voip-ninja
Give me some sugar baby
That's when they shockingly discover that mom & dad reverse mortgaged the house and plan on leaving the world the way they entered it, penniless.
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Disappointed in my tax refund results with $7500 EV credit.
- Thread starter timk225
- Start date
That's when they shockingly discover that mom & dad reverse mortgaged the house and plan on leaving the world the way they entered it, penniless.
Glamisduner
Active Member
Hmmm, sounds like I should try to get into bee keeping, isn't that also a farmer credit or some such thing?
Many people get stung trying to get ahead in that type of scheme...
He would have owed a boatload if not for the EV Tax Credit.
I agree. You are better off always owing some. But not too much.
We will get a large refund, only be cause of the tax credit, otherwise we would have normally owed, just the right amount.
We bought the car late in the year and it was not worth messing with withholding for an "outlier" year. No idea how this new year was gonna work out and it came out perfect. More by accident than by planning
Glamisduner
Active Member
I got back way too much, but I don't remember what I claimed on my original W4.He would have owed a boatload if not for the EV Tax Credit.
I agree. You are better off always owing some. But not too much.
We will get a large refund, only be cause of the tax credit, otherwise we would have normally owed, just the right amount.
We bought the car late in the year and it was not worth messing with withholding for an "outlier" year. No idea how this new year was gonna work out and it came out perfect. More by accident than by planning
Figured I'd wait and see what happened this year as well. Getting around 15k back...Ok that's fine. Claiming home office and travel miles are still red flags no matter which accountant you choose.
Net worth only matters if you liquidate. As it is, my house was a foreclosure that was empty 3 years. Over 50% loan to value at this point...
The car loan bought a car that makes trips actually enjoyable for my wife instead of painful, very much worth it...
cpa
Active Member
Nope. Farmers can use income averaging for their farming income. (Unlike the rest of the taxpaying public.) And self-employed farmers do not have to make estimated tax payments throughout the year if they file AND pay their tax liability before March 1 every year.
voip-ninja
Give me some sugar baby
I got back way too much, but I don't remember what I claimed on my original W4.
There are free calculators available online so that you can pretty precisely calculate your proper withholding amount and not give the .gov a free loan on your money for 12+ months.
voip-ninja
Give me some sugar baby
I see your username and kind of expect something like this by now
And a good day for us too!
Hey, maybe a set of 4 similar matched winter tires? Glad you ended up richer than you thought.
JPP
Active Member
....so, lots of financial/legal/accounting advice up thread. A bit of perspective from CA (where many, many residents/taxpayers are suffering under the new tax laws due to our high State taxes , real estate taxes, and high real estate prices---yes, my wife & I will get killed this year with loss of deductions):
Who does your taxes-- FWIW, my wife and I have used a small law firm specializing in finance and taxes, with some staff formerly employed by the IRS. With an attorney, you have attorney-client privilege...not true with an accountant. So you can have a deeper discussion with your attorney about your situation and alternatives and not have to reveal the substance of the discussion (see audit below).
How hard do they push--my tax attorney is not a risk taker, but does push hard as the law allows. Home office--fine, but be sure to have all of the backup documentation (home purchase & sale docs, architectural drawings to support square footage, careful records on updates/upgrades, utilities, internet, phone/fax, etc, etc). Consulting practice on the side--sure, but keep careful track of income and expenses (e.g. auto, office expenses) as well as 1099 income. Housekeeper--keep it legal (pay the taxes, file the W-2, etc).
Documentation--you must document everything. As noted upthread, you basically are attesting that you have all records and documents to back up your tax returns, including income, deductions, etc. I intentionally write more checks than most (...and never pay in cash), and keep every charge slip in a file with my monthly charge statements. I use Quicken to track all of my inflows and outflows. And of course you never barter, do you?
