Tax Q's Thread

Okay . . . let's try this again.

Moderators: Shirley, Sabo, brian, rass, DaveInSeattle

User avatar
The Sybian
The Dude
Posts: 18865
Joined: Tue Mar 19, 2013 10:36 am
Location: Working in the Crap Part of Jersey

Re: Tax Q's Thread

Post by The Sybian »

HDO45331 wrote:
The Sybian wrote:Hi HDO. Longtime listener first time caller. Can you let me know if I have this right? My wife did some consulting work in 2012. She put the money in a bank account in the name of the business (LLC), and has not touched it. My understanding is that this does not get claimed as income until she takes the money out and pays herself, do I have that right?

Second part: If she closes the account and invests the money, does she hold off on reporting the money until she takes it out of whatever she invests it in?
I am taking for granted that this is happening in the gold old US of A.

Part 1. Whatever happens to the money, it is taxable when rceived. If she has an LLC, and is the sole owner, she would file the LLC income on a Form 1040, Schedule C, like any other sole proprietorship. Unless she set the LLC up under the check-the-box designation of a corporation, she does not pay herself; she would be taking money out of one pocket, and putting it in another. Hopefully, if she did for the LLC as a corporation, she also filed the form with the IRS, making it a Sub S Corp.


Part 2. See part 1.
We made it a 2 owner LLC to avoid the sole proprietorship. In NJ, LLCs pay lower fees and don't require workers comp insurance, which Corps do, so we did not do the Sub S election. Basically, she formed the LLC in case she decided to work full time as a consultant. She decided to take a new position instead, and put the consulting on the side. Does this change the analysis at all?
An honest to God cult of personality - formed around a failed steak salesman.
-Pruitt
User avatar
HDO45331
Brandt
Posts: 307
Joined: Mon Mar 11, 2013 8:04 am

Re: Tax Q's Thread

Post by HDO45331 »

The Sybian wrote:
HDO45331 wrote:
The Sybian wrote:Hi HDO. Longtime listener first time caller. Can you let me know if I have this right? My wife did some consulting work in 2012. She put the money in a bank account in the name of the business (LLC), and has not touched it. My understanding is that this does not get claimed as income until she takes the money out and pays herself, do I have that right?

Second part: If she closes the account and invests the money, does she hold off on reporting the money until she takes it out of whatever she invests it in?
I am taking for granted that this is happening in the gold old US of A.

Part 1. Whatever happens to the money, it is taxable when rceived. If she has an LLC, and is the sole owner, she would file the LLC income on a Form 1040, Schedule C, like any other sole proprietorship. Unless she set the LLC up under the check-the-box designation of a corporation, she does not pay herself; she would be taking money out of one pocket, and putting it in another. Hopefully, if she did for the LLC as a corporation, she also filed the form with the IRS, making it a Sub S Corp.


Part 2. See part 1.
We made it a 2 owner LLC to avoid the sole proprietorship. In NJ, LLCs pay lower fees and don't require workers comp insurance, which Corps do, so we did not do the Sub S election. Basically, she formed the LLC in case she decided to work full time as a consultant. She decided to take a new position instead, and put the consulting on the side. Does this change the analysis at all?
Due to having a 2-member LLC, a Federal tax return, Form 1065, will need to be filed. Each member will get a K-1, and pay tax on the income.
It's the sixth version of The Swamp. What could possibly go wrong?
User avatar
HDO45331
Brandt
Posts: 307
Joined: Mon Mar 11, 2013 8:04 am

Re: Tax Q's Thread

Post by HDO45331 »

Sybian, if she is the only active member, and you are the other member, you can elect to have her take all the income, as guaranteed payments.
It's the sixth version of The Swamp. What could possibly go wrong?
P.D.X.
The Dude
Posts: 5280
Joined: Wed Mar 13, 2013 12:31 pm

Re: Tax Q's Thread

Post by P.D.X. »

Hey HDO. I converted my condo into a rental unit at the end of last year. Collected one month of rent in December. Can I wait until next year to file the 1040 Sched. E rather than doing all that jazz now for just one month's rent?
User avatar
HDO45331
Brandt
Posts: 307
Joined: Mon Mar 11, 2013 8:04 am

Re: Tax Q's Thread

Post by HDO45331 »

No.

