On the other side, 3 kids and a house eat my money and crap bills. I view the tax return as the government's way of giving me a resigned, understanding fist-bump.
I work in the advertising/ecommerce business. I get a W2 from an HR company. I'm not technically a full-time employee. I work when they need me to work, this just so happens to be about 1800 hours/year which is nearly full-time. So I guess I'm actually freelance? Some of my coworkers who are in the same boat swear that I should hire a CPA and be writing off everything I own except for my cat (exaggerating here). Some say I should just use turbotax like I'm a normal employee. I talked to a CPA over the phone and he said I shouldn't be writing things off because I get a W2. One of the accountants at my company says we can write things off because we're freelance. I buy my own health insurance.
This is a moot point for this year as I've already gone the turbotax route and had no write-offs. Did I miss out on a lot of money?
If it helps, I made about 70k in 2013. My wife and I together totaled 100k. We also bought our first house mid-way through 2013. Our combined refund is $8,500.
In general, the idea is that if you get a 1099, you're a contractor, and you can write off all of your expenses (on Schedule C). If you get a W-2, and are therefore an employee, you have to write off your expenses on Schedule A. Which means you can only use them if they're more than about $2k (2% of your AGI), and you also have to itemize. If you have enough (a lot of mileage, travel, buying furniture/computers, etc.), it might help
For what it's worth, though, you generally pay less tax as an employee, because the company is paying half of your FICA tax. So even though it seems like you don't get to deduct your expenses as easily, it's usually still better.
Getting to/from work alone costs me more than $2k per year and then I have my health insurance premiums on top of that so maybe it's worth it for me to look more into it?
Getting to/from work alone costs me more than $2k per year and then I have my health insurance premiums on top of that so maybe it's worth it for me to look more into it?
Driving to/from work is not considered a deductible expense. You can only deduct the miles spent driving to clients or suppliers or other stuff like that.
Working in a different office than normal that day (I think so long as it's > your normal travel). Client/suppliers/etc. Being asked to drive to a different office. That kind of thing. Or if you were hired in one location and then moved to another afterwords.
not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
It's my understanding that you can only claim some portion of your home as a home office for tax purposes if you're self employed. If you just work at home for your employer, that's not deductible in any way. Am I correct here?
You can, but it's subject to the same 2% of AGI limitation that I mentioned above (and you have to itemize). So unless you have a lot of other expenses, it won't necessarily help.
So I decided to finally do my taxes. I don't have a lot of tax related things, so I've been able to get away with the 1040EZ form for my entire life. I've been using TurboTax's free web app for ages now. Anywho, I fill out all the crap, but when it comes time to input the Alaska Permanent Fund Dividend, it decides "Oh no, the free version isn't compatible with this, you'll have to upgrade to the basic version for $20" and if I decline, it erases all the info I just put in about the PFD. (Even though I saw it calculate it into the total of my refund in the background already.) They've let me do this for free for the past several years, so I'm a little miffed and confused as to why they decided to change how they do things this year. Any other good free alternatives, or am I just going to have to bite the bullet for $20?
Also, the money I spent on charity apparently doesn't mean anything to my deductible? It wasn't a lot (under $300) so I'm guessing that's why. Getting a slightly bigger deduction would have been nice, but that's not the reason I donated, so oh well I guess
So in 2013 I received a Permanent Partial Disability (PPD) payment from my employer's insurance carrier after a final evaluation of my work-related injury from 2011 (now post-surgery and several rounds of physical therapy) with their chosen hand/wrist specialist rated my permanent partial disability percentage and paid out on the loss of strength and range of motion based on that percentage. What I'm trying to figure out is if this payment counts as taxable income that I need to report somewhere or not? I've done some searching and lot of places say that a PPD payment is equivalent to worker's compensation and does not need to be reported, but then there are a couple voices that say otherwise.
I'm currently doing my federal return through H&R Block's free online system, and they let you ask questions of their staff - so I tried that as well and this is the response I got:
Disability isn't typically taxable income, however, it will depend on how your employer classified it and whether or not you receive a 1099 form reporting the income to you and the IRS. I would contact the employer or the company that paid out the claim to you. Again, typically it is not taxable income.
I didn't receive any sort of tax-related form from the insurance company, and I only received a W-2 from my company, so I think I'm in the clear, but still am a little nervous about it. Any thoughts one way or the other?
I agree, I think you're in the clear. As long as the company doesn't send you a 1099, W-2, or any other form that shows it as taxable income (in which case you either have to pay tax on it, or request that the fix it), you should be fine. I looked it up, and I think they're right that in general it's not taxable. Here's what I found.
