Taxes are done!

LawBeefaroni · Post by **LawBeefaroni** » Tue Apr 15, 2014 1:50 pm

Isgrimnur wrote:
Teggy wrote:Only took 3 years but we finally figured out how to be married with a house and not screw up our taxes. Came through with a teeny refund.
Any suggestions you'd like to share? I'm headed that way within the next year.

My current method is to claim zero and not worry about the specifics until February when I file for my refund.

Pay a professional. ~$200/year for piece of mind and a pro doing the min/maxing.

Teggy · Post by **Teggy** » Tue Apr 15, 2014 1:57 pm

Isgrimnur wrote:
Teggy wrote:Only took 3 years but we finally figured out how to be married with a house and not screw up our taxes. Came through with a teeny refund.
Any suggestions you'd like to share? I'm headed that way within the next year.

My current method is to claim zero and not worry about the specifics until February when I file for my refund.

If both you and your wife make similar salaries you need to take out more than 0 does or you will owe. If you look on the W4 form there is a calculator for figuring out how much extra. It might be a little on the conservative side, though, so you might wind up giving too much the first year. We were able to figure it out based on the years we didn't pay enough so we scaled it back a little.

The rules are kind of designed assuming that there is one breadwinner in the family, so unless one spouse makes considerably less than the other you need to compensate.

Having a mortgage gets you a lot of deductions for taxes and interest, so if you are renting, for example, a more conservative number for the extra amount would probably be the way to go.

Isgrimnur · Post by **Isgrimnur** » Tue Apr 15, 2014 1:58 pm

FiscallyResponsibleTeggy.

Thanks.

stessier · Post by **stessier** » Tue Apr 15, 2014 2:06 pm

I've found paycheckcity helpful for estimating what my take home would be in different scenarios.

Teggy · Post by **Teggy** » Tue Apr 15, 2014 2:14 pm

Isgrimnur wrote:FiscallyResponsibleTeggy.

Thanks.

Haha, not if you ask my parents!

Zarathud · Post by **Zarathud** » Tue Apr 15, 2014 3:44 pm

stessier wrote:
Zarathud wrote: ...unless you defraud the US...

So if you just made a mistake on your timely filed...
I'm assuming the difference between the two is in the eye of the Auditor?

Depends on what issues the Auditor can raise and the additional amount of tax you would owe. I have regular arguments with Auditors over their interpretation of the facts and law, especially over asset valuations. Auditors can -- and do -- get overridden by their supervisor, IRS Appeals or a court. Auditors often miss more issues than they create.

Carpet_pissr · Post by **Carpet_pissr** » Tue Apr 15, 2014 4:07 pm

I wonder if selling, then buying a house in the same year has any effect? Other than potentially paying taxes on gains from selling your house (from when you first bought it). I guess if your mortgage is higher with the new house, there should be a slightly higher deduction as well?

I'm about halfway through finishing my taxes using Turbotax and I'm already in the hole about $600. I guess that adjustment I made last year to my withholdings was a little too aggressive (had been getting back between $5 and $7K).

stessier · Post by **stessier** » Tue Apr 15, 2014 4:48 pm

Carpet_pissr wrote:I wonder if selling, then buying a house in the same year has any effect? Other than potentially paying taxes on gains from selling your house (from when you first bought it). I guess if your mortgage is higher with the new house, there should be a slightly higher deduction as well?

I'm about halfway through finishing my taxes using Turbotax and I'm already in the hole about $600. I guess that adjustment I made last year to my withholdings was a little too aggressive (had been getting back between $5 and $7K).

You don't pay any gains on a first residence as long as you roll it into a new residence in a certain time period (I think 2 years) and the gains are less than some amount and you make less than some amount. I hope that clears things up.

Carpet_pissr · Post by **Carpet_pissr** » Tue Apr 15, 2014 5:14 pm

stessier wrote:
Carpet_pissr wrote:I wonder if selling, then buying a house in the same year has any effect? Other than potentially paying taxes on gains from selling your house (from when you first bought it). I guess if your mortgage is higher with the new house, there should be a slightly higher deduction as well?

I'm about halfway through finishing my taxes using Turbotax and I'm already in the hole about $600. I guess that adjustment I made last year to my withholdings was a little too aggressive (had been getting back between $5 and $7K).
You don't pay any gains on a first residence as long as you roll it into a new residence in a certain time period (I think 2 years) and the gains are less than some amount and you make less than some amount. I hope that clears things up.