Two weeks or less would get you off the hook. A month? No.

Also, when you set it up for depreciation, make sure you check the real estate tax valuation. That is the limit you can use when setting up a residence for a rental.
It's the sixth version of The Swamp. What could possibly go wrong?
P.D.X.
The Dude
Posts: 5280
Joined: Wed Mar 13, 2013 12:31 pm

Re: Tax Q's Thread

Post by P.D.X. »

Cool. Thanks.
Johnnie
The Dude
Posts: 16730
Joined: Mon Mar 18, 2013 7:31 pm
Location: TUCSON, BITCH!

Re: Tax Q's Thread

Post by Johnnie »

I've noticed on a couple of my mutual funds I have capital gains distribution. So...where on my 1099 do I put this? It only totals a few hundred bucks, but still.

Also, I made the max contribution to my ROTH IRA. Where does that go?

One other thing: I'm fiddling around with a tax calculator online. If I max out a standard IRA I'll get back another grand. Can I have a standard IRA and a ROTH and contribute to both in the same year? Am I even allowed to open a standard IRA for 2013 being that it's 2014?

Because it required: I'm single with no kids
mister d wrote:Couldn't have pegged me better.
EnochRoot wrote:I mean, whatever. Johnnie's all hot cuz I ride him.
User avatar
Shirley
The Dude
Posts: 7516
Joined: Mon Mar 11, 2013 2:32 pm

Re: Tax Q's Thread

Post by Shirley »

Johnnie wrote:I've noticed on a couple of my mutual funds I have capital gains distribution. So...where on my 1099 do I put this? It only totals a few hundred bucks, but still.

Also, I made the max contribution to my ROTH IRA. Where does that go?

One other thing: I'm fiddling around with a tax calculator online. If I max out a standard IRA I'll get back another grand. Can I have a standard IRA and a ROTH and contribute to both in the same year? Am I even allowed to open a standard IRA for 2013 being that it's 2014?

Because it required: I'm single with no kids
I'm pretty sure you can do IRA stuff for 2013 until tax day. You just have to declare it for 2013.

Also, you don't need to put your Roth contributions on your tax forms, as it's after-tax money. It's only a tax issue when you retire and take it out tax-free.
Totally Kafkaesque
Johnnie
The Dude
Posts: 16730
Joined: Mon Mar 18, 2013 7:31 pm
Location: TUCSON, BITCH!

Re: Tax Q's Thread

Post by Johnnie »

Oh, I gotcha. Also Googled the Roth vs Standard question...I can contribute to both. But only up to the max.

:-/
mister d wrote:Couldn't have pegged me better.
EnochRoot wrote:I mean, whatever. Johnnie's all hot cuz I ride him.
User avatar
HDO45331
Brandt
Posts: 307
Joined: Mon Mar 11, 2013 8:04 am

Re: Tax Q's Thread

Post by HDO45331 »

Johnnie wrote:Oh, I gotcha. Also Googled the Roth vs Standard question...I can contribute to both. But only up to the max.

:-/
Capital Gains distributions, from your regular investments, would go on Scheduole D. If the cap gain distributions are on a regular or Roth IRA, there is no taxability right now.

Balance your IRA contributions. If you will have a pretty good amount of retirement income, a Roth might be best. If not, a regular IRA would be a good idea, as you still have a standard deduction, and personal expemption, later in life. For example, if you were retired right now, and had IRA or retirement income, the first $10,000 would not be taxable.

As always PM me with specific questions.
It's the sixth version of The Swamp. What could possibly go wrong?
User avatar
Brontoburglar
The Dude
Posts: 5851
Joined: Mon Mar 18, 2013 7:20 am

Re: Tax Q's Thread

Post by Brontoburglar »

Everything now runs through my LLC. I have it for my business + now my full-time duties.

Therefore, I am fully self-employed and self-insured. I pay my LLC taxes with my personal, of course, but should I be paying my insurance with my business credit cards/bank account rather than my personal bank account? Should I do it with other work expenses as well? Does it matter?
"We're not the smartest people in the world. We go down the straightaway and turn left. That's literally what we do." -- Clint Bowyer
Johnnie
The Dude
Posts: 16730
Joined: Mon Mar 18, 2013 7:31 pm
Location: TUCSON, BITCH!

