TAX QUESTION

why no tea party thread?

burn the books?

http://michellemalkin.cachefly.net/michellemalkin.com/wp/wp-content/uploads/2009/02/1aaaiwanna.jpg

It always amazes me that there are wingnuts that believe they don't have to pay US income taxes because the income tax amendment to the constitution wasn't properly ratified and a variety of other reasons. It seems as absurd as believing killing your wife isn't really illegal because of something in the Bible, while countless people have been prosecuted and jailed for killing their wives.

seriously - anyone have any last minute tax questions? I'm sitting around waiting for clients to get back to me with info and have to print things. Free tax advice 4U.

Sarahel or anyone else who might be able to help: I'm a Britisher in the US. I have to file my UK taxes tomorrow. When I left the country I actively pushed to keep paying UK taxes, because I didn't want the complications of getting into the US system: so I carefully explained to the tax authorities that I am paid in pounds, into a UK bank account, am coming back in three years, am a civil servant working for a dept that reports to UK govt, etc.

I have discovered that one of my colleagues is not paying tax in the US or the UK, and that my predecessor here wasn't either. Obviously I'd like to know if I can get a rebate, but I just can't believe that it can possibly be right that I/they don't have to pay tax in either country. The US and UK have a tax agreement.

But I don't want to stir this up only to be told I have to pay US tax instead of UK tax, and I don't want to drop my colleague in it. She has tried in good faith to sort this out too (she was naive about thinking it's ok not to pay anywhere) and has not been able to get a straight answer out of anyone.

I'm not all that experienced with foreign citizens working in the US that aren't residents' tax issues, but... There are two types of U.S. taxes that could have been withheld from your gross wages: income tax and social security/medicare. Social Security and Medicare aren't technically taxes, but in researching someone else's question (maybe Ed?) - depending on your situation in the UK, these could be things that shouldn't be withheld. I guess my question to you is - was anything deducted from your pay on the U.S. side at all? If they're not taking out income tax or social security and medicare, then I'd say, treat it as UK income and not worry about US tax.

should be an exemption for uk diplomatic employees, is that what you mean by "tax agreement"? if so you could get a rebate of whatever was withheld.

maybe you could call these ppl http://www.state.gov/ofm/tax/

Thanks all. I didn't explain myself very well here, sorry! I'm not paying any US tax at all, neither is my co-worker. We're not even in the system. But I pay tax in the UK, and she doesn't pay tax anywhere. So either that is fine (not to pay tax anywhere) and I am due a rebate on my UK taxes, or it's not fine and she could be prosecuted. I want the rebate if I'm due it; she wants to fess up and pay up if she's not entitled to some of the money she's saved.

But she's already tried to get an accountant's advice and got nowhere, and if I just call the authorities and say 'you treated us differently', she might get in trouble.

I guess my question is: can it possibly ever be right (legally - leaving aside morally!) not to pay tax anywhere at all? I just can't believe that's ok by either govt.

I don't know anything about UK tax laws, but I would guess, that you and she should probably be paying one or the other.

That's what I think too. Our HR dept in the UK did nothing for months, then when we started using words like 'prosecution', called the authorities several times. They got different advice every time and chose to accept the advice of the person who said 'it's all fine' and not the one that said 'yes, she's in big trouble'.

So I think I'm going to just file a normal return and not ask them to re-examine my position.

any quick reactions to this would be helpful:

i lived and worked in DC for all of 2012. my home address is correct on my W2 - it shows a DC address. but in box 15 (state), it lists MD, which is where i lived in 2011.

so basically i paid thousands of dollars in state taxes to MD, despite not living there in 2012. And in turbotax, it's showing i owe several thousand dollars to DC, since apparently i never paid them taxes in 2012.

fuuuck ?

sounds like you might be eligible for a MD tax refund, with which you would then use to pay your DC taxes??

oh jeez. that sounds logical, but...fuck. that would mean i owe DC $5K, but i can't pay them until Maryland gets around to sending me a check for $5K.

