New answers tagged taxes
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The account to or from which anything flows shouldn't matter for anything tax related. What matters is that it's correctly accounted for in the books. It's just generally easier to have a separation between personal and business funds if they're in separate accounts.
Also note this doesn't apply to all types of businesses. Bigger businesses tend to have ...
4
A Roth IRA is a tax sheltered Retirement account. It differs from a traditional IRA in terms of when taxes are paid.
It might help to explain by illustrating the two types of account:
With a Traditional IRA, you can pay money into it (subject to conditions) with money from your payroll without paying your regular income tax on the money (if you do, you ...
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Thank you very much for your precise answer, NL7.
I supposed that gift would be seen like an income by US Gov.
What I don't know is why broker is asking me to withhold a 45% ; I'll follow your advice and I 'll ask him.
1
You heard correctly that interest paid on NRE accounts in India is not taxable income in India. In particular, there is no Tax Deducted at Source (TDS) by your bank and sent to the Indian Income Tax Authority on your behalf, and you don't need to file any tax returns in India. But, if you are a tax resident of the US (different from visa status), your world-...
2
Stock exchanges reduce share price by the exact amount of the dividend on the ex-dividend date so if one does nothing and the security is held in a non sheltered account in the U.S. then all one would gain would be a taxable event and negative total return.
In a perfect world where you could sell at the close on ex-div eve and buy at the adjusted close the ...
1
You’ve gained 48 shares, but you’ve lost the dividend your 3,006 shares would have paid if you’d just kept them. Assuming the markets have priced it correctly, which they usually do, those are worth pretty much the same and your net gain is zero.
3
I'm assuming you have a qualified employee stock purchase plan (ESPP) and sell immediately after receiving the shares, which means you have what's called a disqualifying disposition. Selling only $1000 worth actually complicates things, so let's instead first assume you sell all shares. What should happen is the W-2 from your employer will report the ...
-2
This answer relates to the generic concept of capital gain and is not intended to be financial advice, and certainly not advice relevant to any particular jurisdiction.
Capital gain is a rise in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price. The gain is not realized until the asset is sold.
...
8
Having just done this, the tax benefits are minimal. We got married in December (to fit our schedules, not taxes), and have a big gap in salaries.
I think we got around an additional 2-3% of our combined income back in taxes, but it's only due to the split in our income (split 13%/87%) and the effect of progressive tax rates.
Overall, we saved a lot more ...
1
It is not a "gift" in the US tax sense. Employer gifts are almost always taxable income in the US. There are exceptions for certain fringe benefits, but something from your employer that is either cash or has a direct cash value is basically never tax-free as a "gift." Shares in a publicly traded corporation have a readily knowable price, so this is like ...
3
Certainly run the numbers both ways to get a rough idea. Would you hit the state and local tax deduction limit ("SALT") of $10K on your own? If yes my guess is that you're better off not being married this year since you'll be able to itemize, but maybe not once you're married due to the SALT limit staying at $10K for both single or married.
32
It's easy to get a rough but practical answer for this yourself. As an exercise, do your taxes now, estimating income or other factors through the end of the year, as if you were both single. Then do the same, but married filing jointly. Compare the results.
I was married last year (for the 2nd time) and did this comparison "for fun" (it didn't impact our ...
45
Generally there are tax benefits from filing as a married couple, specifically if one spouse has a very different salary. It can pull you into a lower tax bracket overall since everything (brackets, deductions, etc.) is roughly doubled, so one spouse gets the benefit of any "unused" margin that the other would not get to use as an individual.
That said...
...
3
If your business is not an LLC or a corporation, you cannot take charitable contributions as a business expense. (And as you don't give 1099's to corporations, I'm guessing you're not one.) Pay yourself from the business funds, then use this income to make charitable contributions. You then claim the deduction for charitable contributions normally.
Note ...
0
In addition to what @gnasher729 explained, you'll probably want not only to list what foreign income you had but also some more information.
if that foreign income was already taxed somewhere else, say what tax office collected the taxes.
if the foreign income is of a type that is exempt of German income tax (e.g. scholarship), add this information.
if the ...