Re: Tax Q's Thread

Post by Johnnie »

Here's a question: HDO, How stupid am I for knowing about the TSP since I've enlisted but only started contributing to it in October -- over 13 years after the fact?

I did some math and if I started to contribute to it when I had the real funds to (around 2006), up to the maxes of each year, I would have invested over $125K by now. At least I can attain somewhat that much over the next 7 years if I contribute up to the max until I retire. I never did it because I have other investments and the government doesn't match dollar for dollar for active duty. I feel like a fucking moron this tax season. Having a $250K nest egg when I retired from the military, on top of my military retirement -- at 38-- would have been nice. Ugh.

/rant
mister d wrote:Couldn't have pegged me better.
EnochRoot wrote:I mean, whatever. Johnnie's all hot cuz I ride him.
User avatar
HDO45331
Brandt
Posts: 307
Joined: Mon Mar 11, 2013 8:04 am

Re: Tax Q's Thread

Post by HDO45331 »

Brontoburglar wrote:Everything now runs through my LLC. I have it for my business + now my full-time duties.

Therefore, I am fully self-employed and self-insured. I pay my LLC taxes with my personal, of course, but should I be paying my insurance with my business credit cards/bank account rather than my personal bank account? Should I do it with other work expenses as well? Does it matter?
I would segregate all business expenses, if I were you. All business expenses should be with separate checking accounts, and credit cards.

At some point in time, you might file the proper form with the IRS to have the LLC taxed as a corporation, and as a Sub-S corporation. That all depends upon our income level. At that time, all revenues and expenses would have to be separated from personal items.
It's the sixth version of The Swamp. What could possibly go wrong?
User avatar
Brontoburglar
The Dude
Posts: 5851
Joined: Mon Mar 18, 2013 7:20 am

Re: Tax Q's Thread

Post by Brontoburglar »

HDO45331 wrote:
Brontoburglar wrote:Everything now runs through my LLC. I have it for my business + now my full-time duties.

Therefore, I am fully self-employed and self-insured. I pay my LLC taxes with my personal, of course, but should I be paying my insurance with my business credit cards/bank account rather than my personal bank account? Should I do it with other work expenses as well? Does it matter?
I would segregate all business expenses, if I were you. All business expenses should be with separate checking accounts, and credit cards.

At some point in time, you might file the proper form with the IRS to have the LLC taxed as a corporation, and as a Sub-S corporation. That all depends upon our income level. At that time, all revenues and expenses would have to be separated from personal items.
Thanks. I'll switch the credit cards over on that ASAP.
"We're not the smartest people in the world. We go down the straightaway and turn left. That's literally what we do." -- Clint Bowyer
User avatar
The Sybian
The Dude
Posts: 18865
Joined: Tue Mar 19, 2013 10:36 am
Location: Working in the Crap Part of Jersey

Re: Tax Q's Thread

Post by The Sybian »

HDO45331 wrote:
Brontoburglar wrote:Everything now runs through my LLC. I have it for my business + now my full-time duties.

Therefore, I am fully self-employed and self-insured. I pay my LLC taxes with my personal, of course, but should I be paying my insurance with my business credit cards/bank account rather than my personal bank account? Should I do it with other work expenses as well? Does it matter?
I would segregate all business expenses, if I were you. All business expenses should be with separate checking accounts, and credit cards.

At some point in time, you might file the proper form with the IRS to have the LLC taxed as a corporation, and as a Sub-S corporation. That all depends upon our income level. At that time, all revenues and expenses would have to be separated from personal items.
Another issue with not partitioning LLC from personal is that you can lose all of the legal protection the LLC provides. Without a distinction between you and the LLC, it makes it very easy to argue that the LLC is not a separate entity from you, and your personal assets could be at risk if someone sues the LLC.
An honest to God cult of personality - formed around a failed steak salesman.
-Pruitt
User avatar
Brontoburglar
The Dude
Posts: 5851
Joined: Mon Mar 18, 2013 7:20 am

Re: Tax Q's Thread

Post by Brontoburglar »

The Sybian wrote:
HDO45331 wrote:
Brontoburglar wrote:Everything now runs through my LLC. I have it for my business + now my full-time duties.

