88

TL/DR: Basing your life on current tax law is foolish. Tax laws will change. Personal finance is largely about emotions and behavior: math plays less of a role than one might think. Seeing a lawyer for common transactions might encourage one to marry just to avoid using a lawyer. Your question also represents the misunderstanding that much of personal ...


45

Let’s start with your last question first: Do I even need to report it? Yes, you are supposed to report it, as this is considered income. It was not simply a gift, because you did do some work in exchange for the money. Having said that, I will point out that, because it was all in cash, it is unlikely that the IRS would ever find out about it if you did ...


23

In addition to Pete's answer outlining the legal and other benefits of marriage, I would add the financial benefit of being able to transfer money and assets between the spouses without incurring gift tax. This could greatly outweigh the higher taxes.


22

If you have not (and will not) file your taxes for 2018 or 2019 then the only way to receive the check is to file for 2020 next spring. The check is actually an advance on a 2020 tax credit, so you can take it now or later. However, for this year you have until July 15 to file your 2019 taxes. Even if you have $200 in income for the year, might as well file ...


17

There are two types of items that reduce your income tax: deductions and tax credits. With a deduction, you subtract the deduction from your income before the tax is calculated. The benefit to you with a deduction is dependent on your tax rate. So if you are in the 22% tax bracket, a $6000 deduction would ultimately be worth $1320 to you. With a tax ...


15

Generally the IRS processes your return as soon as they can. So unless there is an issue that causes them to have to stop processing returns you will get your refund in a few weeks. It does depend on direct deposit vs paper check. Usually each year they set a date in January or February when they will start processing returns, but if you file after that ...


14

Its important to note that the minimum threshold of income to be required to file your taxes ($12,200 for a single filer under 65) is just that, a minimum to be required to file, not the minimum where filing is an option. If you so choose, you can file your taxes with $0 in reported income (or some small amount of money from your odd jobs in your specific ...


11

I'll add an answer from the numbers point of the view - what exactly is the potential inefficiency? This answer's going to use the 2019 Tax Computation Worksheet for taxable incomes over 100k, and checking the difference between two incomes filed separately versus one filing jointly. Let's get started! T-Income A T-Income B Inefficiency Amount 100k ...


10

Is that really accurate? You need to find the 1099-G forms that you should have received from the state. It is possible that it didn't get to you because in another question from a year ago you mentioned that you worked in several states. The IRS did get a copy of the 1099-G and are now reconciling all the forms they received with the SSN numbers to make ...


10

The sooner you file your tax return, the sooner you’ll get your refund. This has not changed, and there has been no talk of delaying tax refund payments.


9

Children. It's really that simple. It sometimes transcends money at that point. Edit: In response to the 18 upvotes on a "care to explain" comment, there are plenty of legal protections and rights that are established automatically for legally married couples when they have kids. Since laws are free to change, sometimes drastically and due to court ...


7

One good reason is that your spouse can not be forced on the stand in court against you. Your spouse should be someone you are able to trust and be open with. This gives your the legal ability to do so without worry. Money is less important than trust.


6

Social security and medicare taxes are still levied on 401k contributions at a total of 7.65%. Looking at your table, ($496 + $116)/$8,000 = 7.65%. Federal taxes were 22% of $1,200 (0.22 x $1200 = $264) which is inline with IRS rules, as pointed out by users in the comments. State taxes look like they are levied on the $1,200 as you expected. But, you can ...


5

Yes, the deadline for making contributions to Traditional IRA and Roth IRA for 2019 is now July 15, 2020. See this IRS FAQ: Q17. Does this relief provide me more time to contribute money to my IRA for 2019? A17. Yes. Contributions can be made to your IRA, for a particular year, at any time during the year or by the due date for filing your ...


5

First, let me clear up a misunderstanding in your question. Is there a way to check with the IRS to see if they indeed receive my file as Exempt and if they did actually return it to my Employer? I’m just wondering if either HR forgot to follow up with me or even IF the IRS does actually cull these exempt requests in the first place? The W-4 form does ...


