Taxes

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Ready for your questions!

Dear Penny
Hey, friends! I hope you’re all staying safe and healthy during these trying times. This week, I’d like to invite you to submit your questions about what coronavirus means for your money here in The Penny Hoarder community group. It’s a scary time we’re facing right now, but we’re all in this together. Send your questions my way and I’ll do my best to answer.Read More...

Topics

How long do you keep paper records?

Jobelle Collie
I’m keeping three years of paid bills. Anything that seems important to proof of purchase, insurance claims, I keep those longer. If I have my bank statements, do I need to keep the carbon checks?Read More...
I keep each months budget, bills paid, important letters in plastic bags labeled with month/year. I keep each year in one box. I have 20+ years of these boxes. So I went through the oldest and culled out power bills, water bills, normal monthly bills. Shredded them. Then went through what was left. Tax documents, receipts for things I still own, those I moved into a file cabinet. Now there are only three full years of all budgets/bills in 3 boxes. These will be easier to move, once my new...Read More...
I keep our personal paperwork for 7 years but it seems like from reading the comments that 3 is sufficient.Read More...
Last Reply By Jobelle Collie · First Unread Post

Do You Ask for a Receipt When Donating?

ERoberts
I have done my own taxes for two years now and it's been a painless process. I did, however, make the mistake last year of claiming too many allowances and ended up owing a couple hundred bucks from those larger paychecks. I also moved, and although I was able to sell everything I was looking to get rid of I was wondering about the process of donating those items to Goodwill or Salvation Army and getting a receipt to apply to my taxes instead. Is it worth it to keep those receipts hanging...Read More...
For donations where you get a product like Girl Scout cookies, you must subtract the amount you would normally pay for the same type cookies in the grocery store and can only deduct the amount of the donation over that amount. If you pay $500 for a pair of tickets that normally cost $100, you can only deduct $400 for tax purposes unless you donate the tickets to another legal charity.Read More...
Thanks for the info, I never would have thought a consumable-like GS cookies-are tax deductible!Read More...
Last Reply By dboothe · First Unread Post

Capital Gains for Selling property

I asked our cpa how our taxes will be affected if we sell our rental property. Most of the funds of the sale will be going to the mortgage company and we’ll pocket about $20,000. That $20,000 will go to pay down my husbands stock plan loans (he can borrow against it). Our cpa said we’ll pay capital gains on the total gain. In my understanding, that means that the difference in what we are getting ready to sell it for minus what we paid for it, is what we have to pay taxes on. If that is...Read More...

First year as a Small Business - What can I expect this Tax Season?

Are there any Small Business owners or people that work out of their homes? What are some things you can help me prepare for as we start digging into our taxes? We made an account just to put back the expected amount we would have to pay in taxes and we hired a professional CPA. But what does that all really mean for us? What are some tips or tricks or advice you can give me?Read More...
This info may be too basic for you, but they're things I learned in the beginning. Your CPA should advise you what items are deductible for business purposes, some of these may have changed over the years. I'm assuming you saved your documentation. That was the biggest surprise when I started freelancing. Professional organisation fees, subscriptions to professional publications, training seminars, office space in my home, and of course tools, were all deductible. If you entertain clients or...Read More...
Last Reply By Olivia · First Unread Post

This week in... The Penny Hoarder Community

Ashlee
Happy Friday! Whew! Where has this week gone? Here’s your weekly round up of announcements to get you through today and into the weekend... We’ve crowned our November Member of the Month. Join me in congratulating Lisa Acu ñ a (@lismox) for being selected this month’s winner! We all appreciate your help around here, Lisa. Each month we look to crown a new winner. We’re looking for someone who is super helpful and active in the community. Each winner receives a $25 gift...Read More...
Not a problem, @Lesley Michele .Read More...
Thanks Average Joe😁😁😁😁Read More...
Last Reply By AverageJoe · First Unread Post

Happy November!

