Taxes are done!

[naednek]

IRS tells millions of taxpayers to hold off on tax filing

The IRS is asking millions of taxpayers in California, Colorado and other states that issued tax rebates last year to hold off on filing their taxes.

The reason: The agency said it is seeking to clarify whether those tax rebates and special refunds are considered taxable income. "We expect to provide additional clarity for as many states and taxpayers as possible next week," the IRS said on Friday.

And here I was chomping at the bit to do my taxes...ha! Every year I plan on doing them right away after getting all the forms, and every year I end up doing it the last weekend before it's due.

Ya I live in CA, and when I put my inflation relief info in, the feds took $215 out of the 1050 I received. I've been waiting for things to play out.

Biden mentioned in his speech about rising costs and how they need to help. Well, that's one way to do it. Not tax what CA gave us.

YAY!

https://www.sacbee.com/news/california/ ... 2114388909.

Now just gotta wait until H&R block updates their forms

Wondering if I should just attach that document that I got instead of waiting to see if H&R Block updates their software to adjust?

[Skinypupy]

We got a pretty good chunk of money from mom when she passed. My tax guy has been working up all the numbers and called me with a total this morning.

Um…ouch.

[LordMortis]

We got a pretty good chunk of money from mom when she passed. My tax guy has been working up all the numbers and called me with a total this morning.

Um…ouch.

I thought estate taxes were supposed to be tiny nowadays.

https://www.investopedia.com/estate-tax ... on-5114715

And inheritance taxes don't apply to you, do they?

https://www.nerdwallet.com/article/taxe ... itance-tax

[Skinypupy]

I’m still a little fuzzy on how all that works, but my tax guy explained it that the $$ we got from mom’s bank accounts falls under the estate. We don’t owe any taxes on those. We do, however, owe taxes on her annuities because those count as income (since they were never taxed as she was contributing to them).

So about half of what came from mom came over tax free (from her accounts), and we end up paying about 30% on the other half (from the annuities).

It’s all tax sorcery to me…I just know I have to write a big check.

[LordMortis]

State took money they day after I reported. Fed refunded me within a week. My biggest refund ever. Suppose getting paid for only four months last year contributed to that big time. /wonders how 2023 is going to look with no W2.

[Jaymann]

Mine are done. I had to redeem some retirement $$ for home repairs so my income went way up. Will have to pay $2,500 to feds, $4,500 to state. Will pay them on April 18 so I make the interest until then, not them. Will remember to withhold more this year.

[Freyland]

Mine are done. I had to redeem some retirement $$ for home repairs so my income went way up. Will have to pay $2,500 to feds, $4,500 to state. Will pay them on April 18 so I make the interest until then, not them. Will remember to withhold more this year.

So, I'm super-naive, I guess. Never in my life has my State tax been higher than my Fed tax, and never close to that number even when I got seriously burned by the Fed tax one year. How does your scenario happen, without asking for personal details?

[Jaymann]

Two factors:

High CA tax rate.

When I redeem my retirement funds I can withhold any amount, say 20%. But for the state they will only withhold 10% OF THE FEDERAL WITHHOLDING. So I would have to take my fed withholding through the roof to get substantial state withholding.

[Scuzz]

I’m still a little fuzzy on how all that works, but my tax guy explained it that the $$ we got from mom’s bank accounts falls under the estate. We don’t owe any taxes on those. We do, however, owe taxes on her annuities because those count as income (since they were never taxed as she was contributing to them).

So about half of what came from mom came over tax free (from her accounts), and we end up paying about 30% on the other half (from the annuities).

It’s all tax sorcery to me…I just know I have to write a big check.

Yea, the untaxed profits in an annuity or IRA are considered taxable. I had to pay on my dad’s when he died.

[Isgrimnur]

I switched all my contributions to post-tax a while back.

[stessier]

I switched all my contributions to post-tax a while back.

I wish I had done that for the years I didn't have kids. Now, though, its's too big a credit to give up.

