Search found 1060 matches

by MarkNYC
Fri Jan 13, 2017 4:10 pm
Forum: Personal Finance (Not Investing)
Topic: Schedule K-1 on Undistributed Profit in S-corp - Possible TurboTax Error
Replies: 7
Views: 395

Re: Schedule K-1 on Undistributed Profit in S-corp - Possible TurboTax Error

Technically, an S-Corp distributes all income. Technically, I would disagree. A "distribution" refers to an actual payment of cash or property. Per the IRS instructions to S Corporation Schedule K-1: "Shareholders are liable for tax on their shares of the corporation's income...Share...
by MarkNYC
Fri Jan 13, 2017 11:47 am
Forum: Personal Finance (Not Investing)
Topic: Schedule K-1 on Undistributed Profit in S-corp - Possible TurboTax Error
Replies: 7
Views: 395

Re: Schedule K-1 on Undistributed Profit in S-corp - Possible TurboTax Error

When preparing a tax return, if you don't understand the reason for a question being asked by the tax program, you should not assume it is a program error. While the amount distributed does not affect the taxable income on the K-1, the amount distributed does go on line 16 (code D) of the K-1 as an ...
by MarkNYC
Thu Jan 12, 2017 3:31 pm
Forum: Personal Finance (Not Investing)
Topic: How to build passive income
Replies: 45
Views: 4281

Re: How to build passive income

Some have commented that interest and dividends from stocks, bonds and mutual funds will provide "passive income" but that rental income from being a landlord is not really "passive income" because there's work involved. Logically this seems correct but in the world of taxes it's...
by MarkNYC
Wed Jan 11, 2017 5:25 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Question on a Jointly Owned Property
Replies: 8
Views: 570

Re: Tax Question on a Jointly Owned Property

I don't know if you're filing taxes correctly or not; however, I would also be asking your tax professional what happens if the other couple doesn't report/file/pay their half? That's an even larger concern in my opinion. If the other couple does not report/file/pay their half, then the other coupl...
by MarkNYC
Wed Jan 11, 2017 10:59 am
Forum: Personal Finance (Not Investing)
Topic: Tax Question on a Jointly Owned Property
Replies: 8
Views: 570

Re: Tax Question on a Jointly Owned Property

I have a property that is jointly owned by myself, my husband and another married couple. My current accountant has been splitting the income/expenses between us and we have reported the rental income on schedule E. I briefly explained our current arrangement with a new accountant and he mentioned ...
by MarkNYC
Tue Jan 10, 2017 4:49 pm
Forum: Personal Finance (Not Investing)
Topic: Quarterly taxes with W2 and K1 income
Replies: 12
Views: 386

Re: Quarterly taxes with W2 and K1 income

I have not been able to find an answer to this question. I have both W2 and K1 income. The majority is K1 income. Is it possible to not withhold anything from my W2 and pay quarterly taxes on both W2 and K1 income or am I required to withhold from my W2 and pay quarterly on my K1 income? I don't be...
by MarkNYC
Tue Jan 10, 2017 2:46 pm
Forum: Personal Finance (Not Investing)
Topic: AMT and taxable portion of state tax refund
Replies: 8
Views: 472

Re: AMT and taxable portion of state tax refund

ryman554, Your analysis is correct. A refund of state tax that was deducted in the prior year is a "recovery" in IRS language, and is taxable in the year received up to the amount by which the deduction reduced your tax in the earlier year. Usually a state tax refund is either fully taxabl...
by MarkNYC
Mon Jan 09, 2017 5:29 pm
Forum: Investing - Help with Personal Investments
Topic: kiddie tax
Replies: 15
Views: 1329

Re: kiddie tax

http://www.forbes.com/sites/troyonink/2015/11/30/2016-kiddie-tax-rates-rules-and-ways-around-it/#4c0d52423c31 This article from Forbes provides a bit of a summary. Key points: In 2016, the only way that college students under age 24 will be able to avoid the kiddie tax is if they provide over half ...
by MarkNYC
Mon Jan 09, 2017 5:23 pm
Forum: Investing - Help with Personal Investments
Topic: kiddie tax
Replies: 15
Views: 1329

