The Swamp

my yearly trip to the accountant took much longer than usual.
19 minutes this morning, as opposed to our customary 7-9 minutes.

year in and year out... always does right by us. probably should have gone to see him two months ago when we had the paperwork ready.

mister d wrote:Yeah, what is it? $800? Thanks for the 7 day write-off, Obama.

$1,200 per kid.

The Sybian wrote:

mister d wrote:Yeah, what is it? $800? Thanks for the 7 day write-off, Obama.

$1,200 per kid.

My bad, it's $1,200 for BOTH kids. Fuck me. Approximately 11 school days are deductible for my daughter. And this doesn't factor in the cost of summer care, which is anywhere from double to 4 times the cost. Fuck, even more for my son. On program he is doing for a couple of weeks is more for one week than his entire month, and it ends at 3:00. American dream my ass. Broke down and went to an accountant to make sure I didn't miss anything. I needed piece of mind. TurboTax was dead on to the dollar for Federal, and within $100 for state compared to our accountant's figures. At least she could explain all of the additional taxes added on due to jumping brackets and other thresholds. What pisses me off is that federal income taxes take no account for cost of living. $250,000 in the Northeast is not the same lifestyle as $250,000 is Nebraska. Property taxes were not deductible due to the AMT. My property tax is 10 times as much as my parents for a similar house on a similar sized plot of land, yet I can not take a deduction for that. Why does falling into the AMT force me to pay taxes on my taxes? The purpose of the AMT was to prevent the wealthy from obscenely deducting their income, but they can afford tax shelters and have the ability to hide their income, so it is just the middle class getting hit now. And I didn't even get my Obamaphone!

The Sybian wrote:

The Sybian wrote:

mister d wrote:Yeah, what is it? $800? Thanks for the 7 day write-off, Obama.

$1,200 per kid.

My bad, it's $1,200 for BOTH kids. Fuck me. Approximately 11 school days are deductible for my daughter. And this doesn't factor in the cost of summer care, which is anywhere from double to 4 times the cost. Fuck, even more for my son. On program he is doing for a couple of weeks is more for one week than his entire month, and it ends at 3:00. American dream my ass. Broke down and went to an accountant to make sure I didn't miss anything. I needed piece of mind. TurboTax was dead on to the dollar for Federal, and within $100 for state compared to our accountant's figures. At least she could explain all of the additional taxes added on due to jumping brackets and other thresholds. What pisses me off is that federal income taxes take no account for cost of living. $250,000 in the Northeast is not the same lifestyle as $250,000 is Nebraska. Property taxes were not deductible due to the AMT. My property tax is 10 times as much as my parents for a similar house on a similar sized plot of land, yet I can not take a deduction for that. Why does falling into the AMT force me to pay taxes on my taxes? The purpose of the AMT was to prevent the wealthy from obscenely deducting their income, but they can afford tax shelters and have the ability to hide their income, so it is just the middle class getting hit now. And I didn't even get my Obamaphone!

Inequities with the AMT has been a problem for awhile now. Of course, in classic American fashion both political parties agree it's a problem with the tax code, but nothing ever gets done because Washington. Unless you're in the top 1 percent, no one gives a fuck about you.

The Sybian wrote:

The Sybian wrote:

mister d wrote:Yeah, what is it? $800? Thanks for the 7 day write-off, Obama.

$1,200 per kid.

My bad, it's $1,200 for BOTH kids. Fuck me. Approximately 11 school days are deductible for my daughter. And this doesn't factor in the cost of summer care, which is anywhere from double to 4 times the cost. Fuck, even more for my son. On program he is doing for a couple of weeks is more for one week than his entire month, and it ends at 3:00. American dream my ass. Broke down and went to an accountant to make sure I didn't miss anything. I needed piece of mind. TurboTax was dead on to the dollar for Federal, and within $100 for state compared to our accountant's figures. At least she could explain all of the additional taxes added on due to jumping brackets and other thresholds. What pisses me off is that federal income taxes take no account for cost of living. $250,000 in the Northeast is not the same lifestyle as $250,000 is Nebraska. Property taxes were not deductible due to the AMT. My property tax is 10 times as much as my parents for a similar house on a similar sized plot of land, yet I can not take a deduction for that. Why does falling into the AMT force me to pay taxes on my taxes? The purpose of the AMT was to prevent the wealthy from obscenely deducting their income, but they can afford tax shelters and have the ability to hide their income, so it is just the middle class getting hit now. And I didn't even get my Obamaphone!

Hit AMT for first time a few years ago. It was a .... shock.

HDO?

So, I moved, more or less, to Bellevue, WA at the end of August. My wife and kids stayed in our NC. As far as Microsoft is concerned, my primary residence is my apartment in Bellevue, and that's where I've spend 75% of my time since I moved out there (the rest of it is back in NC).

