The new forums will be named Coin Return (based on the most recent vote)! You can check on the status and timeline of the transition to the new forums here.
The Guiding Principles and New Rules document is now in effect.
Really? Already? The 2017 [Tax] Thread
ceres
When the last moon is cast over the last star of morningAnd the future has past without even a last desperate warningRegistered User, Moderator Mod Emeritus
When the last moon is cast over the last star of morningAnd the future has past without even a last desperate warningRegistered User, Moderator Mod Emeritus
Not ready.
It's that time again. January. Time for W-2s, 1090s, and frantically digging through the trash pile on the passenger seat of your car for receipts (not based on real events). To pick a software, hire an accountant, or call your mom in a panic on the eve of April 14th and make her do it (also not based on real events).
I'll try to keep an updated resource list in this post, as well as some helpful info from the rest of the thread.
It's that time again. January. Time for W-2s, 1090s, and frantically digging through the trash pile on the passenger seat of your car for receipts (not based on real events). To pick a software, hire an accountant, or call your mom in a panic on the eve of April 14th and make her do it (also not based on real events).
I'll try to keep an updated resource list in this post, as well as some helpful info from the rest of the thread.
And it seems like all is dying, and would leave the world to mourn
ceres on
0
Posts
FREE STUFF
If your adjusted gross income (AGI) is $66,000 or less, https://www.irs.gov/freefile has many options which may allow you to e-file your federal and state income taxes for free using popular brand-name software like TurboTax, TaxSlayer, etc., even if you need the more “complicated” schedules for things like itemized deductions, self-employment income, or capital gains and losses. Note that the free products offered via this service may differ from the “free” (with pushy upselling) products you’d find if you went directly to the vendors’ web sites. Always follow the links from the IRS if you want the truly free versions.
If your AGI is above $66,000 you can still use Free File Fillable Forms which is an IRS-provided service that allows you to fill out the federal tax forms somewhat manually (it does basic arithmetic but does not really help you through the process) and then e-file them for free.
Also many states offer free e-filing through their own state department of revenue web sites. Google your state’s name and “free e-file” and see what you find!
After all that, if you don't qualify for Free File, and you don't want to use Free File Fillable Forms, or your state does not offer an easy/free e-filing option, then my personal preference for paid filing over the past couple of years has been FreeTaxUSA.com. It's free for federal filing with all the schedules you might need, and $12.95 per state. I find it reasonably easy to use although I have never had to contact them for help, so I can't say how good they are in that regard.
So just a heads up that they're not operating with a full deck at the moment.
I actually did the whole thing over with Credit Karma and I get the same results except they never ask for the form. Which is worrying?
H&R definitely has a bug in the system though. I may just go through customer service and see what's up.
Please report back if you find anything!
That kind of sounds like bullshit to me, right? Like, if I can do all of that then what's the point in even hiring him? Is this common practice?
Edit: oh I missed they asked for the documents sent too. Yeah it’s looking like mostly laziness. You can totally just do it yourself. You are already putting forth 90% of the time doing it that way.
You've got a lazy bugger on your hands.
For me, the long portion where you fill out each box of the W-2, 1099s, etc. is not really necessary. Like others have said, I can type all that in myself. It's mainly the questionnaire that can be useful. Just a bunch of yes/no questions about things that can impact taxes, that people sometimes forget about (did you buy a new car this year, did you buy/sell a home, did you change jobs, etc.).
I'll post a Bitcoin memo soon that I shamelessly stole
Note: I do not practice CPA stuff much anymore. This is a memo I found. It is very useful but you should consult with an actual god damn CPA (not me though) to make decisions. Do not rely on the advice of just what you read on the internet.
Q-1: How is virtual currency treated for federal tax purposes?
A-1: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency.
Q-2: Is virtual currency treated as currency for purposes of determining whether a transaction results in foreign currency gain or loss under U.S. federal tax laws?
A-2: No. Under currently applicable law, virtual currency is not treated as currency that could generate foreign currency gain or loss for U.S. federal tax purposes.
Q-3: Must a taxpayer who receives virtual currency as payment for goods or services include in computing gross income the fair market value of the virtual currency?
A-3: Yes. A taxpayer who receives virtual currency as payment for goods or services must, in computing gross income, include the fair market value of the virtual currency, measured in U.S. dollars, as of the date that the virtual currency was received.
Q-4: What is the basis of virtual currency received as payment for goods or services in Q&A-3?
A-4: The basis of virtual currency that a taxpayer receives as payment for goods or services in Q&A-3 is the fair market value of the virtual currency in U.S. dollars as of the date of receipt.
Q-5: How is the fair market value of virtual currency determined?