Re: kiddie tax

kiddie tax only applies to dependent children. If your parents are not claiming you, you file as a single. 1. The instructions to Form 8615 clearly state that the "kiddie tax" rules apply regardless of whether or not the child is a dependent. 2. If the child is unmarried, the child files ...
by MarkNYC
Fri Jan 06, 2017 9:15 am
Forum: Personal Finance (Not Investing)
Topic: Estimated taxes
Replies: 16
Views: 1402

Re: Estimated taxes

I honestly don't even calculate my estimated taxes. I just pay the IRS what I think is a fair share and pay the penalty at the end. Ends up being $200 or so, which is ok by me. Just pay 100% of what your total tax was last year and no penalty, It's not always that simple. It is not uncommon for the...
by MarkNYC
Wed Jan 04, 2017 4:56 pm
Forum: Personal Finance (Not Investing)
Topic: How to calculate the IRA Deduction Limits
Replies: 17
Views: 554

Re: How to calculate the IRA Deduction Limits

According to IRS website, if you are married filing jointly And Your Modified AGI is more than $99,000 but less than $119,000 and you are Covered by a Retirement Plan at Work, then you are eligible to a partial IRA deduction. I couldn't find any rules or tables to calculate that partial deduction a...
by MarkNYC
Wed Jan 04, 2017 4:43 pm
Forum: Personal Finance (Not Investing)
Topic: How to calculate the IRA Deduction Limits
Replies: 17
Views: 554

Re: How to calculate the IRA Deduction Limits

According to IRS website, if you are married filing jointly And Your Modified AGI is more than $99,000 but less than $119,000 and you are Covered by a Retirement Plan at Work, then you are eligible to a partial IRA deduction. I couldn't find any rules or tables to calculate that partial deduction a...
by MarkNYC
Wed Jan 04, 2017 4:16 pm
Forum: Personal Finance (Not Investing)
Topic: How to calculate the IRA Deduction Limits
Replies: 17
Views: 554

Re: How to calculate the IRA Deduction Limits

According to IRS website, if you are married filing jointly And Your Modified AGI is more than $99,000 but less than $119,000 and you are Covered by a Retirement Plan at Work, then you are eligible to a partial IRA deduction. I couldn't find any rules or tables to calculate that partial deduction a...
by MarkNYC
Thu Dec 29, 2016 2:16 pm
Forum: Personal Finance (Not Investing)
Topic: 2016 Federal Taxes underwithheld
Replies: 37
Views: 2642

Re: 2016 Federal Taxes underwithheld

The last example would not be correct. There are 3 basic safe harbors from the underpayment penalty: 1. Pay in 90% of current year tax 2. Pay in 100/110% of prior year tax 3. Owe less than $1,000 on your tax return The third item is not correct as written. There is no underpayment if the tax for th...
by MarkNYC
Fri Dec 16, 2016 5:08 pm
Forum: Personal Finance (Not Investing)
Topic: Tax withholding rules for S Corp
Replies: 9
Views: 760

Re: Tax withholding rules for S Corp

I have operated a S-Corp for years. I pay myself a salary and any excess profit is taxed to me as a distribution when I file taxes. I have never withheld federal or state tax from my salary, though I file a quarterly 941 to pay my (and employee's FICA tax). I personally make quarterly estimated pay...
by MarkNYC
Fri Dec 16, 2016 2:42 pm
Forum: Investing - Theory, News & General
Topic: Indexing: When being 'average' is a lot better than average
Replies: 19
Views: 1801

Re: Indexing: When being 'average' is a lot better than average

As a low-cost index investor, here is how I view accepting "average returns" each year, using estimated percentages: The annual returns are only average before expenses (expense ratio and portfolio transactions costs). The annual returns are slightly above average after expenses, putting m...
by MarkNYC
Wed Dec 14, 2016 3:19 pm
Forum: Personal Finance (Not Investing)
Topic: 2 RMD Questions
Replies: 22
Views: 2174

Re: 2 RMD Questions

I am not Alan, but the answer to the RMD question can be found in Treasury Reg. 1.402(c)-2 Q&A-7.
by MarkNYC
Wed Dec 14, 2016 1:29 pm
Forum: Personal Finance (Not Investing)
Topic: How is it possible to pay less income tax with more Qualified Dividends?
Replies: 10
Views: 523

Re: How is it possible to pay less income tax with more Qualified Dividends?

