As April 15th approaches, things you should know about taxes
Let's clear up a few things about the April 15th deadline to file your income tax return.
#1. If you know you're going to owe, you're better off to file the return, or file an extension and make a good estimate of your balance due.
The why of this is very simple. The extension, Form 4868, is not an extension of the time to pay your balance. It is only an extension of the deadline to file. If you just file an extension and put down zero as your estimated balance due, you could find your request for the extension denied. Then instead of just owing for Failure to Pay Timely, which is a monthly amount currently based on a 9% annual rate, you will owe for Failure to File Timely. That particular penalty is very stiff, 5% per month on the unpaid balance, for the first five months. If you own $1,000 and your extension says that's your estimate of the balance, you'll owe roughly 1/12th of $90 for each month you're late in paying. The higher penalty is $50 per month for five months. After that, the lower penalty rate continues to apply.
#2. The best thing to do is pay the balance due by April 15th, if at all possible.
If it isn't, file the return. Or file the extension, with the amount you owe showing. Then you can make a payment arrangement. If you owe $50,000 or less, the IRS will approve a payment plan as long as your balance, with interest, will be paid in full in 72 months. You can apply on line.
If you arrange to write them a check monthly, or have the monthly payment taken via payroll deduction, the fee to set up the installment agreement is $120. If you agree to allow the IRS to directly debit your bank account, the fee drops to $52.
#3. If you owe a balance, and ask for a payment plan, bear in mind that for every year while you are on a payment plan, you must pay that year's balance in full by April 15th.
Failure to do so will breach the first installment agreement. They may allow you to roll in a new balance to the agreement, but they will charge you another $45 to restart the agreement.
If you owe, clearly you need to increase the amount taken in withholding from your wages.
4. There is no "standard amount" or "limit" on how much you can take for each deduction.
If you're self-employed, or if you have unreimbursed expenses from employment, there are two tests that must be met in order for said expenses to be deductible. 1. The expense must have been incurred as part of the effort to earn income. 2. The expense must be both ordinary, and necessary.
Going to a conference closely related to your business which is being held in Honolulu, may well qualify as ordinary and necessary. Taking the spouse and kids along is neither.
Taking a potential client who may end up giving you some business is both ordinary and necessary. If this potential client may end up paying you four or five hundred dollars per year, taking them out for dinner and drinks, and paying $100 is almost certainly going to be considered ordinary and necessary. Taking the client to Urasawa in Beverly Hills, where a dinner for two will easily cost over $1,000 is neither.
5. Tax software or online facilities are no substitute for a trained tax pro.
No matter how good software becomes, it can't interview you as well as another human being can. I recently helped a client who thought that the moment their child turned 24, that child could no longer be claimed as a dependent. That assumption had cost the client over $1,000 per year for the two previous years.
Moving expenses incurred when moving to take a new job are deductible if certain tests are met. What most people don't know is that since you must work at the new job for 39 weeks after starting it (or lose it and work at some other job), you don't have to take the deduction in the year of the move. You can wait to take it until the test is met. If you're moving to take on a job that will pay a lot more, the deduction may well be more valuable in the following year than in the year of the move.
Depending on your income level, and whether or not you have a retirement plan where you work, you may wind up paying less in tax over the long haul by contributing to a traditional IRA rather than a Roth IRA.
These are just some of the reasons why those online programs and software in a box aren't as good as an experienced, knowledgeable tax professional can be.
* * *
Yesterday was the birthday of my first ex-wife. Wednesday will be the birthday of my second ex-wife. I have no plans to try to emulate the marriage totals of either of my parents (4 for my dad, 3 for my mom) and can't imagine I'd ever get married again.
Heck, I don't even want to date. I wouldn't mind being "involved" with the right woman, but the process of getting to that point is just too much to contemplate. I don't want to go on any more first dates. I've done enough of that for one lifetime. Heck, in 1994 and 1995, there was an 18 month period where that alone should have been enough first dates for a lifetime.