i wish i could get Mary Taxlady on the phone Dee Taxman and get them to just paypal it

http://taxes.marylandtaxes.com/Resource_Library/Taxpayer_Assistance/Frequently_Asked_Questions/Individual_Tax_FAQs/Income_Tax_FAQs/q20.shtml
http://taxes.marylandtaxes.com/Resource_Library/Taxpayer_Assistance/Frequently_Asked_Questions/Individual_Tax_FAQs/Income_Tax_FAQs/q26.shtml
http://taxes.marylandtaxes.com/Tax_Compliance_and_Enforcement/Tax_Compliance_Information/Dispute_It/

you could also go to D.C.'s tax department and tell them since you, a D.C. resident, are not represented in the congress, you refuse to pay taxes, at which point you drop your pants and moon them with the 'DONT TREAD ON ME' logo that youve painted onto your buttocks with edible body paint

see if you can get an extension on your DC filing to give MD time to correct this.

http://wttg.images.worldnow.com/images/20595600_BG1.jpg

feel like i would just give em a call and explain your sitch, they probably run into it all the time http://taxes.marylandtaxes.com/Resource_Library/Taxpayer_Assistance/

I've been on hold with turbotax since before I revived this thread, lol. I realize at this point they're probably not going to be able to solve it for me, but at this point I've waited so long I just want to hear a voice. Hopefully they'll at least be able to refer me to the correct form/person/#

i'll be impressed if they can actually help as opposed to just referring you to the appropriate state agency contact

this guy has absolutely no idea what he's talking about. god, get me out of this

god, i can't just hang up on him now

fuck

we are having a debate about what city i work in. for my employee address, it lists cleveland oh, because that's where my payroll goes through. he doesn't understand how this could possibly be

now we are filling in my entire W2 again, for no reason

he just asked me if DC citizens have to pay taxes

"at this point, I'm going to ask you to contact your payroll dept"

this is the course of action that i suggested to him at the very beginning of the call

the maryland income tax hotline has so many people on the line that not only are no operators available, but the number of calls has "exceeded the number that can be handled by our hold system"

try calling them on a day when it probably won't be busy, like the day after taxes are due

god, this is such a fucking mess.

so dayo was right - "sounds like you might be eligible for a MD tax refund, with which you would then use to pay your DC taxes??"

i haven't talked to a helpful human being yet, but everything online suggests that i have to file a nonresident return for Maryland, report $0 state wages for Maryland, and then get a big refund. here is what renowned tax expert taxes.about.com advises:

Filing a Return for Mistaken Withholdings

If you are filing a nonresident return because taxes were withheld for the state by mistake and you did not make any income in the state, you would simply report zero income for that state on your nonresident return, resulting in zero tax liability. Once you enter the amount mistakenly withheld from your paycheck for the nonresident state you will have a refund balance.

So, there goes using Turbotax (or any other online tool) this year, I guess. because it asks me at the very beginning to provide my W2 information, and I can't "simply report zero income for that state", because my W2 says I made money in Maryland. I can't just change the information on my W2...can I?

The state tax isn't based on the address that is listed on your W-2, it is based on what is in the state tax withheld field. It is far from uncommon to live in one state and work in another. If the taxes were withheld by your employer, based on wages paid to that other state, you would file a non-resident return, showing that income and those taxes.

No you can't change the info on your W-2, but you can ask your employer to issue a corrected w-2 if you did not work in Maryland, but it was reported that you did.

Ok, I've had more time to think about this and do research:

the easiest thing to do is to is to accept the mistake, and report your income as if you did work in Maryland.

On the DC state tax form, you calculate your DC tax based on your income, and then you will get a credit for the tax paid to Maryland, which will offset your DC tax.

On the DC state tax form, you calculate your DC tax based on your income, and then you will get a credit for the tax paid to Maryland, which will offset your DC tax.

thought about this option, but the anecdotes i found online (terrible source, i know) made it seem somewhat risky, and that each state calculates the credit for paying to another state a little differently.

i ended up up just filing a nonresident return for MD, reporting $0 income. Now I'm waiting for my refund, and I'll report to DC when it comes.

my biggest concern is just that maryland might wonder what happened and look at my state form with more scrutiny. hopefully they'll be able to confirm that i didn't live/work in MD in 2012 without forcing me to submit a dozen different forms of proof.

uh oh. The thing is, that if that income was reported to Maryland as having been earned in Maryland and you report it incorrectly, they could withhold the refund, or flag it for an audit. They will undoubtedly say that your return does not match their records. If you have already filed that way, what you need to do is get your employer to issue a corrected w-2 showing that you did not work in Maryland.