Yeah, I could tell by the way they phrased it in Turbotax that it's a complicated issue. Lots of conditionals and tons of questions. "IF" and "IF" and "COULD POTENTIALLY", etc.

Rip · Post by **Rip** » Tue Apr 15, 2014 5:20 pm

stessier wrote:
Rip wrote:Just sent off a stack of returns the last week. Life went crazy and I hadn't filed 1065s or 1040 since 2007. My effective tax rate for 2008 was over 30%. Needless to say I am in a massive hole. I would celebrate only owing $25K. I will be on SS by the time I can even hope to pay off my debt.
You haven't filed a return in 7 years?

For the record it was six years, but yea stupid. This is what happens when you don't have the money, are in denial, and are quite the procrastinator. Went from $138K AGI in 2008 to $18K AGI in 2011.

stessier · Post by **stessier** » Tue Apr 15, 2014 6:34 pm

Rip wrote:
stessier wrote:
Rip wrote:Just sent off a stack of returns the last week. Life went crazy and I hadn't filed 1065s or 1040 since 2007. My effective tax rate for 2008 was over 30%. Needless to say I am in a massive hole. I would celebrate only owing $25K. I will be on SS by the time I can even hope to pay off my debt.
You haven't filed a return in 7 years?
For the record it was six years, but yea stupid. This is what happens when you don't have the money, are in denial, and are quite the procrastinator. Went from $138K AGI in 2008 to $18K AGI in 2011.

After many deleted responses, I'm going with wishing you the best.

Jaddison · Post by **Jaddison** » Tue Apr 15, 2014 7:42 pm

about not filing:
File, Even if You Can’t Pay. The IRS can assess penalties for failing to file a tax return and for not paying taxes, but the first tends to be a lot higher than the latter, according to Smith.

The late-filing penalty is 5% of the unpaid bill each month up to 25% of the total outstanding tax liability while the failure-to-pay penalty is one-half of 1% of the unpaid taxes.

“Do not not file. Come hell or high waters, file the return or an extension, don’t get hit with that penalty,” Smtih says

If owed a refund there is no penalty for not filing

Cortilian · Post by **Cortilian** » Tue Apr 15, 2014 9:34 pm

Well I'm all filed. With 2 and a half hours to spare. I hate this time of the year.

gilraen · Post by **gilraen** » Tue Apr 15, 2014 9:47 pm

I discovered this year that I couldn't deduct my IRA contribution because apparently I made more than the threshold. Beyond that, I pretty much knew that I was going to owe (ended up being about 2k). Which sucks but whatever; I made this income, I owe the taxes regardless of whether I up my deductions throughout the year or write a check in April.

Post by **ImLawBoy** » Wed Apr 16, 2014 10:24 am

My wife worked as an independent contractor with no payroll taxes deducted this year, so instead of our usual way too big refund, we actually owed about $3,300 this year. On an academic level, I know it's better to owe than to get a refund. On an emotional level, I miss getting that big refund!

Carpet_pissr · Post by **Carpet_pissr** » Wed Apr 16, 2014 11:22 am

Wow...ended up getting about a $3K refund this time. It was looking grim there for a while, as most of the time that real time refund/owe meter in Turbotax was in the red.

One thing Turbotax should change, IMO, is the way they handle the obviously complicated house purchase/sale tax code.

We sold, then bought a house in 2013, and I swear TT went through 5 pages of questions, making me look up documents from the original house purchase date in 2001, all for nothing! From what I understand, if you lived in that house you sold as your primary residence for 2 years (and maybe even the LAST two years), you don't have to pay taxes on the gains from the sale.

TT asked me how long I lived in the house AFTER asking a bazillion questions about improvements to the sold house, actual value, etc. etc. All for nothing. Had they asked me up front, we could have just gone to the next section without me having to frantically find 14 year old docs.

Anyhoo, it's done and over. Will never have to revisit that topic again.

Kraken · Post by **Kraken** » Wed Apr 16, 2014 10:54 pm

This is kinda cool: How does your county's tax burden stack up?

You can double-click the map to zoom in.

