Search found 1298 matches

by MarkNYC
Sat May 26, 2018 9:59 am
Forum: Personal Finance (Not Investing)
Topic: Does IRS penalize for overpayment of taxes?
Replies: 19
Views: 2030

Re: Does IRS penalize for overpayment of taxes?

Just this week a coworker and I were talking about estimating taxes and he said you can be assessed fines for both underpaying and overpaying. I was surprised but he was confident that is the case. Your coworker is mistaken. There is no penalty for overpaying estimated income tax or any other type ...
by MarkNYC
Fri May 25, 2018 8:45 am
Forum: Personal Finance (Not Investing)
Topic: Selling ‘Gifted’ property
Replies: 7
Views: 1254

Re: Selling ‘Gifted’ property

If it's within 9 months from the first transfer, the child might be able to disclaim it, thus avoiding two taxable gifts. In this instance, I doubt there are any taxable gifts. For 2017, the gift tax exemption was $5.5M (IIRC) and has increased to $11M (IIRC) for 2018. The term "taxable gift" refer...
by MarkNYC
Wed May 23, 2018 8:18 pm
Forum: Personal Finance (Not Investing)
Topic: Helping a friend injured in a car crash file a few years of back tax returns, missing a weird K-1...
Replies: 6
Views: 564

Re: Helping a friend injured in a car crash file a few years of back tax returns, missing a weird K-1...

Will they run into difficulties if they do not report that missing income? If you think they might run into trouble, what is the best solution? As a part of the Schwab portfolio they owned a teeny-tiny share of something called PowerShares DB Commodity Index, which I have learned is some kind of we...
by MarkNYC
Sun May 20, 2018 6:21 pm
Forum: Investing - Help with Personal Investments
Topic: Tax related questions
Replies: 17
Views: 1451

Re: Tax related questions

Are withdrawals from 401K subject to state tax? If so, how is taxed if I end up living in my home country after age 59.5 (in which case I will not be tied to any state)? Your last state of residency before you leave the USA will consider you a resident and continue taxing your income while you are ...
by MarkNYC
Thu May 10, 2018 6:53 pm
Forum: Personal Finance (Not Investing)
Topic: Estimated tax question
Replies: 21
Views: 1697

Re: Estimated tax question

It's very much a semantic issue: what is the definition of "safe harbor" in this situation? Those who define it as "not having to pay a penalty" will reach conclusions different from those who define it as "any one of the three conditions leading to the 'You are NOT required to pay estimated tax' b...
by MarkNYC
Thu May 10, 2018 3:41 pm
Forum: Personal Finance (Not Investing)
Topic: Estimated tax question
Replies: 21
Views: 1697

Re: Estimated tax question

Since a single first quarter installment is not four equal installments it does not exactly follow the description of the safe harbor. Note that form 1040-es specifically says: Payment Due Dates You can pay all of your estimated tax by April 17, 2018, or in four equal amounts by the dates shown bel...
by MarkNYC
Tue May 08, 2018 2:14 pm
Forum: Investing - Theory, News & General
Topic: Don't leave your non-spouse heirs TIRAs with basis, unless you hate them!
Replies: 92
Views: 8732

Re: Don't leave your non-spouse heirs TIRAs with basis, unless you hate them!

I suspect those who have both their own 8606 as well as an inherited IRA with basis and thus an inherited 8606 usually have more complex tax returns... The complication comes for those using tax software, none of which can handle this situation. It’s not just a matter of having to do an 8606 by han...
by MarkNYC
Sun May 06, 2018 3:55 pm
Forum: Personal Finance (Not Investing)
Topic: IRS Filing [Should 1040X be filed?]
Replies: 7
Views: 921

Re: IRS Filing

My son is in college, so I helped him file his taxes electronically on about 23 March and he was due about a $100 refund. After we filed, I realized we left some income off and he owed about $1000, assuming the $100 refund came through. I expected the $100 refund to show up before 17 April, but it ...
by MarkNYC
Tue Apr 17, 2018 2:41 pm
Forum: Personal Finance (Not Investing)
Topic: Relative Never Took RMDs on Inherited IRA From 2004
Replies: 19
Views: 2620

