New answers tagged

1

You can make a bit of money in the UK on VAT if you are a very small company (one man band). If your revenue is low, you can get a deal where you register for VAT so 20% is added to each bill, but you don’t deduct itemised VAT but are allowed to pay only say 14.9% of the bill including VAT. So you can put about 2% or so in your pocket, legally.


2

Yes, definitely. For 2019, yes. Well, her situation for 2019 is a little more complicated because it's her first year of residency. Since she is a resident by passing the Substantial Presence Test, her residency starting date is when she was first present in the US in 2019. So basically, she is dual-status for 2019 -- resident for the part of 2019 after she ...


4

Generally: No, only if they commit VAT fraud. Basically, VAT is money for the government. The business collects it, deducts the amount of money it PAID for VAT, then sends the rest to the government. If the result is negative (because you have more VAT expenses than income - which may happen i.e. if you export out mostly to countries that are outside the EU ...


0

Accrual accounting and cash accounting are two very different methods of accounting, and which one you use could have either an insignificant or major impact your annual tax return. The vast majority of individuals and some eligible small businesses use the cash method of accounting, because it is generally simpler and more intuitive than accrual basis. In ...


0

The deferral of payroll tax doesn't affect income tax. Even if you have to pay back the deferred payroll tax next year, that is calculated separately from income tax, and doesn't affect your tax rate next year. From your question, it seems you are asking generally about if you have some extra money now that you expect to have to spend later (not necessarily ...


5

(Note: This answer has been rewritten.) Trump has signed this executive order today, August 8, 2020. As expected, the details are different from what was previously announced and reported. Before I get to the actual answer to your question, I want to correct some of the assumptions in the question. Your three point summary of the implications of this order ...


1

For the 2021 reimbursement, assuming this is post 2017, the answer depends on how much you repaid. If you repaid more than $3000, then you can follow the instructions in Publication 525 under "Repayments" to claim a credit on your 2021 taxes (on Form 1040). Note that you cannot claim a miscellaneous itemized deduction anymore (post 2017), so you ...


0

For the first part of this answer I am going to ignore the CEO part. It is very unlikely that the benefit will be tax free. IRS pub 15-bdescribes what needs to be done to have the fringe benefit not be taxable for the employee: The document is from the view of the employer. Lodging on Your Business Premises You can exclude the value of lodging you furnish ...


5

Your question seems to posit that the housing is provided as a benefit and the employee is not charged rent. The value of the housing is likely taxable to the employee: Unless an exception applies, the full value of the housing is treated as additional taxable compensation to the employee. Full or partial exceptions apply if the housing is: Provided for ...


1

You are a resident alien for all of 2020 (or, at least, starting from Jan 3). I don't believe there is any way to pay FICA taxes on your income tax return. You can notify the employer, but it would be them who would need to pay the FICA taxes to the government, and then they can seek reimbursement from you somehow. By default, she is a nonresident alien ...


0

The answer is in the Form 5000 instructions (mirror): Send the French-language copy before the dividend payment date to the institution in France or abroad that manages your account. If have accounts with more than one institution, you will need an affidavit for each institution. Where applicable, you can provide a certified copy of the original affidavit ...


0

If you reported your IRA contribution on your tax return, it should be deductible to the extent allowed by law. If the contribution was made before the deadline, and you can submit proof that you in fact made the contribution before the deadline, then the IRS should allow the contribution to count for 2016. If the contribution is considered late because the ...


1

If you receive a tax form in the mail, it will usually include several copies (Copy B for your personal records, Copy C to attach to your federal return, and Copy D to file with your state tax return). Which copy you actually use to file your taxes usually doesn't matter, unless you are mailing in a hard copy of your return instead of using e-file. According ...


2

The IRS probably would not consider the whole day as uninterrupted business use unless you could prove that the entire day was, in fact, spent driving passengers around. If you stopped off somewhere for lunch in between rides, and that was your only non-business stop of the day, you could possibly consider your entire day as uninterrupted business use, so ...


2

Although the IRS permits filing a 1040 without having any U.S. taxable income, it is unnecessary to do so. According to the Consumer Financial Protection Bureau, if you do not have a social security number (SSN) or ITIN, some banks will accept a government-issued ID number, such as a passport number and country of issuance, instead of a SSN or ITIN. ...


2

You are correct. Non-residents do not qualify. I do know that there is one exception where if your spouse has a social security number and is a member of the U.S. military during the taxable year. If not, then I would assume it is because of the incorrect tax form.


