Need Help on calculating AGI/MAGI and Estimated Taxes Owed

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xrw1
Posts: 71
Joined: Wed Aug 22, 2012 5:24 pm

Need Help on calculating AGI/MAGI and Estimated Taxes Owed

Post by xrw1 » Thu Nov 13, 2014 8:38 pm

Hi everyone,

I recently sold some ISO stock options at my company and I think it moved me up tax bracket. As far as I know the ISO options I have will be taxed as income. I am having a little trouble getting a rough estimate of my AGI and MAGI and how much I should write a check to pay the taxes owed on the capital gains.

Filing: Single
Salary: $66,000
Bonus: $6,400
Dividend/interested earned for the year: It will be about $1,000
Capitals gains for ISO stocks: $37,600
I maxed out my 401k: $17,500
I do not have any student loans or any debt.

Could you guys help me with the math a bit.

1. I believe my AGI would be $93,500 = ($66,000 + $6,400 + $1,000 + $37,600 - $17,500) Am I right from subtracting the 401k to get my AGI. This would be the 28% Tax Bracket

2. Since I don't have student loans, tuitions and the like my MAGI is my AGI then. I just want to make sure that I can still contribute to my Roth IRA which I have already maxed out

3. For my Estimated Taxes for the ISO stocks I just sold, should I just pay $10,528 = ( $37,600 x 0.28)


I greatly appreciate all your help! Thank you!
Last edited by xrw1 on Thu Nov 13, 2014 9:30 pm, edited 2 times in total.

Carl262
Posts: 84
Joined: Mon Nov 10, 2014 6:26 pm

Re: Need Help on calculating AGI/MAGI and Estimated Taxes Ow

Post by Carl262 » Thu Nov 13, 2014 8:57 pm

You are right to subtract your 401k contributions.

Remember AGI doesn't include the standard/itemized deductions or personal exemptions. Your taxable income is lower than your AGI.

kaneohe
Posts: 4734
Joined: Mon Sep 22, 2008 12:38 pm

Re: Need Help on calculating AGI/MAGI and Estimated Taxes Ow

Post by kaneohe » Thu Nov 13, 2014 10:21 pm

You can find retirement account income limits, tax rate schedules, and std deduction/exemptions figures here. http://fairmark.com/general-taxation/reference-room/

Looks like std deductions/exemptions for single are about 10K
which would make your taxable income in the 25% bracket. If you withhold from salary this yr at least as much as your last year's taxes were (total taxes for yr, not what you paid in Apr), you can make use of the safe harbor provisions and just pay taxes in April w/o paying estimated in Jan. http://fairmark.com/estimate/howmuch.htm

xrw1
Posts: 71
Joined: Wed Aug 22, 2012 5:24 pm

Re: Need Help on calculating AGI/MAGI and Estimated Taxes Ow

Post by xrw1 » Fri Nov 14, 2014 9:08 am

So the tax bracket is on taxable income and not the AGI.

Therefore my Taxable Income would be $83,350 = ($66,000 + $6,400 + $1,000 + $37,600 - $17,500 - $6,200 - $3,950) The $6200 is standard deduction and $3950 is the personal exemptions.

My AGI would be $93,500 = ($66,000 + $6,400 + $1,000 + $37,600 - $17,500), given that i don't believe I have anything deductions to add back to get my MAGI, my MAGI would be my AGI and I would be under the contribution limits for contributing the full $5,500 to my roth ira.

Also could someone help me verify that from selling a Company ISO (cashless transaction), the amount reported as income would be the Profit right. A simplified example would be. Company grants 100 shares at 10 dollars and sometime later I excercise and sell the 100 shares same day at 50 dollars a share. The total amount would be $50 x 100 shares = $5000 dollars, however since I was given the shares at $10 a share ($1000 total). The amount I report to my income would be $4000. Is this correct?


Thank you everyone!

kaneohe
Posts: 4734
Joined: Mon Sep 22, 2008 12:38 pm

Re: Need Help on calculating AGI/MAGI and Estimated Taxes Ow

Post by kaneohe » Fri Nov 14, 2014 10:13 am

xrw1 wrote:So the tax bracket is on taxable income and not the AGI.

Therefore my Taxable Income would be $83,350 = ($66,000 + $6,400 + $1,000 + $37,600 - $17,500 - $6,200 - $3,950) The $6200 is standard deduction and $3950 is the personal exemptions.

My AGI would be $93,500 = ($66,000 + $6,400 + $1,000 + $37,600 - $17,500), given that i don't believe I have anything deductions to add back to get my MAGI, my MAGI would be my AGI and I would be under the contribution limits for contributing the full $5,500 to my roth ira.

Also could someone help me verify that from selling a Company ISO (cashless transaction), the amount reported as income would be the Profit right. A simplified example would be. Company grants 100 shares at 10 dollars and sometime later I excercise and sell the 100 shares same day at 50 dollars a share. The total amount would be $50 x 100 shares = $5000 dollars, however since I was given the shares at $10 a share ($1000 total). The amount I report to my income would be $4000. Is this correct?


Thank you everyone!
Sounds correct http://twtitw.firebus.com/node/273 . Probably won't hurt to check w/ your company HR folks. I'm only familiar with NQSO (not ISO) but it sounds like if you do a cashless transaction (buy/sell) same day,the results are the same. Just for curiosity,are you sure they are ISO and not NQSO? HR can confirm.

more education: https://turbotax.intuit.com/tax-tools/t ... 12049.html

xrw1
Posts: 71
Joined: Wed Aug 22, 2012 5:24 pm

Re: Need Help on calculating AGI/MAGI and Estimated Taxes Ow

Post by xrw1 » Fri Nov 14, 2014 1:42 pm

I just asked and the stocks are an ISO, however the finace person said that since it is a cashless transaction the I would only pay taxes on the profit protion of the sale.

What would be the easiest way to estimate the taxes owed on the sale if I had a profit of $37600?

dbr
Posts: 26911
Joined: Sun Mar 04, 2007 9:50 am

Re: Need Help on calculating AGI/MAGI and Estimated Taxes Ow

Post by dbr » Fri Nov 14, 2014 1:58 pm

xrw1 wrote:I just asked and the stocks are an ISO, however the finace person said that since it is a cashless transaction the I would only pay taxes on the profit protion of the sale.

What would be the easiest way to estimate the taxes owed on the sale if I had a profit of $37600?
Since the profit on the sale is taxed as ordinary income, your total tax bill is now going to be what it would be if you increased your pay check by that amount. I estimate taxes due in a year by filling out a dummy 1040 using tax software, certainly if it is for this year. It might be trickier if it is for next year and there is some pending tax change that makes a current version of tax software out of date. In any case the increase in taxes will depend on the rest of your income.

kaneohe
Posts: 4734
Joined: Mon Sep 22, 2008 12:38 pm

Re: Need Help on calculating AGI/MAGI and Estimated Taxes Ow

Post by kaneohe » Fri Nov 14, 2014 2:08 pm

try this calculator which is for2014 http://www.hrblock.com/get-answers/tax-calculators.html
also this one which is for 2013 https://turbotax.intuit.com/tax-tools/c ... taxcaster/

If you are straddling the 25-28% boundary, should be about 10K or so?

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