New answers tagged

1

Yes, that sounds like a fine plan. In the case of a traditional IRA, making a trade and then not paying taxes on the gains is like getting an interest free loan in the amount of the taxes you would have paid. You can then invest that money and earn a return on it, eventually repaying the loan when you withdraw the money at retirement. All the returns you ...


1

I sold a rental property this year and it's going to move me up in the tax brackets... I have some crypto I want to sell off and put into silver and gold but I'm not sure how much to put into savings because this tax system seems so confusing. I'm not looking for an exact answer if it's not trivial, just maybe some guidance on where to look. Since this is a ...


1

SPECIAL NOTE: THIS IS ONLY FOR SINGLE-FILING TAX STATUS. IF YOU ARE A COUPLE, IT WILL BE DIFFERENT! SPECIAL NOTE 2: TAX BRACKETS ARE GRADUATED. MAKE SURE YOU UNDERSTAND HOW BRACKETS WORK BEFORE PROCEEDING This is the long-term capital gains tax brackets: You can find it here: https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates#:~:text=In%...


3

If the 1099-MISC would be $600 or more they have to send it to you and the IRS. They have to do this so they can claim the expense on their taxes. But if it is less than $600 they are allowed to submit the 1099-MISC. Even if they don't send a 1099-MISC, you still have to account for the income on your tax form. So even if they didn't send you a 1099, you ...


6

It's up to the bank's policy whether they send it out if you're under the $600 threshold, but either way, you still have to report it on your taxes. Doctor of Credit has a list of which banks report and which don't.


2

It depends on your income. The capital gains rates for long-term gains are 0%,, 15%, and 20%, depending on income. From the IRS: Capital Gain Tax Rates The tax rate on most net capital gain is no higher than 15% for most individuals. Some or all net capital gain may be taxed at 0% if your taxable income is less than $80,000. A capital gain rate of 15% ...


1

The IRS hears about when you sell a security, not when you move money around between your own accounts. The capital gain is realized when you sell, and that’s when you pay the tax. This is no different for short term gains, where you’ll pay the income tax rate, than for long term gains.


1

If you don't need to register for VAT, you don't need to put it in your invoice. It's normal for a business to be unprofitable at first if you have a good reason, e.g. if the quite expensive equipment can be used for more jobs to generate profit over time.


3

It's a very difficult question to answer - it becomes political in nature, and the nature of definitions used can massively swing the data. I've spent ages and years trying to find this sort of data. There area number of problems: One instant practical problem. One ridiculously stupid thing is that in some countries, there are taxes that have "a ...


0

If your goal is to avoid short-term capital gains tax you could buy a put + sell a call on VT (same strike/maturity, i.e. a synthetic forward) and buy a call (+ sell a put or put spread, if your option agreement/risk tolerance allows) on VEU with maturity dates far enough in the future that you'll have held your VT position for over a year. The main risk ...


2

Seems to fly into the face of the many articles that say "never take out a 401K loan". You need to look at the date of the articles. The Trump tax plan removed some of the gotchas with 401K loans. Mainly you now have at least a year to pay back the loan, when you leave an employer, where you only had 30 days (IIRC) previously. Most people ...


3

There may be little practical difference between these options. First, you shouldn't count the entire capital gains tax as a cost of liquidating investments, because if you opt for the loan and don't sell now, you'll probably owe capital gains tax anyway whenever you sell later. Or to put it another way, without a 401(k) loan, the money you'd otherwise use ...


7

You can't "exchange" one asset for another similar asset, if the asset you hold is a stock. If you instead wanted to do this for investment real property (not a residence) or a business, you'd possibly be able to pull off a 1031 exchange (a "like-kind" exchange). Even this is very complicated (I don't have experience with it).


1

According to this Journal of Accountancy article: If the employer discovers the error after the calendar year of the wage payment closes, the employer also provides the employee and the Social Security Administration a corrected Form W-2 (Form W-2c) reflecting additional FICA earnings, if applicable, for the prior year and FICA tax withholding as if the ...


2

You not only have to create a CreditKarma account to receive the tax refund, but if you want to receive the $50 bonus and to be eligible for entering the $50K sweepstakes, you also need to arrange for direct deposit of your paycheck into the new CreditKarma account. So, Yes, you could get an extra $50 bonus over and above what your regular bank account will ...


6

CreditKarma is an Intuit product that, among other things, offers a high-yield savings account. They are, essentially, promoting another of their products within the one you're using. Note the footnotes 1-4 (which aren't in your screenshot). You would need to create a CK account if you don't have one, you'd essentially be opening a savings account with them. ...


