Time to Start on 2017 Taxes

[Talent312]

Being somewhat OCD about my finances, I started in on my taxes today.

-- Downloaded a W-2 (worked 4 months) and a 1099-R (pension)
-- Totaled our Social Security payments (their 1099's are "in the mail").
-- Added a taxable IRA distribution, interest+dividends from various places.
-- Ran numbers on a rental house that I sold (more like gave) to a stepson.

Plugged it all into Tax Act, and it showed Refund of... $8.00.
Sure, that may change a bit, but I've never nailed it so close at this point.

.

 

[MOXJO7282]

I'm really eager to pull in my numbers because I prepaid my 2018 property taxes and want to see what kind of impact that has but I don't have all my numbers yet.

 

[Panina]

I wish I had everything I needed. If I did they would have been done yesterday. Just like to be over with it.

 

[VacationForever]

We had no earned income but had some amount of ex-business legal expenses that we get to claim. Awaiting our financial statements that are supposed to be posted by Feb 1. We will do our taxes then. We still use a CPA but we are thinking of doing a parallel run this year on Turbo Tax to see if we come up with the same number. If we do then we will start doing our own taxes starting with 2018 returns.

 

[rapmarks]

Wish I had the numbers to get started, having that darn knee replacement Thursday and hear I won't feel like doing anything for weeks.

 

[WinniWoman]

I don't receive everything until March. Mainly our brokerage statement holds everything up. I usually start them though. Now that Tax Act has gone up in price, I might try Turbo Tax through my T Rowe Price account which is free for clients and everything I have there downloads into it.

The only thing is last time I tried using Turbo Tax I hated it. Found it confusing and annoying. Plus I am not sure how to carry over my capital losses, which Tax Act does for me automatically year to year since I initially entered them on the program. Not sure how to get that onto Turbo Tax.

I also will do my son's as soon as he gets his forms over to me- which is oh so easy since he has no state taxes to file being he lives in a no tax state, and he does not own a home or have anything to deduct. Just his W-2's and the bank interest and the standard deduction on the simple 1040 form.

 

[WinniWoman]

We had no earned income but had some amount of ex-business legal expenses that we get to claim. Awaiting our financial statements that are supposed to be posted by Feb 1. We will do our taxes then. We still use a CPA but we are thinking of doing a parallel run this year on Turbo Tax to see if we come up with the same number. If we do then we will start doing our own taxes starting with 2018 returns.

If you have fairly simple taxes you will save a bundle doing them yourself. Essentially your CPA uses a program and just types in the numbers you give him/her. Turbo Tax or Tax Act simply ask you the same questions and YOU do the typing.

This is not to say there isn't some benefit to using a CPA in certain cases. But you are smarter than you think!

 

[VacationForever]

I don't receive everything until March. Mainly our brokerage statement holds everything up. I usually start them though. Now that Tax Act has gone up in price, I might try Turbo Tax through my T Rowe Price account which is free for clients and everything I have there downloads into it.

The only thing is last time I tried using Turbo Tax I hated it. Found it confusing and annoying. Plus I am not sure how to carry over my capital losses, which Tax Act does for me automatically year to year since I initially entered them on the program. Not sure how to get that onto Turbo Tax.

I also will do my son's as soon as he gets his forms over to me- which is oh so easy since he has no state taxes to file being he lives in a no tax state, and he does not own a home or have anything to deduct. Just his W-2's and the bank interest and the standard deduction on the simple 1040 form.

I had my son use our CPA when he first started working. After the 2nd year, he wanted to do it himself. He refused any help as he said "I got to learn how to do my own taxes." Now we have to learn how to do our own taxes.

 

[SmithOp]

I guess its time to put in my .02 for getting your taxes filed free. I volunteer in this program, 6th year for me.

https://secure.aarp.org/applications/VMISLocator/searchTaxAideLocations.action

I also downloaded my 1099s and did a quick return, a big refund, its time for me to stop making estimated payments.


Sent from my iPad using Tapatalk Pro

 

[MOXJO7282]

I find Turbotax really easy to use and we have K1s and my TS rental income and those write-offs and it answers all my questions for me. I bet a CPA would charge me $250-$400 for my whole family and I do it was $99 I believe.