So how do I work out my residence for taxes? Can I not do a married-filed-jointly return?

Since Washington doesn't have state income tax, I don't want to just say that my primary residence has been NC all along, right? Microsoft certainly hasn't been paying NC income tax.

Shirley wrote:HDO?

So, I moved, more or less, to Bellevue, WA at the end of August. My wife and kids stayed in our NC. As far as Microsoft is concerned, my primary residence is my apartment in Bellevue, and that's where I've spend 75% of my time since I moved out there (the rest of it is back in NC).

So how do I work out my residence for taxes? Can I not do a married-filed-jointly return?

Since Washington doesn't have state income tax, I don't want to just say that my primary residence has been NC all along, right? Microsoft certainly hasn't been paying NC income tax.

Don't rely on my advice, but my understanding is Microsoft is only responsible for deducting WA taxes, since that is where you work. If you submit NC as your domicile, you are fully responsible for paying NC income tax on income earned out of state. A lot of states have reciprocity, for example if you live in NJ and work in NY, New Jersey will collect income tax withheld by NY. IIRC, if NY withholds more than NJ collects, NY keeps the difference. Since WA doesn't tax income, you would likely owe NC a decent chunk of change.

Isn't the athlete rule you owe state taxes to the state where you're physically working, not where you hold your home address?

Yeah, you guys hit on the key issues. I'd hate to have to write a fat check to NC if I don't have to.

Shirley wrote:Yeah, you guys hit on the key issues. I'd hate to have to write a fat check to NC if I don't have to.

Given the implications I think this year at least you'd be smart to have a professional do your taxes.

That said, my understanding is the IRS gives you some decent latitude to define where you live for purposes of income/taxation. And even though the IRS doesn't control state taxes, where you tell the federal government you live defines the biggest part of the state question.

My only comp is when I moved from MI to NV I moved from a state with state income tax to no state income tax and despite traveling frequently to other states and even back to Michigan (for work and visits) I just simply defined the percentage of time lived in NV as the time after I moved (in other words I moved the first week in October, so I said I lived 25 percent of the year in NV.

The biggest question might well be if given that (if you legally can say you lived in WA for 75 percent of the year which I think you legally CAN) if you can still file a joint return since your wife lives in NC. I think you're probably going to have to file married filing separately to take full advantage of the difference in state taxation. But again, you should definitely talk to a pro.

mister d wrote:Isn't the athlete rule you owe state taxes to the state where you're physically working, not where you hold your home address?

I thought pro athletes were actually taxed based on where they played the games. I'm sure that's wrong though.

Giff wrote:

mister d wrote:Isn't the athlete rule you owe state taxes to the state where you're physically working, not where you hold your home address?

I thought you were actually taxed based on where you played the games. I'm sure that's wrong though.

You guys are saying the same thing. So even if you play for the Houston Rockets where there is no state income tax, you owe California taxes on games played at Golden State, the Lakers, etc.,etc.

brian wrote:

Giff wrote:

mister d wrote:Isn't the athlete rule you owe state taxes to the state where you're physically working, not where you hold your home address?

I thought you were actually taxed based on where you played the games. I'm sure that's wrong though.

You guys are saying the same thing. So even if you play for the Houston Rockets, you owe California taxes on games played at Golden State, the Lakers, etc.,etc.

Yeah, now that I re-read mister d's comments, we are.

Anyone else paying w/o dependents paying ~3k in taxes on ~75k income? (Federal only, YAY Washington state) I make 65k at work, and took in ~12k in rental income and owe uncle sam approximately 3k. Did my taxes through turbo tax, and it seemed right.

blundercrush wrote:Anyone else paying w/o dependents paying ~3k in taxes on ~75k income? (Federal only, YAY Washington state) I make 65k at work, and took in ~12k in rental income and owe uncle sam approximately 3k. Did my taxes through turbo tax, and it seemed right.

If you had $0 in taxes withheld and owe only $3K then that doesn't sound right at all unless you had some insane writeoffs/deductions.

https://www.irs.gov/pub/irs-pdf/i1040tt.pdf" onclick="window.open(this.href);return false;

Tax table.

brian wrote:

blundercrush wrote:Anyone else paying w/o dependents paying ~3k in taxes on ~75k income? (Federal only, YAY Washington state) I make 65k at work, and took in ~12k in rental income and owe uncle sam approximately 3k. Did my taxes through turbo tax, and it seemed right.

If you had $0 in taxes withheld and owe only $3K then that doesn't sound right at all unless you had some insane writeoffs/deductions.

Are you a truly shitty investor?

I read it that he underpaid by that much and had to cut a check, not that his total tax liability was just 3k. It doesn't seem unreasonable without kids and such.