So when does this all pay off? If and when you get audited, and have a simple Correspondence Audit or even an Office Audit, you should be able to easily answer the questions without an issue. But if, like me, you get hit with the National Research Program audit (supposedly a random 1 in a million event), you face a line by line, document by document audit, where an IRS agent painstakingly goes through your return to see if what you filed is in fact backed up as the law requires. To prepare (in response to the initial IRS document request), I gave my attorney 2 banker's boxes of documents, including every charge slip and statement, purchase and sale documents for our home (...happened that year), purchase & sale of car that year (as it is partially deducted on Schedule C), home office info (architectural drawings, all improvement documentation), all utility bills, housekeeper info, etc, etc. My attorney met with the IRS agent for 3 full days (!!!) for an initial review (at my/our expense), then there was a meeting about once a month for the next 6 months, with requests for additional info (like cancelled checks, with both sides shown, to prove that the person/entity depositing/cashing the check is the one you wrote the check to). I was allowed to provide Quicken reports as needed (...and the agent accepted them). We never had to attend the audit sessions, talk to the agent, or answer any questions (...our attorney would forbid it anyways). So, after 6 months, and many thousands of $$ in legal fees (our nickel...), the upshot was that there was a clerical error in data entry into the tax software used by our law firm when entering mileage, and we owed something like $3000. No penalties, no additional audits, no rancor. Expensive and painful, but in the end not rewarding for the IRS. But interestingly I have a partner who buys, improves and sells houses. Poor record keeping, lots of cash payments for repairs/contracting, sketchy deductions, all under an accountant's purview (with many discussions about how to work the tax filing). He could not document his return, got hammered, and this opened him up to a review/audit of past returns. YMMV.
Who does your taxes-- FWIW, my wife and I have used a small law firm specializing in finance and taxes, with some staff formerly employed by the IRS. With an attorney, you have attorney-client privilege...not true with an accountant. So you can have a deeper discussion with your attorney about your situation and alternatives and not have to reveal the substance of the discussion (see audit below).
How hard do they push--my tax attorney is not a risk taker, but does push hard as the law allows. Home office--fine, but be sure to have all of the backup documentation (home purchase & sale docs, architectural drawings to support square footage, careful records on updates/upgrades, utilities, internet, phone/fax, etc, etc). Consulting practice on the side--sure, but keep careful track of income and expenses (e.g. auto, office expenses) as well as 1099 income. Housekeeper--keep it legal (pay the taxes, file the W-2, etc).
Documentation--you must document everything. As noted upthread, you basically are attesting that you have all records and documents to back up your tax returns, including income, deductions, etc. I intentionally write more checks than most (...and never pay in cash), and keep every charge slip in a file with my monthly charge statements. I use Quicken to track all of my inflows and outflows. And of course you never barter, do you?
So when does this all pay off? If and when you get audited, and have a simple Correspondence Audit or even an Office Audit, you should be able to easily answer the questions without an issue. But if, like me, you get hit with the National Research Program audit (supposedly a random 1 in a million event), you face a line by line, document by document audit, where an IRS agent painstakingly goes through your return to see if what you filed is in fact backed up as the law requires. To prepare (in response to the initial IRS document request), I gave my attorney 2 banker's boxes of documents, including every charge slip and statement, purchase and sale documents for our home (...happened that year), purchase & sale of car that year (as it is partially deducted on Schedule C), home office info (architectural drawings, all improvement documentation), all utility bills, housekeeper info, etc, etc. My attorney met with the IRS agent for 3 full days (!!!) for an initial review (at my/our expense), then there was a meeting about once a month for the next 6 months, with requests for additional info (like cancelled checks, with both sides shown, to prove that the person/entity depositing/cashing the check is the one you wrote the check to). I was allowed to provide Quicken reports as needed (...and the agent accepted them). We never had to attend the audit sessions, talk to the agent, or answer any questions (...our attorney would forbid it anyways). So, after 6 months, and many thousands of $$ in legal fees (our nickel...), the upshot was that there was a clerical error in data entry into the tax software used by our law firm when entering mileage, and we owed something like $3000. No penalties, no additional audits, no rancor. Expensive and painful, but in the end not rewarding for the IRS. But interestingly I have a partner who buys, improves and sells houses. Poor record keeping, lots of cash payments for repairs/contracting, sketchy deductions, all under an accountant's purview (with many discussions about how to work the tax filing). He could not document his return, got hammered, and this opened him up to a review/audit of past returns. YMMV.
I agree. A home office is a completely legitimate deduction for self employed individuals. My tax guy has a standard form that goes into significant detail that I can honestly document. I have claimed that deduction for six years with no issues whatsoever.
So you're saying that if I have paid off my mortgage, I should never take out a car loan? This advice makes no sense.
voip-ninja
Give me some sugar baby
Stop putting words in my mouth I never said anything of the sort.
SageBrush
REJECT Fascism
This is not true for a personal tax return. I cannot remember how it is handled for a business tax return.
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