New answers tagged

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It is considered additional income, so the 1% is added to your other income, and then the tax is normally calculated. You can imagine it as getting a raise in that amount, paying your taxes on the higher salary, and then making the virtual 'payment' in the original height to the car dealership. The net effect of this is a slightly increased tax rate on all ...


0

You will most likely pay around 30%, between standard income tax and payroll taxes. That is a good place to start. If you live in a state/city with income taxes, add that to the mix.


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Are there any US or Indian tax implications of us sending this amount of money on a recurring basis? I have read/heard we can send it as a gift with no issues? If you are transferring money to Parents bank Account in India; from US taxation it would be under gift tax, $14K per person. So you and your wife can transfer to your MIL/FIL and her Parents ...


3

Depends on the state, but in the case of Pennsylvania, it looks like you may be subject to PA state taxes (at least, local may depend on locality) depending on the circumstances. Several states - almost entirely states near NYC - tax income derived from employers located in their state regardless of where work is performed. Deleware, Pennsylvania, New ...


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As I understand it the usual rule is that the country you are "resident" in taxes you on your worldwide income but gives you credit for foreign tax paid. The country you are not normally resident in taxes you only on income from that one country. Note that residence for tax purposes can have different rules from residence for immigration purposes. At least ...


1

First off, if you need full financial profile information to compare between Contractor and Permanent income, I'd have a look at http://www.contractorcalculator.co.uk - they have a range of calculators, including full financial profile info for limited companies, and dividends calculators for how you run your pay scheme. Secondly, umbrella companies are ...


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Please correct me if I erred, but I thought to reproduce this post on ask.Metafilter.com (which I modify lightly) that exemplifies how a donation CAN reduce your tax bill. Agreed with all the answers before that in general: you don't "save" money by donating to charity, but there are a couple of corner cases. Suppose the following: You have no ...


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Typically, there is a 12% per annum interest rate (subject to change) applied on the overdue tax amount, calculated on a daily compounding basis.


2

You can take out the contributions to your Roth tax and penalty free. That's the good thing. Anything above the amount you contributed that you withdraw early will cost you ordinary income tax (which is higher than capital gains tax) plus a 10 percent penalty on that amount. So if you have $15,000 in the account and $5,000 is gains and you withdraw ...


2

You probably do. There may be some specific exclusions and exceptions under the tax treaty, but the general rule is that the country you do the work in (Mexico in this case) has the first right to tax your earnings. I'm sure your employer can help you with reimbursement for a tax consultation with a local licensed tax adviser on this issue, and even if not ...


4

For whatever it's worth ObamaCare is not a type of insurance or some specific plan. People seem to be in the habit of referring to individual policies sold through one of the state or federal exchanges as an ObamaCare policy. Healthcare reform set certain minimum benefits that must be present in all health insurance policies with some exceptions granted to ...


2

I would just take $2000 and multiply by your marginal tax rate, weight that between the 5 other people according to their share of the prize money and ask them to give you that. From your question it seems like you all have a good working relationship, I'm sure the other partners would agree to that. I think it's the simplest solution that is also fair and ...


6

Line 61 of the 2015 Form 1040 is labeled "Health care individual responsibility." If you are required to make a so-called "shared responsibility payment," you would do so on this line. The IRS has a chart called Health Care Law & Your Tax Return that explains all the different situations you might find yourself in regarding health care and what you ...


2

A simple option is to ask your teammates to send you their portion of the tax bill. This option makes everyone's taxes easier, especially since it is very likely that they have already sent in their tax returns.


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I would deduct all the other payments out as subcontractors, but I typically have all the paperwork and entities set up to make that applicable. In Turbotax I do this with as subcontracting expense under my business entity, but for the IRS the categories of the deductions do not matter This isn't tax advice, it is what I would do, and how I would defend it ...


4

Both California and the Federal Government allow you to exclude $250,000 (single) or $500,000 (couple) of profit. So in your case, $1.35M would be exlcluded (basis $850k plus $500k exclusion), plus any amount you paid for capital improvements (consult your tax accountant for details on that). Beyond that amount, the rest of the sale (so in your case, about ...


3

W4 has usually no effect on lump-sum payments. These are usually (unless the employer is feeling extremely masochistic) are under flat 25% withholding rate rule. So changing the W4 will likely have no effect. Confirm with your employer if they're using the flat withholding rate or actually doing the math with the regular allowances, which I doubt they'd do. ...