Therefore, I am fully self-employed and self-insured. I pay my LLC taxes with my personal, of course, but should I be paying my insurance with my business credit cards/bank account rather than my personal bank account? Should I do it with other work expenses as well? Does it matter?
I would segregate all business expenses, if I were you. All business expenses should be with separate checking accounts, and credit cards.

At some point in time, you might file the proper form with the IRS to have the LLC taxed as a corporation, and as a Sub-S corporation. That all depends upon our income level. At that time, all revenues and expenses would have to be separated from personal items.
Another issue with not partitioning LLC from personal is that you can lose all of the legal protection the LLC provides. Without a distinction between you and the LLC, it makes it very easy to argue that the LLC is not a separate entity from you, and your personal assets could be at risk if someone sues the LLC.
That makes me think that it'd be a good idea to have waivers for my event given the nature of it
"We're not the smartest people in the world. We go down the straightaway and turn left. That's literally what we do." -- Clint Bowyer
User avatar
A_B
The Dude
Posts: 23319
Joined: Mon Mar 11, 2013 7:36 am
Location: Getting them boards like a wolf in the chicken pen.

Re: Tax Q's Thread

Post by A_B »

The undersigned agrees to hold harmless Bronto Burgled, LLC in the event of any injuries sustained by poor squat technique or restrictive t-shirts.
You know what you need? A lyrical sucker punch to the face.
User avatar
GoodKarma
The Big Lebowski
Posts: 1508
Joined: Tue Mar 19, 2013 12:14 pm
Location: Colorado

Re: Tax Q's Thread

Post by GoodKarma »

Ahh...tis the season.

I have what might be an oddball question...I received a notice from the IRS about a credit posted to my account (an estimated payment I made in 2014 for tax year 2013 - long story). Anyway, I talked to my accountant and he said I should call the IRS to see if there is really is a credit and have them send it to me.

My issue is...how in the hell do you get ahold of someone on the phone from the IRS this time of year? I tried this morning and the system told me to try again later. I would imagine it's like this all day everday from now until April 16.

Anyone have any good tips for getting to talk to an actual person at the IRS?
I would like expensive whiskey.
We only have beer & wine...
What am I, 12?
User avatar
The Sybian
The Dude
Posts: 18865
Joined: Tue Mar 19, 2013 10:36 am
Location: Working in the Crap Part of Jersey

Re: Tax Q's Thread

Post by The Sybian »

GoodKarma wrote:Ahh...tis the season.

I have what might be an oddball question...I received a notice from the IRS about a credit posted to my account (an estimated payment I made in 2014 for tax year 2013 - long story). Anyway, I talked to my accountant and he said I should call the IRS to see if there is really is a credit and have them send it to me.

My issue is...how in the hell do you get ahold of someone on the phone from the IRS this time of year? I tried this morning and the system told me to try again later. I would imagine it's like this all day everday from now until April 16.

Anyone have any good tips for getting to talk to an actual person at the IRS?

You could try flying a small plane through their windows. That seemed to work for that one guy.
An honest to God cult of personality - formed around a failed steak salesman.
-Pruitt
User avatar
HDO45331
Brandt
Posts: 307
Joined: Mon Mar 11, 2013 8:04 am

Re: Tax Q's Thread

Post by HDO45331 »

A letter, referencing the notice, should get you started. There are notice IDs, like CP2000, and there should be an ID# for the letter.

Good luck getting anyone. The IRS has been stretched so thin that, even if you get someone, they won't know how to help. The front line people stock the shelves at Walmart in the offseason.
It's the sixth version of The Swamp. What could possibly go wrong?
User avatar
GoodKarma
The Big Lebowski
Posts: 1508
Joined: Tue Mar 19, 2013 12:14 pm
Location: Colorado

Re: Tax Q's Thread

Post by GoodKarma »

Thanks...I do have a letter with instructions to respond....I will most likely go that route. I was just hoping for a quicker resolution. They're going to owe me money.
I would like expensive whiskey.
We only have beer & wine...
What am I, 12?
User avatar
Keg
The Big Lebowski
Posts: 1026
Joined: Sun Mar 10, 2013 11:42 pm
Location: LA of A

Re: Tax Q's Thread

Post by Keg »

The last time I called the IRS, I left my contact info and they called me back when I was next in the queue (instead of having me wait on hold).

