Remember PL 86-272 only applies to income tax nexus. You can establish nexus for sales tax purposes by simply having employees in the state. Per Quill, having "slightly greater" than a minimum presence is sufficient. Doesn't matter if they don't have an office in LA. If a Bose rep goes to the state to solicit sales, train or provide customer service, they would have nexus. Bose reps are basically everywhere. I think Bose end-caps in the store were set up by Bose reps as well. I used to work for Best Buy and we had a Bose rep come to our store regularly to train our salespeople. I would be very surprised if Bose did not have sales tax nexus in LA.
Edit: Nexus confirmed. There's a Bose Rep in Baton Rouge: https://www.linkedin.com/profile/view?id=237287852&authType=OUT_OF_NETWORK&authToken=_qvF&locale=en_US&srchid=1249225501407965657293&srchindex=1&srchtotal=1&trk=vsrp_people_res_name_headless&trkInfo=VSRPsearchId%3A1...
I think you may have a misunderstanding of how wash sales work. This article is very approachable and worth a read: https://www.schwab.com/resource-center/insights/content/a-primer-on-wash-sales
At their core, wash sale disallowances are inherently temporary. What you seem to be suggesting would result in a degree of permanence. Granted, the temporary disallowance can string for a very long time depending on the trades, but that isn’t the fact pattern here: the washed loss on stock sale 1 would add to the basis of stock purchase 2 and thus make the loss the full and proper $30. Again, assuming you didn’t have any other transactions before or after in that XYZ stock, the full amount would flush through. There is a more detailed example in the article. Let me know if it doesn’t clear your questions up.
Stock and options are subject to the wash rule. Crypto isn't. The wash rule disallows some losses. In this case, hopefully your losses are big enough that you have no taxable gain on stocks and options. You can write off $3,000 in captal losses per year and carry the rest forward.
Cryptotrader.tax will assemble your crypto transactions into long-tern and short-term for use on Schedule D and Form 8949. Your stock broker will send you a similar statement to use.
"A wash sale occurs when you sell a security at a loss and then purchase that same security or “substantially identical” securities within 30 days (before or after the sale date). If you end up being affected by the wash-sale rule, your loss will be disallowed and added to the cost basis of the securities you repurchased.
https://www.schwab.com/resource-center/insights/content/a-primer-on-wash-sales
Start there. It's open enrollment. Plan on taking some time with it (bring a snack and a Mt. Dew to the computer with you).
It's reasonably strait forward... essentially, if you're using Reddit you should have the ability to compete an application to see what it'll cost you. They also have additional questions if you'd like to see if you qualify for assistance (you want to see if you qualify for assistance).
Like I say, it'll probably suck up half an hour of your time, but consider it research. (Also, when I did it, I was running about four scenarios for my family and myself, so I'm just guessing how much time it would take if it were just me... actually probably less than half an hour).
As long as you're planning on pulling less than $47,000 in 2017, you'll probably qualify for some level of help (the less you make, the more help you get). Again, the marketplace's will handle those details.
OP, have your friend use this tool to see if he qualifies for an exemption. Although you can't go back to do this last year, I've always thought that the utility shut off notice would be the easiest way to get an exemption. Just don't pay your electric bill for a few months, get a shut off notice, and then you don't have to pay an Obamacare fine.
If you can get yourself insured on or before December 31, then the 'short gap exception' will apply (assuming you don't have any other gaps in the year). Otherwise, assuming you're uncovered for part of september, and all of october-december, the fee would be the greater of either $173.75 or 0.625% of your household income (not to exceed the yearly premium for the national average price of a Bronze plan sold through the Marketplace). See https://www.healthcare.gov/fees/ for details, or use this tool to estimate your fees.
That was under old tax law. TCJA eliminated it..
"No more deduction for miscellaneous investment-related expenses
Prior to the TCJA, taxpayers were allowed a tax deduction for certain expenses known as “miscellaneous itemized deductions.” Miscellaneous itemized deductions included expenses such as fees for investment advice, IRA custodial fees, and accounting costs necessary to produce or collect taxable income. For tax years 2018 to 2025, these deductions have been eliminated."
https://www.schwab.com/resource-center/insights/content/investment-expenses-whats-tax-deductible
The question you are asking is hard for me to follow, I think because you are misunderstanding what a wash sale is/does. This article is very approachable:
https://www.schwab.com/resource-center/insights/content/a-primer-on-wash-sales
Give it a read and let us know if you have followup questions.
This article is very readable and includes a nice example: https://www.schwab.com/resource-center/insights/content/a-primer-on-wash-sales
To your question in the OP, assuming the second sale completely divests you of any position related to that stock (i.e. no prior holdings to worry about) and you don’t buy back in for 30 days, then you would have a no gain or loss on the first transaction and would have recognized $4/share loss on the second which could be used against other income according to the relevant ordering rules/limits.
>This is the first I've ever heard of this, and there is no such language anywhere on the site.
It says here on healthcare.gov that catastrophic plans are not eligible for premium tax credit ...
>How much Catastrophic plans cost
>Monthly premiums are usually low, but you can’t use a premium tax credit to reduce your cost. If you qualify for a premium tax credit based on your income, a Bronze or Silver plan is likely to be a better value. Be sure to compare.
https://www.healthcare.gov/choose-a-plan/plans-categories/#catastrophic
You wrote:
> ... they said I can still fill out form 8962 (Premium Tax Credit) and see if I can get a credit....
Nope. Instructions for Form 8962 also make it clear that whoever told you that was wrong.
