22
votes
Does every US state set its standard deduction to match the federal one? Why?
Most States "conform" to the Federal tax code and basically say "whatever is income or deductions for Federal - is also for us", but not all. Some States conform to a specific ...
- 148k
17
votes
Accepted
How to deduct a loss from an investment that went bankrupt?
You may want to consider consulting a tax attorney for this. This is, for the most part, new territory with a lot of gray area in the tax code.
You can claim worthless securities as a loss on your ...
- 2,525
13
votes
When to claim check dated in one year but received the next
When you deposited the check is not important. Because if that was true and you knew the tax rates were going down significantly in January you could hold all your December checks and maybe even your ...
- 125k
12
votes
Accepted
How to handle a hobby that makes income in US
You report hobby income as miscellaneous income on line 8z of Schedule 1.
TCJA has eliminated the hobby expenses deduction for the years 2017-2025. It was on Schedule A as a miscellaneous deduction ...
- 148k
10
votes
Does every US state set its standard deduction to match the federal one? Why?
It simplifies taxes if they do.
The Federal tax code has a complex process by which you arrive at tax. Frankly, this process is most of filling out a tax form, with dozens of supplemental schedules ...
9
votes
When to claim check dated in one year but received the next
Quoted from https://www.irs.gov/pub/irs-wd/06-0005.pdf (2006):
Generally, we consider checks income to a cash method taxpayer in the year he or she
receives them unless constructively received in an ...
- 99
8
votes
Accepted
Does every US state set its standard deduction to match the federal one? Why?
I live in Virginia. When the Federal government almost doubled the standard deduction and removed the personal exemption, some states made a similar change to the standard deduction. The legislature ...
- 125k
6
votes
Accepted
Underreporting expenses to get social security credits
She'd be paying SECA (15.3%) on that additional income, plus whatever Fed+state taxes apply based on your joint income (or separate income if MFS). If her income is always going to be low, she may ...
- 2,525
6
votes
Accepted
Can Uber drivers deduct daily car washes on their income tax?
Expenses are only deductible to the extent that they're ordinary and necessary (See the IRC Sec. 162(a)).
What is "ordinary" and what is "necessary"? The IRS Taxpayer Advocate says ...
- 148k
6
votes
Accepted
Can a single file tax as "married file jointly" to take advantage of more standard deductions?
As the other answer states, tax returns are filed under the penalty of perjury. This is governed by the 26 USC Sec. 7206 (Title 26 of the US Code is also known as the "Internal Revenue Code",...
- 148k
5
votes
Withholding as single and filing as married jointly: question after W4 changed?
It is allowed, and a lot of people do it. They may have advised that to you based on the "muscle memory" - that was the easiest way to make adjustments until the new form and IRS calculator ...
- 148k
5
votes
Does every US state set its standard deduction to match the federal one? Why?
More generally, does any U.S. state (with an income tax) choose to set its standard deduction differently from the U.S. federal income tax's standard deduction? If not, why not?
Illinois has no ...
- 31.1k
5
votes
When to claim check dated in one year but received the next
You always record a payment to you when you receive it. The only exception is paychecks which are dated on the same day as the check was issued.
So, in your example the money is recorded as a credit ...
- 9,662
4
votes
Independent contractor taxes with J1 visa
Should I pay taxes for the April-June compensation in the US?
Of course. This is US-sourced income that is not related to your J-1 job. It doesn't matter where the employer is, what matters is where ...
- 148k
4
votes
Can a single file tax as "married file jointly" to take advantage of more standard deductions?
NO. Read the line above your signature on the tax return. "Under penalties of perjury ..."
- 1,718
3
votes
Withholding as single and filing as married jointly: question after W4 changed?
If you're more comfortable using the IRS withholding estimator, do that. And if a significant portion of your income is supplemental (bonus, RSUs, NSO exercises, etc.), self-employment with no ...
- 2,525
3
votes
Accepted
Unmarried couple, DCFSA without claiming the child?
Your scenario is covered by Pub 501 tiebreaker rules, in Example 8:
Example 8—unmarried parents. You, your 5-year-old child, L, and L’s other parent lived together in the United States all year. You ...
- 47k
3
votes
Accepted
If the highest federal marginal tax rate is 33% and the highest Ontario provincial marginal tax rate is 13.16%, why can marginal rate by 53.36%?
Ontario appears to operate a "surtax".
So you pay the headline Ontario income tax, plus an extra 56% of that tax above a certain level. This effectively means that those with high enough ...
- 27.2k
3
votes
Can a single file tax as "married file jointly" to take advantage of more standard deductions?
Can a single file tax as "married file jointly" to take advantage of
double the standard deductions?
It is of course not your correct status, so that would mean you would face fines and ...
- 125k
3
votes
Tax Reporting for Teen Freelancer using PayPal and Outsourcing Work: Necessary Steps?
Whether or not there's any form 1099 is irrelevant, taxable income is not defined by a form.
#2 is a business deduction. If you're subcontracting some work to someone else you get their details ...
- 148k
3
votes
IRS Notice LTR 105 C Disallowed claim
You filed a return as single when you were married. That's bad. If you're married you can only file MFJ or MFS, you cannot file single. ITIN has nothing to do with that, you could have filed MFJ and ...
- 148k
3
votes
Accepted
Declaring foreign interest in 1040 and FBAR
You would need to report foreign interest the same way you would report US interest, i.e. on Form 1040 line 2b, and if you need to file Form 1040 Schedule B, you would list the items of interest ...
- 16.4k
2
votes
better understanding wash sale rule
Question 1:
Day-2 is a wash sale that requires that the cost basis of the replacement shares bought on Day-3 be adjusted by the loss incurred on Day-2. Day-4 realizes all losses and they can be ...
- 75.5k
2
votes
Accepted
better understanding wash sale rule
In a comment you mentioned you were unclear about the situation where the 2nd purchase is done just before the 1st sale. This provision is to close a very big loophole.
There is a flaw that you see ...
- 125k
2
votes
better understanding wash sale rule
#1. That's right. When a wash sale occurs, the "loss" gets added to the cost of your new purchase. What might be confusing you is that, counter-intuitively, wash sales only happen when you ...
- 1,292
2
votes
I'm self employed and I 1099 someone on my Schedule C. This person also happens to watch my kids as daycare, can I double dip the expense?
First, a note: I don't know whether it is proper or not for you to deduct child care expenses as part of your business expenses on your Schedule C. However, since you aren't asking about that, the ...
2
votes
HSA and Concierge Medicine
The expenses eligible for HSA are generally the same expenses eligible for deduction. The HSA-related IRS Pub. 969 refers to the IRS Pub. 502 on deductible expenses for that matter.
It is unclear what ...
- 148k
2
votes
When to claim check dated in one year but received the next
The income is taxable when it is actually or constructively received. However, the concept of constructive receipt is sometimes complicated.
Consider the 1987 case of Baxter v. Commissioner of ...
- 16.4k
1
vote
Accepted
How I get federal tax extension granted proof when Form 4868 was mailed?
No. Every mailing to the IRS should be done via certified mail, which gives you proof of mailing. Alternatively you can file this specific form online. The extension is automatic, you don't need it to ...
- 148k
1
vote
Can I combine lines on my 1099-B if the basis and dates are the same?
If neither exception applies then no, you cannot. You need to report each transaction separately.
"This is fine" is contrary to the instructions and the IRS guidance. However, if you ...
- 148k
Only top scored, non community-wiki answers of a minimum length are eligible