Taxes Taxes

[Gargamel]

Every year I swear I'll do them early, get my refund, be a happy camper.  I always forget about about them.   And here I am, doing them morning of.....  Sigh.  

[GoSlash27]

Yup. Did mine last night, but I was intentionally procrastinating.

Best,
-Slashy

[Gargamel]

I use turbotax, and every year, I am amazed at how easy they make it.  The "sign this and that" section is more work than actually doing the taxes.

 

1 hour ago, Gargamel said:

about about

I might be the only person online with a chronic stutter while typing.  I do this all the time. 

15 minutes ago, GoSlash27 said:

Yup. Did mine last night, but I was intentionally procrastinating.

Best,
-Slashy

Lemme guess though... You did it all by spreadsheet and abacus.

And another thing, I have always contended that the hardest date to write out is your birthday, but not the birth year.  Like the expiration date on your license.  It's almost unnatural to write anything but your birth year. 

I've have medical reports (ex medic) get rejected by insurance companies because I wrote a date 3 decades previous to the actual date of the report. 

[GoSlash27]

1 hour ago, Gargamel said:

Lemme guess though... You did it all by spreadsheet and abacus

haha no... I used H&R Block software. Not particularly user- friendly, but it got the job done.

Best,
-Slashy

[Geonovast]

Turbotax once tried to steal $2,000 in "misc fees" from me when I made $12,000 in the year and had a kid.

They burned their first and second chances with that one.

Mine are done on paper and physically mailed in within a week of getting my W2s.

 

I tried H & R Block once, and it kept rejecting it because it claimed my birthday was wrong. (July 6th).  Turns out the IRS had entered it in that year as June 7th (apparently they hand enter the info every year?).  In order to fix it, I had to go apply for a new SS card to trigger them to re-enter the information.

[GoSlash27]

Thinking about it further... I would never use a spreadsheet and abacus to do taxes, since taxes don't obey any known mathematical laws.

/badum-tiss

/try the veal

[TheSaint]

I've been doing our taxes with TurboTax for close to a decade now. Works great. But, on the other hand, our taxes aren't that complicated. We aren't the people who show up at the tax guy with a box of receipts and try to deduct our pet groomer. We did ours second week in February, had the refund in the first week in March. We don't normally get a refund, I normally engineer it so we pay a couple hundred dollars each to Fed and state. (Because what's the point in handing an interest-free loan to Uncle Sam?) But we came into a bit of money last year and wound up maxing out our IRA deposits, which pushed our return into the black.

[GoSlash27]

33 minutes ago, TheSaint said:

I normally engineer it so we pay a couple hundred dollars each to Fed and state. (Because what's the point in handing an interest-free loan to Uncle Sam?)

And also, they like to treat any refund as "taxable income" the next year, so any refunds get taxed twice. Better to not have a refund.

Best,
-Slashy

[Superfluous J]

I just fill out the forms and get money. I don't care enough to try to save $10 in interest or $30 in fees.

And yes, I tend to do it all on the very last day even though there is literally no reason to. If it wasn't for the last minute, I'd never get ANYTHING done.

[adsii1970]

1 hour ago, 5thHorseman said:

I just fill out the forms and get money. I don't care enough to try to save $10 in interest or $30 in fees.

And yes, I tend to do it all on the very last day even though there is literally no reason to. If it wasn't for the last minute, I'd never get ANYTHING done.

I don't. I made the mistake of waiting until April 15th ONE time in my life. And wouldn't you know it, on April 13th, I was deployed to Haiti for a six month rotation back in the 1990s. At first, there wasn't going to be an extension granted for deployed military. But we did receive word during a morning briefing that Congress had directed an extension one week longer than the deployment. So, since that day in 1994, I've NEVER procrastinated on my taxes again.

I work with multiple employers. And I set my exemptions to single with no exemptions, and the two smaller paying employers, I have an extra $50 in federal and $25 in state/local taxes withheld each pay period.

Yeah, some years I end up giving the government a loan for free, but most years, I either only get $125 back or pay in about that amount.

[Shpaget]

The Gov does it for us automagically here.

In 2016 I got $10 back XD, last year not even that.

[Gargamel]

13 hours ago, adsii1970 said:

And I set my exemptions to single with no exemptions, and the two smaller paying employers, I have an extra $50 in federal and $25 in state/local taxes withheld each pay period.

Kids, listen up.  And by kids I mean the youngins on this site who have yet to deal with this.   This is the key.  Withold what you have to, not less.  One year, I actually followed the instructions on the W4, and I ended up with 6 dependants.  That was Me, Myself, the Wife, the Dog, and I.   We ended up owing.   A lot.  And of course, I did it late in the year, and we didn't have the cash to cover it, so we owed a penalty too.      Now, I always set it to 1.  I'm not sure if I can, but I'd set it to 0 if I was allowed.    If your cashflow is too small for your household (and notice I said household, not expendable income), then increase it. 

EDIT:  I still can't count.....

[adsii1970]

3 hours ago, Gargamel said:

Kids, listen up.  And by kids I mean the youngins on this site who have yet to deal with this.   This is the key.  Withold what you have to, not less.  One year, I actually followed the instructions on the W4, and I ended up with 6 dependants.  That was Me, Myself, the Wife, the Dog, and I.   We ended up owing.   A lot.  And of course, I did it late in the year, and we didn't have the cash to cover it, so we owed a penalty too.      Now, I always set it to 1.  I'm not sure if I can, but I'd set it to 0 if I was allowed.    If your cashflow is too small for your household (and notice I said household, not expendable income), then increase it. 