I'm pondering this tonight because I'm tired of hearing people excuse male infidelity as being caused (at least in part) by the drive to procreate. I've always wanted to father a child, but it wasn't a "drive" to procreate, to "be ye fruitful and multiply" as was written somewhere once. I just wanted to see if I could do a better job than my own father. To sit and watch as my children played the sports of their choice, the musical instruments of their choice, to do what they wanted to do. I didn't choose to learn the violin. That choice was made for me.
Also, I look at the recent studies that show the rate of infidelity among women is increasing as evidence that the issue isn't the drive to procreate. The truth as I see it is that male or female, people who choose to be unfaithful simply want the BBD. The Bigger, Better Deal. The person waiting faithfully at home isn't enough to satisfy the desires of these wretches, so they look elsewhere.
At one time I was dating a woman who lived with her sister and brother-in-law, residing in the guest house behind theirs. She was her brother-in-laws executive assistant. She knew he was having an affair. She knew that her sister was having an affair. She was sleeping with a married man on occasion and refused to stop doing it when we began to date. When we got to the point of wanting to become intimate, I insisted that she had to stop "seeing" him. She refused. I walked. Sex without love, or at least the appearance and feeling of love, is merely physical exertion. In those days it was easier to work up a good sweat by going to the gym or for a bike-ride.
At least you won't have to worry about buying me a future wedding gift.
* * *
I have sympathy for the plight of Marsha Temple, but she's wrong on the issue of opening up adoption records to the adoptees. That's what she wants to have happen, so she and thousands of other adopted children like her can discover who their biological parents are.
Access to match up biological parents and offspring should be a one-way street. Parents who decide after making that incredibly difficult decision to put a child up for adoption should be given the opportunity to reach out and see if the child is interested in contact. If the child is not interested, things should end there.
Doesn't seem fair, does it? Giving a choice to the parents that wouldn't be given to the children. But it is fair. When a parent chooses to walk away from a child, unless they want to revisit that moment in their life, they shouldn't be forced to. It is different for an adopted child. They learn at some point that the parent or parents who raised them were not those who provided the genetic material for their creation. That doesn't mean those parents aren't their parents; in fact, the real parents of an adopted child are those who cared enough to take them in.
But reminding a child they were adopted when a biological parent reaches out to attempt contact isn't going to be anywhere nearly as fraught with potential emotional trauma as it would be if that child is reaching out to the parent. Try to imagine what a mother or father would feel four or five decades after giving up a child, to find out that child wants to enter their life. They shouldn't be made to confront that possibility unless they decide it is something they want to pursue.
* * *
Random Ponderings:
Why would someone attempt to insinuate they are a feminist and call feminists "cunts" and "bitches" in the same message? Stupidity?
Even today, when Burt Young calls himself the "un-silent majority" in "Rocky IV" I can't help but to think of him as part of the unwashed minority. I'm referring of course to the character he plays in the Rocky films, not the man himself.
Could someone explain to me why it's okay for male comedians to be "crude, but not for comediennes? That's what Jerry Lewis says.
While the NBA playoffs go on without the Lakers, I'll be thinking about the draft lottery.
It is a good thing for Taylor Swift that she became a singer rather than a dancer, because her ability to bust a move appears quite limited.
The only proper reaction to yet another Miley Cyrus topless selfie is to yawn.
Being unable to repeal Obamacare 40 plus times thus far isn't stopping Congressional Republicans. Apparently they're unaware of the real definition of the term "insanity" which means doing the same thing over and over and expecting a different result.
It has to really suck to be running for Congress, make a point of claiming the other side is dishonest and then be caught in a lie on national television. Mike Dickinson (D-VA), I'm referring to you.
It is frightening that baseball's new instant replay blows a call. What's really scary is that MLB claims they didn't have the right camera angle on the play. If everyone at home had that angle, the replay should have had it too.