The way the DC form is set up is that if all of your income is "from Maryland" then you can get a credit against all of your DC tax, that is, if the tax paid to Maryland equals or exceeds the tax you would owe if that income was from DC.

you can also amend your Maryland return.

ugh

i hate all of this

i tried to do all of this in turbotax and could not find out how to claim the "credit" on the DC form, no matter what i did

the guy on the phone was just a complete, utter fool

the credit for DC tax paid to another state is on Schedule U

does turbotax have some kind of "tax payments worksheet" where you put in amounts paid? I haven't used it in like 10 years.

I don't know, this has completely ruined my day off already. I've already filed. I'm just going to wait to get audited.

in the meantime, contact your employer and see if they will issue you a corrected w-2 showing that your wages were earned in D.C.

it had a section where you enter the W-2 information where it said something like "enter $0"for the state wages if your state taxes were paid to the wrong state for 2012". and when i did that, it was like "note: this is very rare, but you'll know if it's true".

so i did that.

definitely going to try to get a corrected w-2. i spent over an hour on the phone/internet trying to contact someone at my workplace today regarding the payroll. no one has any clue who to talk to.

oh, well then, you might be ok.

still, never underestimate state tax agencies' lethargic and dull-headed responses to things. Like, I can see them issuing you the refund for Maryland, and then sending you nasty letters 9 months later saying that your tax return does not match their records and that you owe all the money back + penalties and interest

yep, i'm resigned to this happening already. also, i've been paying taxes to maryland for 3 months of 2012, already, so this is going to happen again next year.

btw i finally managed to switch my W-2 information to DC today. it was a success story

w-2? more like w-woohoo!!

More like w-boohoobear

anyone here filing 1099 contractor taxes? i'm mulling over buying the TurboTax Home and Business and have no idea if there's something special about it over the basic one. dif is $39 v. $109. i'm definitely not looking forward to this, i made about 1/3 of my income last year freelancing. is there a better way to do this than TurboTax out there? i'm pretty lazy about this shit.

I'm a freelancer, with a 1099 from my main client, paying quarterly estimates, etc -- but I have an accountant who pulls all his hair out for me 'cause I don't have any hair left, so I can't advise on Turbotax.

I have a feeling I'm going to have a tax bill this year -- almost no business expenses or mileage in '12.

xp the $109 version would be useful if you have employees and/or people you need to issue w-2s and 1099s to, and you don't have any payroll program or other accounting software that does that for you. Unless that applies to you, get the basic version. It is perfectly serviceable, if I remember correctly.

the thing about Turbo Tax, is it's made by Intuit, who, for some obviously profit-related reason decided that they were going to make a half dozen versions of each of their products with different price points, though the software isn't all that different. My suspicion is that these different products and how they are priced, are mostly based on their presumed users and the competition.

For example, the "Home & Business" edition is probably targeted at the small business owner or landlord who would otherwise go to a CPA or H&R Block, and would probably be charged somewhere around $250 - $500, so $109 is an eminently reasonable price.

phone bill about 2 g's flat / no need to worry my account handle sthat

UPDATE (for sarahell and dayo, mostly - thanks for your help!)

On page 5 of the instructions for Maryland nonresident form 505 *takes a drink of water*, there are actually clear instructions on what to do! http://forms.marylandtaxes.com/11_forms/nonResident.pdf

phew!

so basically I'm going to do that and I should be set.

What the hell is the point of a 1095-C and why am I just getting it now?

i feel like this is a rhetorical question but it's for the ACA tax implications of insurance or non-insurance and it probably has no impact on your taxes

The point is mostly for employer compliance with health insurance requirements -- that is, imposed on the employer. It can actually be useful for your taxes if it shows an employee contribution to the insurance benefits (in certain circumstances this is useful information, for the majority of people, it has no bearing on your tax return ... I've had clients where the employee contribution was for a partner to whom the employee was not married, and it could be treated as a payment by the partner ... again, generally not useful, but not as redundant as the student loan interest 1098-E form one of my clients got that showed they paid $0 student loan interest).

Basically, even though the penalty for not having insurance has gone away, the employer is still required to send you the form. There might be state requirements as well.

Thank you!

tbh I kinda tuned out that section of the ACA continuing education courses because I don't do taxes for companies that are large enough to have to file 1095-C forms ... but I had to remember/know enough to answer a few multiple choice questions related to it in order to pass the course.

Basically, even though the penalty for not having insurance has gone away, the employer is still required to send you the form.

This drives me crazy.

I also nearly always have to call the insurance provider for a copy with my family's names on it instead of just mine, since, you know, my wife pays taxes too. Not that it literally matters or anything.