Disability insurance through employer:
•Group plans typically cover no more than 60% of salary.
•Benefits are taxable if the employer paid the premiums and the premiums were not taxable income to the employee.
•Benefits are not taxable if reimbursement is for medical expenses, permanent loss or loss of use of part of the body or permanent disfigurement. [IRC §105(b) and (c)]
Disability insurance paid by individual with after-tax amounts. Benefits are not taxable.
Strategy: Insurance purchased with after-tax dollars through an employer’s cafeteria plan is treated as paid by the individual. Some plans allow employees to choose whether to purchase disability on a pre-tax or after-tax basis. Using after-tax dollars might be a better option, to avoid having benefits being taxed when received.
So I decided to finally do my taxes. I don't have a lot of tax related things, so I've been able to get away with the 1040EZ form for my entire life. I've been using TurboTax's free web app for ages now. Anywho, I fill out all the crap, but when it comes time to input the Alaska Permanent Fund Dividend, it decides "Oh no, the free version isn't compatible with this, you'll have to upgrade to the basic version for $20" and if I decline, it erases all the info I just put in about the PFD. (Even though I saw it calculate it into the total of my refund in the background already.) They've let me do this for free for the past several years, so I'm a little miffed and confused as to why they decided to change how they do things this year. Any other good free alternatives, or am I just going to have to bite the bullet for $20?
Is it the Turbotax Freedom Edition you're talking about? I thought that was still free if your AGI was low enough even if you can't do the EZ. But if your AGI is over the threshold, yeah you're fucked as far as TurboTax goes. I've never used any other free options (military qualifies me for free TurboTax every year).
Also, the money I spent on charity apparently doesn't mean anything to my deductible? It wasn't a lot (under $300) so I'm guessing that's why. Getting a slightly bigger deduction would have been nice, but that's not the reason I donated, so oh well I guess
Nearly positive charitable donations don't do anything unless you're itemizing, and it sounds like you aren't in a position where itemizing makes sense.
I've had a decent amount of stuff happen this past year: it's the first year I'll actually be making enough that taxes matter, I got married (to a non-US citizen), and I'm very soon going to close out on buying my first house (assuming nothing big changes).
I'm really leaning towards trying to have someone else file my taxes, since I think it'll be a bit too complicated for me this first time. Are there any big reasons I shouldn't do that, or opinions either way? Any recommendations in the Seattle area? Any thoughts on how much that would cost?
if you haven't closed on the house yet it won't be affecting your 2013 taxes. I'm not sure if the non-citizen thing is a problem but I've done taxes for my wife and I for years with the H&R block online thing, including the year we got our house. It's not really bad as long as you have all of your documents together, the program walks you through everything pretty well.
Well, I'll be closing in a couple weeks theoretically, so probably before taxes.
The taxes you're doing right now are for things that happened from January 1, 2013 to December 31, 2013, so even if you close on your house soon before April 15 it doesn't matter since it's happening in 2014. Hold onto that HUD-1 for next year, though!
Yeah, asking someone you know if they like their accountant is usually the best bet. Or if you don't know anyone that uses one, a review site like Yelp would be a good start.
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ceresWhen the last moon is cast over the last star of morningAnd the future has past without even a last desperate warningRegistered User, Moderatormod
We got a 1098 from our short sale/deficiency forgiveness, but as far as I can tell that's all EXCEPT
We got a notice from the bank with a rather large balance on it that says it's for FHA mortgage insurance. We were told at settlement that we were done, owed nothing else, bye bye. Now, this letter came in an envelope marked 'tax info', but I can't see where it says anything about taxes.. just this balance as of Feb 1st. It doesn't say that we owe the balance, and it doesn't say that we don't owe the balance, only that the balance exists and that the letter is no indication of anything other than that.
I have no idea what the hell to do with this thing. Is it a tax doc? Do I need to send it to the CPA we're hiring? We sure don't have that kind of money lying around and haven't in years, and I am unsure what to do about it.
And it seems like all is dying, and would leave the world to mourn
So, my mother in law is convinced that we need a tax person, and that turbo tax won't be able to figure out our complicated tax situation. By complicated, I mean we worked in NJ last year and we live in NY. Everything else is really standard.
My husband does not want to fight her, so will let her pay for the guy. Am I missing something? Is it really that difficult? Lots of people work in states where they do not live.
