how Intuit can pull my credit rating when I've frozen my credit everywhere. Friggen comcast want an extra $150 deposit to open an cable bill because my credit is frozen but Intuit can publish my credit back to me?

Anyhoo, I have increase my holding for the state next year. I guess my DRIP and CDs with TD Ameritrade are starting to be meaningful enough that I have to beg the state to take even more from me than claiming 0 plus whatever my extra withholding was.

While I am pretty sure we have everything we need now I am in no hurry to visit the accountant. In fact, I will probably have him file an extension. Because of my selling some stock and the final accounting on closing my business (sale of building and property) I assume I am going to be paying. I would like to put some money in the IRA but again I may not be able to before April 15th.

Should be an interesting last few weeks.

Refunds of $2,605 fed and $785 state. Direct deposit FTW.

Dunno if I should be happy or sad my fed return is tiny and I owe the state small. (I am likely to ask for additional state with-holding, well past my claimed deduction of 0 and I hate surprise expenses and I can only... hope?... I owe more as my interest and dividends grow in my non sheltered savings. What I get now is trivial but it's all taxable and is likely the swing between tiny return and tiny owe)

I actually got way too much back for both Fed and State. I was putting extra with holdings into both Fed and State, but my wife changed jobs and her income went down by like 75%, so it was not needed. So I got a lot of my money back that was in the extra withholding. So adjusted that way down, so that my paycheck went up, and my taxes should be normal next year.

LordMortis wrote: Thu Mar 05, 2020 11:41 am Dunno if I should be happy or sad my fed return is tiny and I owe the state small. (I am likely to ask for additional state with-holding, well past my claimed deduction of 0 and I hate surprise expenses and I can only... hope?... I owe more as my interest and dividends grow in my non sheltered savings. What I get now is trivial but it's all taxable and is likely the swing between tiny return and tiny owe)

You should be happy! That’s the ideal situation. You win!!!

Does anybody know anything about filing taxes for dead people? I might be able to put together a rudimentary final return for my BIL (died last summer), but I need to know if he paid his 2018 balance due and made the quarterly estimated payments that he was scheduled to make. We don't have his bank statements and his checking account was closed. AFAIK the IRS doesn't report amounts it received via 1040-ES. None of the payment coupons were mailed, so that's a bad sign. If he paid the balance due -- and I assume that the IRS would've gone after him had he not -- but didn't make the quarterlies, then we probably owe around $4,000. (His only income was from his 401k, from which taxes were withheld, but not the early withdrawal penalty.)

Alternately, if nobody ever files his last return, would the IRS ever wake up to that and come after his heirs? We aren't talking high finance here. I wonder if they ever go after dead scofflaws who owed small amounts.

Top Tax Defenders

As with any tax return, the returns of a deceased individual can be targeted for an IRS audit for up to six years after they are filed. In some instances, a return of a person who is no longer alive may be targeted for audit by random computer selection. In other cases, the return may be need to be audited because the deceased individual owes taxes, failed to provide documentation, or engaged in activities like concealment or fraud when filing.

Regardless of the reason for the audit, it is up to the executor or heir of the estate to contend with the proceedings.

We got ours done. We're getting back about a third of what we normally do, which is really, really painful given that we were counting on that to balance out the debt we got into during several months of unemployment over the winter when we had four people and one disability check. This will take quite a while to come back from.

Finished mine yesterday. Getting back about half of what we did last year, which is about right...since my income dropped by just over 50% last year vs 2018.

Sales is fun!

I am doing my taxes with TurboTax and I'm confused. I went through all the income section and at the conclusion get a list of all income. Included were two items listed as non-taxable. They were part of a 401K RMD and the premiums on Medicare. I don't recall seeing non-taxable on an list of income before. Will these two items be deducted later?

Isgrimnur wrote:Top Tax Defenders

As with any tax return, the returns of a deceased individual can be targeted for an IRS audit for up to six years after they are filed. In some instances, a return of a person who is no longer alive may be targeted for audit by random computer selection. In other cases, the return may be need to be audited because the deceased individual owes taxes, failed to provide documentation, or engaged in activities like concealment or fraud when filing.

Regardless of the reason for the audit, it is up to the executor or heir of the estate to contend with the proceedings.

This. You can request a tax transcript from the IRS but the new system to request them is an amateur incompetent show — complete with generic robot voice prompts. The old system of sending in a form then calling in to check on it was better.