I suspect you are entering $35,000 "qualified dividends" without also entering $35,000 "total dividends."
by MarkNYC
Sun Dec 11, 2016 4:20 pm
Forum: Personal Finance (Not Investing)
Topic: 2016 Federal Taxes underwithheld
Replies: 37
Views: 2642

Re: 2016 Federal Taxes underwithheld

The last example would not be correct. There are 3 basic safe harbors from the underpayment penalty: 1. Pay in 90% of current year tax 2. Pay in 100/110% of prior year tax 3. Owe less than $1,000 on your tax return The third item is not correct as written. There is no underpayment if the tax for th...
by MarkNYC
Sat Dec 10, 2016 5:11 pm
Forum: Personal Finance (Not Investing)
Topic: 2016 Federal Taxes underwithheld
Replies: 37
Views: 2642

Re: 2016 Federal Taxes underwithheld

Just a FYI, there is another safe harbor. There is only a penalty on the amount owed > $1000. I wish it was less than $1,000 :( I think you misunderstand: ⋅ $500 owed, $0 subject to penalty ⋅ $1000 owed, $0 subject to penalty ⋅ $1500 owed, $500 subject to penalty The l...
by MarkNYC
Fri Dec 09, 2016 8:49 pm
Forum: Personal Finance (Not Investing)
Topic: Who gets taxed on trust distributions?
Replies: 28
Views: 1018

Re: Who gets taxed on trust distributions?

There are several principles that apply to a complex trust, which is one where the trustee has the discretion whether or not to distribute income. If a check is paid to a beneficiary, or the trust directly pays an expense on behalf of a specific beneficiary, these payments will be considered a distr...
by MarkNYC
Tue Dec 06, 2016 1:31 pm
Forum: Investing - Help with Personal Investments
Topic: Can I time-shift sole proprietor income to max employer solo401k contributions?
Replies: 9
Views: 646

Re: Can I time-shift sole proprietor income to max employer solo401k contributions?

OP here. Thanks all, very helpful. It might seem to be semantics, but when it comes to the IRS, it most definitely matters. If you have a discussion with a client and the payment delay to next year is for "your" convenience, then the payment was constructively received this year. If it is...
by MarkNYC
Mon Dec 05, 2016 10:47 pm
Forum: Investing - Theory, News & General
Topic: When is the five years up for Roth conversion
Replies: 7
Views: 1197

Re: When is the five years up for Roth conversion

My wife converted her traditional IRA on 12/8/2012. When does the five year wait period expire so that earnings can be withdrawn without penalty? Is it Jan. 1, 2017? The 5-year period would end on Jan 1, 2017, after which the conversion amount can be withdrawn without penalty, even prior to age 59....
by MarkNYC
Sat Dec 03, 2016 4:20 pm
Forum: Personal Finance (Not Investing)
Topic: Estimated Tax (IRA to ROTH conversion) question
Replies: 11
Views: 758

Re: Estimated Tax (IRA to ROTH conversion) question

Please correct me if I'm wrong: As I understand it, form 2210 provides a number of (rather cumbersome) methods to calculate interest on underpayment by "quarter," not necessarily penalty. A penalty is for a specific violation, such as failure to file, etc. It is the equivalent of interest...
by MarkNYC
Sun Nov 27, 2016 10:22 pm
Forum: Personal Finance (Not Investing)
Topic: An IRS correspondence mess
Replies: 45
Views: 3730

Re: An IRS correspondence mess

The IRS has already provided me with an actual xerox of the filed return for 2013. In that case, I wouldn't need a transcript, right? But a letter which was sent to the IRS says "we corrected a typo and corrected the amount we were due...". I have no idea what that really means and neithe...
by MarkNYC
Sun Nov 27, 2016 7:20 pm
Forum: Personal Finance (Not Investing)
Topic: An IRS correspondence mess
Replies: 45
Views: 3730