>Qualified health plan. For purposes of the PTC, a qualified health plan is a health insurance plan or policy purchased through a Marketplace at the bronze, silver, gold, or platinum level. Throughout these instructions, a qualified health plan is also referred to as a policy. Catastrophic health plans and stand-alone dental plans purchased through the Marketplace, and all plans purchased through the Small Business Health Options Program (SHOP), are not qualified health plans for purposes of the PTC. Therefore they do not qualify a taxpayer to take the PTC.
https://www.irs.gov/instructions/i8962/ch01.html
So your action is you cannot use Form 8962 because you aren't eligible for any premium tax credit, whatever you paid in premiums for the catastrophic plan is a sunk cost, and you don't need to file Form 8965 for any exemption from penalty if you had coverage all year. You check "Full-year coverage" and leave the line 61 empty if you're filling in Form 1040.
Estimate the profit from the self employment business.
Subtract $24000 (that's the standard deduction for married filing jointly for 2018) from your combined W2 gross income to get an estimate of your taxable income before the self employment income. Look that number up here to find out what marginal tax bracket you'll be in for the year using the married filing jointly tables, i.e. 10%, 12%, 22% etc. Unless the self employment profit spans more then one tax bracket you can use that percentage to estimate the income tax due on the profit, and then add 15% more for the self employment tax due on the profit.
So if your combined W2 wages put you in the 12% income tax bracket, you'd have to pay about 12%+15%=27% tax on the self employment profit. You'd calculate that and pay one quarter of it on each of Apr 15, Jun 15, Sep 15 and Jan 15. You can make payments using IRS Direct Pay or the other options there. Make sure you use the options to mark the payment as estimated taxes for the 2018 tax year.
Maybe it helps to take a step back. The wash sale rule is designed to prevent "loss harvesting" which is selling a losing position to recognize loss and save taxes now, while buying back the stock (so nothing economically has changed). Thats all it is. You don't get a tax loss until you actually exit a position for 31 days. The loss is suspended until that exit. If you hold the stock for years after a wash sell/buy then you dont get that loss for years, like you never sold it at all.
Averaging your basis per share can be misleading. Much easier examples if 1 share has a basis of $50 and 1 share has a basis of $150. Sell both shares for $110. Gain of $60 and loss of $40. The loss of $40 will be suspended temporarily if you buy the same position back. IF you use average basis of $100 per share and sell 2 shares there is no loss at all, just a net gain of $20. You literally report the gain or loss on each share sold. Basis can be assigned to shares by many reasonable methods including FIFO (first in first out) or specific identification. I'm not aware if average cost basis per share is an acceptable tax reporting method. Every broker I use picks FIFO or specific ID.
Edit: decent Schwab article - https://www.schwab.com/resource-center/insights/content/save-on-taxes-know-your-cost-basis
It appears that you are exempt from any penalty for lack of coverage during the months you were out of the US. https://www.healthcare.gov/exemptions-tool/#/results/details/resident-alien
When you file your tax return
Read IRS form 8965 instructions. Pay special attention to the heading “Citizens living abroad and certain noncitizens (code “C”)” on page 9.
On IRS form 8965, Part III: Enter code “C” in column “c.”
Check the boxes for the months you didn’t have coverage in 2014 for which you’re claiming an exemption.
Do the same for every person on your tax return who also qualifies for this exemption.
Be sure to include Form 8965 when you file your tax return.
you can reduce your tax liability by itemizing gambling losses if you happen to keep track of your tickets that you didnot won!
> Will this gap in coverage subject me to the fee for not being insured when I file my 2014 taxes?
Only for gaps larger than 3 months.
>Living abroad, am I still required by the US to have eligible health coverage?
Yes, unless you are out of the country at least 330 days during the year or are a bona fide resident of another country for the entire year.
https://www.healthcare.gov/exemptions/
http://www.irs.gov/uac/Questions-and-Answers-on-the-Individual-Shared-Responsibility-Provision
Yes. TaxSlayer will take you through a series of steps to determine if you qualify for the unaffordability exemption, but I've found that it's not very clear if you don't already know the rules. There's a lot of math involved, which TaxSlayer handles fine, but you have to know what numbers to put in.
You can take the unaffordability exemption if the amount you would have had to pay for minimum essential coverage exceeds 8.16% of your income. (That could be monthly, or yearly if it was true for the whole year.)
Unfortunately, if you are having to pay back an advance premium tax credit, I believe that means they've already determined that marketplace coverage was affordable for you. (If it wasn't, you would have gotten to keep the advance premium credit, or at least some of it.)
Still, it wouldn't hurt to run the numbers. TaxSlayer will ask you for the costs of the Lowest Cost Bronze Plan and the Second-Lowest-Cost Silver Plan for your county and number of covered individuals. If your state has an exchange you can find it through that website; otherwise, use healthcare.gov: https://www.healthcare.gov/exemptions-tool
If you qualify for Medicaid, though (which will depend on your income and whether your state expanded Medicaid), you should enter $0 instead of the SLCSP cost. TaxSlayer doesn't tell you that.
Then TaxSlayer will ask you to input the annualized premium amount for each month. For each month: If you had an offer of employer coverage for that month, you put in (the monthly amount times 12); if you did not, then you put in the amount that TaxSlayer calculates for you (which is already annualized).
Then TaxSlayer will tell you whether you qualify for the exemption.
Or you can use the healthcare.gov tool I linked above.