Re: Relative Never Took RMDs on Inherited IRA From 2004

I have never heard of an instance where the IRS assessed the 50% penalty tax either proactively or as a result of a denial of a waiver request on Form 5329. If it ever happens it is rare. I had an opportunity recently to speak briefly with a former IRS Commissioner and asked him about this, that is,...
by MarkNYC
Sun Apr 15, 2018 6:05 pm
Forum: Personal Finance (Not Investing)
Topic: HELP - IRS says I owe close to $12,000 for 2016 taxes
Replies: 26
Views: 4482

Re: HELP - IRS says I owe close to $12,000 for 2016 taxes

The IRS realized the mistake and sent her a bill this week. Gross proceeds not reported: $37,000 Taxes owed: $9,100 Tax understatement penalty: $1,800 Interest: $440 I assume the IRS used a cost basis of 0 and assumed everything was a short-term gain. She's in the 25% tax bracket and that seems to ...
by MarkNYC
Sat Mar 31, 2018 8:26 am
Forum: Investing - Help with Personal Investments
Topic: Residential Energy Credits-Non owned property
Replies: 14
Views: 786

Re: Residential Energy Credits-Non owned property

barberakb wrote:
Fri Mar 30, 2018 2:26 pm
The way I read it would be no.

Both the first and last sentence state "your home"

IMO it isn't your home unless you own it.
So would you consider a person who rents to be a homeless person? :wink:
by MarkNYC
Thu Mar 29, 2018 1:47 pm
Forum: Personal Finance (Not Investing)
Topic: SS Taxation -Please Clarify
Replies: 12
Views: 1331

Re: SS Taxation -Please Clarify

After reading the Bogleheads wiki on the subject [Taxation of Social Security benefits] ... $90,000 AGI [?] exceeds couple's upper base of $44,000 so 85% of SS is taxable, 85% of $20,000 = $17,000 Your $90,000 is correct. (However it is not called AGI (Adjusted Gross Income) -- that refers to somet...
by MarkNYC
Thu Mar 29, 2018 11:43 am
Forum: Personal Finance (Not Investing)
Topic: No income but sold a house... (taxes)
Replies: 29
Views: 2706

Re: No income but sold a house... (taxes)

Since the home was inherited, it's probably eligible for LTCL treatment - so even though you don't get a refund, that Long Term Capital Loss will carry forward. In the original post, the OP says "sold my home in Colorado and moved to Nevada." This suggests the home was used as a personal residence....
by MarkNYC
Tue Mar 27, 2018 7:18 pm
Forum: Personal Finance (Not Investing)
Topic: Gifting Appreciated Stocks to Grandparent to pay Child's Private School Tuition
Replies: 121
Views: 7042

Re: Gifting Appreciated Stocks to Grandparent to pay Child's Private School Tuition

The grandparent's cost basis will be the fair market value at the time of the donation, so if the grandparent immediately sells it, their capital gains will be zero. That's not correct. The basis for the recipient of the gift will be the same as the basis for the person who made the gift. Not accor...
by MarkNYC
Tue Mar 27, 2018 7:10 pm
Forum: Personal Finance (Not Investing)
Topic: Gifting Appreciated Stocks to Grandparent to pay Child's Private School Tuition
Replies: 121
Views: 7042

Re: Gifting Appreciated Stocks to Grandparent to pay Child's Private School Tuition

willthrill81 wrote:
Tue Mar 27, 2018 4:48 pm
The grandparent's cost basis will be the fair market value at the time of the donation, so if the grandparent immediately sells it, their capital gains will be zero.
That's not correct. The basis for the recipient of the gift will be the same as the basis for the person who made the gift.
by MarkNYC
Sat Mar 17, 2018 11:08 am
Forum: Personal Finance (Not Investing)
Topic: I owe $50k in 2017 taxes. Where can I find a good accountant/ bookkeeper? Or DIY?
Replies: 26
Views: 3531

Re: I owe $50k in 2017 taxes. Where can I find a good accountant/ bookkeeper? Or DIY?