Re: An IRS correspondence mess

neurosphere, A few comments in response to your posts above: 1. The language in IRS Notice CP22A is misleading, and should not be interpreted to mean an amended return was filed, or even that the taxpayer ever requested a change to the tax return. 2. A person who prepares a tax return for a friend o...
by MarkNYC
Wed Nov 23, 2016 12:10 pm
Forum: Personal Finance (Not Investing)
Topic: Checking IRS refund applied to next year's return
Replies: 11
Views: 1021

Re: Checking IRS refund applied to next year's return

As far as I know, having the refund applied to next year's taxes isn't any more effective than taking the refund and then paying an estimated tax. That is what I do. Since the OP filed late in the year for TY 2015, if the refund, once received, is paid toward this year's estimated tax, wouldn't it ...
by MarkNYC
Sun Nov 20, 2016 9:37 am
Forum: Personal Finance (Not Investing)
Topic: IRS quarterly estimated tax payments
Replies: 19
Views: 1901

Re: IRS quarterly estimated tax payments

MarkNYC and dodecahedron are you telling me that if you made an estimated tax payment of $10K for the first three quarters and $20K for the fourth quarter and filed no Form 2210, that the IRS is not going to question that even if the total was sufficient for total tax liability? That runs counter t...
by MarkNYC
Sat Nov 19, 2016 10:21 pm
Forum: Personal Finance (Not Investing)
Topic: IRS quarterly estimated tax payments
Replies: 19
Views: 1901

Re: IRS quarterly estimated tax payments

Very helpful replies thank you. I am in the 28% tax bracket. As far as quarterly payments, I've always had to make the fourth payment higher than the first three. I guess I will get a letter from the IRS or incur a penalty. Unequal quarterly estimated payments require Form 2210. If the 4th quarter ...
by MarkNYC
Sat Nov 19, 2016 8:01 pm
Forum: Personal Finance (Not Investing)
Topic: An IRS correspondence mess
Replies: 45
Views: 3730

Re: An IRS correspondence mess

In addition, IRS Tax Information Authorization Form 8821 will allow anyone designated by the taxpayer to receive, either verbally or in writing, the taxpayer's confidential tax information. The form is more restrictive than the Form 2848 in that it does not allow the representative to advocate for ...
by MarkNYC
Sat Nov 19, 2016 7:54 pm
Forum: Personal Finance (Not Investing)
Topic: IRS quarterly estimated tax payments
Replies: 19
Views: 1901

Re: IRS quarterly estimated tax payments

Very helpful replies thank you. I am in the 28% tax bracket. As far as quarterly payments, I've always had to make the fourth payment higher than the first three. I guess I will get a letter from the IRS or incur a penalty. If each of your first 3 quarterly payments was adequate, and you don't need...
by MarkNYC
Sat Nov 19, 2016 7:35 pm
Forum: Personal Finance (Not Investing)
Topic: An IRS correspondence mess
Replies: 45
Views: 3730

Re: An IRS correspondence mess

They can probably tell you how to initiate the query, but you probably can't do it on your friend's behalf (short of a power of attorney). Except for professionals recognized by the IRS (Enrolled Agents, CPAs, and attorneys), it is not that easy to get a Power of Attorney (POA) recognized by the IR...
by MarkNYC
Sat Nov 19, 2016 6:34 pm
Forum: Personal Finance (Not Investing)
Topic: An IRS correspondence mess
Replies: 45
Views: 3730

Re: An IRS correspondence mess

(My personal guess is that the check is somewhere in the preparer's office and was never deposited... and that the IRS computer that says "we overpaid" didn't talk to the IRS computer that knows whether or not the check ever cleared.) Why should the check be in the preparer's office? It i...
by MarkNYC
Sat Nov 12, 2016 9:58 am
Forum: Investing - Help with Personal Investments
Topic: Submitted Form 8606 for Non-deductible IRA and IRS asks for 1040x
Replies: 24
Views: 1556