Finished mine today. One of the stocks I own re-orged and issued shares in the new company but paid off any partial shares. As a result, I sold 0.12 shares netting me $0.13. This sale meant I had to use TurboTax Premium for $119 instead of the free version. I hate this so very, very much.

[Carpet_pissr]

Say what? I use TT Deluxe and have several sales, disbursements and never had an issue.

Of course they make it sound like you need a higher version if you have investment trades, but if you read the fine print, Deluxe handles investments quite well IMO.

[Scuzz]

I switched all my contributions to post-tax a while back.

I wish I had done that for the years I didn't have kids. Now, though, its's too big a credit to give up.

Finished mine today. One of the stocks I own re-orged and issued shares in the new company but paid off any partial shares. As a result, I sold 0.12 shares netting me $0.13. This sale meant I had to use TurboTax Premium for $119 instead of the free version. I hate this so very, very much.

As someone who used to work for the IRS I can tell you nobody cared about your $.13 profit.

[Kraken]

I switched all my contributions to post-tax a while back.

I wish I had done that for the years I didn't have kids. Now, though, its's too big a credit to give up.

Finished mine today. One of the stocks I own re-orged and issued shares in the new company but paid off any partial shares. As a result, I sold 0.12 shares netting me $0.13. This sale meant I had to use TurboTax Premium for $119 instead of the free version. I hate this so very, very much.

As someone who used to work for the IRS I can tell you nobody cared about your $.13 profit.

Of course the humans don't, but what about Al Gore's rhythms?

[pr0ner]

Say what? I use TT Deluxe and have several sales, disbursements and never had an issue.

Of course they make it sound like you need a higher version if you have investment trades, but if you read the fine print, Deluxe handles investments quite well IMO.

Yeah, Deluxe handles sales quite well.

[stessier]

Say what? I use TT Deluxe and have several sales, disbursements and never had an issue.

Of course they make it sound like you need a higher version if you have investment trades, but if you read the fine print, Deluxe handles investments quite well IMO.

What fine print? I entered the 1099B and I was hit with a pop-up saying I needed to upgrade to Premium to proceed. There was no cancel button or other option. Just an "Ok."

[LordMortis]

Say what? I use TT Deluxe and have several sales, disbursements and never had an issue.

Of course they make it sound like you need a higher version if you have investment trades, but if you read the fine print, Deluxe handles investments quite well IMO.

What fine print? I entered the 1099B and I was hit with a pop-up saying I needed to upgrade to Premium to proceed. There was no cancel button or other option. Just an "Ok."

This is the case for me as well with the online version. I used to have to upgrade even further to fill out Schedule K(1?) which never actually changed my taxes and took hours to figure out every year. Still, I was legally required to fill out the paperwork. That said the entire cost for state and federal and filing for premium online was $98 this year. I may switch to something else one day but inertia keeps me using TT Online.

[Jeff V]

Some years ago, Tax Act (or was it Turbo Tax?) said we owed $7K...with nothing to lose, we had an accountant do it and they characterized an inheritance improperly and we got a $7K refund instead. This earned our eternal gratitude.

I wish she had more tricks up her sleeve this time around. The punchline is we owe over $10K. I'm sure she did the best she could. Ugh.

[Kraken]

Ouch. Welcome to quarterly estimated payments.

I finally secured Wife's cooperation and our info is ready to go to our new CPA. She thinks it's late because I told her 3/1 was his deadline. It's actually 3/24 so we should be able to file on time, which is usually a hit-or-miss proposition.

The same CPA is doing the return that will allow us to close her BIL's estate, as well as my corporate return. He has asked me for documentation that nobody ever asked for before -- bank statements, credit card statements, payroll records -- it's like he's doing a thorough audit. I get why he'd want to do that to a new customer whose QuickBooks file goes back 18 years, but it's not like Kraken Enterprises is Amazon.