Note that filing for an extension does not relieve you of the obligation to pay the tax by April 15. If you pay 90% of the tax by April 15 (including the payment with the extension, plus any payments already made by withholding and estimated tax), you can file for an extension, and owe only interes...
by MarkNYC
Thu Mar 15, 2018 6:54 pm
Forum: Investing - Help with Personal Investments
Topic: Help with the new tax laws and deductions for a w2 salesman
Replies: 8
Views: 560

Re: Help with the new tax laws and deductions for a w2 salesman

As an employee who works as a travelling salesman, you should check your W-2 to see if box 13 is checked. If it is, you qualify as a "statutory employee", which means you can report on Schedule C both your wage income and your unreimbursed business expenses (without paying self-employment tax).
by MarkNYC
Thu Mar 15, 2018 4:54 pm
Forum: Personal Finance (Not Investing)
Topic: Not Claiming Dependant to Get Saver’s Credit
Replies: 13
Views: 1250

Re: Not Claiming Dependant to Get Saver’s Credit

The important part about dependency is that you cannot decide who is a dependent and who is not. The support tests are clear about dependency, so if you legally can be claimed as a dependent of another individual, then you cannot claim yourself (which is to say take your exemption). Just because so...
by MarkNYC
Wed Mar 14, 2018 1:42 pm
Forum: Personal Finance (Not Investing)
Topic: Trad IRA Conversion to Roth: Should I bother? [What is "earned income"?]
Replies: 23
Views: 1347

Re: What constitutes earned income for trad/Roth IRA contributions?

* Report $3000 income on your Schedule C. * Do not take any business deductions. * You will have to compute Self-Employment tax on Schedule SE. * Compute Form 8880. You will garner a Savers Credit of $1000 for your (>$2000) IRA contribution, whether it is Traditional IRA or Roth IRA. * In your othe...
by MarkNYC
Tue Mar 13, 2018 7:29 pm
Forum: Personal Finance (Not Investing)
Topic: MLP Taxation Confusion [Master Limited Partnership]
Replies: 27
Views: 1744

Re: MLP Taxation Confusion [Master Limited Partnership]

Your original basis is increased by any income items on the K-1s, and is decreased by any loss or deduction items on the K-1s as well as any distributions received. The losses on the K-1s are generally not deductible until the year of sale, so be sure to indicate on your tax program input that 2017 ...
by MarkNYC
Tue Mar 13, 2018 2:06 pm
Forum: Personal Finance (Not Investing)
Topic: Inhertiance beneficiaries and tax deductions
Replies: 5
Views: 683

Re: Inhertiance beneficiaries and tax deductions

My friend, Roger, and his sister are the only beneficiaries. They have donated some stuff to goodwill such as clothing and medical equipment. For this the "estate" has some donation receipts which all together total about $2,000. When filing their taxes, it's my understanding that both Roger and hi...
by MarkNYC
Mon Mar 12, 2018 6:45 pm
Forum: Personal Finance (Not Investing)
Topic: When does a trust file?
Replies: 10
Views: 851

Re: When does a trust file?

Mark, what’s your reaction to my idea of filing a return in order to generate a K-1? Gill Gill, I think your suggestion makes sense, because it would be very helpful to the beneficiary. Perhaps the "under $600" part of the filing requirements is analogous to the 1099-MISC filing requirement, where ...
by MarkNYC
Mon Mar 12, 2018 5:42 pm
Forum: Personal Finance (Not Investing)
Topic: When does a trust file?
Replies: 10
Views: 851

Re: When does a trust file?

Without looking up the reference, I believe “Taxable Income” here refers to to a positive non zero number on the 1041 line 22. This is not the same as just having a couple of hundred dollars of interest. Yes, you might be correct; I assumed the OP didn't have deductions from lines 11 - 21, as he wa...
by MarkNYC
Tue Mar 06, 2018 9:07 am
Forum: Personal Finance (Not Investing)
Topic: 1099-MISC from SOFI - Am I self employed?
Replies: 18
Views: 1298

Re: 1099-MISC from SOFI - Am I self employed?

The OP can decide if he wants to attach a statement or not. In the past, I had clients getting letters from the IRS because the amounts shown in box 7 were not reported as SE income. Sure, you can wait for the IRS to contact you but I prefer to be proactive. I agree with Huey. It's not the statemen...
by MarkNYC
Mon Mar 05, 2018 5:42 pm
Forum: Personal Finance (Not Investing)
Topic: 2011, 12, 13 forgot to deduct very large deferred SavBond INT on State Tax Return ..
Replies: 2
Views: 514

Re: 2011, 12, 13 forgot to deduct very large deferred SavBond INT on State Tax Return ..