A-5: For U.S. tax purposes, transactions using virtual currency must be reported in U.S. dollars. Therefore, taxpayers will be required to determine the fair market value of virtual currency in U.S. dollars as of the date of payment or receipt. If a virtual currency is listed on an exchange and the exchange rate is established by market supply and
demand, the fair market value of the virtual currency is determined by converting the virtual currency into U.S. dollars (or into another real currency which in turn can be converted into U.S. dollars) at the exchange rate, in a reasonable manner that is consistently applied.
Q-6: Does a taxpayer have gain or loss upon an exchange of virtual currency for other property?
A-6: Yes. If the fair market value of property received in exchange for virtual currency exceeds the taxpayer’s adjusted basis of the virtual currency, the taxpayer has taxable gain. The taxpayer has a loss if the fair market value of the property received is less
than the adjusted basis of the virtual currency.
Q-7: What type of gain or loss does a taxpayer realize on the sale or exchange of virtual currency?
A-7: The character of the gain or loss generally depends on whether the virtual currency is a capital asset in the hands of the taxpayer. A taxpayer generally realizes capital gain or loss on the sale or exchange of virtual currency that is a capital asset in the hands of the taxpayer. For example, stocks, bonds, and other investment property are generally capital assets. A taxpayer generally realizes ordinary gain or loss on the sale or exchange of virtual currency that is not a capital asset in the hands of the taxpayer. Inventory and other property held mainly for sale to customers in a trade or business are examples of property that is not a capital asset.
Q-8: Does a taxpayer who “mines” virtual currency (for example, uses computer resources to validate Bitcoin transactions and maintain the public Bitcoin transaction ledger) realize gross income upon receipt of the virtual currency resulting from those activities?
A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income.
Q-9: Is an individual who “mines” virtual currency as a trade or business subject to self-employment tax on the income derived from those activities?
A-9: If a taxpayer’s “mining” of virtual currency constitutes a trade or business, and the “mining” activity is not undertaken by the taxpayer as an employee, the net earnings from self-employment (generally, gross income derived from carrying on a trade or business less allowable deductions) resulting from those activities constitute self-employment income and are subject to the self-employment tax.
Q-10: Does virtual currency received by an independent contractor for performing services constitute self-employment income?
A-10: Yes. Generally, self-employment income includes all gross income derived by an individual from any trade or business carried on by the individual as other than an employee. Consequently, the fair market value of virtual currency received for services performed as an independent contractor, measured in U.S. dollars as of the date of receipt, constitutes self-employment income and is subject to the self-employment tax.
Q-11: Does virtual currency paid by an employer as remuneration for services constitute wages for employment tax purposes?
A-11: Yes. Generally, the medium in which remuneration for services is paid is immaterial to the determination of whether the remuneration constitutes wages for employment tax purposes. Consequently, the fair market value of virtual currency paid
as wages is subject to federal income tax withholding, Federal Insurance Contributions Act (FICA) tax, and Federal Unemployment Tax Act (FUTA) tax and must be reported on Form W-2, Wage and Tax Statement.
Q-12: Is a payment made using virtual currency subject to information reporting?
A-12: A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property. For example, a person who in the course of a trade or business makes a payment of fixed and determinable income using virtual currency with a value of $600 or more to a U.S. non-exempt recipient in a taxable year is required to report the payment to the IRS and to the payee. Examples of payments of fixed and determinable income include rent, salaries, wages, premiums, annuities, and compensation.
Q-13: Is a person who in the course of a trade or business makes a payment using virtual currency worth $600 or more to an independent contractor for performing services required to file an information return with the IRS?
A-13: Generally, a person who in the course of a trade or business makes a payment of $600 or more in a taxable year to an independent contractor for the performance of services is required to report that payment to the IRS and to the payee on Form 1099-MISC, Miscellaneous Income. Payments of virtual currency required to be reported on Form 1099-MISC should be reported using the fair market value of the virtual currency in U.S. dollars as of the date of payment. The payment recipient may have income even if the recipient does not receive a Form 1099-MISC. See the Instructions to Form 1099-MISC and the General Instructions for Certain Information Returns for more information. For payments to non-U.S. persons, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities.
Q-14: Are payments made using virtual currency subject to backup withholding?
A-14: Payments made using virtual currency are subject to backup withholding to the same extent as other payments made in property. Therefore, payors making reportable payments using virtual currency must solicit a taxpayer identification number (TIN) from the payee. The payor must backup withhold from the payment if a TIN is not obtained prior to payment or if the payor receives notification from the IRS that backup withholding is required.
Q-15: Are there IRS information reporting requirements for a person who settles payments made in virtual currency on behalf of merchants that accept virtual currency from their customers?
