New answers tagged

1

TurboTax's Wisconsin state tax product is not as intuitive as it could be. First, I will answer your question simply and directly: In your situation, enter $0 here. You do not need to enter a negative number. In future years when you are asked this question, you will also enter $0. Now, here is the explanation for this confusing section, for anyone that ...


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You are on the right track, for tax purposes its all ordinary income at the end of 2016. If the free lance "employer" will withhold fed,state and local tax, then that takes care of your estimated tax. If they can't or won't, you will need to make those estimates and make payments quarterly for the fed and state tax at your projected tax liability. Or, you ...


0

You shouldn't file Form 8843, as you are not an exempt individual anymore. You are not an exempt individual as a student if you have been an exempt individual as a student for any part of 5 previous calendar years, which you have in 2009, 2010, 2011, 2012, and 2013. So in 2014 and later, you are not an exempt individual as a student. If you didn't get paid ...


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typically, your employer will automatically stop making contributions once you hit the 18k$ limit. it is worth noting that employer contributions (e.g. "matching") do not count towards the 18k$ employee pre-tax contribution limit. however, if you have 2 employers during the year their combined payroll deductions might exceed the limit if you do not inform ...


4

IRS Publication 502: Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body. Loan interest and fees do not meet this definition. Your loan interest and fees are a cost of the payment method you chose (a loan), not a cost of medical ...


5

Welcome to the workforce. The W-2 is the form on which your employer has reported both your income for last year as well as the taxes you've already paid. This form gets sent both to you and to the IRS. You will use the information on this form to complete your tax return. You generally get sent 3 or 4 copies of this form: one is for you to keep for your ...


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Is it liable for taxation in India? Taxation does not depend on whether to transfer money to India or keep it in GCC. It depends on your tax status. In a given Financial year; 1st April to 31st March, if you are outside of India for more than 182 days, your are Non-Resident Indian, NRI for tax purposes. If you are NRI, income earned outside of India ...


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I'd say it's part of the marketing/advertising budget.


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You probably should declare but in reality you won't be taxed as it mostly will be nowhere near the personal tax allowance. On a self employment view, the definition seems to include trading and businesses (e.g. trades person, flower selling business etc where you are a sole trader). Infact many self employed don't reach the tax allowance anyway depending on ...


0

Scenario: Ken contributes $20,000 in 2015 when the 402(g) limit is $18,000. Ken is not old enough to make catch-up contributions. Ken made $2,000 in excess deferrals which the plan must correct by refunding the excess and any allocable earnings. If the correction is made prior to April 15th, 2016: No penalty. The excess + earnings is refunded to Ken and ...


2

On the ITD website, on the upper-right corner, you will find Help>User Manuals>Response to Notice u/s 139(9). Just go through the manual to find the answers.


2

Yeah, it's kindof assumed that if you have to go to the client, you're not staying there forever. You deduct your mileage for the whole trip, including the part where you actually have to leave there and go back.


3

Some companies allow you to make a post-tax contribution to the 401K. This is not a Roth contribution. This can be money beyond the 18,000 or 24,000 401k limit. The best news is that eventually that money can be rolled into 1 Roth-IRA. Not all companies allow this option. One company I worked for did this automatically when you hit the annual max. Of ...


4

Yes, the penalty is the tax you pay on it again when you withdraw the money. The withdrawal of the excess contribution is taxed as your wages (but no penalty). Excess contribution cannot be added to the basis or considered "after-tax" (hence the double taxation). Note that allowing you to keep the excess contribution in the plan may lead to disqualifying ...


2

When you have too many deductions--especially high property taxes--this can trigger AMT, eliminating some or all of your ability to deduct them. This is affecting an increasing percentage of taxpayers. The first thing you should do is understand your situation using tax software. Increase and decrease your salary by a few thousand dollars and watch the ...


3

It would be better to use a bank account and have the refund deposited directly to it. But you said you never had a bank account, so that may be a problem. Another option is to have the refund check mailed to you, and you deposit it in your local bank, converting to your home currency (or not, depending on local laws). Generally, for another person to cash ...


2

I faced this situation a few years back. Property taxes where I live are paid in arrears, so at closing I had to settle on the property taxes that I owed which the buyer would have to pay. I e-mailed IRS TaxHelp (unfortunately no longer available) to ask how this should be handled on my tax returns. This is the response I got: If you are a cash method ...