Norfolk Cty, where I live now, is 15th in dollars and 34th proportionately. Kent Cty, where I grew up, is 399th and 854th. Yet I will bet dollars to donuts that the people back "home" bitch more about taxes than we do here.

gbasden · Post by **gbasden** » Thu Apr 17, 2014 4:57 am

What on earth is going on in Western Wyoming? I never would have pegged there to have had the largest tax burden in the U.S.

coopasonic · Post by **coopasonic** » Thu Apr 17, 2014 10:03 am

gbasden wrote:What on earth is going on in Western Wyoming? I never would have pegged there to have had the largest tax burden in the U.S.

I guess this:

Teton County contains the affluent Jackson Hole skiing area.

Smoove_B · Post by **Smoove_B** » Wed May 28, 2014 7:30 pm

I'm sure there's a perfectly good reason why our HSA management company sent us a 5498-SA (non-corrected) 6 weeks after our 2013 taxes were filed...a completely different form than what we used for our tax calculations, with different numbers.

I guess this is why I pay an accountant, but seriously...what the hell?

Kraken · Post by **Kraken** » Wed May 28, 2014 9:31 pm

I mailed our tax package to our CPA today. Hoping to learn the bottom line in the next few weeks -- ideally before Q2 estimated taxes are due.

malchior · Post by **malchior** » Wed May 28, 2014 10:59 pm

Smoove_B wrote:I'm sure there's a perfectly good reason why our HSA management company sent us a 5498-SA (non-corrected) 6 weeks after our 2013 taxes were filed...a completely different form than what we used for our tax calculations, with different numbers.

I guess this is why I pay an accountant, but seriously...what the hell?

I got a similar one from mine today - no idea what it is all about.

Isgrimnur · Post by **Isgrimnur** » Wed May 28, 2014 11:32 pm

Apparently, that form has a June 1st deadline for generation.

If you are required to file Form 5498-SA, you must provide a statement to the participant (generally Copy B) by June 1, 2015. You may, but you are not required to, provide participants with a statement of the December 31, 2014, FMV of the participant's account by January 31, 2015. For more information about statements to participants, see part M in the 2014 General Instructions for Certain Information Returns.

Kraken · Post by **Kraken** » Thu May 29, 2014 1:06 am

I knew it was Part M. It's always Part M.

pr0ner · Post by **pr0ner** » Thu May 29, 2014 7:55 am

Kraken wrote:This is kinda cool: How does your county's tax burden stack up?

You can double-click the map to zoom in.

Norfolk Cty, where I live now, is 15th in dollars and 34th proportionately. Kent Cty, where I grew up, is 399th and 854th. Yet I will bet dollars to donuts that the people back "home" bitch more about taxes than we do here.

I just saw this now! Kind of fascinating.

Where I live now, Fairfax County: 25th in dollars and 37th in share. Norfolk City (Virginia, not Mass!): 1,150th in dollars and 1,910th in share. Woah.

Isgrimnur · Post by **Isgrimnur** » Wed Jan 28, 2015 1:48 pm

Effective Tax Rate
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%

Now married filing jointly, combined refund is about $3k, which will get eaten as closing costs on the mortgage if the seller ever gets back to us about our offer.

RunningMn9 · Post by **RunningMn9** » Wed Jan 28, 2015 1:55 pm

I did prelim taxes yesterday. Looks like the Feds are going to want an extra $1700. Savages.

Octavious · Post by **Octavious** » Wed Jan 28, 2015 2:00 pm

Haven't gotten my form from work yet.

My wife has hers.

Jeff V · Post by **Jeff V** » Wed Jan 28, 2015 2:10 pm

My wife appears to be expecting a windfall this year (I don't share her expectations) and I think she was hoping I could file and get it so she could spend it in the Philippines. Still waiting on her tax form from her old employer -- and since she didn't tell them we moved, it could be delayed. Since I'd rather she not spend it there, I'm in no hurry to file anyway.

MHS · Post by **MHS** » Wed Jan 28, 2015 2:17 pm

We don't have all of our documents yet but I think this *might* be the year we don't end up owing thousands. Neal starting withholding an extra $500 a month last April or May, and I started withholding an extra $250 a month last January on top of whatever was being withhold claiming 0 exemptions. Preliminary run-through looks like around $120 in either direction. Singly, we'd each only be in about the 15% tax bracket. Together, it shoots way up.

And next year, we'll lose the minimal amount we can claim on the kid since she'll be done with college.

Kraken · Post by **Kraken** » Wed Jan 28, 2015 2:20 pm

O god, not this stupid thread again.

