The 2013 taxation thread
#63
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At this point, I'm out of the game. Regular W2 employee, with a 401k and the whole nut.
Still, I could never figure out how creating an S-Corp, an LLC, or anything of that nature would have benefited me, aside from creating a bunch of additional paperwork. I had a lot of people ask me that, but nobody could ever explain to me why I'd want to do it.
#64
On the flip side, as an LLC (or S-Corp) the member can not usually represent themselves in a financial dispute (as in small claims court) and so the attorney's get fatter or the LLC just says '**** it' to the debt. Smart business people (or dishonest... you pick) understand this when paying monies due especially near the end of relationships/contracts. The point being, an LLC or a Corp can not represent itself in a court of law (in most states anyway).
In your case, if no 1099 was ever filed by the company paying the money I'd probably opt to 'forget it' until such time as someone in the state of NJ figured it out and sent you the 'hey WTF' letter. That happens more than you think....
Hell, by then you may be off to another state/country anyway.
#66
Yeah, I don't know all the details, but essentially for what my wife typically grosses in a year, putting all the money into the S-Corp (thanks for jogging the memory that it's an S-corp not an LLC), then paying herself a weekly salary, she ends up paying less into the IRS than if she just files on her personal return.
You were probably making enough that it didn't work out in your favor. IIRC it essentially works if you're in the middle-to-upper middle (essentially $50k-120k gross per year).
But I only talked with her accountant long enough to make sure that since we are filing jointly this year, they could adequately separate our income so we aren't paying each others taxes.
You were probably making enough that it didn't work out in your favor. IIRC it essentially works if you're in the middle-to-upper middle (essentially $50k-120k gross per year).
But I only talked with her accountant long enough to make sure that since we are filing jointly this year, they could adequately separate our income so we aren't paying each others taxes.
#68
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Interesting that you mention the concept of "middle to upper middle" class. I have honestly never understood such distinctions, at least based solely on income. Income and class are not strongly inter-related.
I mean, a $100k job up in the Catskills would make you a 1%er. Here in Manhattan, that puts you near the poverty line.
Still, it's quite possible for a "wealthy" person in upstate NY to have little class, and for a "poor" Manhattanite to comport themselves like a Rockefeller.
So long as the streets are kept clear, I'll go ahead and pay my tax.
#69
I know that I've sat down and tried to do the math a few times, and I could never figure out a reason to do it.
Interesting that you mention the concept of "middle to upper middle" class. I have honestly never understood such distinctions, at least based solely on income. Income and class are not strongly inter-related.
I mean, a $100k job up in the Catskills would make you a 1%er. Here in Manhattan, that puts you near the poverty line.
Still, it's quite possible for a "wealthy" person in upstate NY to have little class, and for a "poor" Manhattanite to comport themselves like a Rockefeller.
Interesting that you mention the concept of "middle to upper middle" class. I have honestly never understood such distinctions, at least based solely on income. Income and class are not strongly inter-related.
I mean, a $100k job up in the Catskills would make you a 1%er. Here in Manhattan, that puts you near the poverty line.
Still, it's quite possible for a "wealthy" person in upstate NY to have little class, and for a "poor" Manhattanite to comport themselves like a Rockefeller.
I'm using it in the, "divide people based on income" sense. No more, no less. I'm not sure how one "comports" themselves as relevant to a discussion on taxes/income.
#70
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The underlying concept is that the relationship between income and "class position" varies greatly with geography. In all seriousness, living in some parts of the country, a $75k salary probably puts you in the top 1%, whereas in other areas, $75k means you're living in a crappy, run-down studio apartment in an iffy neighborhood, and commuting two hours each way to get to work.
I was just making an observation about the notion of "middle-to-upper middle (essentially $50k-120k gross per year)." Where I live right now, $50k means you have several roommates, while $120k puts you right at about average- not quite enough to be able to justify renting a parking space, but enough to live comfortably. (Certainly a long way from "upper-middle-class.")
By comparison, in the town I grew up in, $50k would have put you into a nice house in a neighborhood with an HOA, and $120k wasn't even a relevant concept for most people.
#71
True, I got sidetracked a bit.
The underlying concept is that the relationship between income and "class position" varies greatly with geography. In all seriousness, living in some parts of the country, a $75k salary probably puts you in the top 1%, whereas in other areas, $75k means you're living in a crappy, run-down studio apartment in an iffy neighborhood, and commuting two hours each way to get to work.
I was just making an observation about the notion of "middle-to-upper middle (essentially $50k-120k gross per year)." Where I live right now, $50k means you have several roommates, while $120k puts you right at about average- not quite enough to be able to justify renting a parking space, but enough to live comfortably. (Certainly a long way from "upper-middle-class.")
By comparison, in the town I grew up in, $50k would have put you into a nice house in a neighborhood with an HOA, and $120k wasn't even a relevant concept for most people.