4

For property tax, you deduct the tax in the year that you actually pay it. So if you paid property tax during the year in 2015, and then you paid property tax again in November 2015 at closing (even if it was just to your buyer), you can deduct the total amount on your 2015 taxes. When your buyer does his taxes, he will have to subtract the $5,000 that you ...


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How to pay remaining tax online even after notice u/s 139(9) of income tax? You have to pay tax online similar to the self assessment tax. This can be done via your bank Internet login. If your bank does not provide this you can pay using Income Tax website How to file ITR online again after paying above remaining tax online? File the revised ...


4

You can print them on any IRS-approved paper, you don't have to use pre-printed forms. The IRS publishes specifications for paper that is approved for use for these kinds of forms (109*, W*, etc). Here's the reason why it is important: Even the slightest deviation can result in incorrect scanning, and may affect money amounts reported for employees. ...


1

The publication is really clear about what counts as a day of presence. If it says "Don't count" - then don't count. Why are you confused?


1

That would result in varying rates of take-home pay for the employee, which many people are very bad at dealing with. Most people have very little 'float' cash from month to month, and their liabilities (food, commuting, rent/mortgage) are fixed from month to month. Varying income would result in cashflow problems and many people would end up taking out ...


4

Consider this scenario with random but not entirely unreasonable numbers: - Spouse A: AGI=$200K - Spouse B: AGI=$200K - Mortgage (both on deed and note): $2M - Interest: $80K/year Let's do the math for married couple A+B who just bought a $2M property (a 3-bedroom house in Mountain View, CA, say). Not unreasonable, I know people in exactly this situation. ...


1

There's only one tax treaty (the Indo-US tax treaty). You need to check what else may apply to you (probably nothing else, but you need to check based on your personal circumstances).


11

Whether someone needs to file a tax return for a given year is covered in a section at the beginning of each year's Form 1040 instructions, called "Do You Have to File?". Generally, if the income that year is below a certain threshold (this threshold varies depending on filing status, whether the person is claimed as a dependent, and other factors), then the ...


13

As long as the baby was born by December 31, 2015, he can be claimed as a dependent by his parents for tax year 2015. He should definitely be claimed as a dependent; it will save them money on their taxes, and there is no reason not to. The baby does not need to file a tax return, but he does need a Social Security number in order for the parents to claim ...


7

Regardless of the source of the software (though certainly good to know), there are practical limits to the IRS 1040EZ form. This simplified tax form is not appropriate for use once you reach a certain level of income because it only allows for the "standard" deduction - no itemization. The first year I passed that level, I was panicked because I thought ...


0

Should I go see a CPA? Not unless you are filing paperwork for a corporation. A CPA (Certified Public Accountant) is a certification required to file certain paperwork for a corporation. In any other situation, you don't need a CPA and can just use a regular accountant. You could conceivably go to a tax accountant, but unless you are doing ...


1

I went through this too. There's a safe-harbor provision. If you prepay as estimated tax payments, 110% of your previous year's tax liability, there's no penalty for underpayment of the big liquidity-event tax liability. https://www.irs.gov/publications/p17/ch04.html That's with the feds. Your state may have different rules. You would be very wise indeed ...


1

Just don't list it any more. No special reporting needed. Check if there's a checkbox for "account was closed this year" somewhere, I vaguely remember there used to be.


61

It is very helpful to understand that Free File is not actually "by" the US Internal Revenue Service (IRS). The IRS does indeed offer access to the program through their website, but Free File is actually a public-private partnership program operated and maintained by the Free File Alliance. Who is the Free File Alliance? Well, according to their members ...


26

Free File is not software by the IRS. Free File is actually a partnership between the IRS and the Free File Alliance, a group of tax software companies. The software companies have all agreed to provide a free version of their tax software for low-income taxpayers. According to the Free File Alliance FAQ, the Alliance was formed in 2002 as part of a ...


19

In the U.S., Form 1040 is known as the tax return. This is the form that is filed annually to calculate your tax due for the year, and you either claim a refund if you have overpaid your taxes or send in a payment if you have underpaid. The form is generally due on April 15 each year, but this year the due date is April 18, 2016. When it comes to filing ...


3

Since you did not treat the house as a QBU, you have to use USD as your functional currency. To calculate capital gains, you need to calculate the USD value at the time of purchase using the exchange rate at the time of purchase and the USD value at the time of sale using the exchange rate at the time of sale. The capital gain / loss is then the difference ...


