New answers tagged

1

I would only trust a tax accountant's answer on that one. It seems like it could go either way and may even change from year to year. LLCs organized as a sole proprietorship would be tricky in this case. If, however, your LLC was organized as a S-Corp this would be an unnecessary step. You would simply hire yourself and pay yourself occasionally. Part ...


0

There are two types of insurance companies: admitted and surplus lines (also known as Excess & Surplus or Surplus Lines or E&S for short). Insurance companies cannot negotiate with you on admitted insurance products because they are required to file their rates with each individual state in the U.S. and cannot deviate from them without being ...


1

https://www.irs.gov/instructions/i720#idm139958484331024 : Final Return. File a final return if you have been filing Form 720 and you: Go out of business, or Won't owe excise taxes that are reportable on Form 720 in future quarters. In other words if you have collected tax this quarter, but won't do so in the future, you file a final ...


4

The shares bought in your first 3 transactions were all sold on Apr 15th for a gain of $67 (+40 +18 +9). If you were to sell the 5 shares bought on May 5th for a loss in less than 31 days after the purchase made on May 10th, that would create a wash sale violation. Selling them now would not.. But that's not what you asked. You could sell the ...


2

Several FAQs state that you can be disenrolled for not paying your IRMAA, e.g. https://www.cms.gov/Outreach-and-Education/Outreach/Partnerships/downloads/11338-P.pdf Since presumably people who are having their IRMAA paid out of SS deductions wouldn't be able to not pay their IRMAA, this strongly implies that it is possible for there to be a net amount due....


6

In a comment, you clarified that you were specifically asking about a first house: I was hoping for a more cohesive overview of what tax elements come into play for a new homeowner At the federal level, there are no tax benefits to buying your first house. You get the same benefits as anyone else who owns a house with a mortgage. This has been a change ...


9

In the US you can take a standard deduction or itemize your deductions. Mortgage interest and property tax tips the scales in favor of itemizing deductions for many people. So the answer to your question is, it depends. If the sum of your itemized deductions exceeds the standard deduction then you pay less federal income tax by itemizing your deductions. If ...


8

Possibly - you can deduct mortgage interest from your federal taxes if you itemize. In order to benefit from itemizing, though, you need have (for 2020) more than $12,400 in deductible expenses, or $24,800 if you are married and file jointly. This is not as common as it was before the recent tax changes, and typically requires either a large mortgage and/or ...


6

Do I qualify for "First Time Home Buyer" in the first place? You don't qualify as a first-time home buyer. It doesn't have to truly be the first home you've purchased, but you can't have owned a house for the last two years. I could take out a loan against the 401K, right? Would there be tax implications for this? Would this be a qualified reason for ...


4

With vehicle expenses for business you can opt to take actual expenses or a standardized rate per mile (currently $0.58/mile). If you take actual expenses, you'd typically depreciate the vehicle cost over 5 years, but there are several depreciation options. The options front-load the deprecation expense to varying degrees, it can range from taking the ...


2

I can't speak for all brokers but my brokers provides an 8949 form which calculates wash sales (and is reported to the IRS). I'd also add that they add a disclaimer that their form is "not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and does not resolve ...


6

Simplest answer is simply that this isn't fraud, but is a wrong number (maybe the person named, A, actually has a number 1 or 2 digits off yours). But, it certainly could be a scam of various types (and there's certainly no reason to call the number back in any event). If you keep getting calls/texts about this person's account, consider calling the main ...


0

It said that lenders typically wanted to see that I had lots of experience with borrowing responsibly. That doesn't mean that your history is missing. You said that you had no history under your previous name prior to 2017. That's less than 3 years... 719 is a rather good score for that scenario, particularly considering that you admit to financial ...


3

Your credit history should follow you despite any changes in personal details (name, address, or even SSN). However, the real world is often messier than that, as you are discovering. But - that said - name changes are very common and shouldn't be an unusual change. Generally, the best practice is to contact your active creditors immediately and provide ...


5

No. Unreimbursed business expenses are no longer deductible by employees as of tax year 2018: "The Tax Cut and Jobs Act made many sweeping changes to the U.S. tax system. One of the biggest changes under this new law was the elimination of the deduction unreimbursed employee business expenses beginning with 2018 tax returns. This effectively means ...


1

A variable annuity is a contract with an insurance company that invests your money in mutual funds. The annuity will provide payments to you either immediately or at a future date, for the rest of your life, guaranteeing that you won't outlive your assets. The death benefit guarantees that your beneficiary will receive at least the amount of your ...


