Tax return....

[dingbat]

Willing to bet they cashed the checks they received WHEN they received them, though.

When we finally received our return our bank put a few days hold on the deposit before making it available to us. Same thing with this year’s return which we’ve already received and was much smaller. What’s that tell you about how our .gov’s accounts are if the banks don’t trust their deposits.

 

[dingbat]

The IRS does pay interest on DELAYED refunds if I recall

Yes, but it’s lower than prime rate and you have to declare it as income on your taxes for the year you receive it.

Eta: Think we got something shy of $12 for them holding between $3-4k for a year this last go round. It’s more of a slap in the face than compensation for holding money you could have used to earn 8-12% or pay down higher interest debt.

 

[VetteGirlMA]

Owed State $32 and Feds $5800. M


If you are over 50 you can contribute "catch up" money. For 2022 the limit for catch up dollars is $6500

Even with the catch up I am hitting the cap which in my case is $27000 (20500+6500), so I need something else.

 

[Stape]

Just got back from our CPA's office. We owe $24K federal and $6K State. We knew it was going to be around that, so we saved accordingly. We've always been joe blow boring married couple, get back $500 federal and owe the state $400, kinda break even.

Wife started a business. As silly as it sounds, she makes customized coffee cups, tumblers and t-shirts, has a little shop in town and sells online. Shes sold an F-ton of them. It just kinda hurt, having $30k in the bank and then just writing a check to our benevolent govt.

This was her first year so she didn't do quarterly. Now she is so its not such a slap in the face come next April.

 

[AHM]

... Interesting that in 2022, some people are turning down promotions.

(WTAF?)
The Bride once had a high-seniority very skilled tech in the clean room who declined to
jump through the corporate hoops to get anointed as an engineer.
He was just fine with getting hourly pay rather than being salaried.
(It wasn't an up-or-out situation - they were just trying to value and reward the guy properly).
But WTAF?

I hand a pile of papers and receipts to my accountant. A few weeks later he gives me a stack of papers an inch or two thick and points to where I sign. Sometimes I have to write a check for $10k-$20k and sometimes something is coming back.

Last time I actually LOOKED at a return I had a literal heart attack so now I just sign whatever he puts in front of me. So far neither of us has landed in jail. Well, in the US anyway.

The Bride is going to hate you.
You just made me realize that every time she gives me a ration for all the clutter I've accumulated,
I can brush back with "how come we have so damned many 1099's in our tax filings?"
The Bride is going to hate you.

... back in the 90s I had a buddy that was a race car driver. He needed to give his mechanic some money and decided to pay it in ones. We went to his bank and took out a grand in the form of a shrink wrapped brick of ones.

A friend of a friend is a (now-retired) lawyer. 40 years ago he commented that
all the malcontents who try to pay their taxes with a wheelbarrow full of pennies
are playing with fire. Because there is an obscure offense known as "vexatious tender".
(So obscure that the most on-point usage is something I wrote here 14 months ago ).

The government doesn't have to accept the payment,
the mere attempt doesn't absolve you of the debt,
and if you cross the right clerk, you may get jacked-up for making the attempt.

Don't assume it can't be applied in the private sector.

Anyhow, that's my story, and I'm sticking to it.

When we finally received our return our bank put a few days hold on the deposit before making it available to us. Same thing with this year’s return which we’ve already received and was much smaller. What’s that tell you about how our .gov’s accounts are if the banks don’t trust their deposits.

At least you're not using a bank that trusts the government.

And that smacks of the kind of thing that government bank regulators might bitch about
(if the regulators are from the same jurisdiction as the taxing authority).

The fact that the bank did it means either they're trying to profit from the float;
or the government screwed them in the past with insufficient funds or post-dated EFTs or something,
and the taxing authority may have told the regulators to back the F off before it catches the public's attention.

 

[cathouse01]

One of the guys I worked with, instead of having a framed 1 dollar bill on his wall as his “first dollar made”, framed his canceled 1 million dollar check to the Fed Gov as his first “over a million” income tax payment.

 

[Mark from MA]

How do you get past the 401k cap? I've been thinking off loading more income to a roth ira since I've paid taxes on it and I end up hitting the 401k cap. My bonus is usually pretty good although this year I also received a pretty decent pay raise amid the inflation. I was pretty much ahead of inflation but the raise keeps me ahead of it. Then again my company bled out a lot of people last year in key management positions so we're running really short staffed in IT. Good for me, but dayum I'm going nuts right now while we try to hire and/or promote new folks. Interesting that in 2022, some people are turning down promotions.

We are OK for each of us at 20%. I think...its 26K each person.....

We actually can't do a Roth, past like 180K MAGI you cant do a Roth is what I've been told.