 

[Talent312]

...big refund, its time for me to stop making estimated payments.

Yeah, don't want to loan IRS too much of your $$, interest-free.
I'm using extra withholding options for my pension to cover it.

.

 

[VacationForever]

If you have a one-time capital gains that come in middle of the year, are you supposed to pre-pay the capital gains tax during the year or can you wait until you file at the end of the year? If you wait until when you file your taxes, is there penalty for not pre-paying the estimated capital gains tax during the year?

 

[Panina]

I find Turbotax really easy to use and we have K1s and my TS rental income and those write-offs and it answers all my questions for me. I bet a CPA would charge me $250-$400 for my whole family and I do it was $99 I believe.

Most CPA’s charge more, at least that is what I’ve experienced.

 

[Talent312]

If you have a one-time capital gains that come in middle of the year, are you supposed to pre-pay the capital gains tax during the year or can you wait until you file at the end of the year? If you wait until when you file your taxes, is there penalty for not pre-paying the estimated capital gains tax during the year?

I trust that someone more knowledgeable than I will reply shortly, but here's my 2-bit understanding:

With a mid-year gain, you're 'sposed to pay the add'l tax at the next quarterly estimated tax due date. However, a penalty can be avoided if (1) your return shows an underpayment of LT $1,000, or (2) you prepaid at least 90% of the tax due for the year, or (3) you prepaid at least 100% (110% in some cases) of the tax due for for the prior year. There's a worksheet/form for this.

The tax prep software/websites that I've used - TurboTax & Tax Act - determined this for me.

.

 

[bogey21]

Although I owe the IRS (sometimes a lot) every year when I file I have never screwed around with Quarterly payments. I think only once in the last 20 years or so have I ever been assessed a penalty and it wasn't all that much. It was simple. The IRS computer generated a bill; I paid it; and it was done.

 

[rapmarks]

As long as you have sent in as much as previous year, no penalty?
I still remember hiring a cpa for one item for my mother in law return and she charged $650. That was in the year 2000. Because you can import your information from most brokerages, it is pretty easy to use turbo tax or tax act.

 

[pittle]

I don't receive everything until March. Mainly our brokerage statement holds everything up. I usually start them though. Now that Tax Act has gone up in price, I might try Turbo Tax through my T Rowe Price account which is free for clients and everything I have there downloads into it.

The only thing is last time I tried using Turbo Tax I hated it. Found it confusing and annoying. Plus I am not sure how to carry over my capital losses, which Tax Act does for me automatically year to year since I initially entered them on the program. Not sure how to get that onto Turbo Tax.

I also will do my son's as soon as he gets his forms over to me- which is oh so easy since he has no state taxes to file being he lives in a no tax state, and he does not own a home or have anything to deduct. Just his W-2's and the bank interest and the standard deduction on the simple 1040 form.

I have used TurboTax since before it even became TurboTax (Parsons Technology - Personal Tax Edge was the original Intuit tax program). It works for us and we have done vacation rentals and now have sold that and retired, so have IRA, SS, and Retirement/Pension Plans to deal with. It has been doing the carry-over Capital Losses for me automatically each year since I have history with that. I think we have 2 more years from the huge loss years ago.

I wrote one best guess check to pay in April for 2017, that was for the same as we had with-held in 2016 and it looks like we are within $25 of what this year's amount will be. I do not have the final numbers from everyone, but looked at everything that I have receipts and statements for, so am pretty close.

 

[WinniWoman]

I have used TurboTax since before it even became TurboTax (Parsons Technology - Personal Tax Edge was the original Intuit tax program). It works for us and we have done vacation rentals and now have sold that and retired, so have IRA, SS, and Retirement/Pension Plans to deal with. It has been doing the carry-over Capital Losses for me automatically each year since I have history with that. I think we have 2 more years from the huge loss years ago.

I wrote one best guess check to pay in April for 2017, that was for the same as we had with-held in 2016 and it looks like we are within $25 of what this year's amount will be. I do not have the final numbers from everyone, but looked at everything that I have receipts and statements for, so am pretty close.

I tried Turbo Tax twice and didn't find it as user friendly as Tax Act. It seemed quirky and asked some weird questions and wouldn't let me go further at times.