I'm considering closing my company after this year. I needed the benefits of incorporation when I was a public-facing business, but not so much anymore. Just being a corporation costs nearly $1,000, and then there's the tax prep fee. Plus the quarterly federal and state filing requirements. A single quarterly 1040-ES is a lot easier than the several federal and state forms I have to file every quarter. Switching to 1099 income will enable us to take home office deductions again, which are substantial. I like the trappings of being a corporation and would miss being legally Kraken after all this time, but it's the rational move. Especially since I'm technically "retiring" in November.

The only thing that might change that calculus is Wife's post-retirement work plans. If she joins my editing business, it makes sense to make her a W-2 employee. But if she pursues one of the self-employed teaching avenues she's positioning for, 1099 is the way to go.

[Scuzz]

Strange your CPA would ask for that much info. When I was in business my CPA would want year ending statements for the business but he didn’t care about those for my personal tax return. His liability was much more limited with the personal return. I think for both I would sign something stating the returns (and for the business some follow up statements) were based on info I gave him and not an audit.

[malchior]

I'd certainly be asking what the expected or range of benefit looks like for providing that level of detail. As someone who provides consultative services my thoughts are that you're potentially giving someone license to run up the tab if paid hourly. If it's flat fee then whatever - it's his job to manage his workload then. Still the time to get all that info and paper together is your time, it has to come with a worthwhile benefit or some understanding of why it is required.

[Kraken]

I'd certainly be asking what the expected or range of benefit looks like for providing that level of detail. As someone who provides consultative services my thoughts are that you're potentially giving someone license to run up the tab if paid hourly. If it's flat fee then whatever - it's his job to manage his workload then. Still the time to get all that info and paper together is your time, it has to come with a worthwhile benefit or some understanding of why it is required.

Those were all business docs. "Ed needed these items to tie out accrued payroll taxes as well as those that were paid in 2022." IDK exactly what that means.

[Zarathud]

Not paying payroll taxes correctly turns out bad very quickly for all concerned.

[Kraken]

I pay mine diligently, so I don't mind him making sure everything's square. If I made any mistakes, they were small.

[Carpet_pissr]

Gah, what is this new devilry requiring me to state if my current home loan was EVER re-financed (not just in tax year 2022), and if so, what it was used for. Sonofa..

I’m seriously confused: I actually did refi w/cash out a few years ago, then that loan was bought by another mortgage company (I believe in the same year that I did the refi). So is my CURRENT mortgage considered to have been re-fi’d by the IRS?

Bollocks they have to constantly make shit as complex as possible.

[Jeff V]

I've not heard of that one. We've a meeting with our accountant set up in a few weeks.

We refinanced the house last year -- we didn't take out any equity, just dropped a point and half in interest and lost the mortgage insurance since the house gained 150K in value since we bought it (apparently).

The punchline on our taxes has my wife depressed again and reconsidering moving us to the Philippines. Last week she said she didn't want to move there, but all she sees is everything we work for going to taxes and insurance. And two cars that we didn't expect to be paying for after paying off our two (now totaled) cars last year.

[Kurth]

Mine are done, and not by me this year! Just met with the CPA we hired to do ours. Because I messed something up on last years return having to do with moving to a new house, we had to file an amended return (even though the actual change in taxes owed in 2021 was zero).

Yet again, we’re getting smacked with a massive tax underpayment and a massive payment to the Feds and to OR and even to the City of Portland, even though we don’t live there.

Tax season is not fun.

[em2nought]

The punchline on our taxes has my wife depressed again and reconsidering moving us to the Philippines. Last week she said she didn't want to move there, but all she sees is everything we work for going to taxes and insurance. And two cars that we didn't expect to be paying for after paying off our two (now totaled) cars last year.

Where would you live in the Philippines? I'm thinking of visiting Thailand again and the Philippines for the first time once I get my condo listed and sold. Philippines seems so much easier visa wise, just buy a cheap condo and you're good to go. Of course it's even easier for you.

[Jeff V]

The punchline on our taxes has my wife depressed again and reconsidering moving us to the Philippines. Last week she said she didn't want to move there, but all she sees is everything we work for going to taxes and insurance. And two cars that we didn't expect to be paying for after paying off our two (now totaled) cars last year.