5

Washington State doesn't have a state income tax for individuals, so unless you've got a business there's nothing to file. Find out more on their website.


1

I called the IRS and they stated it may take up to 45 days to withdraw the cash, but the proceeds would be applied on the date of the filing (Or when the amount was stated to be debited). Federal and State taxes differ in timelines but as long as deadlines are met and proof exists IRS does not penalize.


2

No. Utilities and repairs to your own home aren't a deduction. An upgrade, a major renovation, might be added to the cost basis. For the rental half, are you saying the expenses are so large that they can't be deducted? In that case, they carry over to the next year. They shouldn't be lost.


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The state income/sales tax deduction is an itemized deduction, located on Schedule A. If this taxpayer didn't have enough deductions, the software would have chosen the standard deduction instead. If this is the case, then it wouldn't matter if they change the amount of the sales tax paid, because with the standard deduction, it would have no effect. Take ...


2

I just got hit with the late payment penalty due to a bug in the H&R Block tax program. The underpayment was only $2 and the penalty was a whopping 1 cent. The letter that informed me of the error also said that they did not consider the $2.01 worth collecting, the amount owed had been zeroed.


1

Years ago I mailed my personal tax return one day after the due date, and my check was deposited as normal, and I never heard anything about it. As an employer, I once sent in my employee's withheld federal taxes one day after the due date, and I later received a letter stating my penalty for being late worked out to be around $600. The letter stated that ...


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The IRS provides a little more information on the subject on this FAQ: Will I be charged interest and penalties for filing and paying my taxes late?: If you did not pay your tax on time, you will generally have to pay a late-payment penalty, which is also called a failure to pay penalty. You will not have to pay the penalty if you can show ...


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In practice the IRS seems to apply the late payment penalty when they issue a written paper notice. Those notices typically have a pay-by date where no additional penalty applies. The IRS will often waive penalties, but not interest or tax due, if the taxpayer presses the issue.


2

Assuming US/IRS: If you filed on time and paid what you believed was the correct amount, they might be kind and let it go. But don't assume they will. If you can't file on time, you are supposed to file estimated taxes before the deadline, and to make that payment large enough to cover what you are likely to owe them. If there is excess, you get it back ...


1

The decision whether this test is or is not met seems to be highly dependent on the specific situation of the employer and the employee. I think that you won't find a lot of general references meeting your needs. There is such a thing as a "private ruling letter," where individuals provide specific information about their situation and request the IRS to ...


3

Retirees are not treated any differently from anyone else. If you are resident in Canada for tax purposes (which you certainly would be if you lived there most of the year) then you are expected to pay tax to Canada (and BC) on all your income, wherever it comes from. With almost any other origin country in the world, living almost all your time in Canada ...


0

On the latest occasion that my income tax office sent me their (very long) printed guide to how to fill in my tax return, it specifically mentioned my not needing to include any documents or payslips when submitting the form. If one is an employee, the Inland Revenue will already know from PAYE all about your earnings, all of which are taxed at source ...


1

I see several interesting statement in your question. A. my only income is from my Employer B. I also receive employer stock (ESPP, RSU, NSO). However, employer withholds taxes for these stock transactions through my broker (I see them broken down on my W2). C. I have been subject to Alternative Minimum Tax. A implies a simple tax return. B ...


6

ADP does not know your full tax situation and while the standard exemption system (actually designed by the IRS not ADP) works fairly well for most people it is an approximation. This system is designed so most people will end up with a small refund while some people will end up owing small amounts. So, while it is possible that ADP has messed up the ...


1

You should talk to a tax professional in your area. It seems like you should start filing your returns. In the US there are certain income thresholds that need to be attained before a return is required, though it's often thought of as best practice to file anyway. Also in the US there are programs designed to encourage delinquent filers to begin filing ...


3

You appear to just have admitted to tax evasion. You need a lawyer. There's a good chance you don't actually owe any money, but you need legal advice. To be clear, you may well not have been obligated to file tax returns, but you have stated you had some income you didn't report, so there's really nothing else we can say other than recommend you seek legal ...


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I'd go with A. It would appear that your job with the university was short term and ended before the start of the current tax year on April 6th so neither B nor C are appropriate. Answering B or C will probably lead to you being overtaxed whilst answering A should allow the company to tax you correctly from the start.