Zarathud wrote: Mon Mar 09, 2020 10:15 pm

Isgrimnur wrote:Top Tax Defenders

As with any tax return, the returns of a deceased individual can be targeted for an IRS audit for up to six years after they are filed. In some instances, a return of a person who is no longer alive may be targeted for audit by random computer selection. In other cases, the return may be need to be audited because the deceased individual owes taxes, failed to provide documentation, or engaged in activities like concealment or fraud when filing.

Regardless of the reason for the audit, it is up to the executor or heir of the estate to contend with the proceedings.

This. You can request a tax transcript from the IRS but the new system to request them is an amateur incompetent show — complete with generic robot voice prompts. The old system of sending in a form then calling in to check on it was better.

Death and taxes, eh? You'd think that the former should get a poor person off the hook for the latter, but no. I have to figure out whether I can handle this myself or have to hire somebody, since blowing it off and hoping for the best isn't a viable strategy. If I can get that missing info, I can probably pull together a credible facsimile of an accurate return. And without that info, then I don't see how a hired gun could do it, either. Probably just have to assume that the quarterly taxes weren't paid.

There's one lifeline -- Paul had a financial adviser who might have made the payments directly from the 401k, or at least could help me find out. It struck me as funny that a dude with 0 income who was prematurely surviving on retirement savings would have a paid adviser, but nobody in Wife's family ever had a lick of financial sense. He needed help, and maybe that dude can help again now.

Call the financial advisor, and pull the transcript.

Another option would be to file and list the payment as made then see if they send you a correction.

The one good thing about being an estate lawyer is that the Coronavirus will lead to more business, not less.

Does the transcript get me the quarterly payment info for '19? I have his 2018 return to use as a template, just need 2019 info.

Refund secured. That was fast.

Finished mine up and filed a couple of weeks ago. About the same amount coming to me as as last year. That's in spite of adjustments I had made to take nothing extra out. I guess its because I took FMLA when my mom was dying from cancer, and thus my gross income was actually about 10K less.

Jeff V wrote: Mon Feb 24, 2020 8:58 am We see the accountant this afternoon. Not expecting any surprises, unless the $1600 wife made on YouTube videos somehow doesn't get washed out by increased 529 deposits for the kids education.

Edit: the 529 deposits didn't do squat since only 3 vendors is approved for exempt status in Illinois and Merrill Lynch is not one of them. Fortunately, the You Tube income was such that every expense we could think of counted against it, so instead of a profit, she showed a larger loss. Next year she won't have as much write-offs against it though, which is concerning that without the loss we'd have paid a bunch this year.

You can't show losses on things like that very long before it becomes a non-entity tax wise. The government considers it a hobby. Even people with small farms face that danger.

Kraken wrote: Mon Mar 09, 2020 7:01 pm Does anybody know anything about filing taxes for dead people? I might be able to put together a rudimentary final return for my BIL (died last summer), but I need to know if he paid his 2018 balance due and made the quarterly estimated payments that he was scheduled to make. We don't have his bank statements and his checking account was closed. AFAIK the IRS doesn't report amounts it received via 1040-ES. None of the payment coupons were mailed, so that's a bad sign. If he paid the balance due -- and I assume that the IRS would've gone after him had he not -- but didn't make the quarterlies, then we probably owe around $4,000. (His only income was from his 401k, from which taxes were withheld, but not the early withdrawal penalty.)

Alternately, if nobody ever files his last return, would the IRS ever wake up to that and come after his heirs? We aren't talking high finance here. I wonder if they ever go after dead scofflaws who owed small amounts.

Because of the threat of fraud, the IRS doesn't like to give out info on ES-Payments that have been made. The feeling is you should know what you did and didn't pay. Now is a terrible time to call the IRS for help but that is what I would recommend.

PS....I work for the IRS on a seasonal basis.

Scuzz wrote: Wed Mar 11, 2020 2:22 pm You can't show losses on things like that very long before it becomes a non-entity tax wise. The government considers it a hobby. Even people with small farms face that danger.

If the accountant ever deems that to be the case, I suppose she could always incorporate. I fail to see how it could be classified as a hobby though, she is producing something in demand and getting paid for it. She would not be producing such things if she wasn't getting paid.

Jeff V wrote: Wed Mar 11, 2020 2:43 pm

Scuzz wrote: Wed Mar 11, 2020 2:22 pm You can't show losses on things like that very long before it becomes a non-entity tax wise. The government considers it a hobby. Even people with small farms face that danger.

If the accountant ever deems that to be the case, I suppose she could always incorporate. I fail to see how it could be classified as a hobby though, she is producing something in demand and getting paid for it. She would not be producing such things if she wasn't getting paid.