I'm going to use turbotax alongside her guy this year.
Following up with this. . Yeah, the tax guy wasn't worth it. Took almost as much work as turbo tax, cost a lot more, and we got 18 dollars less back on our refund than if we had done turbo tax. Which would have been fine, except he then went and processed my refund ever so slightly wrong. He had it going to Lisa and Gareth Husbandlastname. Never mind that every piece of tax documentation clearly said my name was Lisa Maidename. And the check I sent for the direct deposit information had my full name on it. It's my account alone, so there was some issue with my bank and accepting the refund. It should be settled now, but oh man. I hope he didn't screw the actual return up (from what I checked it looked ok)
If that's all there is my friends, then let's keep dancing
We got a 1098 from our short sale/deficiency forgiveness, but as far as I can tell that's all EXCEPT
We got a notice from the bank with a rather large balance on it that says it's for FHA mortgage insurance. We were told at settlement that we were done, owed nothing else, bye bye. Now, this letter came in an envelope marked 'tax info', but I can't see where it says anything about taxes.. just this balance as of Feb 1st. It doesn't say that we owe the balance, and it doesn't say that we don't owe the balance, only that the balance exists and that the letter is no indication of anything other than that.
I have no idea what the hell to do with this thing. Is it a tax doc? Do I need to send it to the CPA we're hiring? We sure don't have that kind of money lying around and haven't in years, and I am unsure what to do about it.
FHA mortgage insurance is tax deductible, if you paid mortgage insurance in 2013 you should be able to write it off.
There's a name for that form. If you see one on that paper, name it here and i can probably recognize it from memory
Never filed with the 1040x before, but have you checked the IRS' where's my refund site?
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ceresWhen the last moon is cast over the last star of morningAnd the future has past without even a last desperate warningRegistered User, Moderatormod
We got a 1098 from our short sale/deficiency forgiveness, but as far as I can tell that's all EXCEPT
We got a notice from the bank with a rather large balance on it that says it's for FHA mortgage insurance. We were told at settlement that we were done, owed nothing else, bye bye. Now, this letter came in an envelope marked 'tax info', but I can't see where it says anything about taxes.. just this balance as of Feb 1st. It doesn't say that we owe the balance, and it doesn't say that we don't owe the balance, only that the balance exists and that the letter is no indication of anything other than that.
I have no idea what the hell to do with this thing. Is it a tax doc? Do I need to send it to the CPA we're hiring? We sure don't have that kind of money lying around and haven't in years, and I am unsure what to do about it.
FHA mortgage insurance is tax deductible, if you paid mortgage insurance in 2013 you should be able to write it off.
There's a name for that form. If you see one on that paper, name it here and i can probably recognize it from memory
Heard back from the cpa, he said he doesn't need it for us. He pretty much conformed what you said, which is great news because we really don't have that.
And it seems like all is dying, and would leave the world to mourn
So I just applied for an ITIN, but it seems like it won't be issued before next month. Without it, my wife can file her tax returns as if we were married filing separately, but the difference between that and filing jointly is around $600.
Can we simply file a 1040x once my ITIN arrives and get that difference back?
That would work. That, or just have her do an extension, and file together once you get it.
Obviously it's too late for you, but for anyone else reading, you can actually file the ITIN request form with a completed tax return, and "applied for" in place of your SSN. So that way you can file jointly from the get go.
I need some advice, and I can't afford to pay an accountant.
The IRS amended my 2012 return and disallowed some credits, causing me to owe them a little over $900. I'm going to try and argue this, but I can't afford a lawyer so I will probably fail.
I'm supposedly getting a little over $1300 back for 2013. If I file now, will they remove the $900 from that refund and send me the rest? Is there a way to continue arguing about 2012 without losing that money from my 2013 return?
Unfortunately I can almost guarantee that if you generate a 2013 refund, they'll use it to pay off your 2012 balance.
Would you feel comfortable telling us (or just me) what they disallowed on 2012? Was it an actual audit, or just one of those auto-generated "if you agree with our findings, please pay the following..."?
Unfortunately I can almost guarantee that if you generate a 2013 refund, they'll use it to pay off your 2012 balance.
Would you feel comfortable telling us (or just me) what they disallowed on 2012? Was it an actual audit, or just one of those auto-generated "if you agree with our findings, please pay the following..."?
Auto-generated thing. They disallowed the "additional child tax credit".
Did you fill out your return manually? Because the additional child tax credit should pretty much be automatic. There's a worksheet for it, but whatever software you use would fill it out, and wouldn't take it unless you qualified. The main requirement seems to be that you have a certain amount of earned income.
