Help, I am very bad at my taxes! [2019 Tax Thread]

mxmarksmxmarks Registered User regular
edited February 10 in Help / Advice Forum
I think it's finally time to hire someone to do my taxes for me, because I think I'm making huge mistakes - well, I KNOW I am.

I have always owed money because I used to be a freelancer. I just got used to never getting a refund because freelancing you have to figure out your taxes yourself.

3 years ago I got married and everyone said oh, you'll get a break now. Well - I really didn't. We still owed and I again chalked it up to freelancing.

2 years ago we bought a house and everyone said, oh man now you'll get some back because you get a lot of benefits. What ended up happening - weirdly - was we OWED about $6,000 in Maryland state tax (where we bought the house, in Feb), but we got a refund in VA of about $6,000 so it evened out.

It gets complicated because I always do my taxes myself, on TurboTax, and for awhile we lived part year in VA, part year in MD, and worked in DC. So it was always weird, and we always ended up owing but I chalked it up to us being in a weird situation. At the end of 2018 I took a full time job, and asked my other freelance employer to switch me to W-2's. They did.

So I was all excited for this year because everything was in place: We lived full year in MD, I had no 1099's, everything seemed good.

...I owe Federal $700 and the state of MD like $8,000.

I am REEEEEEEALLY hoping I am filling out shit wrong, but at the VERY LEAST I need someone to explain to me what I'm doing that this is happening so I can make it fucking stop. I'm losing my mind. I have my witholdings at 1 and 0 (Fed and State), and my wife THINKS she does but it may be 1 and 1. That's IT. There's nothing else weird about our situation, so what the hell is happening?

Anyone able to point me in the right direction? I was going to just call H&R Block today or a local accountant because I am just so lost.

PSN: mxmarks - WiiU: mxmarks - twitter: @ MikesPS4 - twitch.tv/mxmarks - "Yes, mxmarks is the King of Queens" - Unbreakable Vow
ceres on

Posts

  • SimpsoniaSimpsonia Registered User regular
    edited February 10
    What do your W2s and paystubs say about your state withholding? With an amount like $8k, it sounds like your employers aren't withholding anything at all for your state income tax.

    Simpsonia on
    MugsleyElvenshae
  • IrukaIruka Registered User, Moderator mod
    When you were freelancing, were you paying quarterly taxes and itemizing your business purchases? I contract, but pay my taxes in quarterly chunks. I only owe when I miss a quarterly payment like I did this year. MDs income tax is apparently 15%, and I dont have to contend with that since Texas has no state income taxes (yeehaw), but in MD you can pay quarterly for state as well.

    I'm not an expert but simpsonia's assumption would be mine as well. There's no harm in talking to someone about your taxes, though. I generally do my taxes through turbo tax just for ease of use since I also route my income through their self employed quickbooks. I've not compared their live services to H&R block, but I imagine its similar. Just make sure you've really gathered all your documents so you can maximize your time.

  • zepherinzepherin Registered User regular
    mxmarks wrote: »
    I think it's finally time to hire someone to do my taxes for me, because I think I'm making huge mistakes - well, I KNOW I am.

    I have always owed money because I used to be a freelancer. I just got used to never getting a refund because freelancing you have to figure out your taxes yourself.

    3 years ago I got married and everyone said oh, you'll get a break now. Well - I really didn't. We still owed and I again chalked it up to freelancing.

    2 years ago we bought a house and everyone said, oh man now you'll get some back because you get a lot of benefits. What ended up happening - weirdly - was we OWED about $6,000 in Maryland state tax (where we bought the house, in Feb), but we got a refund in VA of about $6,000 so it evened out.

    It gets complicated because I always do my taxes myself, on TurboTax, and for awhile we lived part year in VA, part year in MD, and worked in DC. So it was always weird, and we always ended up owing but I chalked it up to us being in a weird situation. At the end of 2018 I took a full time job, and asked my other freelance employer to switch me to W-2's. They did.

    So I was all excited for this year because everything was in place: We lived full year in MD, I had no 1099's, everything seemed good.

    ...I owe Federal $700 and the state of MD like $8,000.

    I am REEEEEEEALLY hoping I am filling out shit wrong, but at the VERY LEAST I need someone to explain to me what I'm doing that this is happening so I can make it fucking stop. I'm losing my mind. I have my witholdings at 1 and 0 (Fed and State), and my wife THINKS she does but it may be 1 and 1. That's IT. There's nothing else weird about our situation, so what the hell is happening?

    Anyone able to point me in the right direction? I was going to just call H&R Block today or a local accountant because I am just so lost.
    Maryland is tough, and employers often don't properly take out your county taxes. It sucks I ran into that problem this year. Have them start taking out an extra 20 a pay period on your state.