28

In the US we deduct certain things from income to calculate how much of our income is taxable. Rather than have everyone list out all applicable deductions people can choose to use a standard deduction. The amount of the standard deduction varies by year based on filing status and whether or not the filer is a dependent. Regardless of your filing/dependent ...


0

FOR US -- or more exactly, for persons considered tax residents of US, which is not always the same thing as actual residence -- "legal winnings ... not usually taxable" is quite wrong. All lawsuit awards or settlements are taxable except compensatory (NOT punitive) damages for physical injury or sickness. Pub 525 says The character of the income ...


1

Sometimes cost basis and dates take a little longer to post to the receiving account than the positions themselves. Just give it a few weeks and that information should eventually appear in your Ally Account. If not, contact Ally. I transfer positions between my Fidelity and Interactive Brokers accounts all the time, and this always happens in one direction ...


1

Quoting from this Bankrate article: Are business loan payments tax deductible? In short, business loan payments aren’t tax deductible. When a business loan is received by a company, it’s not included as taxable income. In turn, when that loan is repaid, you are not able to deduct loan principal payments. You are simply paying back money you borrowed, not ...


4

Paying back a loan is not an expense - only the interest would be an expense. The rest would be profit that is taxable. If you used the $1M profit to pay salaries, and paid back the $1M from the cash that remained, then you'd have zero net income and pay no taxes.


1

The question is asking: in your Form 1040, was there no income (interest, dividends, royalties, other income, gains), deductions, or credits that specifically pertain to this foreign financial account? For example, for your foreign investment account that made $500 in dividends last year, you would have reported this interest as income on Line 2b Taxable ...


4

You probably won’t be getting any tax forms from them, but it doesn’t matter. Your business needs to declare all of its revenue, whether you get a 1099 or not. Add in whatever they paid you in 2020 to the other freelance revenue you had when you do your taxes.


3

You can only make an HSA contribution for 2020 if you had an HDHP for all or part of 2020. If you had an HDHP for only part of 2020, your HSA contribution limit for 2020 will be proportionally reduced (unless you are using the last-month rule where you had an HDHP since 12/1/2020 and will maintain an HDHP until 12/31/2021, in which case you can contribute ...


4

You may be overthinking this. From a tax standpoint, your situation isn't conceptually much different from buying a used car for $1000 and selling it the next day for $1200. The key is going to be good documentation. Use some sort of spreadsheet or software to keep accurate records of every transaction you make. I assume you'll be splitting profits with your ...


1

Because you did not become an HSA eligible individual until 2021, you cannot make any HSA contributions for 2020. If you had been HSA-eligible in 2020 and had simply waited to open your HSA until 2021, then yes, you could have made prior year contributions. But if you try to determine your 2020 contribution limit, you will see that your prorated limit ...


-7

This is a very well-known scam. Be aware that when you fall for a scam there are two disastrous outcomes, You become listed - there's literally a scammer's database of "unbelievably stupid idiots we have been able to scam". You then become subject to far more serious criminal activity, in particular, house robbery and physical attacks. Be aware ...


1

Assuming it isn't a scam, because you said you have known them for 15 years. Assuming that the opportunity for that 18% gain is also true. You are proposing the following: You buy $1,000 in bitcoin. You transfer it to your friend. They sell it for KRW equivalent to $1,180. They don't owe any tax on the gain. They convert to back to USD, and transfer the ...


0

Have you met this friend in real life? This sounds exactly like a scam. Bitcoin doesnt substantially vary in value from place to place save a few countries who heavily restrict it. Beware and double check this really is a friend and not a scammer. Even if it was not directly a scam this could easily.be a money laundering scheme you could get in serious ...


3

Every day is the end of a year The Earth is at the same point in its orbit from where it was a year ago every single instant of every single day. Choosing which one to observe as “the end of the year” (calendar or fiscal) is completely arbitrary. 31 December as the end of the year was adopted by Julius Caesar when he introduced the Julian colander, however, ...


0

One mistake I made was that for my age, the limit for backdoor conversion was $6,000 but I accidentally converted all of $7,000. The $6,000 limit is for contributions. There is no limit for conversions. Since the 1099-R only references a conversion of $7,000 that means that theee were no gains or losses. Don't worry that the form 2a has a value of $7,000, ...


0

I traded options and believe had several wash sales. Does it matter if they're puts or calls or sell to close or expired? Individually, it doesn't matter what type of security you traded. It doesn't matter whether it was buy to close or sell to close or the options expired. What may matter is if a loss was realized and if substantially identical ...


0

Life insurance is supposed to secure the beneficiary in case of early death. For covering that risk, the insurance company takes a significant chunk out of the contributions. Using a life insurance as 'savings' is a very poor investment, and easy to beat. Any advisor (that doesn't get a bonus based on life insurance sales) will confirm that. However, a lot ...