Have you looked into the Unaffordable Care exemption. This exemption is dependent upon your age and the costs of coverage in your zip code. https://www.irs.gov/affordable-care-act/individuals-and-families/aca-individual-shared-responsibility-provision-exemptions
Go here and click on find exemptions when you get there. Then follow the prompts. https://www.healthcare.gov/health-coverage-exemptions/exemptions-from-the-fee/
https://www.healthcare.gov/tax-tool/#/
Also note that for affordability exemption you need to find the cost of bronze plan after the tax credit you would have been eligible for.
See Form 8965 instructions pp 10, 11.
https://www.irs.gov/forms-pubs/about-form-8965
If SLCSP and LCBP info is required to determine affordability, do you really think the information to find them would be unavailable outside open enrollment period?
Thank you - that makes a lot more sense. I just realized I had pulled my info from the "spouse" section of this pdf from Schwab. https://www.schwab.com/resource/youve-just-inherited-a-retirement-account
If you are trading the same stock repeatedly, beware of the Wash Rule.
I buy 100 XYZ at 10 on 9/1
It drops so I sell it all at 8 on 9/8. Normally, that would be a $200 loss.
I buy 100 more on 9/15 at 9, then sell them on 9/22 for $13, that normally would be a $400 gain. So my capital loss would be $200 and capital gain $400.
HOWEVER, the Wash Rule disallows the capital loss because I bought back in less than 30 days. So the gain is now $400, no offsetting loss, and more taxable income.
Your brokerage statement online will probably have details on disallowed wash sales.
"A wash sale occurs when you sell a security at a loss and then purchase that same security or “substantially identical” securities within 30 days (before or after the sale date).
If you end up being affected by the wash-sale rule, your loss will be disallowed and added to the cost basis of the securities you repurchased."
https://www.schwab.com/resource-center/insights/content/a-primer-on-wash-sales
> https://www.schwab.com/cms/P-221581.6/
Notice that the instructions for this form say:
"The deadline for removing an excess IRA contribution is your federal tax-filing date (including extensions) for the year for which the contribution was made."
For 2019 contributions, this data was in 2020 and has long passed.
For your 2019 contribution use this form: https://www.schwab.com/public/file/P-221662
Yes, it's just the regular distribution form. Request an amount equal to the excess contribution you made in 2019 to be distributed to you -- no earnings.
December 31 for the executed sale within that limited fact pattern. Wash sales only happen when you sell at a loss and you have a purchase of that same stock within 30 days before or after the loss sale. Here is a very approachable article:
https://www.schwab.com/resource-center/insights/content/a-primer-on-wash-sales
The rule you are concerned about would be if there were surviving shares. Separately, if you have totally exited the position as your example suggests for 30 days, there would be no wash sale issue.
This article is very readable and should help:
https://www.schwab.com/resource-center/insights/content/a-primer-on-wash-sales
Just want to clarify the above that the 2/1 date assumes you wait until 12/31 to sell. The window is 30 days so if you do close your position earlier the timer starts earlier.
https://www.schwab.com/resource-center/insights/content/a-primer-on-wash-sales
> If the security has a CUSIP number, then it's subject to wash-sale rules. In addition, selling a stock at a loss and then buying an option on that same stock will trigger the wash-sale rule. ETFs and mutual funds present investors a different set of challenges. Switching from one ETF to an identical ETF offered by another company could trigger a wash-sale. There are ways around this problem. For instance, an investor holding an ETF indexed to the S&P 500 at a loss might consider switching to an ETF or mutual fund that is indexed to a different set of securities, such as the Russell 1000 or Dow Jones Industrial Average.
https://www.schwab.com/resource-center/insights/content/a-primer-on-wash-sales
There is a method for getting an "exemption" based on snafu like you are describing. You have to send an application for it by mail. You might try #14 other hardship.
https://www.healthcare.gov/health-coverage-exemptions/hardship-exemptions/
https://www.healthcare.gov/exemption-form-instructions/
You could do that and write "PENDING" on your Form 8965 in Part I column c.
What did your income turn out to be in 2016?
BTW: You won't face a $695 penalty. If you aren't able to get an exemption, the $695 penalty is pro-rated by number of months you did not have insurance, so 6/12 * $695, for example.
If you didn't claim any subsidy (advance premium tax credit) and you don't want to check whether you qualify for the premium tax credit on your tax return then you don't need to file Form 8962 and don't need the 1095-A to file.
You can check if you would get the PTC by comparing your AGI to the federal poverty level. You're not eligible for PTC if your income is above 400% of the FPL (so about $48K if you live alone).
You'll still need to file the other parts of your taxes if you have a filing requirement (wages over $6300 if you're a dependent, over $10350 if not). And the extension form 4868 is here if you need it. If you owe taxes you should pay what you think you owe before April 18th, even if you can't finalize the details for now.
The exemptions you can qualify for on a tax return are all based on your annual income. If Johnathon or Mary needs specific exemptions such as homeless, hardship, ineligible for medicaid, etc then they need to apply for exemptions through the exchange. They can grant exemptions for specific months based on various applications.
As for Head of Household, He must pay more than half of the cost of keeping up a home for the year. It woudl be hard to imagine he paid half of the annual cost of the home if he didn't move in until June, even if one of the relatives is a qualifying person. See Pub 501 for details
Yes, but don't forget to net the rental income with expenses.
There a quite a few exemptions for health coverage. Look here
There's an exemption for taxpayers living outside of the US. If you are not lawfully present in the US, you are not required to have coverage.
I am not educated in regards to qualifying events, which may include your living arrangements, but the months you are not living in the US shouldn't be a problem.