I've also called random (less used) phone numbers that they have on their website to get a human on the phone quicker.

This wasn't during tax season though...
My only fear of death is coming back to this b1tch reincarnated
User avatar
HDO45331
Brandt
Posts: 307
Joined: Mon Mar 11, 2013 8:04 am

Re: Tax Q's Thread

Post by HDO45331 »

GoodKarma wrote:Thanks...I do have a letter with instructions to respond....I will most likely go that route. I was just hoping for a quicker resolution. They're going to owe me money.
Good. If that is in a previous tax year, you'll get some interest, too.
It's the sixth version of The Swamp. What could possibly go wrong?
User avatar
The Sybian
The Dude
Posts: 18865
Joined: Tue Mar 19, 2013 10:36 am
Location: Working in the Crap Part of Jersey

Re: Tax Q's Thread

Post by The Sybian »

Using TurboTax for the first time. While the program seems fantastic and extremely easy to use with great explanations, I am really not happy with the results. We have always gotten refunds of around $4000 Federal and $1,000 state. Going through Turbo Tax, it calculated that I owe the Feds $3,800 and the state $2,000. Our income is up this year, but we both claimed the same W-4 allowances as the past few years, deductions went up by $3,000, and looking at previous years' returns, I don't think I missed any deductions.

We do fall into the AMT, but I think we did the previous years as well. In checking the tax brackets, our taxable income (after deductions) is in a higher bracket, so that probably explains it. Is it taxable income, or total income that sets the bracket? When salaries increase, does the percentage of salary deducted for income tax change if allowances stay the same? Is TurboTax a good, reliable program?
An honest to God cult of personality - formed around a failed steak salesman.
-Pruitt
User avatar
mister d
The Dude
Posts: 29045
Joined: Tue Mar 12, 2013 8:15 am

Re: Tax Q's Thread

Post by mister d »

That seems like a really big swing.
Johnnie wrote: Sat Sep 10, 2022 8:13 pmOh shit, you just reminded me about toilet paper.
User avatar
The Sybian
The Dude
Posts: 18865
Joined: Tue Mar 19, 2013 10:36 am
Location: Working in the Crap Part of Jersey

Re: Tax Q's Thread

Post by The Sybian »

mister d wrote:That seems like a really big swing.
Right? I just don't want to pay to someone to tell me I had the numbers right.
An honest to God cult of personality - formed around a failed steak salesman.
-Pruitt
User avatar
BSF21
The Dude
Posts: 5261
Joined: Mon Mar 11, 2013 2:08 pm
Location: Playing one off the Monster

Re: Tax Q's Thread

Post by BSF21 »

The Sybian wrote:
mister d wrote:That seems like a really big swing.
Right? I just don't want to pay to someone to tell me I had the numbers right.
I can't see any way that you fly 5500$ the other way. I started using an accountant last year and I don't think I can go back to TT. I did BSFgf's by hand this year and ended up better than Turbo Tax had her projected.
Dances with Wolves (1) - BSF

"This place was rockin'," said BSF21.

"There is nothing ever uncommon about BSF21."
User avatar
rass
The Dude
Posts: 20209
Joined: Mon Mar 18, 2013 9:41 am
Location: N effin' J

Re: Tax Q's Thread

Post by rass »

rass wrote:My wife did some work as a consultant last year, registered as a sole proprietorship with the state (NJ). She has yet to be paid for her work or reimbursed for her expenses. She has been told she must claim the expenses (about $500) for 2013. Is that true, and should she just claim a loss?

Also, I usually manage to file with TurboTax, as we're pretty vanilla. I guess this in part may depend on the answer to the above, but should we just suck it up and find a good tax accountant this year?
One year later, and we are going with an accountant. She got paid/reimbursed for everything so late that we just punted on it until this (last?) year. Wednesday evening meeting.