A-15: Yes, if certain requirements are met. In general, a third party that contracts with a substantial number of unrelated merchants to settle payments between the merchants and their customers is a third party settlement organization (TPSO). A TPSO is required to report payments made to a merchant on a Form 1099-K, Payment Card and Third Party Network Transactions, if, for the calendar year, both (1) the number of transactions settled for the merchant exceeds 200, and (2) the gross amount of payments made to the merchant exceeds $20,000. When completing Boxes 1, 3, and
5a-1 on the Form 1099-K, transactions where the TPSO settles payments made with virtual currency are aggregated with transactions where the TPSO settles payments made with real currency to determine the total amounts to be reported in those boxes. When determining whether the transactions are reportable, the value of the virtual currency is the fair market value of the virtual currency in U.S. dollars on the date of payment.
Q-16: Will taxpayers be subject to penalties for having treated a virtual currency transaction in a manner that is inconsistent with the IRS direction, laws and regulations?
A-16: Taxpayers may be subject to penalties for failure to comply with tax laws. For example, underpayments attributable to virtual currency transactions may be subject to penalties, such as accuracy-related penalties under section 6662. In addition, failure to timely or correctly report virtual currency transactions when required to do so may be subject to information reporting penalties under section 6721 and 6722. However, penalty relief may be available to taxpayers and persons required to file an information return who are able to establish that the underpayment or failure to properly file information returns is due to reasonable cause.
I'm assuming paying the IRS is easy?
When I had to pay an additional amount last year, it was as easy as going to irs.gov and filling out some info about my checking account and they did a direct withdrawl. Didn't have to cut a check or worry about anything getting lost in the mail.
You're supposed to get back the additional withholding (or overwithholding) on your taxes when you file.
That's not even slightly related to my situation, but thank you for assuming.
Edit: the fuckup is that for the first 2 years I'm here, I'm eligible for a non-resident J-1 status which exempts me from FICA taxes. Only you have to fill out an extra form to get this status and I never received the form. So I've been paying FICA as a resident for two years unnecessarily, which is (for me) a very large chunk of change.
Hopefully that all works out, then you do it for the next year and so on. It's totally doable on your own, but a tax pro is not a bad idea to utilize if it's a substantial amount that wouldn't be wiped out by paying for their guidance.
edit: Oh yeah, go up the totem pole at the employer first, that's right.
Looks like your employer is on the hook with getting you your money back. Looks like that last part applies to you @tynic:
https://ttlc.intuit.com/questions/3181721-i-have-a-j1-visa-and-the-employer-made-me-pay-the-fica-taxes-without-knowing-wasn-t-supposed-to-is-it-handled-by-the-turbotax-refund
I've ran both zephiance and my income through a paycheck calculator and when I adjust the income to married, it seams to increase the take home by 200 bones each.
That seams not good in terms of owing money. Even if I reduce allowances to 0.
I don't see anything in the federal tax code that gives married couples a sweetheart break. Is it just an issue with the paycheck calculator I'm using or do I need to essentially pre-do our taxes to determine additional tax rules.
Also as an annoyance my company is using 2017 for how they are calculating take home and taxes, which is a separate corporate issue which they are "addressing."
Are you still on good terms with your employer? Because I recently handled this for a client of mine (the client being the employer) for one of their employees, and we fixed it on the employer side. Basically filed amended payroll tax returns for the quarters in question (941-X, for reference), and the IRS processes and sends the employer a check. They can either front you the cash, or have you sign something saying you're allowing them to not front you the cash, and then they owe it to you when they get it.
It's not rocket science, but it is kind of a pain, so it's sometimes an uphill battle trying to push it through as the employee. But since the employer matches FICA, they should get an equal amount refunded as well, so there is incentive for them to do it. And that way you don't have to file any amended individual tax returns (FICA doesn't generally flow anywhere on your 1040 anyway), you just get a check.
Unfortunately when both spouses work, it can get complicated. The "easiest" solution, in my opinion, is indeed to just pre-do your taxes. Just find a simple projection software, plug in your estimated earnings for the year, figure out what the tax would be, and work backward from there to tweak your withholdings.
It is true that all else being equal, when you change from "single" to "married" on your W-4, your take home will go up. But if you're both working, what I usually recommend is to just both stay "single" on your W-4, to avoid not having enough withholding. It all depends on how much you each make (relative to each other), whether you have kids, other income, etc., but I've seen plenty of cases of two people getting refunds every year, getting married, and then all of a sudden owing (because they updated their W-4s.
it seems to work fine for me and is easy
Although note that there are occasionally benefits to being married, each filing singly, as opposed to married, filing jointly.
I've never run into it, but it does exist.
EDIT: And most tax prep programs will do a quick check for you, to see if there are any benefits to changing your filing status.
Steam: Elvenshae // PSN: Elvenshae // WotC: Elvenshae
Wilds of Aladrion: [https://forums.penny-arcade.com/discussion/comment/43159014/#Comment_43159014]Ellandryn[/url]