EDIT:  I still can't count.....

I learned my lesson the hard way. It was 1997, I was in college, and was working on campus and was working nearly full time on third shift Wal-Mart store security. That year, as a full-time student, I ended up owing the state of Louisiana close to $200 in state taxes and another $750 to the Infernal Ripoff Service. It was really bad that year. I had to do a payment plan with the IRS and had to pay the state taxes BEFORE I could renew my car tags in May. State used to have a law, no payment plan for any amount owed under $500 and they could hold any licenses as collateral until it was paid off.

I decided that I'd never experience that again. Went to an accountant who gave me some convoluted method (a long formula, really) to determine how much additional withholding to take out. Over time, I developed my own method and it has seemed to work pretty well. I adjust the withholding amount each year based on the previous year's tax return. So:

• Total amount of taxes paid/the total gross pay from all job sources = T
• Total amount of gross pay * Main job (J¹) = W¹
• Total amount of gross pay * Second job (J²) = W²
• Total amount of gross pay * Third job (J³) = W³

Check the math: T = W¹ + W² + W³  (Normally this is within $5 of each other)

At this stage, I do this for each job: W^x/12 = Monthly tax amount withheld (M¹).

Take this number and compare it to your pay stubs from each job from the previous December. These numbers should be close to equal. To figure out how much I need to adjust my additional withholding, I take M¹  - additional withholding = unadjusted tax amount (U). Here's where it gets tricky, and it took three years to understand how it works.

If you take the tax return's tax schedule (T² ; how much taxes you must pay on your income)/12 = will equal the exact amount you needed to pay each month.

Compare this number to the number to the original tax amount, and the difference will give you an estimate on how much difference there is between your actual withholding and how much you should adjust it. And I always round up to the nearest $5. So, this year, when I did my estimates, one came out to $21.00, so I changed it to $20.00 and my third job came to $27.00, and that gets rounded up to $30.

[LordFerret]

18 hours ago, Gargamel said:

I'd set it to 0 if I was allowed.

It used to be, I used to do it... but they really complained about it... they do not like having to give you money, just take it from you. If I recall correctly, if your refund is in excess of x-amount of dollars (for me it was over $1000) you're penalized for not taking the proper exemptions. Go figure.

 

Curiosity got the cat. I went and looked it up.
"The erroneous refund penalty is 20 percent of the excessive refund or credit amount claimed."

 

@adsii1970

You haven't lived until dealing with multi-state taxes in the northeast metro area. Living in NJ, working in NYC. Fed taxes were one thing. You also had NJ state and NY state taxes to worry about, as well as NYC taxes. Problem was, to file NJ, you needed NY done first... but to do NY, you had to have NJ done first. No joke.

[Gargamel]

Well, I guess the grinch does have a soul, they extended the filing date by a day....

[adsii1970]

8 hours ago, LordFerret said:

@adsii1970

You haven't lived until dealing with multi-state taxes in the northeast metro area. Living in NJ, working in NYC. Fed taxes were one thing. You also had NJ state and NY state taxes to worry about, as well as NYC taxes. Problem was, to file NJ, you needed NY done first... but to do NY, you had to have NJ done first. No joke.

I live in Kentucky. My wife works in Indiana, and I work for three different community colleges/universities: one in Kentucky, one in Indiana, and one over in Illinois. And all three states have income taxes and county taxes on income... I hate the whole intellectually weak argument "someone doesn't pay their fair share of taxes..."

[linuxgurugamer]

On 4/16/2018 at 11:29 AM, GoSlash27 said:

And also, they like to treat any refund as "taxable income" the next year, so any refunds get taxed twice. Better to not have a refund.

Best,
-Slashy

No,. Federal refunds are not taxable, however STATE refunds are, since you didnt pay taxes on that money,

I should know, I get a few thousand back every year from the feds, and usually about a thousand from the state.

and yes, I have been audited, never had a problem

[Gargamel]

10 hours ago, LordFerret said:

"The erroneous refund penalty is 20 percent of the excessive refund or credit amount claimed."

There's a difference between withheld, and claimed.   Withheld is how much you pay each paycheck.  Claimed is how much tax credit you get at time of filing. 

It's safest to withhold as much as possible, and claim the right amount on your taxes, that way you will have overpaid, and the difference is returned.  Hence, Tax Return. 

The penalty you quote is for refunds that are inaccurately excessive, not just for large amounts. 

I was dating a girl who was a single mom of 3 kids, worked a heavily tipped job with not much hourly, and was able to get refunds in excess of 6k. 

[Superfluous J]

My favorite thing is how you pay tax where you work, but can't vote there if you live elsewhere. We literally fought a war over that.

[GoSlash27]

48 minutes ago, linuxgurugamer said:

No,. Federal refunds are not taxable, however STATE refunds are, since you didnt pay taxes on that money,

Federal refunds are taxed in my State.

And yeah, I *did* pay taxes on that money the year prior. Refunds are not "free money", they're just money that you had already earned (and paid taxes on) being returned to you because they withheld too much.

Best,
-Slashy

[linuxgurugamer]

1 hour ago, GoSlash27 said:

Federal refunds are taxed in my State.

And yeah, I *did* pay taxes on that money the year prior. Refunds are not "free money", they're just money that you had already earned (and paid taxes on) being returned to you because they withheld too much.

Best,
-Slashy

State taxes are deductible from income for Federal taxes.  I believe it's calculated based on what was withheld on the W2, so if you get a state refund, that money was not taxed by the federal, so that's the reason you pay taxes on state refunds