#1. If you know you're going to owe, you're better off to file the return, or file an extension and make a good estimate of your balance due.
The why of this is very simple. The extension, Form 4868, is not an extension of the time to pay your balance. It is only an extension of the deadline to file. If you just file an extension and put down zero as your estimated balance due, you could find your request for the extension denied. Then instead of just owing for Failure to Pay Timely, which is a monthly amount currently based on a 9% annual rate, you will owe for Failure to File Timely. That particular penalty is very stiff, 5% per month on the unpaid balance, for the first five months. If you own $1,000 and your extension says that's your estimate of the balance, you'll owe roughly 1/12th of $90 for each month you're late in paying. The higher penalty is $50 per month for five months. After that, the lower penalty rate continues to apply.
#2. The best thing to do is pay the balance due by April 15th, if at all possible.
If it isn't, file the return. Or file the extension, with the amount you owe showing. Then you can make a payment arrangement. If you owe $50,000 or less, the IRS will approve a payment plan as long as your balance, with interest, will be paid in full in 72 months. You can apply on line.
If you arrange to write them a check monthly, or have the monthly payment taken via payroll deduction, the fee to set up the installment agreement is $120. If you agree to allow the IRS to directly debit your bank account, the fee drops to $52.
#3. If you owe a balance, and ask for a payment plan, bear in mind that for every year while you are on a payment plan, you must pay that year's balance in full by April 15th.
Failure to do so will breach the first installment agreement. They may allow you to roll in a new balance to the agreement, but they will charge you another $45 to restart the agreement.
If you owe, clearly you need to increase the amount taken in withholding from your wages.
4. There is no "standard amount" or "limit" on how much you can take for each deduction.
If you're self-employed, or if you have unreimbursed expenses from employment, there are two tests that must be met in order for said expenses to be deductible. 1. The expense must have been incurred as part of the effort to earn income. 2. The expense must be both ordinary, and necessary.
Going to a conference closely related to your business which is being held in Honolulu, may well qualify as ordinary and necessary. Taking the spouse and kids along is neither.
Taking a potential client who may end up giving you some business is both ordinary and necessary. If this potential client may end up paying you four or five hundred dollars per year, taking them out for dinner and drinks, and paying $100 is almost certainly going to be considered ordinary and necessary. Taking the client to Urasawa in Beverly Hills, where a dinner for two will easily cost over $1,000 is neither.
5. Tax software or online facilities are no substitute for a trained tax pro.
No matter how good software becomes, it can't interview you as well as another human being can. I recently helped a client who thought that the moment their child turned 24, that child could no longer be claimed as a dependent. That assumption had cost the client over $1,000 per year for the two previous years.
Moving expenses incurred when moving to take a new job are deductible if certain tests are met. What most people don't know is that since you must work at the new job for 39 weeks after starting it (or lose it and work at some other job), you don't have to take the deduction in the year of the move. You can wait to take it until the test is met. If you're moving to take on a job that will pay a lot more, the deduction may well be more valuable in the following year than in the year of the move.
Depending on your income level, and whether or not you have a retirement plan where you work, you may wind up paying less in tax over the long haul by contributing to a traditional IRA rather than a Roth IRA.
These are just some of the reasons why those online programs and software in a box aren't as good as an experienced, knowledgeable tax professional can be.
* * *
Yesterday was the birthday of my first ex-wife. Wednesday will be the birthday of my second ex-wife. I have no plans to try to emulate the marriage totals of either of my parents (4 for my dad, 3 for my mom) and can't imagine I'd ever get married again.
Heck, I don't even want to date. I wouldn't mind being "involved" with the right woman, but the process of getting to that point is just too much to contemplate. I don't want to go on any more first dates. I've done enough of that for one lifetime. Heck, in 1994 and 1995, there was an 18 month period where that alone should have been enough first dates for a lifetime.