The underlying concept is that the relationship between income and "class position" varies greatly with geography. In all seriousness, living in some parts of the country, a $75k salary probably puts you in the top 1%, whereas in other areas, $75k means you're living in a crappy, run-down studio apartment in an iffy neighborhood, and commuting two hours each way to get to work.
I was just making an observation about the notion of "middle-to-upper middle (essentially $50k-120k gross per year)." Where I live right now, $50k means you have several roommates, while $120k puts you right at about average- not quite enough to be able to justify renting a parking space, but enough to live comfortably. (Certainly a long way from "upper-middle-class.")
By comparison, in the town I grew up in, $50k would have put you into a nice house in a neighborhood with an HOA, and $120k wasn't even a relevant concept for most people.
But I was basing that on national averages, NYC along with the other top 10 markets in the US are anomalies compared to the rest of the country.
#73
Finished my taxes and got a very nice refund! But don't fret Joe, it was from an education credit and not from over-payment of my withholding taxes. It will all likely be spent on a combination of the miata and a vacation because I already contribute regularly to retirement and my emergency fund. This is fun money.
#74
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Finished my taxes and got a very nice refund! But don't fret Joe, it was from an education credit and not from over-payment of my withholding taxes. It will all likely be spent on a combination of the miata and a vacation because I already contribute regularly to retirement and my emergency fund. This is fun money.
'Tis Ok. I owe the Fed about $4.5k, which is less than usual, but then 2013 was hardly a banner year. On the plus side, penalties are only $130, attributable mostly to an overpayment of ES #1, the complete nonpayment of ES 2-4, and the mitigation of W2 withholding during Q4. It was an odd and confusing year.
Now, onto the joy of CA form 540-NR; one of the least intuitive tax forms ever...
#75
Hehe.
'Tis Ok. I owe the Fed about $4.5k, which is less than usual, but then 2013 was hardly a banner year. On the plus side, penalties are only $130, attributable mostly to an overpayment of ES #1, the complete nonpayment of ES 2-4, and the mitigation of W2 withholding during Q4. It was an odd and confusing year.
Now, onto the joy of CA form 540-NR; one of the least intuitive tax forms ever...
'Tis Ok. I owe the Fed about $4.5k, which is less than usual, but then 2013 was hardly a banner year. On the plus side, penalties are only $130, attributable mostly to an overpayment of ES #1, the complete nonpayment of ES 2-4, and the mitigation of W2 withholding during Q4. It was an odd and confusing year.
Now, onto the joy of CA form 540-NR; one of the least intuitive tax forms ever...
#76
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I do actually intend to see a tax paperer (probably not a CPA) once I'm done with Fed and CA to get some region-specific advice on being a NJ resident who works in NYC (three different tax returns involved there), but after I figure out the specifics of that, I'll probably go back to doing it all myself again.
My taxes actually aren't all that complicated, there's just a large volume of paperwork. And it's not like I'm working on it full-time, just an hour or so every few evenings.
#77
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I am annoyed to have used a payroll service for paying my nanny because they do not spoon feed me information like "Make sure you enter the amounts from your 1040-ES coupons on our site into your tax return". I do not like ot be surprsied by a multi thousand dollar liability that doesn't really exist.
On the upside, I found the information I needed in less time than the online support queue took so now here I am chatting randomly with support people.
It turns out the estimated payments were within one dollar of my actual liability. I can deal with that.
Incidentally, it's nice to know that turbotax online has free CPAs. Even before you pay and file.
On the upside, I found the information I needed in less time than the online support queue took so now here I am chatting randomly with support people.
It turns out the estimated payments were within one dollar of my actual liability. I can deal with that.
Incidentally, it's nice to know that turbotax online has free CPAs. Even before you pay and file.
#78
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I used Turbotax years ago and H&R TaxCut for the last several years. It's pretty thorough, but there is a bit of a learning curve if you are doing oddball business deductions. It does let you compare year to year, which is nice for people who like to stare at data and marvel over % change. It also lets you compare your deductions and other data to national averages for your income level, which I find interesting.
#79
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I have an appointment scheduled next Monday at 11am with my tax guy. After TurboTax failing me horribly last year, I have no problem paying a professional a bit extra to make sure it is done right.
#80
I'm getting very frustrated with the folks doing our return. They have been handling my wife's business stuff for the last year, yet it's been over 3 weeks now and they still haven't filed.
Every other day, it's "Oh now we need this, now we need this, now we need this."
I'm surprised that a professional CPA and his staff don't have some type of document along the lines:
"Hi there business client, if we are to complete your tax review and filing for this year, provide the following information:
1. X
2. X
3. etc. etc. etc.
Thank you,
Professional CPA"
Every other day, it's "Oh now we need this, now we need this, now we need this."
I'm surprised that a professional CPA and his staff don't have some type of document along the lines:
"Hi there business client, if we are to complete your tax review and filing for this year, provide the following information:
1. X
2. X
3. etc. etc. etc.
Thank you,
Professional CPA"