Re: Submitted Form 8606 for Non-deductible IRA and IRS asks for 1040x

I'm not aware of any written IRS policy that ever allowed the separate filing of Form 8606 for a prior year after the 1040 has been filed for that year, suggesting that an amended return is not required. For at least the last 15 years, the IRS instructions to Form 8606 have instructed the form to b...
by MarkNYC
Fri Nov 11, 2016 10:13 pm
Forum: Investing - Help with Personal Investments
Topic: Submitted Form 8606 for Non-deductible IRA and IRS asks for 1040x
Replies: 24
Views: 1556

Re: Submitted Form 8606 for Non-deductible IRA and IRS asks for 1040x

I'm not aware of any written IRS policy that ever allowed the separate filing of Form 8606 for a prior year after the 1040 has been filed for that year, suggesting that an amended return is not required. For at least the last 15 years, the IRS instructions to Form 8606 have instructed the form to b...
by MarkNYC
Fri Nov 11, 2016 7:20 pm
Forum: Investing - Help with Personal Investments
Topic: Submitted Form 8606 for Non-deductible IRA and IRS asks for 1040x
Replies: 24
Views: 1556

Re: Submitted Form 8606 for Non-deductible IRA and IRS asks for 1040x

It is possible the IRS has gotten so many naked Forms 8606 that they have decided to change their procedure and require the 1040x. I'm not aware of any written IRS policy that ever allowed the separate filing of Form 8606 for a prior year after the 1040 has been filed for that year, suggesting that...
by MarkNYC
Sun Oct 30, 2016 10:11 am
Forum: Investing - Theory, News & General
Topic: Schwab and 1099s
Replies: 11
Views: 704

Re: Schwab and 1099s

A separate 1099 such as 1099-INT from a bank, or 1099-DIV from a mutual fund company, is required to be mailed by January 31. Since 2008, a brokerage firm's consolidated 1099 which combines 1099-INT, 1099-DIV and 1099-B, is not required to be mailed until February 15. My sense is that banks and mutu...
by MarkNYC
Sun Oct 23, 2016 7:10 pm
Forum: Personal Finance (Not Investing)
Topic: Over-contribute to 401k to get match: tax implications
Replies: 15
Views: 1932

Re: Over-contribute to 401k to get match: tax implications

Some of the terminology being used is not correct, and can lead to confusion. The situation being discussed is potential 401K "excess deferrals", not "excess contributions." The definitions are not the same, and the rules regarding corrective distributions are also different. &qu...
by MarkNYC
Mon Oct 10, 2016 7:00 pm
Forum: Personal Finance (Not Investing)
Topic: My tax situation, looking for advice or for someone to take a look at it
Replies: 40
Views: 3575

Re: My tax situation, looking for advice or for someone to take a look at it

For joint filers, the modified AGI limits are the same for both a Roth contribution and for a deductible IRA contribution for a spouse who is not an active participant in an employer retirement plan when the other spouse is an active participant. For 2016, the phase-out range is between $184k and $1...
by MarkNYC
Mon Oct 10, 2016 6:43 pm
Forum: Personal Finance (Not Investing)
Topic: My tax situation, looking for advice or for someone to take a look at it
Replies: 40
Views: 3575

Re: My tax situation, looking for advice or for someone to take a look at it

I get about $7000 in rent, but I also pay mortgage interest, real estate taxes, etc.. Gamma Ray, You could start another individual 401K account for this business income and none of it will be taxable. KlangFool Rental income is passive activity income. It is not earnings from self-employment, ther...
by MarkNYC
Fri Oct 07, 2016 2:19 pm
Forum: Personal Finance (Not Investing)
Topic: Trust-- disagree with CPA's Simple/Complex determination
Replies: 22
Views: 1727

Re: Trust-- disagree with CPA's Simple/Complex determination

neurosphere, It can be confusing. Per the instructions to Trust Form 1041: A trust may qualify as a simple trust if: 1. The trust instrument requires all income to be distributed currently 2. The trust instrument doesn't provide for charitable contributions, AND 3. The trust doesn't distribute princ...
by MarkNYC
Fri Oct 07, 2016 1:07 pm
Forum: Personal Finance (Not Investing)
Topic: Trust-- disagree with CPA's Simple/Complex determination
Replies: 22
Views: 1727

