Income tax thread 3.0

[Yakoo752]

Bumping this with a very silicon valley question.

Taking all this to my tax guy soon, but he's a bit busy this time of year.

IANATL but I have experienced similar.

You didn't pay tax at $30. You paid the tax on the difference of fair market value and what you paid. In your 2:20 example, the tax basis would be $18. And you're 3:30 calculation is "wrong"

After a 3-for-2 stock split, you'll have three shares for every two shares you used to own. The company will increase its share count by half, and its share price should correspondingly decline by approximately one-third. The market value of your holding therefore remains more-or-less the same.

a split shouldn't change your overall cost basis so that's a moot point. In total, you paid X amount and it was valued at Y amount. You were taxed on the difference. When you sell, you earned Z amount. If Z is greater than Y, you owe more taxes. If less than Y, you can claim the loss.

If I am incorrect, please follow up with what your tax person indicates.

Also, have you been writing off your AMT? If so, that will change things as well.

 

[2strokeYardSale]

Took a loan out on my 401k to make the down payment on my house. Lost my job, defaulted on the loan to myself, the loan balance counts as a distribution. My 401k tax forms make no mention of this distribution (should be a 1099-R).

TurboTax has something about making up your own 1099-R from what data you have. Sounds sketchy. Anybody ever done this?

P.S. Got a 1099-INT for nine cents. Fuck it? Report it?

 

[Cycle61]

Report the nine cents. It will probably round to zero on the next line anyway.

IDK how to report the distribution/loan/thing, but DON'T IGNORE IT.

I made this mistake once, got fucked by it very very hard, and it's taken a decade to recover.

 

[Yakoo752]

Report the nine cents. It will round to zero on the next line anyway.

this

I would report it unless it changes my filling.

 

[2strokeYardSale]

IDK how to report the distribution/loan/thing, but DON'T IGNORE IT.

I made this mistake once, got fucked by it very very hard, and it's taken a decade to recover.

You too huh? I think I paid a small amount of tax at distribution. Turns out the tax amount is enormous.

 

[rodr]

Took a loan out on my 401k to make the down payment on my house. Lost my job, defaulted on the loan to myself, the loan balance counts as a distribution. My 401k tax forms make no mention of this distribution (should be a 1099-R).

TurboTax has something about making up your own 1099-R from what data you have. Sounds sketchy. Anybody ever done this?

P.S. Got a 1099-INT for nine cents. Fuck it? Report it?

Call the 401K administrator to sort it out and have them re-send the 1099-R. And yes, include all 1099's in your return or you WILL hear from the IRS.

 

[Bowling4Bikes]

send me your social and birthdate and full name and i'll look it up

*edit, just realized that post is a year old :laughing

haha that's ok, I gave the guy that info. He was nice. A real prince.

 

[2strokeYardSale]

I found my 1099-R; it was elsewhere on the site, not with the tax forms. (Of course not, why would it be?) Good news is the distribution is not going to destroy me.

Meanwhile, I'm still wondering about the mortgage interest deduction, which I've yet to take after 4 years. TurboTax says standard deduction is better. I must have made a great deal on my mortgage, yeah that's it.

 

[jc2ducati]

Anybody do their 2018 taxes yet? Most of us in CA will likely get hit with higher bills vs. refunds because of the specific changes made that especially affect CA. I am surprised there is so little comment on this. This is the largest change I have ever seen.

Here is one example.
https://ttlc.intuit.com/community/Tax-reform/Very-Large-increase-in-2018-Taxes/td-p/9820

Are people just unaware like I was or is the outrage just starting?

 

[ejv]

I did mine two weeks ago. AGI up $8700 and total federal tax down a bit over $5000. But I don't own a home so I am not used to deducting 50-80K a year on schedule A like a lot of people around here. Finally got child tax credit since they raised the income limits. Coworker just did his yesterday. Income up $35,000 and taxes only up $3,000 and he does own a home so not too shabby.

 

[ejv]

Anyway you shouldn't get caught up in refund or tax due. Look at the bottom line total tax and your effective rate. That's what matters. My effective rate went down even though income went up.

 

[Yakoo752]

Anyway you shouldn't get caught up in refund or tax due. Look at the bottom line total tax and your effective rate. That's what matters. My effective rate went down even though income went up.

this.

they changed the withholdings tables, so you bring more money home and feel like the new tax laws benefited you.

For most people, the new law actually benefits you even if you now owe at true up.

 

[afm199]

I'm paying a bit less tax.

 

[Cycle61]

Definitely paid less this year, although my AGI was reduced slightly due to being able to claim one of the kids and deduct all of my alimony payments.

 

[jc2ducati]

True, the final effective rate has not gone up the same amount as the increase in your AGI, but my effective tax rate has definitely gone up. I am just quite surprised more people are not more affected, esp. in CA with all the deductions no longer allowed.

For example, IRA deductions are no longer allowed if you make more than 70k according to Turbotax. What?! How could they let this one through. This has been an allowable deduction since I got my very first paycheck decades ago.

There are so many others not allowed: state and local taxes over $10k, employee expenses, home office deduction, etc.

 

[ejv]

If filing as single and you have a company sponsored retirement plan, then the phase out for deductible IRA contributions went up $1,000 from $72,000 to $73,000 modified AGI at the top of the range. The lower range where it starts to phase out went up $1,000 also to $63,000. It goes up another $1,000 at the bottom and top of the range for 2019 as well. In 2016 it went from $61K/$71K to $62K/$72K in 2017 for the phaseout range.

You can check www.irs.gov/retirement-plans/ira-deduction-limits for current info.

So nothing went down.

Perhaps you didn't previously have a company sponsored retirement plan, which if you were single there was no income limit for the deduction of the Traditional IRA. If you now have a company plan, you are limited in the deduction you may take.

 

[Cyclesuzy]

I filed my taxes and am getting some money back (less total than last year but hey better than owning) but the money from the feds is showing as "pending" into my bank account since last night. Still showing that way right now. When is the money likely to be released or has anyone else ever had it "pending" like this? First time for me and it's driving me nuts ... it's like here's money you could be spending but NOOOO you no can haz. :argh!!!

 

[KooLaid]

Just did my taxes. I made a little over $8000 more in 2018. My federal refund was $1000 more than year �� BUT my state taxes also doubled so I owe double what I paid last year!

I filed January 31, got my refund on February 8.

 

[weasel]

I owe for the 2nd year in a row. $600 this time
For the last 34 years I always got a refund. :/

 

[Killroy1999]

I just talked to my tax accountant and the changes that were made to withholdings has a lot of people owing a >$10K and are in bad shape. Tax payers did not realize that if they did not change their withholdings with their employer, they needed to save a lot to write a big tax check.

My effective tax rate went down a little, but I will spending that on on my tax accountant because I added a lot of real estate this year.