I'm pondering this tonight because I'm tired of hearing people excuse male infidelity as being caused (at least in part) by the drive to procreate. I've always wanted to father a child, but it wasn't a "drive" to procreate, to "be ye fruitful and multiply" as was written somewhere once. I just wanted to see if I could do a better job than my own father. To sit and watch as my children played the sports of their choice, the musical instruments of their choice, to do what they wanted to do. I didn't choose to learn the violin. That choice was made for me.
Also, I look at the recent studies that show the rate of infidelity among women is increasing as evidence that the issue isn't the drive to procreate. The truth as I see it is that male or female, people who choose to be unfaithful simply want the BBD. The Bigger, Better Deal. The person waiting faithfully at home isn't enough to satisfy the desires of these wretches, so they look elsewhere.
At one time I was dating a woman who lived with her sister and brother-in-law, residing in the guest house behind theirs. She was her brother-in-laws executive assistant. She knew he was having an affair. She knew that her sister was having an affair. She was sleeping with a married man on occasion and refused to stop doing it when we began to date. When we got to the point of wanting to become intimate, I insisted that she had to stop "seeing" him. She refused. I walked. Sex without love, or at least the appearance and feeling of love, is merely physical exertion. In those days it was easier to work up a good sweat by going to the gym or for a bike-ride.
At least you won't have to worry about buying me a future wedding gift.
* * *
I have sympathy for the plight of Marsha Temple, but she's wrong on the issue of opening up adoption records to the adoptees. That's what she wants to have happen, so she and thousands of other adopted children like her can discover who their biological parents are.
Access to match up biological parents and offspring should be a one-way street. Parents who decide after making that incredibly difficult decision to put a child up for adoption should be given the opportunity to reach out and see if the child is interested in contact. If the child is not interested, things should end there.
Doesn't seem fair, does it? Giving a choice to the parents that wouldn't be given to the children. But it is fair. When a parent chooses to walk away from a child, unless they want to revisit that moment in their life, they shouldn't be forced to. It is different for an adopted child. They learn at some point that the parent or parents who raised them were not those who provided the genetic material for their creation. That doesn't mean those parents aren't their parents; in fact, the real parents of an adopted child are those who cared enough to take them in.
But reminding a child they were adopted when a biological parent reaches out to attempt contact isn't going to be anywhere nearly as fraught with potential emotional trauma as it would be if that child is reaching out to the parent. Try to imagine what a mother or father would feel four or five decades after giving up a child, to find out that child wants to enter their life. They shouldn't be made to confront that possibility unless they decide it is something they want to pursue.
* * *
Random Ponderings:
Why would someone attempt to insinuate they are a feminist and call feminists "cunts" and "bitches" in the same message? Stupidity?
Even today, when Burt Young calls himself the "un-silent majority" in "Rocky IV" I can't help but to think of him as part of the unwashed minority. I'm referring of course to the character he plays in the Rocky films, not the man himself.
Could someone explain to me why it's okay for male comedians to be "crude, but not for comediennes? That's what Jerry Lewis says.
While the NBA playoffs go on without the Lakers, I'll be thinking about the draft lottery.
It is a good thing for Taylor Swift that she became a singer rather than a dancer, because her ability to bust a move appears quite limited.
The only proper reaction to yet another Miley Cyrus topless selfie is to yawn.
Being unable to repeal Obamacare 40 plus times thus far isn't stopping Congressional Republicans. Apparently they're unaware of the real definition of the term "insanity" which means doing the same thing over and over and expecting a different result.
It has to really suck to be running for Congress, make a point of claiming the other side is dishonest and then be caught in a lie on national television. Mike Dickinson (D-VA), I'm referring to you.
It is frightening that baseball's new instant replay blows a call. What's really scary is that MLB claims they didn't have the right camera angle on the play. If everyone at home had that angle, the replay should have had it too.
posted by me at 5:32 AM
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