  • ceresceres When the last moon is cast over the last star of morning And the future has past without even a last desperate warningRegistered User, Moderator mod
    edited February 10
    Oh right, it's time for this shit isn't it fucking bleh

    Going to use this as the general taxes thread if that's okay so at least it's all in one place

    ceres on
    And it seems like all is dying, and would leave the world to mourn
    DisruptedCapitalistJaysonFourtyrannusElvenshae
  • JragghenJragghen Registered User regular
    With regards to the withholding tables, they can vary greatly depending on state and federal, too.

    My wife has 0 exemptions for both, I have 1 for state and I'm paying an extra $150/paycheck on top of it federal, and it's looking like we'll end up even-ish for the state and owing a bit federal (not quite as lopsided as yours - we were worse last year, if you can believe).

    So yeah, I can give a second anecdote that state/federal can be super out of whack (but in the opposite direction, in my case). We're just adjusting how much we take out of the paycheck every year until we settle at about right.

  • DaimarDaimar A Million Feet Tall of Awesome Registered User regular
    mxmarks wrote: »
    Anyone able to point me in the right direction? I was going to just call H&R Block today or a local accountant because I am just so lost.

    I would suggest looking for a local CPA to help you out, check if family or friends can help you out with a recommendation or just look for one with good Google reviews. I would stay away from one of the "big 4" accounting firms (PwC, KPMG, Deloitte, and E&Y) since they will charge more for the same level of service that a local firm offers since they have a ton more overhead. I have a dislike for H&R Block for a few reasons, but in short they're scumbags on the level of payday loan stores.

    steam_sig.png
    twitch.tv/kragaar
  • DisruptedCapitalistDisruptedCapitalist rugged, weathered Registered User regular
    edited February 13
    So browsing around on Google has produced very vague results about IRS auditing on Schedule C Car and Truck expenses. The general sentiment is that the IRS loves to Audit Car and Truck expenses so I'm wondering what you all think about these issues:
    1. I've read some websites that say that Google maps is no good and you should never use that as evidence for you mileage, while others have said it's ok.
    2. (Related to #1) Some websites say you cannot claim non-business errands such as grabbing a cup of coffee along the way. So does this mean that I cannot calculate any mileage after I take a detour? Or do I include the mileage from Google Maps that would indicate what route I would have taken if I hadn't taken the detour for coffee? Basically, I've calculated mileage based on my odometer, but I worry that's not enough if the IRS have a problem with me taking detours particularly since it's not the same mileage for every trip to the same location.
    3. Question 46 on Schedule C asks if you have another vehicle for personal use. Does this mean I can never use my personal vehicle for business use? Sometimes my car was unavailable (in the shop, etc.) and I had to use my wife's car. Will they have a problem with that because it wasn't my "business" vehicle?

    DisruptedCapitalist on
  • mxmarksmxmarks Registered User regular
    Just an update as I continue to navigate why I owe so much in state taxes:

    I went and looked at WHERE my state witholdings were going and saw it was to VA. That's where my company's HQ is.

    Going back into Turbo Tax, and adding that I "worked, but never lived" in VA suddenly gave me the ENTIRETY of that back.

    So I still owe $2,000 now, but this gives me hope that I'm simply still just overlooking things and I'll get a professional involved.

    It's insane to me that inputting everything but not checking that one box meant I was going to just owe $8,000 and everyone would have just happily accepted that and moved on.

    The clusterfuck that is taxes in DC/MD/VA continues...

    PSN: mxmarks - WiiU: mxmarks - twitter: @ MikesPS4 - twitch.tv/mxmarks - "Yes, mxmarks is the King of Queens" - Unbreakable Vow
  • SyphonBlueSyphonBlue Registered User regular
    edited February 13
    mxmarks wrote: »
    Just an update as I continue to navigate why I owe so much in state taxes:

    I went and looked at WHERE my state witholdings were going and saw it was to VA. That's where my company's HQ is.

    Going back into Turbo Tax, and adding that I "worked, but never lived" in VA suddenly gave me the ENTIRETY of that back.

    So I still owe $2,000 now, but this gives me hope that I'm simply still just overlooking things and I'll get a professional involved.

    It's insane to me that inputting everything but not checking that one box meant I was going to just owe $8,000 and everyone would have just happily accepted that and moved on.

    The clusterfuck that is taxes in DC/MD/VA continues...

    Wait how the fuck

    Did your company give you the wrong state's W4? If so, you need to go berate your HR people. I've been living in MD and working in VA/DC for 8 years and have never had this happen before.

    SyphonBlue on
    LxX6eco.jpg
    PSN/Steam/NNID: SyphonBlue | BNet: SyphonBlue#1126
    a5ehrenJragghenElvenshae
  • a5ehrena5ehren AtlantaRegistered User regular
    edited February 13
    Yeah, your company should have no problem giving you the correct state's tax form based on your address.