The reason I ask is because you may be able to just respond to that letter with why you think you should qualify (well, probably more like refuting why they think you don't). Stuff like this rarely comes to a lawyer, plenty of people respond to them themselves.
Did you fill out your return manually? Because the additional child tax credit should pretty much be automatic. There's a worksheet for it, but whatever software you use would fill it out, and wouldn't take it unless you qualified. The main requirement seems to be that you have a certain amount of earned income.
The reason I ask is because you may be able to just respond to that letter with why you think you should qualify (well, probably more like refuting why they think you don't). Stuff like this rarely comes to a lawyer, plenty of people respond to them themselves.
Turbotax did it for me. I think the root of the problem was that they don't think I calculated my deduction for property tax correctly, because I paid a large lump of back taxes when my mortgage was bought.
I can try responding, but ultimately it won't matter until later will it? Even if I'm right, I have to pay the tax now and hope I get it back in the future, or else end up filing for 2013 late as well.
I suppose that could be it. But the fact that it was one of those auto generated letters means that there likely wasn't a person involved, the computer just noticed a discrepancy. Usually people forgetting to report bank interest, mis-stating W-2 income, etc. I'm not sure how they would automatically know your property tax was wrong.
If the deadline for the letter hasn't passed, you might be able to respond with your argument, without paying. But if it's too late, yeah, I think your best bet is to pay, and then try to get it back later. Doing an extension of 2013 might help, if you think you can resolve it before that.
I'm super busy at the moment, but I'd be happy to take a quick look at the letter, if you want to send it. Just a thought.
Assuming that I entered my tax info properly, I should be getting a $2800 refund, due to a lump sum ~$4,000 RRSP contribution late last year (first opportunity where my company would match donations retroactively to when I started working) and ~$6,000 in medical deductions.
Also the first time I've done a return without any tuition deductions.
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On the other side, 3 kids and a house eat my money and crap bills. I view the tax return as the government's way of giving me a resigned, understanding fist-bump.
I work in the advertising/ecommerce business. I get a W2 from an HR company. I'm not technically a full-time employee. I work when they need me to work, this just so happens to be about 1800 hours/year which is nearly full-time. So I guess I'm actually freelance? Some of my coworkers who are in the same boat swear that I should hire a CPA and be writing off everything I own except for my cat (exaggerating here). Some say I should just use turbotax like I'm a normal employee. I talked to a CPA over the phone and he said I shouldn't be writing things off because I get a W2. One of the accountants at my company says we can write things off because we're freelance. I buy my own health insurance.
This is a moot point for this year as I've already gone the turbotax route and had no write-offs. Did I miss out on a lot of money?
If it helps, I made about 70k in 2013. My wife and I together totaled 100k. We also bought our first house mid-way through 2013. Our combined refund is $8,500.
For what it's worth, though, you generally pay less tax as an employee, because the company is paying half of your FICA tax. So even though it seems like you don't get to deduct your expenses as easily, it's usually still better.
Working in a different office than normal that day (I think so long as it's > your normal travel). Client/suppliers/etc. Being asked to drive to a different office. That kind of thing. Or if you were hired in one location and then moved to another afterwords.
So I decided to finally do my taxes. I don't have a lot of tax related things, so I've been able to get away with the 1040EZ form for my entire life. I've been using TurboTax's free web app for ages now. Anywho, I fill out all the crap, but when it comes time to input the Alaska Permanent Fund Dividend, it decides "Oh no, the free version isn't compatible with this, you'll have to upgrade to the basic version for $20" and if I decline, it erases all the info I just put in about the PFD. (Even though I saw it calculate it into the total of my refund in the background already.) They've let me do this for free for the past several years, so I'm a little miffed and confused as to why they decided to change how they do things this year. Any other good free alternatives, or am I just going to have to bite the bullet for $20?
Also, the money I spent on charity apparently doesn't mean anything to my deductible? It wasn't a lot (under $300) so I'm guessing that's why. Getting a slightly bigger deduction would have been nice, but that's not the reason I donated, so oh well I guess
I'm currently doing my federal return through H&R Block's free online system, and they let you ask questions of their staff - so I tried that as well and this is the response I got:
I didn't receive any sort of tax-related form from the insurance company, and I only received a W-2 from my company, so I think I'm in the clear, but still am a little nervous about it. Any thoughts one way or the other?
Disability insurance through employer:
•Group plans typically cover no more than 60% of salary.