5

My calculation is £13,475 for the dividend tax amount. I don't understand why your accountant has given you a figure quite as high as £16.5k. Here are my workings… First, income tax – as this affects how your dividends are taxed subsequently: Total salary Personal allowance Taxable salary Tax rate Amount of tax 26,500 12,500 ...


5

You cannot attach documents; but you don't need to. The IRS assumes all data entered in the forms is correct, and you have the respective documents; your tax is decided on that basis. Only if they select you for an audit, they will contact you, and then you need the recipts, W2s, etc. So keep all orignals secure (for 6 years), and file your taxes without ...


4

Comparison shop two employers' health insurance total costs. Before kids, two singles on the plans our employers offer was slightly cheaper than one family, but now that we have a kid, we are better off under one family plan than a single and head of household on the order of $40 per biweekly payroll period, approximately $1000 a year. My employer's ER and ...


4

This is probably why: Self-Employment Tax Rate The self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance). So you're probably not paying any Federal Tax, but you still have to contribute to other taxes. $462 is less than 13% of ...


4

401(k) plans are, for the most part, funded by voluntary deferrals by the employee, that is, you have to make a conscious effort to do something to put money into your 401(k). It used to be that the deferral was entirely voluntary, but so many people were ignoring the opportunity that the Government changed the rules to make a small percentage mandatory in ...


4

You cannot attach documents on free fillable forms, except those which are built into the program. From the website: General Program Limitations Attaching Statements- This program does not allow you to attach any documents to your return, except those available through the Add/View Forms menu. If you need to attach any such documents, you will ...


4

I filed electronically on March 22 and received the refund (direct deposit) 7 days later.


3

A prize is not income, in general. According to the Government of Canada, When the prize has been received as a gift, it is not included in computing income at the time of receipt. However, the recipient will be deemed to have acquired the prize at its fair market value pursuant to paragraph 69(1)(c), so that a subsequent disposition of the prize will ...


3

Notes: (a) I am not an accountant nor a financial adviser; this is not financial advice. (b) I had all but written this answer when Mark edited his answer to include my correction regarding the Dividend Allowance. As I hope my "visual" representation may be useful addition, I decided to post (a slightly modified version) anyway. But the main credit should go ...


3

The total tax you will pay over the course of the year [from withholdings + a final tax bill] is based on your income, not your source deductions. Whether your deductions are correct or not will not impact the total amount of tax you pay. So you say you "I don't feel like I should be entirely responsible for a $5k-$6k tax liability for a HR clerical error". ...


3

The CRA page about T2125 business expenses shows this about Line 8810 - Office Expenses: You can deduct the cost of office expenses. These include small items such as: pens pencils paper clips stationery stamps For Line 8811 - Office Stationary and Supplies, it says: You can deduct the cost of items the business used to provide ...


3

AGI actually stands for Adjusted (not Annual) Gross Income, so that may be part of your problem. The IRS recommends you use the 'Return Transcript' for AGI. Search for ADJUSTED GROSS INCOME or ADJUSTED GROSS INCOME PER COMPUTER (hopefully they match). For me it's about a third of the way down the second page. There is a return transcript for each year. The ...


3

Yes, unemployment is taxable. You didn't specify a state, so here's what Maryland says: Are unemployment insurance payments taxable? Yes. Any unemployment insurance benefits that you receive must be reported as part of your gross income for both state and federal tax purposes. To assist you in filing your tax returns, we will send you an IRS Form ...


3

Is that really accurate? Your sheet shows an income that would put you in the 24% marginal tax bracket in 2018 The tax is $1668 on almost $7000 of taxable income, not $6000. That is 24%. The extra $89 interest. So yes, it is accurate. You seem to not be disputing the unemployment payment amount. Is the interest income accurate, about $1000?


3

Unfortunately it sounds like you won't be getting anything, even if you file a return with no income. You said in a comment that your father pays more than 50% of your living expenses. This means he can claim you as a dependent, which means you are ineligible for the stimulus check. Note that even if he does not claim you, you still can't get the check. The ...


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