0

"In 2019 and 2020, you can give up to $15,000 to someone in a year and generally not have to deal with the IRS about it." Financially/tax-wise, I would consider this a gift. You don't have a lease (right?) so it's not a formal exchange of money for goods/services. You can give up to $15K without tax consequences. You are way under that with $500/...


1

The key element of a 1031 is that you are replacing the property with on at least as expensive. Any cash pulled out creates tax issues.


2

Step 3 of the new W-4 is where you claim dependents. Instead of putting the number of dependents, you put the total dollar amount of the tax credits you get from your dependents. But, this approach has the added benefit that you can put any number you want! The instructions for step 3 say: You can also include other tax credits in this step, such as ...


3

No. If the IRS believes that your church is being run for your private gain, it'll lose its tax-exempt status. And then you'll be liable for all the back taxes you didn't pay, plus fines and interest. For example, there was a very long-running set of court cases on the tax exempt status of Scientology. If you tried to create a church that acted as a ...


0

It seems like there are some exceptions where you can apply for an ITIN without a tax return: 1. you get third-party witholding on passive income, 2. a third party reports your mortgage interest 3. you're a member or owner of an LLC business, 4. you're exempt under the rules of Treasury Decision 9363 5. you've profited from the sale of property in the U.S. 6....


0

ESPP are typically bought at a discount, the discount is taxed as ordinary income. The remaining gains are taxed as long term cap gains when held for over 2 years. Depending on your income during retirement, that can be 0%, up to 15% maximum. That’s not too bad.


4

The city of Philadelphia has three types of income taxes: Wage Tax: This is tax that is withheld from your paycheck by your employer if you either work in the city or you live in the city and work in Pennsylvania. Earnings Tax: This is paid by anyone who lives in the city and is employed (not self-employed; other types of taxes apply to them) and does not ...


0

So you agreed between you that you will hand over $x every month to your partner, and that doesn't need discussing. The only thing that needs discussing is how to do this to avoid bad tax consequences. And you are living together, but have no common bank accounts. You could pay $x in rent, which is bad because your partner needs to pay tax on it. You could ...


2

One option that I've seen before is for one person to pay the rent, and the other person pays the other bills (water, power, internet, groceries, etc). The bills are split so that each person pays roughly the same total amount. Each person is directly paying bills that are in their own name, you're never paying each other. This assumes, of course, that ...


2

My answer is a bit tangent to the question, but it may be interesting to you. YMMV. Pay half of the EXPENSES Payments towards a mortgage are not expenses, as each payment means that your partner has less debt left to pay, until he owns all the house with no debt. To illustrate it, your partner probably could renegotiate the mortgage to pay $2000/month for ...


10

If your partner can take rental expenses, this can work rather nicely. I'm not a tax accountant, so I'm not going to say definitively that this is allowed in a housemate situation. But it would definitely be if the property was a duplex. The fractional rental, if legal, gives your partner advantages that others have not mentioned. These won't turn the ...


42

In theory, partner treats home as 1/2 rental unit. This creates a far more complex tax return, forces depreciation and expensing of half of all costs, including all utilities and maintenance costs. They must charge you a 'fair market' rate for rent or have that number considered imputed income. In reality, I don't imagine that any significant number of ...


17

Assuming you are not married, the rent payment would be income to your partner which they would have to claim as such on their tax filings. It would also likely complicate their tax filings somewhat. As to your concern with being "docked 30%" that doesn't make much sense. First, it won't be anywhere close to 30% unless they have a very high income. ...


13

Technically, yes. But it may not be a good idea. You will need to declare it, because it's over $10000. And you will have to explain to the officer why you are carrying $1M. If they don't believe your explanation, they will take the money from you.


0

Yes, you will owe capital gains tax. Even if you sold and then re-purchased the shares within the same account, the answer would be the same. The only reason capital gains are not taxable is if they occur within a tax-advantaged account like a 401(k) or IRA. Additionally, there is something called a wash sale that prevents you from realizing a capital loss ...


0

Just scratching the surface but if your client is a non-taxable customer located in the EU (i.e. a private individual, not a business), VAT on digital service must be charged at the rate of the country where they reside. This applies even if you are yourself located outside the EU (and being located outside the EU would mean that you're not covered by the ...


8

The answer to the question “Do you have to file?” is found in the Form 1040 instructions. There, you’ll find Chart A, described as “For most people.” This chart shows a minimum gross income at which you are required to file. For couples that are Married Filing Jointly, this minimum gross income number is either $24,400; $25,700; or $27,000; depending on your ...


