10% on top of normal income taxes. Don't do it.My wife got fired/laid off last week and she had been paying a tiny amount into a work sponsored retirement fund. Don't really know too much about it. I have a 401H here at work and this is something ran by American Funds and looks like her money is in some money market stuff I think like the "Euro Pacific Growth Fund". She only has about $3300 in there but since she's been terminated we are considering cashing it out. On the 14 page document we are supposed to fill out it mentions a 20% tax with holding and also another 10% penalty but it's slightly confusing. I've been told that if I ever leave my job I can cash my fund out with a 30% penalty for taxes so is 30% a pretty standard rate? I'm wondering if she's going to be paying 20% for the taxes and 10% as a penalty for 30% total or if I'm reading it wrong and it's a 20% tax withholding and the 10% is part of that (mentions IRC 72t).
10% on top of normal income taxes. Don't do it.
20% is what the government will withhold (for income taxes) at the time of distribution. 10% is the income tax fee for taking an early distribution. Tack on state/city taxes, SS/medicare, etc. and you'll see probably less than 55% of that cash.So the 20% they're talking about is for normal income taxes right? And the 10% is just purely a penalty?
20% is what the government will withhold (for income taxes) at the time of distribution. 10% is the income tax fee for taking an early distribution. Tack on state/city taxes, SS/medicare, etc. and you'll see probably less than 55% of that cash.
Of course, at the end of the year, that money will be taxed at whatever income tax bracket you are in. It's likely that you'll owe more. Depends on your tax situation.
I figured that was the reason why she told me no. So I asked for it again today saying it was for tax reasons. She told me that if I wanted her SSN then I would have to pay double for her services or I can continue what I am paying now and drop it.
I feel like I ask this question nearly every year, and every year I just don't feel comfortable with the way I report this portion of our return....
My wife has a moderately sized business (5 figures gross revenue per year)
One of the major expenses of the business is booth fees she has to pay for the the shows that she sells her wares at. (Nearly every art fair she partakes in has a fee of $XXX to "Rent" a booth/space to sell at).
I'm not sure if this is "advertisement", cost of goods sold, professional fees or what....
Edit: by the description in Turbo Tax and Quicken (what I use) it seems to me the best bet is under "Rental Expenses" as one of the examples is "Retail or Warehouse space"?
I was stationed in California, and my wife and I bought a house there. We lived in the house for 21 months, 3 less than the two required to be exempt from taxes. I received a short notice PCS (permanent change of station) to Mississippi.
Will I have to pay taxes on the profit?
Is there a rough estimate as to how much changing my federal withholding exemptions will change my end of year taxes for next year? At some point this year I claimed 3(and looking at the form I'm not even sure why or how, but that's irrelevant) and I want to be closer to a "break even" point. I'm not sure if I should claim 2 or 1, or a mix of 2 and extra withholdings to get even. Assume ~$70k gross
In previous years form 8283 was limited to 4 for e-file. Has this number changed? I couldn't find anywhere where this limit is expressly stated.
Thanks EK
So I've entered all my info in TurboTax and TaxACT after a recommendation that TaxACT is the way to go if you have a simple return (which I do). But TaxACT isn't including the Hoosier credit that Indiana residents get, or the (small) amount back for vehicle registration. I won't try it tonight, but does anybody know if H&R block allows me to fill everything out online and know my refund before I file too? Right now TurboTax is netting me more money even though it's a higher filing cost.
In previous years form 8283 was limited to 4 for e-file. Has this number changed? I couldn't find anywhere where this limit is expressly stated.
Bought our first house this year....up until now I have never really tried to do that much with my taxes because my wife and I could never itemize our deductions. However, I suspect that will change this year.
What kinds of things aside from mortgage interest should I be looking out for? Sorry, I hope this question is not too general.
-----------
I have a separate question for my mother in law. In 2004 they sold a house for $350k, and used the money from that ($225k after loan payoff) to purchase another house for $525k. They used some form so they didn't have to pay taxes on the $350k. This year they sold the $525k house for $400k. She is thinking that since they sold the house at a "loss" that they don't have to pay taxes on this house, but that seems weird to me.
Once you switch over to the Schedule A for the mortgage, you also have the property taxes, charitable contributions and misc business expenses (form 2106).
The business expenses have a 2% AGI minimum before they become useful.
You also have the option of choosing a sales tax or state income tax deduction on the Schedule A. If you have some large purchases and live in a state income state, it may be useful.
There are a couple of other line items on the Schedule A; but most people never use them.
Even if the original house wasn't sold at a loss? That's what seems weird to me. What's to prevent someone from rolling over profits to a new home to avoid paying taxes, and then selling that new home for slightly less (so it's at a loss). This seems like an easy loophole.Personal oss is a loss - no taxes paid or credits given.
I'll have to pay an early withdrawal penalty on a retirement distribution in 2012 (I'm only 50).
Other than that my tax issues are pretty straight forward. We almost never itemize (no mortgage interest).
* Married filing jointly
* Income from dividends and interest
* Indiana state property tax
* Contibutions to IRA, 401k and 403b
Is H&R Premium + State a good fit for my needs?
Thanks!
Even if the original house wasn't sold at a loss? That's what seems weird to me. What's to prevent someone from rolling over profits to a new home to avoid paying taxes, and then selling that new home for slightly less (so it's at a loss). This seems like an easy loophole.