I believe CA has a 4-year statute of limitations on filing for tax refunds, so still time for a 2013 amended CA return. Probably out of luck for 11 and 12.
by MarkNYC
Mon Mar 05, 2018 1:00 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Accountants: NJ / NY double taxed income
Replies: 10
Views: 1071

Re: Tax Accountants: NJ / NY double taxed income

Which line do you report the $5k contribution? I don’t see anything in the instruction for IT-203 to allow for the contribution to a NY 529. It goes on line 29 In any case, I don’t think you are really saving any taxes by contributing to a NY 529 because while it will reduce your NY tax, NJ is just...
by MarkNYC
Thu Mar 01, 2018 11:19 am
Forum: Personal Finance (Not Investing)
Topic: Missed 1099-R on taxes
Replies: 19
Views: 1664

Re: Missed 1099-R on taxes

Would $1.54 ($2 rounded for income reporting) additional income really increase his tax bill? I think it would if he were right on the edge of a taxable income range, but I don't think it would otherwise. What say you? That was my original thought. But I guess the tax would increase if it's compute...
by MarkNYC
Tue Feb 27, 2018 2:20 pm
Forum: Personal Finance (Not Investing)
Topic: 1st year I have to pay AMT - Legitimate or an Error?
Replies: 14
Views: 1449

Re: 1st year I have to pay AMT - Legitimate or an Error?

There are two systems used to compute your income tax. The regular tax, which I will abbreviate RT Tentative Minimum Tax, TMT, which computes the tax using what most people call the " ATM " rules. In short you compute both and pay the larger of the two. If RT is larger you pay that and there is no ...
by MarkNYC
Mon Feb 26, 2018 8:39 pm
Forum: Personal Finance (Not Investing)
Topic: Paying estimated taxes for MRD
Replies: 8
Views: 748

Re: Paying estimated taxes for MRD

Epsilon Delta wrote:
Mon Feb 26, 2018 7:39 pm
... the under withholding penalty is 3% per year simple interest. More of an annoyance than a financial calamity.
The federal underpayment penalty rate increased from 3% to 4% in the 2nd quarter of 2016 and has remained at 4% since. Still not too severe at 4%.
by MarkNYC
Sun Feb 25, 2018 10:23 am
Forum: Personal Finance (Not Investing)
Topic: Tax return looks to be significantly less than what was filed
Replies: 4
Views: 871

Re: Tax return looks to be significantly less than what was filed

Another possibility, and my first suspicion when the difference is a round number, is a discrepancy between the amount of estimated tax payments listed on the tax return and the amount the IRS has on record.
by MarkNYC
Fri Feb 23, 2018 10:02 am
Forum: Personal Finance (Not Investing)
Topic: Misc Income [how to report with no 1099]
Replies: 87
Views: 4237

Re: Misc Income [how to report with no 1099]

For those convinced that a Schedule C is required, I suggest they re-read the bolded section of the post above by tomd37, where he quotes the IRS instructions: Use Schedule C... for a business you operated or profession your practiced...the activity qualifies as a business if the taxpayer is involve...
by MarkNYC
Thu Feb 22, 2018 9:31 pm
Forum: Personal Finance (Not Investing)
Topic: Turbotax: forgot to enter estimated payment last year
Replies: 2
Views: 489

Re: Turbotax: forgot to enter estimated payment last year

You should bring over the prior year's tax return as originally filed. If, for example, your 2016 VA tax return showed a $100 refund, and you omitted a $500 VA estimated tax payment, so the actual refund received was $600, you should only include $100 as a taxable state refund on your 2017 federal r...
by MarkNYC
Wed Feb 21, 2018 7:07 pm
Forum: Personal Finance (Not Investing)
Topic: Child's tax return question / parents form 8615
Replies: 23
Views: 1357

Re: Child's tax return question / parents form 8615

If the 1099B shows both gross sales proceeds and "basis reported to IRS", it is wishful thinking to believe the IRS will calculate the net gains or losses from all such reported sales, and add that net income or loss to the interest and dividend income in order to determine if the taxpayer meets th...
by MarkNYC
Wed Feb 21, 2018 12:38 pm
Forum: Personal Finance (Not Investing)
Topic: Child's tax return question / parents form 8615
Replies: 23
Views: 1357