As far as coverage for the rest of the year, you'd have to see it you can enroll after you return (outside of open enrollment) due to a "qualifying event". ~~I believe that information regarding qualifying events would be easily obtained via the marketplace website.~~
from https://www.healthcare.gov/coverage-outside-open-enrollment/special-enrollment-period/ :
Changes in Residence [that qualify for the 'special enrollment period']
Important: You must prove you had qualifying health coverage for one or more days during the 60 days before your move. You don’t need to provide proof if you’re moving from a foreign country or United States territory.
There’s some IRS rule out there that allows you to withdraw $10,000 of your ira money penalty free if it’s used towards the purchase of your first home.
https://www.fool.com/retirement/iras/for-first-time-home-buyers.aspx
Also, you have 60 days from receipt of the Roth money to put it back into the Roth
I don’t think your IRA contribution would be deductible, you can check that here: motley fool deductible Ira 2018
If it is not deductible you are better off with Roth contributions.
You can use Pub 590-B if you want to do it by hand, but it might be easier to use a calculator tool instead:
https://www.schwab.com/ira/understand-iras/ira-calculators/rmd
As /u/simplytaxing said in a comment, check out healthcare.gov and use their tools to see if you are eligible and to possibly amend your return. You can amend them to update them based on new things coming to light (extra credits that you can claim), or to fix mistakes that you made on the return (made a transposition error or reported expenses that you shouldn't have).
You can amend a return for up to 3 years after filing.
https://www.healthcare.gov/exemptions-tool/#/results/2015/details/short-gap <- This should get you to the part you want to know more about, but some of the healthcare exemptions may be income related, so I would check to see if you qualify through their tools.
And here is the specific IRS page. (https://www.irs.gov/affordable-care-act/individuals-and-families/aca-individual-shared-responsibility-provision-exemptions)
You can't claim the SRP as a deduction. However, since it's a penalty and not a fine, they can only take it out of what you would get back. If you owe or return nothing, they will apply the penalty to next year. Source
> The IRS will hold back the amount of the fee from any future tax refunds. There are no liens, levies, or criminal penalties for failing to pay the fee.
This is just for regular Roth: https://www.schwab.com/ira/roth-ira/withdrawal-rules
The first thing is that "You can withdraw contributions you made to your Roth IRA anytime, tax- and penalty-free" even if you are under 59.5. My question is whether this rule applies for contributions from backdoor Roth or even mega-backdoor Roth...I am not talking about withdrawing the earnings. I also always thought that earnings would get taken out last (which can be my misunderstanding).
There is a fine for not having health insurance: https://www.healthcare.gov/fees-exemptions/fee-for-not-being-covered/
This fine is considered to be part of your tax liability.
Student loans are generally not considered part of your income.
By chance, did you get a letter or notice from the Marketplace about an incorrect 1095-A?
If you, inadvertently, filed an incorrect 1095-A, they are essentially asking you to provide backup documentation for the incorrect form. You'd need to amend your return, (or if you are quick enough, file a "superseding" return before April 15th) to correct the issue.
> there's got to be some kind of loop-hole...
"The IRS will hold back the amount of the fee from any future tax refunds. There are no liens, levies, or criminal penalties for failing to pay the fee."
But be aware that TY 2014, TY 2015, and onward you will be penalized for not having insurance unless you fall into an exemption.
There is going to be a handful of ways to look at this and it isn't necessarily a quick easy answer.
Airbnb posted this on their website. [federal taxes]https://www.airbnb.com/support/article/182?topic=248
But yes, in theory you would deduct the amount of rent attributable to the additional room against the Airbnb income. The IRS guide is helpful. Depending on how often you host might change your facts though.
One thing I would recommend against. Let's say you've decided that exactly 50% of the residence is for airbnb purposes solely but only average renting in out 15 days per month, the IRS is more likely to say that you can only deduct 15 days of rent against that income ($250 deduction vs $500).
In my state, property taxes are collected by the county government. Google <county_name> county property tax and you likely will find a page where you can look up your parents property. You might need a current tax bill, but it's likely that having the address will be enough.
Penalties and interest really pile up here in Minnesota.
e.g.
your accountant is doing you a severe disservice. The law is the law, and until it a new law is signed you must pay the penalty until it has changed, after the law is changed, you may (if it is allowed) amend your previous year returns to take advantage of it.
By not filing anything you've committed fraud. Because you've claimed that you've had health insurance when you in fact did not. It would be akin to not claiming cash income. The IRS has had a rather open stance on reporting this (health insurance), with a soft roll out of this portion of the ACA. With each year they require more information to prove that you in fact did have health insurance. In the first year we had the ACA, it was just a few questions, and they've in essence taken your word for it. This year, your employer was required to submit a 1095. So they can now check between their records and yours. If you are audited they'll say you cannot prove you had health insurance, thus you are penalized for not having it, along with interest & penalties.
BUT, The current law has no teeth, meaning, if you refuse to pay the $695, they cannot come after you in any meaningful way (no jail time, liens on your property/assets), they can use the $695 to offset your refund for future years until the penalty is paid in full. BUT they may have you repay the amount you fraudulently took this year.
If they audit you.
The IRS currently is understaffed, so unless there is a clear problem with your return, or you have suspicious deductions on your return, you've got a relatively low chance of Less than 1%. So your odds are good that you'll keep the money. But if you don't want to worry about it, amend and fix the error.
The most recent episode of Planet Money explored this topic, but as b0glehead said, it's typically a bad idea.