0

If this is the US then the maximum amount of margin borrowing for equities is 50%. Lots A and B cost a total of $11,100 so that would be $5,550 borrowed (50%). Lots C and D sold at $16 would generate $19,200 in sale proceeds so the margin loan would be paid off.


0

If you contribute the complete amount to your 401k, you don't own taxes on it. As a result, you can claim back the taxes you already paid, in your annual tax-filing, and yes, you can put the complete amount, including the temporarily 'missing' taxes, in the 401k (assuming you have enough cash on hand).


1

As a software developer, have you considered incorporating and being paid as an independent contractor? There are a lot of things you do now that could be written off as an independent contractor such as commuting to an office, purchasing a computer, software licenses, and other office supplies. If you have a home office, you can write off the portion of ...


1

You know, the whole Idea around the payment services like Google store, Apple store, ShareIt, ... is to save you all the hassle of international taxation. You get you money from google India and google resales your products, with correct taxation (VAT, mainly) to the customers around the world. You only have to worry about the correct declaration of your ...


1

Presumably your 2018 tax return has no mention of the HSA contribution that was mistakenly associated with 2018, and your taxable income was not reduced by that amount. Also, presumably the sum of all of your 2019 contributions plus the errant 2018 contribution is still under the HSA contribution limit for 2019. If both of those statements are true, from a ...


-1

Private Mortgage Insurance is favourable to individual property flipper. Because individual flipper simply can't raise their private insurance (and it is costly) to cover multiple loans. Thus, PMI will come in handy since it applies to the individual mortgage.


1

I'm surprised the provider even allowed [ineligible contribution] to happen. How would they know? Unless both the old and new health plans and the HSA are managed by your employer -- which is reasonably common but by no means universal or required -- the HSA trustee has no way of knowing whether you were eligible to contribute for the prior year, and if so ...


-2

I think there is a point that the other answers haven't addressed. If you default, and the bank recovers its investment through PMI, then you have still defaulted. You have still been forclosed on, and will still take a hit to your credit rating. According to this article, PMI only covers a percentage of the bank's losses anyway. So having PMI does not ...


5

Get married Get divorced A huge chunk of your income will be allocated to "spousal support", which is tax deductible for you (taxable for your ex-spouse). This will significantly reduce your tax burden.


0

Yes, there are situations where that happens. It's actually not uncommon. Sales tax/VAT is typically due in the country of sale Income from such sales may be taxable in the country of sale as well. See nonresident taxpayer or person with limited tax liability. This may be changed (everyone declaring their income in their home country) by tax treaties. ...


0

This is what I do. This sounds crazy but it is a lot of fun. I put a lot in HSA and I have a lot of kids (like more than 5). this decreases my tax liability. You end up spending a lot on food, love, music lessons, and Doctor bills (that is why we have HSA) instead of giving to govt. We also have 401k and RothIRA. Watch your debt and you can do it.


2

An LLC protects you from liability, but for contract development work there's likely no need to set one up as you aren't typically exposed to much liability risk in that context. For tax purposes, LLC doesn't really mean anything to the IRS. If you have a single-member LLC, it will be taxed as a sole-proprietorship, or you can elect to have it taxed as an S-...


1

No, you will not have to pay income tax to the US if you aren't a tax resident of the US. You likely will have to pay income tax in the country you live and/or your country of citizenship.


0

After the registration of a preferred stock is accepted by the SEC and becomes effective, there is a delay prior to the listing of shares on the NYSE or NASDAQ. You will see in almost every prospectus or registration statement a clause that says “we intend to apply to have these shares listed on the NYSE under the symbol xxxxx. If this application is ...


3

I did a little bit of googling and found the answer to my own question. Not sure why I was too lazy to do that initially. Anyway, it depends on when you have to repay the bonus. If you accept the job, then have to pay back the bonus in the same tax year, then you just repay the amount you received after taxes. IE, if my bonus was $1000 and I only received $...


3

A public company does not need a majority approval from share holders to do a secondary offering. Note that there are two types of secondary offerings. From Investopedia, What Is a Secondary Offering? A secondary offering is the sale of new or closely held shares by a company that has already made an initial public offering (IPO). There are two ...


2

Generally speaking yes. Actual physical residence is not the only test countries use to determine tax residence. Contrary to what many people seem to believe, there is no overarching internationally agreed principle that tax residence only exists if you spend X days in a country or anything like that (in fact, the tax year is not the same in all countries in ...


2

Generally speaking - it least from the US point of view - the answer is absolutely yes. For example: A foreign investor in US real estate is subject to US Federal (and possibly state and local) income tax on capital gains from the sale of the property and on any rental income received with respect to it. A foreign investor receiving dividends from a US ...


