New answers tagged

1

An actual conversion to a different holding would not be a taxable event. For example VFIAX to VOO, if converted by the fund provider. (I'm using Vanguard funds as an example both because one appeared in the question and because they are somewhat unique in making ETFs a share class of their mutual fund. They specifically support this non-taxable ...


4

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


0

You can endorse the check on her behalf if you have her permission to do so, and sign it over to yourself. Then endorse it again on your own behalf in order to deposit it. The endorsement would look like this (italics represent signatures). PAY TO THE ORDER OF (YOUR NAME) (Print your sister's name) P.P. Your Signature —————————— FOR DEPOSIT TO (...


4

Generally, if you sell an asset in a non-tax-sheltered account for more than you paid for it, that's a capital gain, and you have to pay capital gains tax. There are exceptions, but I don't believe any exceptions apply here. The wash sale rule says that if you sell a security at a loss and buy a "substantially identical" security shortly before or after, ...


3

So, can I sell my SPY and then buy the equivalent VOO? Absolutely - nothing prevents you from doing so. And if you have a gain then wash sale rules are irrelevant. You would then owe capital gains tax on the gain in value. But the cost basis for VOO would be higher, so your gains on that fund would be lower. So your choice is to pay, say $1,000 in tax now (...


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 ...


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.


-2

Yes, buying the web site is an expense. You can deduct whatever you paid for it. There is the question of whether you can expense it all in the year you bought it or whether you can or must depreciate it over time. If the price was modest you can take a section 179 deduction and deduct the whole thing in one year. (I believe the limit on section 179 is $250,...


1

In broad strokes you are correct. You don’t owe taxes on gifts you make until you exceed the exclusion amount. But you do have to file the gift tax return in the year following the gift. Review the instructions for Form 709 to determine your obligation to file.


5

This typically considered a form of credit card kiting. It is not allowed under the TOS of most (if not all) card processing/merchant account agreements. There can be legal consequences if intent to defraud can be proven, but typically it just results in account closure.


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

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 ...


3

Unless you get Social Security benefits, you will need to have filed a 2019 or 2018 tax return in order to get the check now. Yes, you can file a tax return with no income. If you do not get the check, you can still get the tax credit when you file your 2020 tax return in 2021.


4

There are two parts to the recovery rebate: the tax credit for the 2020 tax year, and the advance tax credit as a check, determined by your 2019 tax return (or 2018 if you haven't filed for 2019). Since you put on your 2019 tax return that you can be claimed by someone else as a dependent, you will not get the check. However, if you cannot be claimed by ...


2

Now, I am not a lawyer/CPA but the text of the bill states: In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by subtitle A for the first taxable year beginning in 2020 ... I would interpret this to mean that the check is actually a tax credit for 2020. This CNBC article seems to agree: ... money ...


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 ...


1

On a podcast I heard yesterday, the Nevada tax commissioner joined and said the tax credit will ultimately depend on the 2020 return filed in 2021. To distribute money now, they will go on the last filed return, e.g. IRS has my 2018 return. They'll base my credit off that. When I file in April 2021, for 2020 income, it will reconcile. The result can remain ...


0

Your question is old, and probably you already know the answer at this point, however... You won't owe income tax in the UK, you are effectively a foreign entity, and the company is paying you for your services - it doesn't really matter that the payment goes into a UK based bank account, it's the same as if they were sending payment for services directly ...


3

If you have filed your 2019 tax return as Single and your 2019 Adjusted Gross Income (AGI) was more than $99,000, you will not get a stimulus check. (Though if your 2020 AGI is less than $99,000, you can still claim credit against your 2020 taxes.)


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 ...


0

Well, p = principal, r = dividend rate, d = dividend, t = tax rate, a = after tax dividend, and y = after tax dividend yield: p * r = d d - (d * t) = a a / p = y Then working with r - (r * t) = y show that r - (r * t) = a / p as (p * r) - (p * r * t) = a and (p * r) - (p * r * t) = d - (d * t) and proven with p * r = d .


2

You will be making a non-deductible Traditional IRA contribution that counts under 2019, so you will fill out 2019 Form 8606 Part I when you do your taxes for 2019, indicating a $6000 contribution. You will get a basis of $6000. You will be making a conversion from Traditional IRA to Roth IRA during 2020, so you will need to fill out 2020 Form 8606 Part II ...


1

It's just a simplification. If you make r before tax, then pay t% tax on r, then your net return after tax is r - t*r = (1-t)r Note that t in the formula is in decimal form, meaning if the tax rate is 30%, then t will be 0.30.


-1

It is likely that you will not get any money. However, it is likely that your parents will get $500 for you provided they fall within income guidelines.


2

According to the version of the bill that has passed in the Senate so far, this "stimulus check" is really a pre-payment of a refundable 2020 tax credit. So if you don't get the check this year, you can file your 2020 taxes next year and claim the credit.


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 ...


2

Based on this page from a public employer, I believe that this is an HRA (Health Reimbursement Arrangement). HRAs are described in IRS Publication 969. You can’t be reimbursed twice for a medical expense by tax-exempt money. Since insurance ultimately paid the expense, somehow this must be accounted for. If it was an HSA, I would tell you to do a ...


4

The $2500 is pre-tax money either from a rollover or a deductible contribution before 2019? If your plan is to convert it, you could actually make your non-deductible Traditional IRA contribution for 2019, then convert all $8500 at once (you should owe regular income tax on the $2500 only). I agree there is no point to directly contribute some and backdoor ...