Also, a life pro tip from having known several people with offshore accounts.... $10k isn't worth the time or cost. Unless you've got at least 6 figures to open an offshore account it's probably not worth it.
Seriously, doing payroll yourself is not the way to save money. The headaches and penalties involved do not compensate for the low cost of a service.
If you really want to go on the cheep, WaveApps does payroll and it only costs $9 per month for a single employee. This covers the state and federal filings, direct deposit, reports for your accountant, and integrates into their free online accounting if you don't have software to track your expenses yet. Considering that most half-assed software packages for payroll start at 100+ it is a very small price to have someone else worry about it for you.
The best answer is for her fiance file those delinquent tax returns. That is a hard task to make someone do thou. If he was paid under the table you should ask him if he received a 1099-MISC or if he received any notices from the IRS. Form 1099-MISC reports payments made to free lancers and self employed folks to the IRS. The IRS then matches those forms up with social security numbers to see if tax was paid. If a tax return was not filed then the IRS will assess tax, penalty and interest on the gross amount reported on form 1099-MISC. If you want to schedule a 50 minute call with a CPA for $50 here.
Sounded worth looking into and also found another, more recent by one of the authors of that.
> I'd never heard of that but I'm having trouble navigating it. When I put in my zip code it just takes me to credit karma (I'm not in CA so that might be part of it?)
Huh, yeah I'm wondering that too. I don't think that used to be a restriction.
FWIW, if you don't know you can often get the desktop version of H&R Block (also TurboTax) for much less than the online version. Amazon has Deluxe for $33 currently for example, including one state.
You can purchase the TurboTax Home and Business 2018 (Download version) from Amazon for $80
​
https://www.amazon.com/Federal-Taxation-Comprehensive-Ephraim-Smith/dp/0808051768
is one of the major tax textbooks for Federal individual and entity taxation for CPA's in the US, and is updated frequently. You might be able to find an international copy that's not $300.
It covers Individual, Estate, and Entity taxation. It does not cover state tax which is a different issue but probably less an issue for you.
The Master Tax Guide is also a good reference that is often purchased annually, but is more geared for individuals and small business. You may need to look at CCH, Bloomberg, or similar for more international topics.
Also join us in /r/taxpros
You don't need a Marketplace exemption. You can claim the coverage considered unaffordable exemption on your own.
There are calculators to help figure out the coverage costs. https://www.healthcare.gov/tax-tool/#/affordability-exemption
Also see the Affordability Worksheet in the instructions for form 8965. https://www.irs.gov/instructions/i8965
It's a bit lengthy and confusing but just read the instructions very carefully. I imagine most software can do it too.
Edit to add: if you happen to be in WA state don't bother with the first link, it will just tell you to go to the state exchange. Last time I checked the state website was not making it easy to find the calculators from the home page, but I can dig out the direct links if you did happen to need it.
>Due to my alien status, I do not qualify for Marketplace plans.
Can you explain what you mean by that?
https://www.healthcare.gov/immigrants/immigration-status/
Are you not lawfully present?
Did you mean you were not eligible for premium tax credits?
Gov't website saying there is an individual mandate / penalty for 2017: https://www.healthcare.gov/fees/fee-for-not-being-covered/
Newspaper report saying that the penalty isn't eliminated under the new bill until 2019: http://www.chicagotribune.com/business/ct-biz-obamacare-insurance-penalty-repeal-1221-story.html
Strongly recommend you read the first 3 chapters of this book and then chapter 8 on purchases:
https://www.amazon.com/dp/B00OA628FA
Ignore the link for the "newer version" as it is for a non-US edition with different tax laws.
Eventually you will want to read the entire book. Spending a few hours learning these basics now and doing your bookkeeping correctly from the very beginning will save you a ton of time and money in the future. Even if you end up paying an accountant to do your bookkeeping and taxes, it will take them less time and thus cost you less money if you understand the general process because you'll know what records to give them and how to accurately communicate with them about your business's activities.
I use this one
It's one of three.
First individual taxes Second business taxes Third regulations.
I mean... if you want to sell and you don't confirm your tax status, then Robinhood will withhold taxes from the proceeds and send it to the IRS on your behalf. Robinhood is not the IRS, so not certifying doesn't negatively affect your tax standing. I'd think the certification is fairly easy to complete. Why just not do it and avoid the hassle down the line? https://robinhood.com/us/en/support/articles/tax-certification/
Their website mentions that it should be reported on a 1099-misc though. Unless I'm misinterpreting it.
https://robinhood.com/us/en/support/articles/open-account-get-free-stock/
https://robinhood.com/us/en/support/articles/refer-one-get-three-free-stocks/
Well.
This is probably the most famous and influential one. Will teach you everything you know.
https://www.amazon.com/Irwin-Schiffs-Anyone-Paying-Income/dp/0930374037
Of course. . .
Sounds like you're attempting to get a the idea of the Fair Tax. An interesting book was written on this idea, but likely never going to come to fruition. Besides that, it would be a convoluted mess to determine which sales were exempt and which weren't. The sales tax codes in many states are already murky, at best, and this would only add to the confusion.
Plus, if you're talking about corporate greed, you'd see a $0.05 increase in tax on items but the markup would be much, much more since it would be set like the VAT in European countries. As a case study, Michigan increased their cigarette tax back around 2001 by like $0.25 per pack or something and it was part of the taxable sales price so it wasn't stated on a receipt. I was working at a corporate owned gas station. The tax rolled out on the first of the month, and our cigarette prices jumped by $1.50 per pack on the same day. Guess who was blamed by the customers for the increase? It wasn't me or the station, but the government.