Ashlee
We’ve made it to the end of the week and the start of a new month Penny Hoarders! Who here can’t believe it’s already November? 😳 This week I want to know if you’re a planner or a procrastinator… Do you start planning and budgeting now for holiday purchases or wait until the last minute? What about your New Year’s resolutions? And now for this week’s announcements… We just hit a HUGE milestone Penny Hoarders… 10,000 community members! Join us in a celebratory happy dance, then go check out...Read More...
@Susan L. Miller We have used Freecycle off and on for years. We got the foot and headboards for our queen-sized bed through the program. We have seen many items we no longer use go to other homes that would use them and recommend it heartily! We have also used our "Marketplace" here in our area on Facebook to buy and sell things. There are so many ways to go and programs to use! Happy selling...and as one of our mentors says "Think..and grow RICH!"Read More...
I'm not sure how many were here when I joined the Penny Hoarder Community, but I do know that it seems as if we've grown by leaps and bounds. I've met some interesting people and like having information and ideas coming in! May we continue to grow in numbers as well as in wealth.Read More...
Last Reply By AverageJoe · First Unread Post

401k contribution

Can increasing your 401k contribution decrease the amount of federal taxes and state taxes that you should pay for the year?Read More...
I know for a fact there is a savers credit for contributing to a ROTH IRA. My tax preparer was saying it only was for contributing to a traditional IRA but I did my research and was able to take advantage of it to not have to pay in at all to federal taxes. (I even got a few bucks back!) It depends on your income situation for the savers credit. For a traditional IRA, there is something but I am not well versed on exactly how that works. I would just recommend doing a little research to see...Read More...
Last Reply By Moore Income · First Unread Post

Tax Settlement Firms - Legit?

Hi - I owe back federal taxes and have heard of offer in compromise as well as tax settlement firms. However by the way they are advertised and what I have read from random searches it seems a little sleazy! Has anyone had any luck with such firms or a settlement on their own? Thanks!Read More...
Thanks... I was hoping to hear from someone who had experience with one, but all good.Read More...
I have heard some good and some bad things about them. Just like debt consolidation firms. I would personally just set up a payment plan through the IRS and pay that way, but that is just me and I don't know your entire situation.Read More...
Last Reply By Wes · First Unread Post

Disability

Lynn Rosenfeld
Can a disabled low income person receive anything back from the government besides income adjustments IF they give one thar year? A friend in Jersey told me to make sure I file to get mo ey to cover some costs for cloyhes, rx's, etc. Ixm in GA and haven't filed since I've been on it.Read More...
@Lynn Rosenfeld I asked a few Penny Hoarder writers for help here and assuming you mean if you file a tax return with the IRS, can you file for additional tax relief besides income adjustments, this is a possible resource: https://www.benefits.gov/benefit/945 You can check out this article as well: https://www.thepennyhoarder.co...le-accounts-savings/ Let me know if this helps at all!Read More...
LYNN ROSENFELD thats a good questions. thanks for asking.Read More...
Last Reply By Briana · First Unread Post

I've a question about Federal and State Taxes

Bonnie Squires
I'm trying to find this out for our son. He been working at a store 2 days a week for over a year. The old owners took federal and state taxes out. Than a new owner took over and she was taking federal and state taxes out. But the last 4 months she has taken Federal or state taxes out. My questions is should she be taken these taxes out. She told my son no because he low income and he has no depended. My other questions is wont my son have to pay these taxes himself? Thank you bonnieRead More...
LISA EICHINGER KS has both Federal and state taxes. He filed a W4 form when he started working. He filed for 2018 taxes and got both back it wasn't much but he didn't owe any thing but the store owner was taken out taxes than.Read More...
MOORE INCOME thank youRead More...
Last Reply By Bonnie Squires · First Unread Post

Head of household

Hey all! I have tried to find the appropriate answer on various google sites, but they all seem a little gray, so I turned to this forum hoping someone is great with taxes! For the past few years, my disabled mom has had no income and has lived with me. I have claimed Head of household with her as my dependent. In 2018, I got married in August. He lived with his parents for the year, my mom still lived with me, and I still supported her financially for 2018. One site said I would still...Read More...
I know this year things have changed, and you only rec a 500 credit for an adult dependent, not a whole deduction. I am not sure if there is another way around this, but I suspect that if they file for their self and have insurance they might get a better refund, next year when Obama care penalty is retracted this will change again.Read More...
You would file married. Either married file separately because he did not live with you or married filed jointly. You can take your mom as "other dependent", but you can't claim head of household anymore because you are legally married. Does that help?Read More...
Last Reply By Christi · First Unread Post