    Now you get to think about how many years' worth of amended returns you can file to get that money back from VA!

    a5ehren on
    JragghenLaOsTofystedeth
  • BlarghyBlarghy Registered User regular
    So browsing around on Google has produced very vague results about IRS auditing on Schedule C Car and Truck expenses. The general sentiment is that the IRS loves to Audit Car and Truck expenses so I'm wondering what you all think about these issues:
    1. I've read some websites that say that Google maps is no good and you should never use that as evidence for you mileage, while others have said it's ok.
    2. (Related to #1) Some websites say you cannot claim non-business errands such as grabbing a cup of coffee along the way. So does this mean that I cannot calculate any mileage after I take a detour? Or do I include the mileage from Google Maps that would indicate what route I would have taken if I hadn't taken the detour for coffee? Basically, I've calculated mileage based on my odometer, but I worry that's not enough if the IRS have a problem with me taking detours particularly since it's not the same mileage for every trip to the same location.
    3. Question 46 on Schedule C asks if you have another vehicle for personal use. Does this mean I can never use my personal vehicle for business use? Sometimes my car was unavailable (in the shop, etc.) and I had to use my wife's car. Will they have a problem with that because it wasn't my "business" vehicle?

    -Google maps isn't the best source for your mileage. While you could potentially use it to fill in the blanks if you forget to properly track your mileage via a dedicated app or log book on a particular trip or two, if its your only source and you get audited, its up to the auditor to determine if your map usage is trustworthy. If the rest of your documentation is poor, you're looking at an uphill battle. You should do it properly, Google Maps -is- evidence, but not sole evidence. Its best as backup corresponding evidence if your main logs are questioned.

    -Strictly technically speaking, you should account for personal detours as personal mileage separate from your business mileage. As in, if you detoured 1 mile out of your way for personal business on a 20 mile trip that was otherwise for business, you can claim 19 miles. Strictly technically speaking too, you should be reporting that quarter you found laying on the sidewalk as income as well. Whether it is material overall is something you need to decide. It is understood that sometimes trips to the same location might take extra miles based on route and detours. If you drive an extra half block to pick up a coffee, unless you've really pissed off your auditor, no one will care if you don't make it an issue yourself.

    -Mixed use vehicles make things more complicated (for you), but can be claimed too.

    DisruptedCapitalist
  • DisruptedCapitalistDisruptedCapitalist rugged, weathered Registered User regular
    Yeah, I first looked to Google because the numbers on my own records seemed off. then I saw how accurate it looked, I was delighted and starting using it more. But then I saw that I had taken a bunch of "detours" that I had forgotten about. So now if the IRS thinks my records look off I've got the maps to help out, but then the "detours" might just make each trip invalid (since I didn't record specifically when I left my route, and when I returned to it...) I guess I'm just going to have to remove the trips that have detours to avoid any auditing problems.

  • zepherinzepherin Registered User regular
    SyphonBlue wrote: »
    mxmarks wrote: »
    Just an update as I continue to navigate why I owe so much in state taxes:

    I went and looked at WHERE my state witholdings were going and saw it was to VA. That's where my company's HQ is.

    Going back into Turbo Tax, and adding that I "worked, but never lived" in VA suddenly gave me the ENTIRETY of that back.

    So I still owe $2,000 now, but this gives me hope that I'm simply still just overlooking things and I'll get a professional involved.

    It's insane to me that inputting everything but not checking that one box meant I was going to just owe $8,000 and everyone would have just happily accepted that and moved on.

    The clusterfuck that is taxes in DC/MD/VA continues...

    Wait how the fuck

    Did your company give you the wrong state's W4? If so, you need to go berate your HR people. I've been living in MD and working in VA/DC for 8 years and have never had this happen before.
    It's more common with small govt contractors. They just don't know how to do it well. Once they have multiple sites in multiple states they tend to get it right.

    My wife got totally fucked by this before, and she ended up owing like 6k for MD and local taxes and fees because they didn't withhold nearly enough. I almost got fucked by this but I fought the good fight because of my wife's experience and they got it mostly right.

  • KleinKlein Registered User regular
    At the end of the last year, I moved to a new state, and I was unemployed for a few months while I waited for my position to start. I did not work during this time and received no income. Do I still need to file taxes for that new state?

  • zepherinzepherin Registered User regular
    Klein wrote: »
    At the end of the last year, I moved to a new state, and I was unemployed for a few months while I waited for my position to start. I did not work during this time and received no income. Do I still need to file taxes for that new state?
    It depends on the states.

    In most cases, I think you have to apply a non resident state return for the state you worked.

  • MugsleyMugsley Registered User regular
    a5ehren wrote: »
    Yeah, your company should have no problem giving you the correct state's tax form based on your address.

    Now you get to think about how many years' worth of amended returns you can file to get that money back from VA!

    Fun fact: I live in DE and work in Philadelphia. Our (fed govt) HR department assumed that DE and PA have a reciprocal agreement; similarly to how PA and NJ have an agreement. They do not.

    I discovered this about 4 years ago, and had to file amended returns to PA and DE for the preceding 3 years, so I could get the numbers right. That was a fun year. (the numbers worked out to be a wash for taxes owed between the two states)

    Since then, I had my taxes updated to pay $25 per paycheck to DE state taxes (after consulting with a CPA in DE) and I've come out not owing since then.

Sign In or Register to comment.