Re: Trust-- disagree with CPA's Simple/Complex determination

I am the trustee of a trust for the benefit of a relative. The trust document requires that I distribute all the income at least annually. The sole beneficiary of the trust has requested a fixed annual distribution that is sometimes more than the trust income and sometimes less. I have discretion t...
by MarkNYC
Thu Oct 06, 2016 10:37 am
Forum: Personal Finance (Not Investing)
Topic: Trust-- disagree with CPA's Simple/Complex determination
Replies: 22
Views: 1727

Re: Trust-- disagree with CPA's Simple/Complex determination

If the trust (simple or complex) is required to distribute all its income it gets a $300 exemption. Otherwise it gets a $100 exemption. Section 642(b)(2). Along those lines, it may be worth checking to see if the trust is a qualified disability trust under Section 642(b)(2)(C), in which case it wou...
by MarkNYC
Thu Oct 06, 2016 8:25 am
Forum: Personal Finance (Not Investing)
Topic: Trust-- disagree with CPA's Simple/Complex determination
Replies: 22
Views: 1727

Re: Trust-- disagree with CPA's Simple/Complex determination

If distributions are discretionary, it should be a complex trust. But if the trustee distributes all of the income each year, then the beneficiary will taxed on all of the income regardless of whether the tax return is filed as a Simple or Complex trust. Incorrectly filing as a Simple trust would ca...
by MarkNYC
Tue Oct 04, 2016 4:08 pm
Forum: Personal Finance (Not Investing)
Topic: Resolving Trust Distribution Issues
Replies: 6
Views: 595

Re: Resolving Trust Distribution Issues

I am working through a problem with a set of trusts that were set up and managed by my father back in 1997 for my grandmother's estate. The trusts essentially divided up a portion of her estate for distribution to various beneficiaries when they turn 35. These beneficiaries are in another branch of...
by MarkNYC
Mon Oct 03, 2016 1:11 pm
Forum: Personal Finance (Not Investing)
Topic: Carryover loss question
Replies: 16
Views: 1079

Re: Carryover loss question

The rules for a Net Operating Loss (NOL) can be complicated, and are different from capital losses. Generally, an NOL is the excess of allowable deductions over total income, allowing for certain modifications. An NOL usually occurs when net nonpassive business losses (Schedule C or Schedule E) exc...
by MarkNYC
Mon Oct 03, 2016 12:10 pm
Forum: Personal Finance (Not Investing)
Topic: Carryover loss question
Replies: 16
Views: 1079

Re: Carryover loss question

The rules for a Net Operating Loss (NOL) can be complicated, and are different from capital losses. Generally, an NOL is the excess of allowable deductions over total income, allowing for certain modifications. An NOL usually occurs when net nonpassive business losses (Schedule C or Schedule E) exce...
by MarkNYC
Fri Sep 30, 2016 6:55 pm
Forum: Investing - Theory, News & General
Topic: why not just buy BRK
Replies: 91
Views: 8616

Re: why not just buy BRK

Larry, In your article, you compared Berkshire's performance to both large value and small value index funds. Given Berkshire's size and the size of its major holdings, why do you think it's appropriate to compare Berkshire's returns to the returns of a small value index fund? Disclosure: I've owned...
by MarkNYC
Wed Sep 28, 2016 6:10 pm
Forum: Personal Finance (Not Investing)
Topic: Tax filing status if divorce not finalized?
Replies: 19
Views: 1067

Re: Tax filing status if divorce not finalized?

Not an option due to the hostility between us. Plus, I have no idea how she's handled any of her earnings or tax payments this year given that she's not a W-2 employee, so that's a hornets nest I am staying away from. Some things will need to be coordinated. For example, if you file MFS, you both h...
by MarkNYC
Wed Sep 28, 2016 4:41 pm
Forum: Personal Finance (Not Investing)
Topic: Tax filing status if divorce not finalized?
Replies: 19
Views: 1067

Re: Tax filing status if divorce not finalized?

Not an option due to the hostility between us. Plus, I have no idea how she's handled any of her earnings or tax payments this year given that she's not a W-2 employee, so that's a hornets nest I am staying away from. When the split up is hostile, certain tax issues can be complicated, including th...

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