>I technically have until 15 Oct to recharacterize my Roth IRA, but my bank Schwab apparently will not recharacterize Roth IRA funds after 1 Apr.
There must be some misunderstanding. See "Deadline for recharacterizing" in the instructions here:
https://www.schwab.com/resource/ira-roth-recharacterization-request-form
That makes sense -- thanks!
It does make me wonder why some companies do allow transfer of ESPP stock (see e.g. https://www.schwab.com/public/eac/resources/faqs ):
>Can I transfer/gift my ESPP shares out of my Schwab account?
>
>Yes, but you may have to hold your shares for a specified period of time before a transfer/gift is permitted. You have the ability to move shares in a variety of ways:
>
>Transfer shares from Schwab’s Equity Award Center to your Schwab brokerage account.
>
>Transfer shares to another brokerage firm.
>
>Request a stock certificate.
>
>Gift shares to another person or organization.
Do those other companies not care about their tax deduction?
https://www.schwab.com/resource-center/insights/content/a-primer-on-wash-sales
> Line 11
> S corporations. Enter the smaller of line 5 or the corporation's total items of income and expense described in section 1366(a) from any trade or business the corporation actively conducted (other than credits, tax-exempt income, the section 179 expense deduction, and the deduction for compensation paid to the corporation's shareholder-employees).
Is this the form you are filling out?
https://www.schwab.com/public/file/P-221581/app13581-09.pdf
There is a checkbox in Section 5 that says "Calculate the earnings on my contribution amount. (Complete Section 6 if applicable.)" Check that box instead of trying to calculate the earnings yourself.
If you must calculate the earnings yourself, you have to follow the procedure in Worksheet 1-4 in Publication 590-A:
https://www.irs.gov/publications/p590a
The earnings have to be calculated on the whole account, not any individual securities.
If your income was under 100% federal poverty level, and you got an ACA marketplace plan and paid full premiums (no Advance Premium Tax Credit) then you are not eligible for Premium Tax Credit, so you would not get any money back.
https://www.healthcare.gov/taxes/marketplace-plan-without-savings/
Hardship exceptions are easy to come by. I did this 2 years ago.
https://www.healthcare.gov/health-coverage-exemptions/hardship-exemptions/
Even better, from what I recollect, you can indicate that you had a hardship and file without the actual exemption number (so long as your request for the exemption is postmarked before or on the date of the return). Don't stress -- this should be pretty easy
> the long and short of it is I simply don't care enough to look so I really don't know if they were affordable or not.
It will take you maybe five minutes to complete Healthcare.gov's Tax Tool for claiming an affordability exemption. If you really can't spare the effort, then you can hopefully spare the money for the shared responsibility payment since that's likely your only other option.
Did you happen to have a qualifying exemption? https://www.healthcare.gov/health-coverage-exemptions/forms-how-to-apply/
When you say you had your taxes done, I'm assuming you mean one of those walk in offices that prepares them for you. If they didn't do something correct when they did your taxes, they may be responsible for the error.
Either way, if you do indeed owe the IRS money, they will come looking for it. It might not be for a few months, could be years later. Better to correct it sooner than later.
Here are the federal poverty level charts for 2016
If you made less than poverty level, medicaid will provide you with insurance for free.
If you made less than 138% of poverty level and your state expanded their medicaid system, your state system would provide you with insurance for free.
If you made 100% - 400%, then the exchange will supplement your insurance premiums to make it more affordable.
If the lowest insurance plan available to you costs more than 8.13% of your household income, you can file an exemption with your tax return.
If any of the other hardship exemptions apply to you, you must complete the application for exemption from the exchange and receive an exemption number before filing.
If the IRS is requesting her 1095-A and 8962, it means that she had a policy through the exchange that was subsidized. for at least part of the year. 1095-A shows the subsidy she received based on what she reported would be her expected income, and 8962 reconciles this against her actual income.
1095-B is the reporting from a non-exchange insurance policy to say what months she was covered so she is not penalized for those months.
In addition, there are several exemptions she may be able to apply for to avoid the fees.
And as always, if you do not understand a legal document (including a tax return) do not sign it. Pay a professional for an hour of their time to answer questions and explain what is going on.
https://www.healthcare.gov/fees/fee-for-not-being-covered/
If you have to pay it's 2.5% of household income or $695 per adult. Whichever is larger. The most you will have to pay is $2,085 or the total yearly premium for the national average price of the bronze plan
sounds like grounds for a lawsuit and repayment of the penalty. Which is either 2.5% (up to the maximum bronze plan in your area) of your income or $347.50 for a child under the age of 18, whichever is greater.
You might look into the exemptions and see if any apply.
There are a bunch of hardship exemptions to the individual mandate:
https://www.healthcare.gov/health-coverage-exemptions/hardship-exemptions/
However, there is no specific exemption for being unemployed, and I'm not sure that you would qualify for a financial hardship exemption because your income is above the federal poverty level of $11,880 for a single individual.
I'm confused though, why didn't the union let you on the insurance plan if you ended up being employed until August? You missed their enrollment deadline? If that's the case, why couldn't you get Marketplace insurance? What kind of insurance did you have in 2015? Sorry, just trying to understand the situation so I can better assist you.
Okay I've done some searching and, as far as I know, Apple takes a 30% cut on any ad revenue or sales and pay me every month depending on what I made the month before.
https://www.quora.com/How-do-developers-get-paid-for-Apps-sold-in-the-iOS-App-Store
Is that still, by definition, royalties? If not, which article would that make it?