I think I've found a new tax advisor:

Glad to see HDO diversifying.

A_B wrote: ↑Fri Jan 18, 2019 3:16 pm Glad to see HDO diversifying.

"So, I am sensing a lot of tension and discomfort." [continues to sit with his legs spread open].

I wonder if "blue D" could be code for something?

The Sybian wrote: ↑Fri Jan 18, 2019 3:25 pm

A_B wrote: ↑Fri Jan 18, 2019 3:16 pm Glad to see HDO diversifying.

"So, I am sensing a lot of tension and discomfort." [continues to sit with his legs spread open].

This gave me a pretty hearty and extended LOL.

Hey! Ya boy is a VITA assistant on base this year! If you're an E-1 to E-7, an O-1 to O-3, or retiree who takes in less than $80k a year and has a rental property or less hit me up.

So if I didn't have a new college student, I would have owed under the new tax plan. However, it was because of an issue with my wife's withholding so it was on us, not the tax plan.

A_B wrote: ↑Tue Feb 05, 2019 11:22 am So if I didn't have a new college student, I would have owed under the new tax plan. However, it was because of an issue with my wife's withholding so it was on us, not the tax plan.

Do you have a 529 plan for college funding? I have no tax effect from my girl being in college, because you aren't taxed on investment income in the 529 plan. (Sure wish I had more money in the college fund!)

sancarlos wrote: ↑Tue Feb 05, 2019 11:25 am

A_B wrote: ↑Tue Feb 05, 2019 11:22 am So if I didn't have a new college student, I would have owed under the new tax plan. However, it was because of an issue with my wife's withholding so it was on us, not the tax plan.

Do you have a 529 plan for college funding? I have no tax effect from my girl being in college, because you aren't taxed on investment income in the 529 plan. (Sure wish I had more money in the college fund!)

We never did a 529, no. One of our bigger regrets, but we started having kids pretty young, and really couldn't spare much because we weren't making a whole lot. So when I was going through turbotax, it found a credit based on the reporting info we got from BU.

Doing the tax assistance thing is pretty fun. From the easy stuff (W2 only, resident of a state with no state income tax) to the harder stuff (married with multiple W2s, 1099-R, SSA, rental property, royalties, and gambling "prizes" as opposed to winnings, Uber driving (just don't bother) and/or being a resident of California or Illinois) I'm learning a lot.

Luckily the people I've done taxes for haven't been angry considering stuff like this is coming out: Average tax refund down 17 percent, IRS reports

The end result is going to be hard working people scratching their head and going "Whaaaa? What happened?" When the likely answer is "You didn't alter your withholding after the tax cut went through in 2017. You received more money back during the year and the tables altered enough that your overage (refund) is smaller."

Now I know you should strive for $0 back every year, but the average person sees it as a forced savings account and cash injection to pay for some things in the spring. But if it's looked at as "the government took my money" as a way to prove the tax cut was bullshit, then that's good with me.

Edit: Just want to note, every situation is different, but for the scope of returns I'm dealing with, it can be generalized.

Missouri apparently fucked up their withholding tables for employers after the tax cut. My brother and his wife are paying the four-figure price.

Fox Corp. did not adjust the withholding for any of their employees last year.

That should be fun for many of them in the near future.

Johnnie wrote: ↑Sat Feb 23, 2019 11:52 am Doing the tax assistance thing is pretty fun. From the easy stuff (W2 only, resident of a state with no state income tax) to the harder stuff (married with multiple W2s, 1099-R, SSA, rental property, royalties, and gambling "prizes" as opposed to winnings, Uber driving (just don't bother) and/or being a resident of California or Illinois) I'm learning a lot.

Luckily the people I've done taxes for haven't been angry considering stuff like this is coming out: Average tax refund down 17 percent, IRS reports

The end result is going to be hard working people scratching their head and going "Whaaaa? What happened?" When the likely answer is "You didn't alter your withholding after the tax cut went through in 2017. You received more money back during the year and the tables altered enough that your overage (refund) is smaller."

Now I know you should strive for $0 back every year, but the average person sees it as a forced savings account and cash injection to pay for some things in the spring. But if it's looked at as "the government took my money" as a way to prove the tax cut was bullshit, then that's good with me.

Edit: Just want to note, every situation is different, but for the scope of returns I'm dealing with, it can be generalized.

I think it was intentional. The GOP wanted people to see more money in their paychecks every week so they could tout middle class tax savings before the election, and by the time people realized they got fucked, the election was already over. I'm just waiting for Republicans to say, "when we had control of the House, your tax withholdings were smaller, now that the Dems control the House, your returns are smaller."