You can only claim a loss in 3 of 5 years, or something like that. I am not an accountant so I am not sure, but there is a limitation to the number of years you can report losses in any legitimate small business. Otherwise everyone would have one.

Even the S-Corp I was in with my family, a construction company doing millions in some years, could only report losses to a certain extent.

I'm aware of the 3-year loss rule. When I did a lot of freelance writing, I would make sure I occasionally showed a profit so as not to run afoul of the tax man. When she started, my wife was all geeked about it watching videos of people who grew their viewership until they were making 6 figures. I told her retirement before age 85 might be possible if she were able to accomplish this. She completely abandon it when her friend spent 3 months in the hospital with a brain disorder, and only halfheartedly returned to it. Meanwhile....SQUIRREL! Her attention now is reselling cheap Chinese-made shit. She was all excited this morning that she actually got an order...less excited when she discovered the order was from Australia and oh, she claimed free shipping. With a shipping cost of $5 for 2 things in the US, her profit is about $4. It does not cover the $25 shipping to .AU. She canceled the order, although she could have about broke even by placing an order for same shit from amazon.au and have it shipped to the guy from there.

Have her try Amway or Mary Kay.

Scuzz wrote: Thu Mar 12, 2020 3:50 pm Have her try Amway or Mary Kay.

No cults!

Tax deadline extended 90 days

• Treasury Secretary Steven Mnuchin said on Tuesday that taxpayers can delay paying their income taxes on as much as $1 million in taxes owed for up to 90 days.
• Ordinarily, individual income taxpayers must submit their 2019 tax returns by April 15. This delay would push the due date to July 15.
• This relief is for federal returns. Double-check your state’s tax deadlines to see if there are any delays.

EDIT: CLARIFICATION HAS BEEN ISSUED - TAXES MUST STILL BE FILED BY APRIL 15TH!

Nice. I just mailed our package to the CPA yesterday, so it's pretty unlikely he'll finish it by 4/15.

stessier wrote: Tue Mar 17, 2020 12:57 pm Tax deadline extended 90 days

• Treasury Secretary Steven Mnuchin said on Tuesday that taxpayers can delay paying their income taxes on as much as $1 million in taxes owed for up to 90 days.
• Ordinarily, individual income taxpayers must submit their 2019 tax returns by April 15. This delay would push the due date to July 15.
• This relief is for federal returns. Double-check your state’s tax deadlines to see if there are any delays.

Great. Finished mine yesterday. At least this delays my having to write a very large check to the Feds.

(repost)
Finally, tax season delayed by 90 days. No interest or penalties on up to $1 million for individuals and $10 million for corporations. Just file by the deadline.

Of course, this relief only applies if you haven’t paid and owe taxes — so it helps the wealthy — but it was a non-brainer action wholly within the Trump administration’s control.
(repost)
This is a lifeline as the next month is generally difficult for even full-time accounting and tax professionals. During enforced no-contact and work-from-home, it would be impossible.

Zarathud wrote: Tue Mar 17, 2020 2:05 pm This is a lifeline as the next month is generally difficult for even full-time accounting and tax professionals. During enforced no-contact and work-from-home, it would be impossible.

Our tax guy is 1450 miles away. I am good at social distancing!

Update: Taxpayers still must file by April 15, the announced extension only applies to the date of payment.

Apparently Mnuchin in a press briefing stated that taxpayers should still file by April 15. (edited to remove commentary to R&P)

Zarathud wrote: Tue Mar 17, 2020 4:05 pm Update: Taxpayers still must file by April 15, the announced extension only applies to the date of payment.

Apparently Mnuchin in a press briefing stated that taxpayers should still file by April 15. (edited to remove commentary to R&P)

Hearing July 15 now? Is that for everyone?

Yes.

https://twitter.com/stevenmnuchin1/stat ... 0483324930

https://twitter.com/stevenmnuchin1/stat ... 2779784192

This would be welcome news, but at this point I’m waiting for the official Revenue Procedure. Long overdue.

I can't quite tell whether underpayment penalties will be waived as well. Due to a series of miscalculations we ended up owing way more taxes than expected. We'll pay the full amount as soon as our return is processed (already sent it in) - no point in waiting until April 15 or July 15 or whatever. Would be nice not to get hit with an underpayment penalty, though.

So any good reason to wait till July if you are getting money back and have everything you need?

If you can do it yourself, go ahead. It’s those who need to meet people and get information that were at risk.