I’m not saying to ignore it. I’m asking why you consider the money stolen instead of a bad investment. I was looking for interpretation, not just ‘because I said so’.
this article mentions the possibility of it being a capital loss if it’s an ICO. Admittedly, it’s not from a source that I would usually cite but it does get the other rules right so depending on what exactly happened, it is worth considering if it was a capital loss.
I did find this article from the Journal of Accountancy which would at least make the deduction exempt from the $100/10% limits assuming this coin was bought for profit (which presumably an ICO is). So that at least is better than what was said above.
The download version of H&R Block Deluxe + State (the version you install on your desktop or laptop computer) is now only $22.50 at Amazon. Although it will "suggest" you upgrade to a more expensive version, the Deluxe download version will handle all your needs. The download versions don't require you to upgrade like the web versions do.
https://smile.amazon.com/dp/B09JG47T44
Or, if you don't want to download software, use freetaxusa:
Thanks for your response. Apologies for what are probably very naive questions. My understanding is that you can figure capital gains on stockmarket sales on a LIFO basis. What is it about crypto which means you can't treat it as inventory, but you can treat stock sales that way? I assume this is the relevant IRC section, but it doesn't define inventory.
It was always advised to NOT make an inherited IRA your own because you might incur the 10% penalty on early withdrawals.
The SECURE act recently changed a lot of rules.
https://www.schwab.com/resource-center/insights/content/inheriting-ira-understand-your-options
Hi thanks for all the useful information, that was quite helpful. I found most the information I needed here at https://www.healthcare.gov/2015-exemptions/, and you are right it seems like it'll require quite a bit of legwork and documentation. I thought a simple application and letter may be enough.
I'll probably have to go over with my family about it because in these next few weeks I dont quite have the time to go through such an extensive process. It'll be hard to find documentation because I had some family insurance for 7 months and then wanted to get on work insurance, but I had to wait for their one month enrollment period so that took a couple months to wait for that. And then after that it took them two months to process it before it started. So not sure if they'll allow for the 3 months of waiting, along with the 2 month short gap exemption. Wish the process was easier so you could go on and off insurance when there are work or insurance gaps.
Besides other exemptions, you are not required to have health care coverage if is considered unaffordable. The 2015 test for unaffordability is 8.05% of your 2015 income. Most people don't qualify for this test because they qualify for a subsidy on the marketplace. However, if you are eligible for Medicaid you are not eligible for a subsidy, and insurance is probably unaffordable. See https://www.healthcare.gov/tax-tool/ and check the months you should have been eligible for Medicaid.
If your income is low enough that you don't have to file a tax return you automatically get an exemption for the penalty.
If you have a particular situation that's stopping you getting insurance (like bankruptcy or homelessness) then you can apply for the hardship exemption at healthcare.gov.
TaxAct finally got back to me, I went through a link they sent me on healthcare.gov, answered the questions, and ended up on short term gap exemption.
It says "You can claim this exemption when you file your 2015 federal income taxes.".
My 2015 return has an 8965 attached, but it doesn't say what it's for and has "pending" for the ECN. So do I wait for the return to be accepted/rejected and then file an 8965? Can I do this through TaxAct or do I have to mail it if so?
If you had coverage for any day in February, you are considered covered in February, so you had a 2-month gap.
If you were not covered at all in February, you can take the 2014 December exemption, but you don't have a short coverage exemption for Jan/Feb 2015. Source: https://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/Questions-and-Answers-on-the-Individual-Shared-Responsibility-Provision#Exemptions
If you were unemployed or underemployed, you can try to get an ECN from the Marketplace. They don't give it out for unemployment, but you may be able to argue that your projected income would have made coverage unaffordable (this isn't something I've specifically worked with). See https://www.healthcare.gov/health-coverage-exemptions/hardship-exemptions/
Unfortunately your employer advised you incorrectly. Under the ACA rules, healthcare offered by an employer must be available within 90 days of joining the company. Open enrollment is for employees to change their options, but qualifying events such as joining the company allow you to change (start) coverage immediately or after their specified waiting period (which must now be less than 90 days).
So you would have to pay a penalty for not having insurance. If your employer could confirm that their insurance was not available to you then you could have got coverage at the marketplace, however that's not useful now.
I would look at all the possible exemptions and see if any apply to you.
Edit: I think I misread, if you were already an employee at the company they were correct in saying you couldn't enroll until open enrollment. So the penalty will definitely apply unless you have an exemption.
You can deduct as an expense any premiums you pay on behalf of your employees.
As you didn't have employer insurance offered to you, you need to find the LCBP (lowest cost bronze plan) and see if that is more than 8.05% of your MAGI. Luckily the marketplace gives a handy tool for that here. Technically you use this tool for each separate location you were in. I haven't used it yet so I don't know how easy it is when you've moved about. Also the tool they have is still the 2014 one, and you need the 2015 one, but it will give you a ballpark number I hope.
Yes, lowering your AGI through tax deferred savings is a way to lower your MAGI.
For the penalty, if you have to pay one (and it might differ by month) you should look at Form 8965. You calculate two numbers and the highest number is your penalty.
1) Find 2% of your excess income over the threshold listed for your status in Form 8965. If this is higher than the National LCBP use that instead (defined as $207 per month per person for 2015, so $9936 for two all year)
2) Find the sum of $325 per adult without healthcare (up to a maximum of $975 per household), so $650 for two of you all year.