4

Because you are currently driving and don't have insurance. You need to get insurance today. It appears that it is law in Florida that all drivers must have insurance. Even if it wasn't the law, you still should get insurance to protect you in case of an accident. Because you need insurance today, you need to worry less about getting the lowest rate, you ...


3

The benefit to the homeowner is that they get to buy the house with a lower downpayment than they would otherwise need. So to make up a case where you might reasonably want to pay PMI... Say it's just after the stock market crash of 2008. You have $50K in cash, you want to buy a house for $250K, but you also think that this would be a really good time to ...


7

You're probably better off having an accountant or tax lawyer going over your finances than having people on the internet try to come up with ideas that might apply to you, but one small thing is that if you use public transit and your employer has a transit program set up, you can put $265 a month of pre-tax money on a Clipper Card or towards other public ...


0

The real issue likely is whether you can trade in your car if you keep the loan, not whether you can keep the loan if you trade in the car. If you have a car loan, then they probably have a lien on the car, so when you try to sell it, the dealership will notice that you don't have a clean title. If you don't pay the loan back, then the bank can repossess the ...


2

There are two things at work here. Let's assume you are buying 300 shares for $32*300=$9600 at a time when the fair market value is $55. At this point you realize a gain of ($55-$32)*300 = $6900. As long you as don't sell anything, there are no taxes due. If you sell the stock right away and cash the $6900 you need to pay regular income tax on this. How ...


7

What are the ways I can pay less taxes? Daniel already noted that you can reduce your taxes by making charitable contributions; note that these lower your taxable income and not your taxes. That is, it is a deduction, not a credit. If you give your last earned dollar to charity, it lowers your taxes by the 32 cents that you would have paid on that dollar ...


0

You got the low rate most likely because you bought it from a dealer as an incentive for you to buy their car. No bank I am aware of gives 1.9% loans right now. If you buy a house, the loan uses the house as collateral. You can sell the house and in some cases the bank will let the new buyer continue paying on the existing loan. This is not what you are ...


24

The best way to understand insurance policies in general is to consider who gets paid, and under what circumstances. Simply put, PMI policies pay your lender. The condition under which they pay is if you default, and the bank is not able to recover the balance of the loan. If you buy a house for $100,000 with $10,000 down and a $90,000 loan, and then you ...


-8

Yes. It insures you in case some claim from somewhere is made against your house. And this can happen , and has happened, from long ago EG when an indian tribe claimed they owned the land because of a long forgotten govt treaty. As I recall the claim was valid and people got hurt who did not have insurance protecting them.


5

There are two reasons I can think of, but they both boil down to the reason that lender will give you a mortgage with PMI, and won't approve a loan without it. Assuming the lender requires PMI for all mortgages with less than a 20% down payment: If you can't come up with enough cash for at least a 20% down payment, you can either get the loan and pay the ...


57

Private mortgage insurance protects the lender if you stop making your mortgage payments. It does not benefit the borrower, aside from the fact that many lenders require it if your down payment isn't large enough. Paying for PMI is essentially paying for insurance to protect someone else's investment - if you're not required to do it, there is no possible ...


-4

your income is personal and will be taxed accordingly. However, if you have different sources of income all accumulated on a sole proprietorship, then is the business getting taxed. If the business reinvested the income on stock market, then a loss is written as debt while a profit is taxed zero. I believe you may reinvest the low-risk income into high-risk ...


2

Read what they're saying. They're not saying they'll issue you a credit card without a hard pull. They are saying you can see if you qualify without a hard pull. What actually happens is You apply, and they ask you questions -- to collect all the data needed to give you the card. They do a "soft pull" to verify some of your answers. They offer you the ...


-1

Buy a copy of Lasser, and their 1001 tips books. They pretty much list all the legal ways to pay less in taxes and explain pub 17 much better than the IRS version. See a lawyer if you want to risk some creative ways to avoid taxes. What you could do is to move to a place with NO income tax as you can not avoid Federal taxes but states vary all over ...


6

Companies that want to offer credit to new or existing customers, do a soft pull to get the basic information they need to put you in the "maybe" category. If you are an existing customer they have even more information and can use the info in the soft pull to put you in the "almost certain" category. The fine print in the advertising tells you that you ...


6

In addition to the other excellent answers, consider doing a "Backdoor Roth IRA." Assuming that your income is too high to fund a traditional IRA with pre-tax dollars, fund it to the max with after-tax dollars, then immediately do a Roth IRA conversion. There is no immediate tax cost or benefit the first year, but as soon as the Roth IRA begins earning ...


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