Tax Return and Tax Reform

Lisa Eichinger
Hi, So this is going to be a follow up to my original post on tax reforms for 2019. As I work as a tax preparer on the side, I have been hearing a lot of people say "my friends have to pay the government this year" or "there are a lot of upset people that aren't getting their normal tax refunds, they're getting a lot less". I am not going to side with anyone on this, but I wanted to take the opportunity to enlighten the community on why there may be changes or why people have to pay, etc.Read More...
@Moore Income . There should be a place on the state form where it asks if you or your spouse lived in the state all year. For her you would say no then it would be a part time resident for state taxes for her. You might have to do it married filed separately, but your federal taxes back that up with the state codes on the W-2'S. I'm reasonable with my charges to do taxes. I don't have a set charge.Read More...
@Lisa Eichinger yes thanks. I am also running into some confusion with filing the state side when trying married filing jointly. She lived and worked in both Illinois and North Dakota in 2018, I only lived and worked in ND. When I am filling it out it is asking me questions about my residency in Illinois although I technically never had residence there. How much do you charge for your services? I am getting so frustrated trying to do my taxes this year.Read More...
Last Reply By Lisa Eichinger · First Unread Post

How Do You Do Your Taxes? Yourself or Someone Else?

Moore Income
With tax time coming around the corner I am curious to know what you have found to be the best way to do your taxes. Previously, I have done my taxes myself using an online platform such as HR Block or TaxAct. This year I got married and invested some money and I am thinking doing my taxes is going to be a little more complicated. Any recommendations for the best way to do them?Read More...
Last year my son did mine. This year i did my own with turbo tax. they all so have a free one threw turbo tax that my son did for his brother this year.Read More...
That unfortunately is the case for a lot of people. I am one of the few that asks questions and wants to know what other business expenses they had that they didn't know could be deducted like bills for a shop they own, etc.Read More...
Last Reply By Bonnie Squires · First Unread Post

Is Your Life Taxing?

One of my neighbors was heading out last year to drop off a folder with his taxes at a Tax Prep office when I asked why he didn't do his own. "Well, I have the condo mortgage to claim," he said as though that made a difference. I explained that I, too, have a mortgage although the interest does not even make a dent in the standard deductions for our property values. He was intrigued. "I can show you how to do your own and save that hundred or so dollars." He was even MORE intrigued. :) There...Read More...
thank you for the infoRead More...
I have only ever done my own taxes. IRS website has great resources if you need assistance and I pay a minimal fee for Turbotax for extra guidance.Read More...
Last Reply By Bonnie Squires · First Unread Post

Crypto and Taxes

Sid
I got sucked into the cryptocurrency storm late 2017 and started trading as well through a good part of 2018 as well. I did cash out some of my investments and now I am eager to learn it's impact on my tax return. Anyone here who has been involved in cryptocurrency over the past year or so? -SidRead More...
I have only watched from afar, but it's funny you mention the impact on your tax return as I was just doing my tax organizer online for my accountant last week. I was surprised by the question that asked if any of my investments last year were in crypto, and it was like a lightbulb moment. I hadn't even thought about having to report those investments on your taxes! For now, I'm glad I can skip that section.Read More...
Last Reply By Former Member · First Unread Post

Tax Reform 2019

Lisa Eichinger
Hi, I am a tax preparer and have been doing taxes for over 20 years. Here are a few changes that are going into effect this year: - Personal Exemptions have been removed - Standard deductions have been almost doubled - Tax brackets have been changed. They have gone down. - Business expenses for non self employed personnel have been eliminated. I will be happy to explain any of these for anyone who would like. Those are just a few.Read More...
Brianna, What exactly do you mean?Read More...
How are you supposed to file as an independent contractor?Read More...
Last Reply By Lisa Eichinger · First Unread Post
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