Re: Child's tax return question / parents form 8615

My daughter has a total of about $7,000 in long term proceeds and $6,800 in cost, resulting in the $200 loss. I believe the 1099 B indicates that all of this was reported to the IRS, so I don't think I need to file, correct? You are correct. The basis was reported to the IRS and she earned below th...
by MarkNYC
Wed Feb 21, 2018 12:17 pm
Forum: Personal Finance (Not Investing)
Topic: Child's tax return question / parents form 8615
Replies: 23
Views: 1357

Re: Child's tax return question / parents form 8615

Why are you trying to file 8615 (separate returns) as opposed to 8814 (adding kids income to your return)? You could do 8814 without having to trick TaxAct into thinking that you are a child etc. Also keep in mind that filing separately with the 8615 also means the child will have to file separate ...
by MarkNYC
Wed Feb 21, 2018 11:58 am
Forum: Personal Finance (Not Investing)
Topic: Child's tax return question / parents form 8615
Replies: 23
Views: 1357

Re: Child's tax return question / parents form 8615

Thank you. To confirm, I thought that if someone (i.e. my daughter) has a 1099 B, that they have to file their own return (regardless of the amount). I could be totally wrong here. If I don't need to file a return for her, would I instead report her dividends and cap gains on my return? And even if...
by MarkNYC
Sat Feb 17, 2018 2:19 pm
Forum: Personal Finance (Not Investing)
Topic: Amended 2016 taxes applied to 2017, but not included in wired return
Replies: 2
Views: 314

Re: Amended 2016 taxes applied to 2017, but not included in wired return

If I understand correctly, you mailed your 2016 amended return in mid-January 2018, requesting the overpayment be applied to 2017 taxes, then a week or two later efiled (probably) your 2017 return which included the 2016 amended overpayment as a credit. If that's what happened, it was naive for you ...
by MarkNYC
Fri Feb 16, 2018 1:18 pm
Forum: Investing - Help with Personal Investments
Topic: How to File Separately after Joint Estimated Payments
Replies: 4
Views: 472

Re: How to File Separately after Joint Estimated Payments

If filing separately after filing joint estimated payments, the payments can be divided any way that both spouses agree upon. If the spouses don't agree, such as in a divorce situation, then there is a required method to use to make the allocation. This policy is stated in both IRS Publications 504 ...
by MarkNYC
Thu Feb 15, 2018 5:27 pm
Forum: Personal Finance (Not Investing)
Topic: When can a married person file Single or Head of Household? [temporary absence question]
Replies: 28
Views: 1389

Re: When can a married person file Single or Head of Household? [temporary absence question]

If there is an intention to return, then the absence is temporary, so both would have to file as MFJ or MFS. You can file in each state as MFJ but show the nonresident spouse as a nonresident in each case. it can be a bit awkward to get this to work on the state forms but it's possible, and is the ...
by MarkNYC
Thu Feb 15, 2018 2:24 pm
Forum: Personal Finance (Not Investing)
Topic: kiddie tax rules for 2018
Replies: 2
Views: 937

Re: kiddie tax rules for 2018

1) The amount after the dependents $1,050 standard deduction and the amount $1,050 taxed at the dependent's rate was changed from parent's rate to trust tax rates $2,000: ordinary dividends subject to ordinary income tax rates. $4,000: qualified dividends and capital gains subject to capital gains ...
by MarkNYC
Thu Feb 15, 2018 11:44 am
Forum: Personal Finance (Not Investing)
Topic: When can a married person file Single or Head of Household? [temporary absence question]
Replies: 28
Views: 1389

Re: When can a married person file Single or Head of Household? [temporary absence question]

You can file in each state as MFJ but show the nonresident spouse as a nonresident in each case. it can be a bit awkward to get this to work on the state forms but it's possible, and is the correct treatment. I have done this for clients in the past. Not allowed for NY State. For NY, even if they f...
by MarkNYC
Sun Feb 11, 2018 10:24 pm
Forum: Personal Finance (Not Investing)
Topic: How to file 1099-R to trust from inherited Roth IRA
Replies: 7
Views: 405