•Benefits are taxable if the employer paid the premiums and the premiums were not taxable income to the employee.
•Benefits are not taxable if reimbursement is for medical expenses, permanent loss or loss of use of part of the body or permanent disfigurement. [IRC §105(b) and (c)]
Disability insurance paid by individual with after-tax amounts. Benefits are not taxable.
Strategy: Insurance purchased with after-tax dollars through an employer’s cafeteria plan is treated as paid by the individual. Some plans allow employees to choose whether to purchase disability on a pre-tax or after-tax basis. Using after-tax dollars might be a better option, to avoid having benefits being taxed when received.
Is it the Turbotax Freedom Edition you're talking about? I thought that was still free if your AGI was low enough even if you can't do the EZ. But if your AGI is over the threshold, yeah you're fucked as far as TurboTax goes. I've never used any other free options (military qualifies me for free TurboTax every year).
Nearly positive charitable donations don't do anything unless you're itemizing, and it sounds like you aren't in a position where itemizing makes sense.
I'm really leaning towards trying to have someone else file my taxes, since I think it'll be a bit too complicated for me this first time. Are there any big reasons I shouldn't do that, or opinions either way? Any recommendations in the Seattle area? Any thoughts on how much that would cost?
Thanks!
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The taxes you're doing right now are for things that happened from January 1, 2013 to December 31, 2013, so even if you close on your house soon before April 15 it doesn't matter since it's happening in 2014. Hold onto that HUD-1 for next year, though!
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We got a notice from the bank with a rather large balance on it that says it's for FHA mortgage insurance. We were told at settlement that we were done, owed nothing else, bye bye. Now, this letter came in an envelope marked 'tax info', but I can't see where it says anything about taxes.. just this balance as of Feb 1st. It doesn't say that we owe the balance, and it doesn't say that we don't owe the balance, only that the balance exists and that the letter is no indication of anything other than that.
I have no idea what the hell to do with this thing. Is it a tax doc? Do I need to send it to the CPA we're hiring? We sure don't have that kind of money lying around and haven't in years, and I am unsure what to do about it.
is there an easy way to find out of they got it?
FHA mortgage insurance is tax deductible, if you paid mortgage insurance in 2013 you should be able to write it off.
There's a name for that form. If you see one on that paper, name it here and i can probably recognize it from memory
Heard back from the cpa, he said he doesn't need it for us. He pretty much conformed what you said, which is great news because we really don't have that.
even better, there's a special amendment site http://www.irs.gov/Filing/Individuals/Amended-Returns-(Form-1040-X)/Wheres-My-Amended-Return-1
they got mine three weeks ago, but apparently it takes 8-12 weeks to process
but... i want me $750 noooooowwwww daddy
Can we simply file a 1040x once my ITIN arrives and get that difference back?
Obviously it's too late for you, but for anyone else reading, you can actually file the ITIN request form with a completed tax return, and "applied for" in place of your SSN. So that way you can file jointly from the get go.
The IRS amended my 2012 return and disallowed some credits, causing me to owe them a little over $900. I'm going to try and argue this, but I can't afford a lawyer so I will probably fail.
I'm supposedly getting a little over $1300 back for 2013. If I file now, will they remove the $900 from that refund and send me the rest? Is there a way to continue arguing about 2012 without losing that money from my 2013 return?
Would you feel comfortable telling us (or just me) what they disallowed on 2012? Was it an actual audit, or just one of those auto-generated "if you agree with our findings, please pay the following..."?
Auto-generated thing. They disallowed the "additional child tax credit".
The reason I ask is because you may be able to just respond to that letter with why you think you should qualify (well, probably more like refuting why they think you don't). Stuff like this rarely comes to a lawyer, plenty of people respond to them themselves.
Turbotax did it for me. I think the root of the problem was that they don't think I calculated my deduction for property tax correctly, because I paid a large lump of back taxes when my mortgage was bought.
I can try responding, but ultimately it won't matter until later will it? Even if I'm right, I have to pay the tax now and hope I get it back in the future, or else end up filing for 2013 late as well.
Correct?
If the deadline for the letter hasn't passed, you might be able to respond with your argument, without paying. But if it's too late, yeah, I think your best bet is to pay, and then try to get it back later. Doing an extension of 2013 might help, if you think you can resolve it before that.
I'm super busy at the moment, but I'd be happy to take a quick look at the letter, if you want to send it. Just a thought.
Also the first time I've done a return without any tuition deductions.