Still waiting on wife's w-2, which I need for our mortgage refinance. Apart from that we're going to try to do them earlier this year to find out if we can take a vacation (refund!) or not (payout). Iggy's death set us back nearly $1,000.

Next year (i.e., this year) we should have almost all w-2 income. If so, I can start doing taxes myself again. I like her 1099 income, but not the deduction game that comes with it.

Isgrimnur · Post by **Isgrimnur** » Wed Jan 28, 2015 2:22 pm

MHS wrote:Singly, we'd each only be in about the 15% tax bracket. Together, it shoots way up.

I find it hard to believe that each of you earn less than $36,900.

El Guapo · Post by **El Guapo** » Wed Jan 28, 2015 2:32 pm

Still waiting on the W-2 from my now former job. I'm really hoping it comes soon since I need to finish my daughter's financial aid application (for first grade!) within the next couple weeks.

LordMortis · Post by **LordMortis** » Wed Jan 28, 2015 2:33 pm

In increased my withholding from 0 to insane last year in hope that I won't owe thousands this year like I have every year for the last decade or so. I think combining that with maxing my 401k to defer taxation should do it for me but I won't know for sure until I get all my documents. I'm still waiting on my mortgage interest statement, my credit union statement, and the bond fund I cashed in last year.

This will be the first year I have to fill out forms on securities so they can tax me on that. I have no idea what I'm in for.

I'm not sure when I should get impatient. Theory is I should have them all by the 31st but that has never been the case in the past, though. I am not looking forward to trying track down people to complain. I'm not even sure what my recourse is.

I do have my W-2s, so I might start just to get a ballpark of what I'm looking at so I can prepare saving if necessary.

My boss also told me the Turbo Tax is getting a lot a negative feedback for sneaking charges related to filling out forms on securities that no one was expecting, so I need to research that before I commit to Turbo Tax again this year. While I like how they are easy, if they are going to end up costing me $100 for all of their fees when it's all said and done, I'll take something a little more difficult elsewhere for half the price or less.

http://www.bloomberg.com/bw/articles/20 ... -turbotax-

MHS · Post by **MHS** » Wed Jan 28, 2015 2:34 pm

Isgrimnur wrote:
MHS wrote:Singly, we'd each only be in about the 15% tax bracket. Together, it shoots way up.
I find it hard to believe that each of you earn less than $36,900.

Hmmm. You are correct. TurboTax estimator gave me that amount as my effective tax rate when I only had me listed but that's definitely not right.

Post by **ImLawBoy** » Wed Jan 28, 2015 2:35 pm

We just need time (and probably a few random forms) to actually do our taxes. I've got my W-2, so my wife just needs her statements from the (untaxed) consulting work she did last year. Then we've got to figure out our medical expense deductions, which will take a lot of time. On the plus side, we have two new (very cute) deductions this year!

RunningMn9 · Post by **RunningMn9** » Wed Jan 28, 2015 2:38 pm

LordMortis wrote:In increased my withholding from 0 to insane last year in hope that I won't owe thousands this year like I have every year for the last decade or so.

I can only hope that you phrased this poorly. I assume you mean that your are withholding at 0 deductions, but are taking out an insane amount extra per pay period?

Because if you increased your deductions from 0 to some insane number...well...

pr0ner · Post by **pr0ner** » Wed Jan 28, 2015 2:38 pm

Not even close to being ready to do my taxes yet, as I'm waiting on at least 3 forms.

Anyone using TurboTax this year? Is everything on the internet true that you need Premier and not Deluxe now to get Schedule D stuff done?

El Guapo · Post by **El Guapo** » Wed Jan 28, 2015 2:39 pm

ImLawBoy wrote:On the plus side, we have two new (very cute) deductions this year!

I'll bet you do.

2. Paying Your Lover. In Bruce v. Commissioner, Bruce hired his live-in girlfriend to find furniture, oversee repairs at rental properties, and to run his personal household. The IRS said deducting her pay was not legit, but Bruce went to Tax Court and won. The court said $2,500 of the $9,000 he paid her was a business expense, but paying for her housekeeping chores was nondeductible.

LordMortis · Post by **LordMortis** » Wed Jan 28, 2015 2:40 pm

I don't even want to know how much you must have paid out of pocket to qualify for medical tax deductions. I don't make a shitton of money and I've had years where I've spend over $5000 out of pocket, dutifully saved all of my paperwork, and none of it qualified for deduction as I had to hit something like 10% of my income to claim any of it.