0

I'm not a tax professional, but as I understand it, you are not expected to commute from San Francisco to Boston. :) If your employer has not provided you with an external office, then yes, you have very likely met the "convenience of the employer" test. However, to take the home office deduction, there are many requirements that have to be met. Do you ...


-1

If your employer does not provide you with a place to work but nevertheless expects you to get work done, then having a place to work is a condition of employment.


0

You can extend your federal tax return without an ITIN, and this extends your filing due date for the state return automatically. Check form 4868 (https://www.irs.gov/pub/irs-pdf/f4868.pdf). on page 3, it states: "IRS individual taxpayer identification numbers (ITINs) for aliens. If you are a nonresident or resident alien and you do not have and are not ...


1

Today, NCDOR was more helpful than before. They said that in such a case, you can write "Applied for" in the field asking for ITIN in your tax return. For payment of taxes, you can write a cheque, or pay by Money Order. Though, one must be careful here as without SSN or ITIN, you are not eligible to print a Payment Voucher, which is a regular practice.


2

The 1098-T is not an income statement. It is a statement of the tuition that was paid on your behalf. Normally, this form is used by the taxpayer to claim educational tax benefits. If you have no income, and if you did not receive any taxable scholarships or tuition reduction, you are not required to file a tax return. If your parents or someone else ...


1

Yes, you guys can choose to use Nonresident Spouse Treated as Resident and file as Married Filing Jointly. Note that this will cause both of you to become resident aliens for the whole year, which means your worldwide income the whole year will need to be reported on US taxes (and she can probably use Foreign Earned Income exclusion to exclude her foreign ...


0

As per section 91 of Indian income tax act you can claim the benefits of state tax http://itatonline.org/archives/dcit-vs-tata-sons-itat-mumbai-foreign-income-taxes-not-eligible-for-deduction-us-371-despite-bar-in-dtaa-credit-for-state-taxes-to-be-given-us-91-in-addition-to-federal-taxes/ I am also researching about social security tax & medicare tax - ...


5

Interesting question. I would say that if you only have one employer, have been employed by them for the entire tax year in question, and have not had any "off-nominal" circumstances (weird share scheme arrangement or something) then the information on your last payslip of the year and your P60 should be the same. I just checked mine for the last two years ...


4

The Form 1040 instructions have this to say about line 65: 2015 Estimated Tax Payments Enter any estimated federal income tax payments you made for 2015. Include any overpayment that you applied to your 2015 estimated tax from: Your 2014 return, or An amended return (Form 1040X). This is in the payments section of the tax return, ...


3

Yes, you are generally allowed to make contributions yourself to your HSA, even if your employer also made contributions. Let me explain further. The contribution limit for tax year 2015 is $3350 for individual coverage. (It is higher for family coverage, or for account holders age 55+.) The limit is for everything contributed to the HSA, whether it is ...


3

Claim it how? If I rent, I don't get to deduct rent on my Federal taxes, although some states offer a small deduction. If I own, my own house maintenance is just a cost like my other bills, not a deduction. The real issue is whether your father is handling the rest of this transaction properly. If he is your landlord, these are his costs and he should pay ...


2

There is no line on the 1040X for changing 8b because it isn't taxed directly. It's tax free. The only thing it is used for is determining the taxability of social security benefits. Rework the taxes with the updated 8b number. If any other values (taxable income or AGI, for example) change, then file a 1040X with the updated numbers that changed. If ...


1

The 2 months extension is automatic, you just need to tell them that you're using it by attaching a statement to the return, as Pete Becker mentioned in the comments. From the IRS pub 54: How to get the extension. To use this automatic 2-month extension, you must attach a statement to your return explaining which of the two situations listed earlier ...


0

Yes. Any changes needing to be made to an already filed return would be done with form 1040X. It sounds like line 8b is going to be smaller on their corrected return which should give them lower overall income. How did they originally file their return? If they used some kind of software, it is usually pretty easy to use the same software to prepare an ...


0

You met the Substantial Presence Test for 2015, so you would ordinarily be a resident alien for 2015. However, since it was your last year of residency, you may qualify to cease being a resident on the day you left (and thus be dual-status for 2015), if for the remainder of 2015, your tax home was in a foreign country, and you had a "closer connection to" ...


5

The IRS publishes an exhaustive set of explicit lookup tables in Publication 15 Determine the payroll period-weekly, biweekly, monthly, etc. For bonuses and exceptional payments there several options available. Determine your exemption, a function of the allowances you reported on W-4 and payroll period (and technically, citizenship status). Take the ...



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