1
"Independent consultant" usually implies that you're not a direct employee. The IRS describes the difference for tax purposes in an article on their website.
Assuming the company you're working for is considering you self-employed, they will report your wages via 1099-MISC (used for independent contractors, based on you providing them a completed W9), not ...
4
If your foreign income was zero, you say that your foreign income was zero. If you had foreign income but didn’t declare it anywhere, you have to declare it in your German tax declaration.
You will not be asked to pay tax on this income, but it is used to determine your tax rate. You know that someone with low income might pay say 20% tax, and someone with ...
1
Yes, you would have to pay taxes on both the interest and the appreciation of the RS. It would be counted as trading foreign currencies. There are a couple exceptions in the law but this would not fall under one of them. The exceptions normally occur in cases like you sell an asset in a different currency and while you are waiting for payments to clear, the ...
3
The main pro of exercising early is that you can sell the shares and diversify your portfolio. It depends on how much the options are worth compared to your other savings. It’s foolish to have most of your savings invested in a single company. It’s positively reckless if that company is also your employer and you stand to lose both your job and your savings ...
0
Generally, securities are Excluded properties from part I taxation. There are some exceptions for things such as shares of company which are not widely held.
https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/disposing-acquiring-certain-canadian-property.html
https://www.canada.ca/en/revenue-agency/...
1
Can a student non-resident alien choose to not exempt themselves from the substantial presence test?
As I understand it, it is mandatory to be an "exempt individual" as a student if you have not been an exempt individual for some part of 5 previous calendar years. (If you have been an exempt individual for some part of 5 previous calendar years, then you are by default not an exempt individual as a student unless you claim a closer connection to a foreign ...
6
The accepted answer is fine for situations where a dependent does not yet have an SSN, but may not be appropriate for when your spouse does not yet have an SSN.
If your spouse is not yet eligible or will not become eligible to get an SSN, you apply for an ITIN when you file your taxes, not before or after filing your tax return.
Fill out your tax return ...
16
You are required to supply a Social Security Number (SSN) when claiming someone as a dependent on your tax return. Or, use an Individual Taxpayer Identification Number (ITIN) if they are not eligible for an SSN.
In the event of a time crunch (tax deadline approaching) you have two options:
Go ahead and file (and not claim them), then later file an amended ...
1
Most IRS collection centers are not an actual bricks-and-mortar IRS office but rather a P.O. Box without a P.O. Box number shown explicitly. The P.O.Box number is essentially "hidden" in the last 4 (sometimes 5) digits of the nine-digit zipcode. So, to explicitly answer your question "Is this correct?", the answer is is _No since you have shown only 8 of ...
1
There is generally no withholding tax on registered government or corporate bonds. This falls under the "portfolio interest exemption":
From the IRS: U.S. source interest income that is not connected with a U.S. trade or
business and that is portfolio interest on obligations issued after
July 18, 1984, in registered form is excluded from income. [4]
...
2
Did you roll over your 401(k) to a new provider, or is it still at the employer's benefits provider? With respect to the 401(k), if it's still in their account it's not yet titled to you and the company should have control via their service provider. Did they ask you to withdraw funds from the account for this event?
Did they pay you in paper checks or ...
3
Typically, your employer is able to 'undo' all those activities retroactively - so you would end up as if the issue never happened.
They will have to fill some forms for most pieces, and it will be a pain for them, but as it seems to be their fault, they can't really complain. I would expect them to maybe forget about the Social Security part, as it is a ...
1
You need to look into this guidance from the IRS:
Requirements to Claim the Home Office Deduction
Regardless of the method chosen, there are two basic requirements for your home to qualify as a deduction:
Regular and exclusive use.
Principal place of your business.
Regular and Exclusive Use.
You must regularly use part of your home exclusively for ...
0
I am unfamiliar with Canadian tax law and Singaporean tax law. However, if it is similar to other western countries:
When you report your income tax to the Singaporean authorities, you are likely to have to report capital gains tax on foreign investments. While sometimes allowance is given if the money is held offshore - tax is sometimes not paid until ...
1
A bit of our background. We are Puerto Ricans but we lived in the US mainland for many years hence our retirement accounts were saved in the US mainland.