I haven't done mine this year, but I guarantee it's a fuckton better than last year. My wife withheld less than she meant to, and I cashed in some of my employee stocks, so we owed $30,000 Federal and $10,000 state. That was a fucking shock.

Jesus Christ. I paid like a few grand in tax. One day I hope to make enough to pay that much in tax.

So, if you sold a bunch of stocks to put a down payment on a condo, a week or so later, you walk away from the purchase and instead reinvest the money in the stock market, do you pay taxes on capital gains if you buy back in again?

blundercrush wrote: ↑Tue Apr 27, 2021 6:56 pm So, if you sold a bunch of stocks to put a down payment on a condo, a week or so later, you walk away from the purchase and instead reinvest the money in the stock market, do you pay taxes on capital gains if you buy back in again?

Yes. You realized the taxable gain, so you have a taxable event. That you reinvested the money is irrelevant.

sancarlos wrote: ↑Tue Apr 27, 2021 6:58 pm

blundercrush wrote: ↑Tue Apr 27, 2021 6:56 pm So, if you sold a bunch of stocks to put a down payment on a condo, a week or so later, you walk away from the purchase and instead reinvest the money in the stock market, do you pay taxes on capital gains if you buy back in again?

Yes. You realized the taxable gain, so you have a taxable event. That you reinvested the money is irrelevant.

OOOOOF. welp. 2021 is gonna suck. thanks for such a fast response.

I’m pretty sure my answer is correct, but I’m not a tax pro. So you might want to double check with a pro.

Fairly sure that tracks. My swing trades in 2020 netted me +$3.5k and because it was under short term capital gains (< 1 year) I paid taxes on the income commensurate with my tax bracket. All of the money in that brokerage account is tied up in other things again, so I kinda did what you did.

If I had done this and the ownership of the stocks was long term (> 1 year) it would cap at 15%. You have to be judicious when moving around investment money.

In a similar tax avoidance vein, this is why people go ROTH over Traditional for individual retirement accounts/401Ks. You've *already paid* the tax with ROTH when you were, more often then not, poorer and in a lower bracket.

(My wife, god love her, just learned this the hard way because she was adamant Vanguard wouldn't let her roll over her 401k so she cashed out - I couldn't protest this enough, but she has a stubborn streak like her dad. Took the 10% penalty AND was raked with taxes. Made the MFJ taxes this year really fun!)

I smashed my taxes-owed record this year. Fucking painful. I did my taxes on TurboTax, gagged at the number, so went to a pro to try again. Got basically the same number. I have to write a check to Uncle Same for $23K. Thanks, Trump!

Shirley wrote: ↑Sun May 02, 2021 10:31 am I smashed my taxes-owed record this year. Fucking painful. I did my taxes on TurboTax, gagged at the number, so went to a pro to try again. Got basically the same number. I have to write a check to Uncle Same for $23K. Thanks, Trump!

I feel your pain, I spent weeks on Turbo Tax to get it under $25K. I lost a lot of my previous deductions, could only deduct a third of my property taxes, all because of Trump's tax plan. And the one year I didn't get fucked by the AMT and items deductions could have helped, I didn't have many as opposed to every other year where I had $1,000s of dollars of deductible shit that didn't matter.

I've got a pretty odd situation in my taxes this year. Being retired, I have no company-sponsored healthcare. So, I signed up for Obamacare (Affordable Care Act, or ACA). You have to declare your expected income so they know how much credit they'll give you. Not having a job, I live on a modest pension, modest investment interest and dividends, and (notably) from selling off investments, which of course can create capital gains. I earned more in 2020 than I predicted because of the latter situation.

I betcha didn't know this: The federal government will cover some of your healthcare through ACA if your total income (before deductions) is less than four times the officially defined poverty level for your size of family. But, the state of California will cover some of your healthcare through ACA if you earn less than six times the officially defined poverty level.

So, in 2020 my total earnings (including capital gains) were above the federal threshold. So, as a part of my 2020 taxes, I am required to pay back all of the health insurance benefit they paid for me and my family. That is over $30,000. I about shit my pants when I realized this. BUT, the good news is that in 2020, my total earnings were still below the California state threshold. So, I am in line for a state tax offsetting credit payment of $22,000 as part of my tax refund.

So, I filed the taxes early, hoping to receive my state refund before I have to pay my federal taxes. Nothing happened. So, I got on the phone a couple days ago. The clerk I spoke with told me that refunds that large had to be reviewed so I was stuck for awhile. I explained the situation to him. He replied, "Oh, goodness!" (Literally). He said he would process it immediately. So, I got that going for me. Which is nice.

Now, my next issue is going to be next year's taxes. Normally, a state tax refund is taxable for federal income taxes. But, since this is an ACA insurance credit offsetting a federal debit, I don't think it should be taxable. Probably going to have to hire a tax guy for that argument.