Where would you live in the Philippines? I'm thinking of visiting Thailand again and the Philippines for the first time once I get my condo listed and sold. Philippines seems so much easier visa wise, just buy a cheap condo and you're good to go. Of course it's even easier for you.

Wife bought a condo in Manila and a house in Ormoc (Leyte). Both are new construction, scheduled to be completed next year when, coincidentally, I can take early retirement. Her egg farm is paying for the house, the condo, bought when still on the drawing board, costs us $200 per month but has tripled in value if we decided to sell. The building will operate the condo as an AirBnB for us, so once complete, we expect it will at least pay for itself. Wife wants it in case I'm ever in need of western medicine, since the only first-world hospital in the country is located there.

[em2nought]

since the only first-world hospital in the country is located there.

That's good to know, thanks. I'd be afraid of pre-construction, you hear horror stories.

[Jeff V]

You might check out some ex-pat focused developments that might have better than average health care. Years ago, a coworker bought into one on Palawan, he tried to get me to go in on one too...they were selling ocean front plots, then you build your own house. Lots were about $35K, but the development would have included "western-style healthcare".

[Zarathud]

Which is important when amateurs are wielding nail guns and saws during construction.

[Isgrimnur]

Effective Tax Rate
2022 - 10.93%
2021 - 9.76%
2020 - 9.87%
2019 - 10.31%
2018 - 11.31%
2017 - 10.16%
2016 - 10.33%
2015 - 11.65%
2014 - 11.03%
2013 - 13.47%
2012 - 15.81%
2011 - 13.10%
2010 - 12.85%
2009 - 12.87%
2008 - 12.35%
2007 - 9.82%
2006 - 9.42%
2005 - 10.66%

[coopasonic]

Effective Tax Rate

Before I do the math, are we talking: Income Tax/AGI? or over Gross? or am I just dumb? Honest question.

[coopasonic]

tax/taxable income = 15.24%
tax/AGI = 13.38%

Lower child tax credit and falling back to standard deduction... damnable feds!

[Isgrimnur]

tax/AGI

[malchior]

Effective Tax Rate
2011 15.2%
2012 16.0%
2013 13.1%
2014 13.7%
2015 15.8%
2016 14.3%
2017 15.9%
2018 18.0% <- FU SALT.
2019 16.2%
2020 19.0%
2021 19.5%
2022 18.2% <- Would have been 19.7% but for a credit for solar panels

I should work up a version with my state and property taxes. It's probably close to 40% effective tax in some of these years.

[Kraken]

I'm not going to calculate my history. I know last year's effective federal rate was 12.6%, so that's what I withheld from myself throughout 2022 -- or from May onward, anyway. When you do your own payroll you don't have to use withholding tables -- you can just take your best shot at it.

Unfortunately '22 was a weird year for us, financially, so our effective rate might be quite a bit different. Will find out in the next couple of weeks.

[Pyperkub]

scary

eFile.com, an IRS-authorized e-file software service provider used by many for filing their tax returns, has been caught serving JavaScript malware.

Security researchers state the malicious JavaScript file existed on eFile.com website for weeks. BleepingComputer has been able to confirm the existence of the malicious JavaScript file in question, at the time.

Note, this security incident specifically concerns eFile.com and not IRS' e-file infrastructure or identical sounding domains.

[Kraken]

Today I got one of those scary Official Business letters from the IRS. Or I should say Kraken Enterprises did.

They issued me a $3 refund. In 2021 I paid $45 in federal unemployment (FUTA), when I only owed $42. You'd think I'd know after all these years that FUTA is always $42/employee/year, and I did get it right on my 2022 deposits. When I filed my paper return for '21, I told the IRS to credit my overpayment to the next year, and then promptly forgot that they were only expecting $39 this year. I'll bet it cost them more than $3 to straighten that out.

Now I'm eagerly watching my checking account for a $3 deposit. This will almost certainly be my only tax refund this year.