5

If you are not present in the US in 2020, you will not be a resident alien for US tax purposes. Although the US taxes US citizens regardless of where they live, causing some people to renounce US citizenship, that doesn't apply to you because you are not a US citizen. If you were a resident alien by passing the Green Card Test, then you would remain a ...


3

Note: I am neither a financial advisor nor a lawyer. This is neither financial nor legal advice! Do I need to pay stamp duty, in [light] of recent UK stamp duty holiday that government introduced? It looks like you will have to pay Stamp Duty at 3% on the purchase price of £250,000, although you may be able to claim it back if you sell your property in ...


0

The answer is yes, MLP ETFs such as AMZA and MLPA eliminate the need to process K-1's yourself. They handle all the complex tax paperwork for you. Source: personal experience


1

Typically, improvements to the house and furnishings are depreciated rather than taken as expense up front. There is a de minimis safe harbor election that allows you to take the full $2500/improvement as an expense instead of depreciating it. There are also depreciation methods that front-load the depreciation expense for the first year(s). You don't have ...


2

Also how would I prove to the IRS that I'm being truthful for both methods? The key to claiming anything on your tax form is documentation. If you have a receipt you have to keep it. So when you buy gas, or pay for parking or pay a toll you have to have a receipt. When you pay for your auto insurance you have to keep the receipt. For some things like tolls ...


2

Yes, you can. You can close the account, with no balance, and open a new account with another provider, and the new account will be your 'active' ISA for the current year. Even if you have paid into the account in the current year, you can transfer it to another provider, and then add further funds up to the annual limit. (Not all ISAs will allow transfer in ...


1

In a word, yes. You’re a sole trader and liable for UK income tax and National Insurance on this income — all of it, not just the money you’ve transferred to your UK account.


2

Did you receive the Stimulus check in error? Did you receive more than the original amount given by the Federal Government? Are you not a Citizen or a green card holder of the USA? Are you not listed as a dependent? Were you incarcerated when the stimulus check was sent to you? If you answered no to questions 1 through 5 THEN you will not need to pay it ...


1

This PDF will provide some insight into international taxation policies, but like the comments said, consult a tax professional. Per Wikipedia, Canada taxes local income, and foreign income of residents. Also from Wikipedia: Countries that tax income generally use one of two systems: territorial or residence-based. In the territorial system, only local ...


10

Unless the law changes again, if they overpaid you based on the numbers on your 2018 or 2019 tax return, you don't have to refund the extra money. That was deemed an acceptable loss in order to get the money into people hands in the spring of 2020. If on the other hand your 2020 return filed in spring 2021 shows that they underpaid you, you will get the ...


0

From the IRS page on the difference between the two: The Form 8938 filing requirement does not replace or otherwise affect a taxpayer’s obligation to file FinCEN Form 114 (Report of Foreign Bank and Financial Accounts). Unlike Form 8938, the FBAR (FinCEN Form 114) is not filed with the IRS. It must be filed directly with the office of Financial Crimes ...


2

It sounds like you need to clear the relationship field itself. If you've done that and it shows a null value (not "NONE" but blank), the usual thing you should do is save and quit and reload - that often resets values to show what the application actually thinks you should have. You should have a field that says "NONE" for relationship,...


2

I wouldn't bother. If you are going to file the 1040-X reasonably soon -- within a month, or two at most -- just pay the tax then, either by including a check or making the electronic payment. Since the interest you at least nominally owe is computed starting from the filing deadline, which was delayed due to COVID, it will only be about 10 or 20 cents. I ...


7

First off, if you needed to file Schedule 1, then you should have answered "yes" to the question at the top of the page - "At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?" - since you did some of that. This doesn't affect your taxes directly and doesn't ...


1

I tried doing it myself with turbo tax and somehow did it wrong and it suggest I owed 1000 or more. I did it with the H&R block software and it said I owed 0. Thus I decided to seek a professional at H&R. Since I had no W2 and only a 1098-T I didn't have to declare anything and thus owing 0 was the correct amount. Also, since I owed zero and didn't ...


0

It's an interesting theoretical question, A few issues, Are you quite sure you have "elected to be taxed as a partnership"? If not, forget it In the US I'm not actually sure you can have an LLC where "someone gets nothing". It has to be a passthrough entity. You can't actually have (I think) weird arrangements such as "you get ...


2

No. The data about sales/dispositions shown on the 1099-B (or all 1099-B's combined if you deal with more than one broker) goes on your 8949(s) (there may be more than one if you have different categories such as shortterm/longterm and covered/uncovered), and the 8949(s) and Schedule D are attached to your paper return (see the 'sequence number' in the upper ...


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