But my concern is how to get the carry over losses started in Turbo Tax from where Tax Act left off.

 

[VacationForever]

I trust that someone more knowledgeable than I will reply shortly, but here's my 2-bit understanding:

With a mid-year gain, you're 'sposed to pay the add'l tax at the next quarterly estimated tax due date. However, a penalty can be avoided if (1) your return shows an underpayment of LT $1,000, or (2) you prepaid at least 90% of the tax due for the year, or (3) you prepaid at least 100% (110% in some cases) of the tax due for for the prior year. There's a worksheet/form for this.

The tax prep software/websites that I've used - TurboTax & Tax Act - determined this for me.

.

Thank you. I believe we pay no taxes for 2017 returns but we will have various income in 2018, including the said capital gains in May. If under rule (3), then there is no penalty if we do not pre-pay the capital gains...??? We will make sure there is tax withholding for Social Security and Minimum Required Distribution as there is a way to specify how much we withhold. It is the capital gains that is tricky. Regardless, we will ask our CPA.

 

[SmithOp]

I trust that someone more knowledgeable than I will reply shortly, but here's my 2-bit understanding:

With a mid-year gain, you're 'sposed to pay the add'l tax at the next quarterly estimated tax due date. However, a penalty can be avoided if (1) your return shows an underpayment of LT $1,000, or (2) you prepaid at least 90% of the tax due for the year, or (3) you prepaid at least 100% (110% in some cases) of the tax due for for the prior year. There's a worksheet/form for this.

The tax prep software/websites that I've used - TurboTax & Tax Act - determined this for me.

.

Spot on.

Note that CA threshold in number 1 is $500. Your state may vary, if you have a State income tax.

As Bogey says, its sometimes easier to pay the late penalty.


Sent from my iPad using Tapatalk Pro

 

[cgeidl]

I can almost guarantee you will not come up with the same numbers as your CPA but that does not mean either of you are correct or wrong. Money Magazine used to give the same information to 20 tax so called experts and no two came up with the same numbers and there was wide disparity. We have done our own for about 20 plus years now and it takes no more time and we can make decisions in grey areas that lessen our taxes. If you have never been audited you are not taking enough. Our only audit was about 40 years ago and we did well.

We had no earned income but had some amount of ex-business legal expenses that we get to claim. Awaiting our financial statements that are supposed to be posted by Feb 1. We will do our taxes then. We still use a CPA but we are thinking of doing a parallel run this year on Turbo Tax to see if we come up with the same number. If we do then we will start doing our own taxes starting with 2018 returns.

 

[rapmarks]

Thank you. I believe we pay no taxes for 2017 returns but we will have various income in 2018, including the said capital gains in May. If under rule (3), then there is no penalty if we do not pre-pay the capital gains...??? We will make sure there is tax withholding for Social Security and Minimum Required Distribution as there is a way to specify how much we withhold. It is the capital gains that is tricky. Regardless, we will ask our CPA.

My broker told me the IRS does not know when the taxes were sent in from am Mrd, so I use my mrds to send in the balance of my taxes late in December after I see what kind of capital gain distributions mutual funds claim. I have never sent extra money after big capital gains.

 

[VacationForever]

My broker told me the IRS does not know when the taxes were sent in from am Mrd, so I use my mrds to send in the balance of my taxes late in December after I see what kind of capital gain distributions mutual funds claim. I have never sent extra money after big capital gains.

Thank you. So does it mean that you only make MRD withdrawals in Dec and ask for what tax withholding amount depending on what you believe the taxes were owed? Would that then include realized capital gains tax?

 

[rapmarks]

Thank you. So does it mean that you only make MRD withdrawals in Dec and ask for what tax withholding amount depending on what you believe the taxes were owed? Would that then include realized capital gains tax?

Yes, if I had a big gain, I would send in extra, but as long as I sent in what I owed the year before I was fine. One year I owed forty thousand, but never heard from them.

 

[VacationForever]

Yes, if I had a big gain, I would send in extra, but as long as I sent in what I owed the year before I was fine. One year I owed forty thousand, but never heard from them.

If we pay no taxes for 2017 returns, does it mean we do not need to prepay tax for 2018 even though there will be quite a bit of taxes, under rule (3)?