The bottom line. If you withdraw money from your tax deferred accounts while living in Puerto Rico, you have to pay Federal and Puerto Rico taxes. You do get a credit in Puerto Rico for taxes paid to the ...
2
This article by Michael Kitces comprehensively addresses the first part of your question. To summarize, your plan could work, but there are the following limitations:
capital gains exclusion shall not apply to any gains attributable to depreciation since May 6, 1997 (the date the rule was enacted), ensuring that the depreciation recapture will still be ...
2
You appear to meet the requirements for an automatic waiver of the 60 day requirement so it should not be a taxable event. Make sure you keep careful records to support that you meet each of the following requirements for an automatic waiver.
From the IRS:
You qualify for an automatic waiver if all of the following apply:
The financial institution ...
4
tldr: The only tax involved is gift tax, and there is a rather large gift tax exemption (an individual can give more than $11,180,000 in gifts during their lifetime before taxes get involved), so in the vast majority of cases no tax is involved.
Does the person the stock is coming from have to pay any taxes on their gain at the time of transfer?
In most ...
1
If the company went bankrupt, your year-end statement from the brokerage should show the stock as now worthless and report a loss equal to what you paid for the stock. This happened to me a couple of years ago.
If it's an OTC stock and the company is still in business but you can't find a buyer ... hmm, I've never run into that situation. I'll yield to ...
4
It depends on the status of the stock. If it trades on the OTC market, sell the shares. If there is no market for the security, your broker may be willing to send you a letter stating that securities have become worthless. Some brokers are willing to buy them back from you for a nominal amount.
To deduct the loss, the stock must be completely worthless. ...
-3
Agreeing with @DavidSchwartz, it is a wash sale, but you can still realize the loss immediately. Remember a wash sale just delays realizing the loss, it doesn't negate it completely (unless a tax-advantaged account is involved). But if there are no replacement shares left to adjust the basis for, the loss can be realized immediately.
Fairmark has extensive ...
4
Addition: With this edit, I add a citation from a well known and highly respected source, instead of merely quoting my experience with the IRS.
As the OP described his purchase, and the sale 15 days later, he has a short term loss. He can deduct this loss, first from any short term gains he has in the same year (or that have been carried forward); second (...
-2
This would appear to depend on ones interpretation of 26 U.S. Code § 1091 (a).
In the case of any loss claimed to have been sustained from any sale
or other disposition of shares of stock or securities where it appears
that, within a period beginning 30 days before the date of such sale
or disposition and ending 30 days after such date, the taxpayer ...
2
Does the purchase through which I acquired the shares I sold count as buying "substantially identical stock or securities" within 30 days before the sale, thus disallowing the loss? I feel like it shouldn't, but laws can get really weird. Citations would be appreciated, the more explicit the better.
Yes, it counts as a wash sale but no, it doesn't disallow ...
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I'm editing this answer because the OP edited the original question, clarifying his premise. If you buy substantially identical identical stock or securities" within 30 days before or after realizing a lose, the loss is disallowed. Note that disallowed means that the loss is deferred. It does not mean that it is disallowed and lost forever. This involves ...
4
Your question about when it makes sense to stop paying in depends on three things:
The possible growth rates of your investments.
The costs of going over the LTA.
The benefits when under the LTA, which translate into lost opportunity to benefit if you undershoot.
It's really hard to make a good guess about growth rates, so I won't try, and instead focus ...
-1
It is taxes at at flat rate of 30% or what ever the tax treaty says if any. This is called non effective income
4
If your withholdings have gone up, then you have been paying too little tax and might be in danger on an underpayment penalty (or at least a large tax bill when you file). Your employer's share is not dependent on your allowances (their share is for medicare and social security, not income tax).
That said, 6 allowances shouldn't be enough to stop ...
2
Simple mathsy answer:
You say you’re past half way to the lifetime allowance which is £1055K – let’s assume that means you’ve got £550K, and you make 12% a year – not bad!
Years = LOG(lifetimeAllowance/currentValue, 1 + yearlyIncreasePercentage/100)
= LOG(1055000/550000, 1.12)
= 5.74 years until you pass £1055000 without contributing a penny.
If you ...
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