4

Yes, just like any other capital gains, they will offset, assuming they are sold in the same year. Note that with rental real estate you will pay depreciation recapture, and your basis is lowered by the depreciation, which makes it more likely that you'll have a capital gain.


4

Yes, absolutely you can skip estimated tax payments for 2021. Of course, you could end up owing a lot when you file in early 2022, especially if you're earning self-employment income, so make sure you save plenty to be able to pay what you owe then.


3

If we're talking about an estate of only a million dollars, there will be no estate tax due so there is no point in trying to avoid estate taxes. Very, very few people in the US actually have to pay the estate tax. As of 2021, the current estate tax exemption is $11.7 million for a single person ($23.4 million for a couple). So long as your parents are ...


1

Sometimes privatization signals an attitude of less regulation going forward by governments, which is always welcome news to everyone in the affected sector. Allowing companies to be privatized opens investment in them, and they can focus on more profitable, efficient operational models and lines of business. Any company run by bureaucrats is almost ...


5

I think that 2008 was the last year before electronic filing took place. My 8949 form was 832 pages (over a ream and a half of paper!) and it took me all day to print it. Now, brokerage firms report 1099 and 8949 forms to the IRS and I just report the 8949 totals. I've never had a complaint from the IRS since 2008.


4

One way to get them there is to import them electronically - many brokers and most tax software support this. I got 2300 transactions from one broker imported (and submitted to the IRS) without a problem; but I can‘t tell you how TurboTax spread it technically on many pages, I never looked. Alternatively, you can total them for each category, and enter one ...


2

Asset monetisation is the process of unlocking the value of investment made in public assets which have not yielded appropriate or potential returns so far. The Minister informed that an Asset Monetization dashboard will also be created for tracking the progress and to provide visibility to investors. According to https://journalsofindia.com/national-asset-...


0

Are you completely set on selling the underlying position? A third option would be to roll the call up and out to a longer expiration with a higher strike to collect more premium against the underlying. That way you could avoid the large capital gains on the stock altogether while collecting more premium. Kind of a side step strategy so I apologize if that's ...


1

The wash sale rule, from investor.gov (emphasis mine): A wash sale occurs when you sell or trade securities at a loss and within 30 days before or after the sale you: Buy substantially identical securities, Acquire substantially identical securities in a fully taxable trade, or Acquire a contract or option to buy substantially identical securities. In ...


3

It's a term that refers to human productivity and experience. Here's a great definition for it from Investopedia: https://www.investopedia.com/terms/h/humancapital.asp They're saying they want to get people motivated to be productive again, basically.


3

The 2nd check is only since January 2021, you can still deposit the check. Do so ASAP. The first check is older. You should try and deposit it. The IRS sent the checks. You shouldn't claim on you didn't get them. Try to deposit them first. So what happens if the check was lost? the IRS has a FAQ, this is pulled from the FAQ related to the first check: Q F1....


3

The answer is right there in the article (bold added): What are government securities or G-Sec? Government securities are the debt instruments which are issued by the government to borrow money. It is divided into two categories namely, Treasury bills are short-term instruments. They get mature in 91 days, 182 days, or 364 days. Dated securities which are ...


5

It says so in the article: Reserve Bank of India (RBI) has announced that it will purchase four government securities (G-Secs) that amount to ₹20,000 crores. So G-Secs is just an abbreviation for Government Securities. What is this? This question is also answered by the article: What are government securities or G-Sec? Government securities are the debt ...


3

A full answer on whether it makes sense would need to look at a lot of specific factors that would impact the net benefit vs cost of incorporating in Canada. However some quick rules of thumb should be enough here. In short, the main benefit to incorporating in Canada is that you can defer about half of your total tax bill until you personally use the money ...


8

No. There are two parts to the stimulus payment: the advance refund (the "check") and the tax credit (in the case of the third stimulus payment, it's a tax credit for the 2021 tax year). For the advance refund, you received the correct amount; and for the tax credit, the lowest it can be is 0 (it cannot be negative). Let's look at the text of the ...


4

The reality is that, even if tax law allows them to hire you, the company can just decide not to hire you for the internship unless you do what they say. They may have their own reasons for not wanting to jump through the various hoops you are investigating, and for wanting to simplify their own bookkeeping by insisting that their interns be physically ...


21

The IRS has done a good job of creating a FAQ for each change in the tax law regarding these payments, they have even updated them as the situation has changed: From the IRS: Questions and Answers about the Third Economic Impact Payments — Topic H: Reconciling on Your 2021 Tax Return I received a Third Economic Impact Payment. Do I need to pay back all or ...


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