The monthly penalty amount is the greater of (1/12th of (1) above) and (1/12th of (2) above).
edit: formatting
Robinhood will send you the form you need for your taxes by mid February. https://robinhood.com/us/en/support/articles/downloading-your-tax-documents/.
As for the actual amount I am not sure, but they will either give you a form or will tell you that you don't have a form
You can transfer the stocks to TD Ameritrade for a fee. It won’t be a taxable event. Make sure to save your Robinhood records to track your tax basis!
> OP would actually have to make contributions to the 401(k) plan in order to have the limits apply.
I disagree but I don't have time to find out why you think that. If you want to prove it in a link, go ahead.
I am pretty sure "covered by workplace plan" means income limits apply to the deduction of an IRA contribution.
https://www.fool.com/retirement/2016/11/05/ira-income-limits-for-2016-and-2017.aspx
Whether you’re a United States-based SaaS selling to customers based out of the country or locally, you need to keep in mind that the jurisdictions are not going to be the same.
Keep track of your customers, and pay attention to the regulations and jurisdictions of where they live.
For example, the UK government states that if a service qualifies as a digital service, that service is taxable. You won’t be able to avoid paying taxes when selling to customers in the UK.
In most states, it’s illegal to collect tax without a sales tax permit. Not having a sales tax permit means you could be collecting tax from your customers and keeping it for yourself. Since you are planning on selling in the U.S., make your business know precisely which sales tax categories your products or services fall into to determine their taxability in the relevant states.
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Yes, if this is a traditional IRA, any withdrawals are taxable.
And the distribution rules have changed.
Also, there are no distributions required in 2020.
I hope an accountant can make sure I'm not wrong here, but I think all those trades need to be reported on Schedule D, even if you made hundreds of them. Also beware wash sales: https://www.schwab.com/resource-center/insights/content/a-primer-on-wash-sales
Even though this is off-topic...don't day trade, unless you are a trained quant. You are the ones those guys make all their money off of.
Money in an IRA is not taxed until it is taken out (distribution) so the mere fact of inheriting the account does not create a tax burdern. There are rules though on when one has to take distributions from an IRA, and those rules change when it's inherited. I'm not an expert and I don't want to inadvertently leave something out if I summarize so here is Schwab's fact sheet on inherited IRA's:
https://www.schwab.com/ira/inherited-ira/withdrawal-rules
I don't know about inherited pensions.
I'm not an accountant, but know there are "wash sale" rules IRS has to prevent people buying and selling back same stocks for tax benefit. I don't know if this situation falls under that. https://www.schwab.com/resource-center/insights/content/a-primer-on-wash-sales
> Is this check taxable to us, or is it taxable to him? Do we have to claim this as income?
Who was the check made payable to? Your wife or the uncle's estate?
> When it comes to his retirement, do we have to claim that is income when it comes through?
I'm assuming this is his 401(k). If so, you can generally roll this over into an inherited IRA. From there you have a few options on how you wish to receive distributions. See here for more information.
Whether it is taxable or not depends on the type of 401(k). Assuming it is a traditional (i.e. pre-tax) 401(k), you will have to report the distributions as income.
Just to add on to the health insurance coment. Since it seems like /u/PinkPuddings is still in school (student loans and work study), most universities require students to have either your own or their health insurance. Some of these univesity health insurance plans count as coverage.
This is from the same website that /u/bdunderscore posted, https://www.healthcare.gov/young-adults/college-students/. If you have the university's health insurance plan, you'll have to check with them to see if it covers the minimum requirements which many do. But, you may not have to worry about health insurance.
>WTF is this about? I had no idea this was a thing that could happen. Why did this happen?
I guess you missed the entire debate regarding Obamacare? Well, this was one of those things everyone argued about, the individual mandate. You are required by law to have adequate health insurance.
>Is there any way to fix this?
There are a slew of exemptions for being covered. Perhaps you qualify for one of those.
>Why does it matter? Are they really going to look into whether or not I had health insurance?
It matters because of what I said above, it's part of the Affordable Care Act (aka Obamacare). I really have no idea how hard they'll investigate this at first, but I'd imagine they'll pick up enforcement in the future.
>Could I just say that I did have it? Please help!
Yes, you could lie. I have no idea if they're going to check or pursue this currently, but you shouldn't decide to obey the law based on if you think you'll get caught or not.
Its pretty much going to be your AGI from line 37 on your 1040. Not sure what subsidies you're talking about but if it doesn't go on your tax return it won't be counted. You would add Nontaxable Social Security benefits to the AGI. But not Supplemental Security Income (SSI)
https://www.healthcare.gov/income-and-household-information/
https://robinhood.com/us/en/support/articles/common-tax-questions/
Per their support page, for the 2019 year they had three clearing firms either Apex or Robinhood / Robinhood Crypto, it should say in the top left of your 1099.
​
As to what forms you need to fill, they reccomend using TurboTax so you dont have to manually enter each transaction.
​
1099 INT is for interest (for Robinhood purposes this should only apply if you have a Cash Management account)
1099 DIV is for dividends, if your dividend income exceeds a certain cutoff (i believe $5k annually) or if you hold shares in an S-corp / MLP or certain commodity ETFs, you'll have to file with a Schedule K1 and Form 1065. Also, some qualified dividends (generally those earned from stocks you have held for more than 3 months prior and 3 months post ex-div date) will be filed as cap gains instead of ordinary income.
1099 B is generally filed as Schedule D form 8949 (capital gains & losses)