5

Yes. In fact, it's explicitly mentioned in Publication 590-A that you can file before making the contribution, as long as you make the contribution before the deadline. Filing before a contribution is made. You can file your return claiming a traditional IRA contribution before the contribution is actually made. Generally, the contribution must be ...


2

Does this hold true with any other form of Tax? VAT? Income Tax? etc? On VAT at a broad level yes. However there are quite a few restrictions on type of good you can claim exemption on, where the good are purchased, generally if purchased out of state, VAT credits are not applicable. Further if the final goods are exempt from taxes, the VAT credits ...


5

The 401(k) limit comes from this paragraph: The reliefs available under this paragraph shall not exceed the reliefs that would be allowed by the other State to residents of that State for contributions to, or benefits accrued under, a pension scheme established in that State. What it says, in your case, is the US would treat the pension ...


3

If you have a one-time event, you are allowed to make a single estimated payment for that quarter on Form 1040-ES. People seem to fear that if they make one such payment they will need to do it forevermore, and that is not true. The IRS instructions do kind of read that way, but that's because most people who make estimated payment do so because of some ...


3

From the IRS instructions for Form 1065 (partnership return): Generally, a domestic partnership must file Form 1065 by the 15th day of the 4th month following the date its tax year ended as shown at the top of Form 1065. Filing late will potentially lead to a penalty from the IRS. There's also the general point of not wanting to draw bad attention to ...


0

Besides the interest interest earned through holding the funds in a Canadian bank account, it sounds like you may not be taxable since it was earned outside of Canada. In addition to the answer provided above, I would recommend you approach a CA or CPA to determine if there are any risks. If you decide to discuss with CRA, you may want to ask them on a no ...


0

You should consult a US CPA to ensure your situation is handled correctly. It appears, the money is Isreal source income and not US source income regardless if you receive it while living in the U.S. If you file the correct form, I suspect the form is 1040NR and your state form to disclose your income, if any, in 2015 and 2016, it should not be a problem. ...


0

as she is not a US person and has no US based income, she will not need to file any paperwork whatsoever with the IRS. I don't know if she has or will applied for an SSN. If she appears on your 1040, you may also need to include her SSN on your jointly filed tax return 1040. My question is whether doing this will complicate matters after we leave ...


4

In addition to what littleadv mentioned, I want to point out that you can use as an itemized deduction either state income tax or state sales tax. In a state without state income tax, like Washington, you would always choose to deduct state sales tax (although the state sales tax may not make your itemized deductions more than standard deductions, so it ...


8

Being incarcerated is irrelevant. You have to file taxes if you earn enough income to be required to file taxes. Most inmates won't earn enough, but it is quite possible you have income from other sources. The minimum income beyond which you are required to file depends on your filing status, your age, and the year. It's just below $10,000 for 2012, and now ...


4

If your itemized deductions on Schedule A exceed the standard deduction, then you can itemize your deductions and deduct the actual amount. State taxes are included in the itemized deductions (though excluded from AMT, but at these levels of income that's irrelevant). Thus you can deduct your California State taxes from your Federal income. It is not ...


0

To determine what your exemptions were in the past check an old pay stub. Every company that I have worked for has included on the pay stub the number of federal and state exemptions. Most people probably make them equal. But they don't have to be equal. Mine are not, because I have found that because my spouses income is variable the numbers needed to ...


2

Unfortunately, the tax system in the U.S. is probably more complicated than it looks to you right now. First, you need to understand that there will be taxes withheld from your paycheck, but the amount that they withhold is simply a guess. You might pay too much or too little tax during the year. After the year is over, you'll send in a tax return form ...


2

The three biggest areas you are missing are: State/local income taxes. Not all states have an income tax, but most do. In some cases the city or county may also tax your income. FICA is comprised of: a 6.2 percent Social Security tax and 1.45 percent Medicare tax other deductions by the company, many of which are optional but when offered almost all ...


3

What you want is the document called Publication 15 (Circular E). It's the IRS document that explains the withholding allowance of $4050 in 2016, and contains the tables that employers use to determine tax withholding for a given income. The value, $4050, is fixed, but its impact changes based on one's tax bracket. e.g. if you are single, and earn a ...


1

It is 4050 $ per allowance for 2016 (https://www.dinkytown.net/java/Payroll.html, far down under 2.)



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