I always felt like TurboTax worked pretty well for us. I did read them getting heavily criticized for the current edition, but I think that was more based on security and fees, not on it flat out not working. It really sounds like you missed something Syb.
I felt aswirl with warm secretions.
User avatar
mister d
The Dude
Posts: 29045
Joined: Tue Mar 12, 2013 8:15 am

Re: Tax Q's Thread

Post by mister d »

Do you both have the same jobs? If so, recalc the percentage of federal tax you each have deducted. If not, there's your probable answer.
Johnnie wrote: Sat Sep 10, 2022 8:13 pmOh shit, you just reminded me about toilet paper.
User avatar
The Sybian
The Dude
Posts: 18865
Joined: Tue Mar 19, 2013 10:36 am
Location: Working in the Crap Part of Jersey

Re: Tax Q's Thread

Post by The Sybian »

rass wrote:
rass wrote:My wife did some work as a consultant last year, registered as a sole proprietorship with the state (NJ). She has yet to be paid for her work or reimbursed for her expenses. She has been told she must claim the expenses (about $500) for 2013. Is that true, and should she just claim a loss?

Also, I usually manage to file with TurboTax, as we're pretty vanilla. I guess this in part may depend on the answer to the above, but should we just suck it up and find a good tax accountant this year?
One year later, and we are going with an accountant. She got paid/reimbursed for everything so late that we just punted on it until this (last?) year. Wednesday evening meeting.


I always felt like TurboTax worked pretty well for us. I did read them getting heavily criticized for the current edition, but I think that was more based on security and fees, not on it flat out not working. It really sounds like you missed something Syb.
I took the AMT test on the IRS website, and no matter how far I pushed various numbers, I still fell into it. I'm going to research more ways to get deductions under the AMT tonight.
An honest to God cult of personality - formed around a failed steak salesman.
-Pruitt
User avatar
The Sybian
The Dude
Posts: 18865
Joined: Tue Mar 19, 2013 10:36 am
Location: Working in the Crap Part of Jersey

Re: Tax Q's Thread

Post by The Sybian »

mister d wrote:Do you both have the same jobs? If so, recalc the percentage of federal tax you each have deducted. If not, there's your probable answer.
I changed jobs last year, and had a period of unemployment. My new job pays significantly more, and my wife pay went up a bit. Would moving up a bracket make that big of a difference? Do I just multiply the percentage increase in bracket by the taxable income? That gets me pretty close to the difference between last years return and my TT number.
An honest to God cult of personality - formed around a failed steak salesman.
-Pruitt
User avatar
BSF21
The Dude
Posts: 5261
Joined: Mon Mar 11, 2013 2:08 pm
Location: Playing one off the Monster

Re: Tax Q's Thread

Post by BSF21 »

The Sybian wrote:
mister d wrote:Do you both have the same jobs? If so, recalc the percentage of federal tax you each have deducted. If not, there's your probable answer.
I changed jobs last year, and had a period of unemployment. My new job pays significantly more, and my wife pay went up a bit. Would moving up a bracket make that big of a difference? Do I just multiply the percentage increase in bracket by the taxable income? That gets me pretty close to the difference between last years return and my TT number.
Unless your witholdings changed I can't imagine it would. I plugged my Gross income off my W-2 in the tax calculator at the back of the 10-40 book and without working it down to taxable income I'm getting back well over 3K based on that figure. and My income was up 35% from last year. There's simply no way there should be that large of a swing from last year to this unless witholdings were messed up or you transposed/made and error.
Dances with Wolves (1) - BSF

"This place was rockin'," said BSF21.

"There is nothing ever uncommon about BSF21."
User avatar
Shirley
The Dude
Posts: 7516
Joined: Mon Mar 11, 2013 2:32 pm

Re: Tax Q's Thread

Post by Shirley »

The Sybian wrote:
mister d wrote:Do you both have the same jobs? If so, recalc the percentage of federal tax you each have deducted. If not, there's your probable answer.
I changed jobs last year, and had a period of unemployment. My new job pays significantly more, and my wife pay went up a bit. Would moving up a bracket make that big of a difference? Do I just multiply the percentage increase in bracket by the taxable income? That gets me pretty close to the difference between last years return and my TT number.
Yeah, that's about it. Changing brackets can make a big difference. In your calculations though, remember that you only pay the higher rate on the amount above the previous bracket. In other words, if the rate was 20% for 100,000 and 25% for 100,000 to 200,000 and you made $150K, you'd pay 20% on the first $100k and 25% on the next $50k.
Totally Kafkaesque
User avatar
The Sybian
The Dude
Posts: 18865
Joined: Tue Mar 19, 2013 10:36 am
Location: Working in the Crap Part of Jersey