Re: How to file 1099-R to trust from inherited Roth IRA

The 1041 instructions do not specifically address the reporting of a Roth distribution, but instruct that the taxable portion of an IRA distribution should be reported on the "other income" line. 1099-R Code T suggests the Roth distribution is not Qualified, in which case some of the distribution c...
by MarkNYC
Sun Feb 11, 2018 10:10 pm
Forum: Personal Finance (Not Investing)
Topic: How to file 1099-R to trust from inherited Roth IRA
Replies: 7
Views: 405

Re: How to file 1099-R to trust from inherited Roth IRA

The 1041 instructions do not specifically address the reporting of a Roth distribution, but instruct that the taxable portion of an IRA distribution should be reported on the "other income" line. 1099-R Code T suggests the Roth distribution is not Qualified, in which case some of the distribution co...
by MarkNYC
Fri Feb 09, 2018 1:01 pm
Forum: Personal Finance (Not Investing)
Topic: NYC Taxes for Surgical Resident
Replies: 78
Views: 4263

Re: NYC Taxes for Surgical Resident

You are making the main issue more complicated than it is. The point is simple: only NY city residents are subject to NY city income tax. (not "maybe, maybe not"). Resident or not, he will be taxed by NY and NYC on his income he makes in NY/NYC, Not true for NYC, as has been explained previously .....
by MarkNYC
Fri Feb 09, 2018 11:21 am
Forum: Personal Finance (Not Investing)
Topic: NYC Taxes for Surgical Resident
Replies: 78
Views: 4263

Re: NYC Taxes for Surgical Resident

My understanding is that any money earned on a job or through a partnership or other business entity in a state is subject to the income taxes of that state and city. Regardless of your state of domicile. I ve been dealing with this for yesrs, Your understanding is incorrect with regards to NY City...
by MarkNYC
Fri Feb 09, 2018 10:33 am
Forum: Personal Finance (Not Investing)
Topic: NYC Taxes for Surgical Resident
Replies: 78
Views: 4263

Re: NYC Taxes for Surgical Resident

My understanding is that any money earned on a job or through a partnership or other business entity in a state is subject to the income taxes of that state and city. Regardless of your state of domicile. I ve been dealing with this for yesrs, Your understanding is incorrect with regards to NY City...
by MarkNYC
Thu Feb 08, 2018 9:00 pm
Forum: Personal Finance (Not Investing)
Topic: NYC Taxes for Surgical Resident
Replies: 78
Views: 4263

Re: NYC Taxes for Surgical Resident

My understanding is that any money earned on a job or through a partnership or other business entity in a state is subject to the income taxes of that state and city. Regardless of your state of domicile. I ve been dealing with this for yesrs, Your understanding is incorrect with regards to NY City...
by MarkNYC
Thu Feb 08, 2018 6:46 pm
Forum: Personal Finance (Not Investing)
Topic: NYC Taxes for Surgical Resident
Replies: 78
Views: 4263

Re: NYC Taxes for Surgical Resident

My understanding is that any money earned on a job or through a partnership or other business entity in a state is subject to the income taxes of that state and city. Regardless of your state of domicile. I ve been dealing with this for yesrs, Your understanding is incorrect with regards to NY City...
by MarkNYC
Tue Feb 06, 2018 8:21 pm
Forum: Personal Finance (Not Investing)
Topic: NYC Taxes for Surgical Resident
Replies: 78
Views: 4263

Re: NYC Taxes for Surgical Resident

If he moves to and lives in NYC for a year to work, and has no intention of retaining domicile in his previous state and has no intention of returning there, NYS is going to consider him a resident unless he is domiciled in a third state and could make him prove otherwise. That is not New York Stat...
by MarkNYC
Tue Feb 06, 2018 7:45 pm
Forum: Personal Finance (Not Investing)
Topic: NYC Taxes for Surgical Resident
Replies: 78
Views: 4263

Re: NYC Taxes for Surgical Resident

If he moves to and lives in NYC for a year to work, and has no intention of retaining domicile in his previous state and has no intention of returning there, NYS is going to consider him a resident unless he is domiciled in a third state and could make him prove otherwise. That is not New York Stat...