Income tax thread 3.0

[Owensdad]

Sam, any input on the chart below? (click to zoom).
In the long-term capital gains section, do those income figures INCLUDE the capital gains?

I'm not following your question.

The chart shows 2012 vs 2013 rates for: income, capital gains, and qualified dividends.

The ACA surcharges are reflected.

 

[Reli]

Chart says a single person making $36-400K would pay a 15% long term cap gains tax.

My question is whether that $36-400K includes those long-term cap gains.

 

[Owensdad]

Chart says a single person making $36-400K would pay a 15% long term cap gains tax.

My question is whether that $36-400K includes those long-term cap gains.

Ah I follow. It should include those gains as the new rates on LTCGs are based on taxable income in aggregate (earned + passive). These rates are not marginal.

 

[JackTheTripper]

Did our taxes over a month ago. Owed a little on state and got back a little more on federal.

Come home today and there is a fat state refund check with no explanation. It's for a nice round number. $x,x00.00. Did everyone get one of these? Did I miss something?

Will be looking into it on Monday.

 

[JesasaurusRex]

Did our taxes over a month ago. Owed a little on state and got back a little more on federal.

Come home today and there is a fat state refund check with no explanation. It's for a nice round number. $x,x00.00. Did everyone get one of these? Did I miss something?

Will be looking into it on Monday.

You made a mistake, they corrected it for you.

 

[JackTheTripper]

You made a mistake, they corrected it for you.

No. I've fucked up before and they send an explanation letter. This didn't come with one.

 

[JesasaurusRex]

No. I've fucked up before and they send an explanation letter. This didn't come with one.

cash it while you can and empty all your bank accounts? :teeth

 

[JesasaurusRex]

Does the IRS or FTB send confidential certified mail?

 

[Cycle61]

How to file an extension? I'm on the road for work for several weeks, will not have my paperwork available to finalize everything, and am having issues getting a W2 from one employer last year.

 

[Yakoo752]

How to file an extension? I'm on the road for work for several weeks, will not have my paperwork available to finalize everything, and am having issues getting a W2 from one employer last year.

turbo tax does this now - it's free and incredibly simple

how do you file a CA extension is what I want to know
just mail the form in?

 

[afm199]

turbo tax does this now - it's free and incredibly simple

how do you file a CA extension is what I want to know
just mail the form in?

You get an automatic extension but must pay your tax. Go to Ca forms and then use the "open a form" The search area is on the right of the "open form" window. Type in "extension" and it will bring up 3519 which you can mail in if you need to pay . I think you can efile it too, but it may cost money. However if you owe no tax further than what you have paid or had withheld, you don't need to file anything.

 

[AbsolutEnduser]

turbo tax does this now - it's free and incredibly simple

how do you file a CA extension is what I want to know
just mail the form in?

You get an automatic extension but must pay your tax. Go to Ca forms and then use the "open a form" The search area is on the right of the "open form" window. Type in "extension" and it will bring up 3519 which you can mail in if you need to pay . I think you can efile it too, but it may cost money. However if you owe no tax further than what you have paid or had withheld, you don't need to file anything.

rad.. are you sure of that?

BTW: due to the above sentence we're short on time . Should we use HR-Block? I'm hoping no..

 

[afm199]

rad.. are you sure of that?

BTW: due to the above sentence we're short on time . Should we use HR-Block? I'm hoping no..

https://www.ftb.ca.gov/individuals/faq/ivr/201.shtml

You can download the form if you have tax to pay, however CA extension is automatic, just be sure your tax due is paid.

I just filed a fed extension that I printed out from turbotax (had to pay them money) and ditto for CA. easy peasy The CA form is just a form that accompanies the check to tell them who and what it is for. The federal form is an extension form.

 

[Owensdad]

Does the IRS or FTB send confidential certified mail?

Typically no. Regular mail. Perhaps after many attempts.

PSA: you will never receive a phone call or email as an initial contact from a tax authority.

 

[Owensdad]

rad.. are you sure of that?

BTW: due to the above sentence we're short on time . Should we use HR-Block? I'm hoping no..

Ernie has it exactly right.

Remember, and this is critical, extension of time to *file* does not extend the time to *pay*. You will accrue interest and penalties (though 10x less than for failure to file) on any underpayment.

Always file timely even if you can't pay the tax you owe. The additions to tax are much (an order of magnitude) less.

 

[Owensdad]

Did our taxes over a month ago. Owed a little on state and got back a little more on federal.

Come home today and there is a fat state refund check with no explanation. It's for a nice round number. $x,x00.00. Did everyone get one of these? Did I miss something?

Will be looking into it on Monday.

Sorry missed this question.

Double check your W-2 and investment income inputs. Did you blow a decimal point?

Be alert for scams. This smells fishy.

 

[byke]

Really good question. You absolutely have recourse. This is what tax practitioners call an issue of procedure and it happens all the time.

A late filed return where no tax is owed should not be an issue assuming the SOL has not run.

Your explicit instructions on how to apply the payment to a specific year's tax liability should generally be respected assuming no illicit acts (fraud etc.). Written instructions on the check itself should be sufficient. Example: year/form/tax ID#, "2013/form 1040(ES)/123-45-6789" in the memo. Did you include any other documents with your payment?

Thanks for the reply and sorry for the slow response.

Unfortunately, I wasn't very specific, but the lady on the phone acknowledged that it was clear what my payment was for and didn't say thing like, "you should have written....". I think I just wrote "2013 taxes" in the notes.

Resubmit the 2013 payment and dispute any interest/penalties based on the facts you noted above.

Robust documentation is critical. How did the Service acknowledge their error? If verbally, keep a record of the agent's ID# and name. If you didn't catch that, keep a diary of your interactions and supply those facts (including a copy of the check that presents your instructions) in a written response to the computer generated notification (the notice will have an identifying number in the upper right hand corner starting with "CP") of additions to tax regarding your 2013 return that you will probably receive in the next few months.

You must respond in a timely manner, typically 30 days from the date of the notice. Timely mailing is generally considered responsive.

Keep a copy of everything.

I'm hoping this is all going to be moot because I received a closing document for 2013 fiscal year from my previous employer that I wasn't expecting. It states a big loss that I *think* is going to offset this "underpayment" (not an underpayment to me because I paid them and then the buggers gave it back in the 2012 return).

I'm sooooo ready for this K-1 nonsense to be 100% over with.

 

[Owensdad]

Partnership matters can be indeed a major hassle, technically and admistratively. Generally not worth it if the partners don't avail of the advantages of special allocations, unique to partnerships, afforded by subchapter k of the code.

PM me if this drags on.

 

[oorahduc]

I have a convoluted situation that I need a simple resolution. My Mother in Law formed an LLC in California last year, but never actually did anything with it (No expenditure or revenue.) The complication is, she made my wife the CEO. From my understanding, there is an $800 fee to pay to CA for the formation of it... How do I go about making that payment? I saw nothing of it in TurboTax.

 

[Owensdad]

I have a convoluted situation that I need a simple resolution. My Mother in Law formed an LLC in California last year, but never actually did anything with it (No expenditure or revenue.) The complication is, she made my wife the CEO. From my understanding, there is an $800 fee to pay to CA for the formation of it... How do I go about making that payment? I saw nothing of it in TurboTax.

File California form 3522 with the $800 payment, currently the minimum *annual* franchise tax for CA organized LLCs and S-Corps.

Your software probably didn't trigger this form because you didn't report self employment income through a CA LLC.

Well done for catching this required payment!

A good example of the limitations of shrink wrapped software.