Re: Tax Q's Thread

Post by The Sybian »

Shirley wrote:
The Sybian wrote:
mister d wrote:Do you both have the same jobs? If so, recalc the percentage of federal tax you each have deducted. If not, there's your probable answer.
I changed jobs last year, and had a period of unemployment. My new job pays significantly more, and my wife pay went up a bit. Would moving up a bracket make that big of a difference? Do I just multiply the percentage increase in bracket by the taxable income? That gets me pretty close to the difference between last years return and my TT number.
Yeah, that's about it. Changing brackets can make a big difference. In your calculations though, remember that you only pay the higher rate on the amount above the previous bracket. In other words, if the rate was 20% for 100,000 and 25% for 100,000 to 200,000 and you made $150K, you'd pay 20% on the first $100k and 25% on the next $50k.
Last year we snuck under the next bracket by $3,000, so all but $3k of the increased income falls under the highest percentage.
An honest to God cult of personality - formed around a failed steak salesman.
-Pruitt
User avatar
mister d
The Dude
Posts: 29045
Joined: Tue Mar 12, 2013 8:15 am

Re: Tax Q's Thread

Post by mister d »

What BSF said. The increased revenue still should have been withheld so its not a matter of "we made $28K more at 25% is the $7K". The change in jobs could easily be the difference, a quick percentage calc would confirm that.
Johnnie wrote: Sat Sep 10, 2022 8:13 pmOh shit, you just reminded me about toilet paper.
User avatar
Shirley
The Dude
Posts: 7516
Joined: Mon Mar 11, 2013 2:32 pm

Re: Tax Q's Thread

Post by Shirley »

mister d wrote:What BSF said. The increased revenue still should have been withheld so its not a matter of "we made $28K more at 25% is the $7K". The change in jobs could easily be the difference, a quick percentage calc would confirm that.
But it's going to be withheld at the wrong rate. Unless you explicitly tell them otherwise, payroll companies withhold at a rate assuming the employee is filing as a single. When you combine salaries and get to a higher bracket, now you are both withholding too little. The same thing happened with me and my wife when she went back to working full time a few years ago.
Totally Kafkaesque
User avatar
mister d
The Dude
Posts: 29045
Joined: Tue Mar 12, 2013 8:15 am

Re: Tax Q's Thread

Post by mister d »

Right, but that's just withholding at the 25% rate when it should be 28%. That won't cause a gap of $7K or whatever it was.
Johnnie wrote: Sat Sep 10, 2022 8:13 pmOh shit, you just reminded me about toilet paper.
User avatar
BSF21
The Dude
Posts: 5261
Joined: Mon Mar 11, 2013 2:08 pm
Location: Playing one off the Monster

Re: Tax Q's Thread

Post by BSF21 »

mister d wrote:Right, but that's just withholding at the 25% rate when it should be 28%. That won't cause a gap of $7K or whatever it was.
If it did, Syb is mailing us all 30 year scotches for Christmas this year.
Dances with Wolves (1) - BSF

"This place was rockin'," said BSF21.

"There is nothing ever uncommon about BSF21."
User avatar
The Sybian
The Dude
Posts: 18865
Joined: Tue Mar 19, 2013 10:36 am
Location: Working in the Crap Part of Jersey

Re: Tax Q's Thread

Post by The Sybian »

BSF21 wrote:
mister d wrote:Right, but that's just withholding at the 25% rate when it should be 28%. That won't cause a gap of $7K or whatever it was.
If it did, Syb is mailing us all 30 year scotches for Christmas this year.
The worst part about doing taxes is seeing a list of annual expenses like child care and property tax lined up. And then seeing the maximum allowed deductible is almost the cost of one month for after/before care for my daughter in K. All of your scotch money is going to be sunk into my sewer line. Sorry, Dougs.
An honest to God cult of personality - formed around a failed steak salesman.
-Pruitt
User avatar
mister d
The Dude
Posts: 29045
Joined: Tue Mar 12, 2013 8:15 am

Re: Tax Q's Thread

Post by mister d »

Yeah, what is it? $800? Thanks for the 7 day write-off, Obama.
Johnnie wrote: Sat Sep 10, 2022 8:13 pmOh shit, you just reminded me about toilet paper.
Post Reply