1

Your general supposition is correct: if you had an imaginary stock that could go up 10% every year, you're better off just keeping the money in, as then you are basically doing what you say (earning 10% on the money you'd be taxed on), and you get to keep 80% of that additional 10%. However, the real world doesn't work that way - stocks go up and down, and ...


0

Essentially correct, which is why it doesn't usually make sense to sell and rebuy the same stock in a short time period. Note that when dealing with losses, this would amount to a wash sale - you can't sell a poorly performing asset to claim capital losses and then re-establish your position immediately (you are disallowed from claiming the loss, since it ...


2

Generally the VAT you do pay to suppliers is deductable from the VAT you get. Problems are cross country because getting that back requires paperwork. And time. Which is why it is standard in B2B transactions to NOT pay the VAT on the country of origin - which is called "reverse charge". They get your VAT ID, they check it against the EU database and ...


1

The trades will be matched in the account that you trade them in. For trading purposes, you cannot designate shares at one broker be matched with shares at another. Ironically, shares at different brokers are considered in toto for tax purposes (wash sales). You cannot take a loss in one account and then replace them with a substantially identical ...


1

Yes, you can't do daily trading on F1-visa but rest is fine. Robinhood will issue you a bunch of tax forms (usually 1099 forms) at the end of the year. You'll need to put in the info from those forms into whatever tax filing software you and/or your college uses. My college uses Glacier Tax Prep but if you're using TurboTax, I've heard there is an option to ...


3

It applies to "California taxpayers affected by the COVID-19 pandemic". According to this FAQ, you do not need to have been directly impacted by COVID-19 to qualify. You qualify if you "experience any difficulty in filing or paying, as a result of COVID-19". Admittedly, this is still vague. I believe that it is on the honor system. Basically anyone in ...


1

Not only publicly-traded (listed) parternerships but many others also are structured as master/limited partnerships (often shortened to limited partnerships) with usually many 'limited' passive partners who only put in money, and one or a few 'managing' partners who actually operate the business -- and make the profits distributed to everybody else as well ...


1

Since amending would benefit me and cost the IRS/Illinois (please correct me if this is wrong), is it reasonable to assume that I am not required to file an amended return? I think so. I have never found an authoritative statement, but, unsurprisingly, pretty much the whole tax code, related regulations, and IRS (and state tax department) policies are ...


10

The minimum for the company or brokerage to issue you a 1099-DIV is $10. Technically, you still ought to report the income, even if less than $10, however, the rounding down of $0.05 to $0 will also make the issue moot. You can probably safely ignore it.


0

An LLC is a "flow through" entity. Assuming you are the only member of your LLC, it's also a "disregarded entity". What that basically means is that the IRS treats the LLC is if it doesn't exist: the assets of the LLC (including its bank account) are treated as owned by you personally, and the income of the LLC is treated as earned by you personally. And ...


-1

You have to report the income, yes. LLCs have to make at least annual reports about their income and costs. I'm not an expert on the topic though and I even think that bigger companies have to make reports each quarter of the year. Is the income taxable? Yes, the interests it makes meanwhile in the bank account are taxed annually. However it's not income / ...


0

You wouldn't be considered a resident of Michigan unless you move there permanently. For instance, buy a house or rent an apartment there (while selling/giving up your California one), change your voter & car registrations, mailing address, &c. Otherwise you're just visiting, even if the visit is extended. FWIW, I've worked in California as a non-...


1

According to OECD – Argentina – Information on residency for tax purposes: An individual is considered a resident, even if he/she has obtained the permanent residence in a foreign country, or has lost its residence status in the Argentine Republic because the person is regarded as resident of another country for tax purposes, when they actually ...


2

Your net income from the rental property will effectively be taxed as additional regular income, with two important points: You can claim expenses from, for example, mortgage interest (but not the mortgage principal payments), or repairs & maintenance, etc. - this will reduce your net rental income If you pay foreign taxes in your home country (you 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 ...


0

It depends on how much money you will make after deductions on your rental property. It is pretty straightforward if you use TurboTax - you can walk through it. Another expensive option is to have a tax preparer create your return, it will be about $1500 + to have someone submit that return for you. Also, you will need to fill out T1135 to submit to the ...


2

There is no different tax treatment for a paid for home versus a home with a mortgage. As a big advocate of not borrowing money for any reason, I can only think of one disadvantage of having a paid off home. Assume you currently own a home with a 100K mortgage, and enough cash to pay off the mortgage, in fact you have 500K in cash. But you want to ...


2

When providing services internationally, two kinds of taxes are relevant: income taxes sales taxes or VAT These are completely independent. Income Taxation There is a US–German tax treaty[1]. When providing independent professional services[2], the location where you perform your service or have your establishment is relevant, but the location of the ...


0

It is true that the standard Black-Scholes assumptions do not take into account tax rates. But you can include non-zero tax rates, and will still end up with the Black-Scholes formula, with a different drift, as you are then not in the risk-neutral world anymore, but in the tax world. There is an old paper from Myron Scholes himself, which explains all the ...


4

Since you are asking a lot of questions at once, this answer is a non-exhaustive list of options to consider: Setup an emergency fund first. A usual recommendation runs at 3-9 x your monthly salary. Due to the german social safety net, this multipler can be lower, but as you are a foreign national(?), you might rather err on the higher side. Deal with any ...


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 ...


0

Wait, are your MIL and Spouse both co-owners, and it's the primary residency for your MIL correct and not your residency? Is your wife handling the money for your MIL? How much mortgage does she (MIL) pay, and you (your spouse/you) pay in %. If she pays 100% of her own mortgage, then provides you the 10k-15k; then it's clearly a gift, and it's subjected to ...


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