 

[cathouse01]

We are OK for each of us at 20%. I think...its 26K each person.....

We actually can't do a Roth, past like 180K MAGI you cant do a Roth is what I've been told.

From Kiplinger’s

To be eligible to contribute the maximum amount in 2022, your modified adjusted gross income must be less than $129,000 if single or $204,000 if married and filing jointly. Contributions begin to be phased out above those amounts, and you can't put any money into a Roth IRA once your income reaches $144,000 if a single filer or $214,000 if married and filing jointly.

 

[TrackDayRdr]

We are OK for each of us at 20%. I think...its 26K each person.....

We actually can't do a Roth, past like 180K MAGI you cant do a Roth is what I've been told.

But you can. Look up a "backdoor Roth". You need to fund a traditional IRA, then roll that over into a Roth. The basis in the initial contribution offsets the income and voila...a Roth for people who can't contribute to a Roth.

 

[VetteGirlMA]

We are OK for each of us at 20%. I think...its 26K each person.....

We actually can't do a Roth, past like 180K MAGI you cant do a Roth is what I've been told.

So basically I should start looking for a new sports car or invest in some business.

 

[FPrice]

So basically I should start looking for a new sports car or invest in some business.

I'm up for adoption if that meets your financial goals.

I clean up well, don't piddle on the floor, say "Yes ma'am" at the proper times. And I'm less controversial than a certain cold-blooded vertebrate on this forum.

Just sayin...

 

[bfm]

Interesting that in 2022, some people are turning down promotions.

I turned one down this year. I did not want to go back into managing people or having to travel.

Wife just got a new job with more earning potential than mine. She is also younger so has a longer potential than I do.
We have a three year old in daycare, so staying a 100% remote individual contributor so I can do drop off and pick up while my wife goes to her new downtown job and makes bank made sense. If it was just me, I would have taken a new job for more money. With the whole family to consider having more flexibilty to take care of the kid was more important. I moved laterally into Cloud Security at same company, so I am using what I already know and picking up some new skills.

 

[chris_1001]

I’m going to ask now. I need a cpa to figure out how to contribute to my 401 to balance out my tax liability. This year sucked.

 

[Rob Boudrie]

Just got back from our CPA's office. We owe $24K federal and $6K State. We knew it was going to be around that, so we saved accordingly. We've always been joe blow boring married couple, get back $500 federal and owe the state $400, kinda break even.

Wife started a business. As silly as it sounds, she makes customized coffee cups, tumblers and t-shirts, has a little shop in town and sells online. Shes sold an F-ton of them. It just kinda hurt, having $30k in the bank and then just writing a check to our benevolent govt.

This was her first year so she didn't do quarterly. Now she is so its not such a slap in the face come next April.

Be careful as the IRS interest rate on under withholding is very high relative to current market rates. You can get an exemption for one year if you have an unexpected bump and your withholding was at least the previous tax year's liability, but you can't underpay by a large amount for multiple years in a row without an under withholding penalty. My wife runs a consulting business and we file state and federal estimated payments quarterly.

 

[Yazz]

Be careful as the IRS interest rate on under withholding is very high relative to current market rates. You can get an exemption for one year if you have an unexpected bump and your withholding was at least the previous tax year's liability, but you can't underpay by a large amount for multiple years in a row without an under withholding penalty. My wife runs a consulting business and we file state and federal estimated payments quarterly.

And when you need to set up an account online to pay them.

Welcome to EFTPS online

www.eftps.gov

 

[namedpipes]

I'm up for adoption if that meets your financial goals.

I clean up well, don't piddle on the floor, say "Yes ma'am" at the proper times. And I'm less controversial than a certain cold-blooded vertebrate on this forum.

Just sayin...

Same

You know you always wanted twin boys!

 

[FPrice]

Same

You know you always wanted twin boys!

 

[Broc]

How do you get past the 401k cap? I've been thinking off loading more income to a roth ira since I've paid taxes on it and I end up hitting the 401k cap. My bonus is usually pretty good although this year I also received a pretty decent pay raise amid the inflation. I was pretty much ahead of inflation but the raise keeps me ahead of it. Then again my company bled out a lot of people last year in key management positions so we're running really short staffed in IT. Good for me, but dayum I'm going nuts right now while we try to hire and/or promote new folks. Interesting that in 2022, some people are turning down promotions.

Check with your 401K provider if they offer a backdoor ROTH.

Fidelity offers one, they do all the transfer themselves, but your employer has to be onboard with it.

Fun fact - Fidelity employees can't use the backdoor roth. At least per my admin.

 

[FPrice]

I’m going to ask now. I need a cpa to figure out how to contribute to my 401 to balance out my tax liability. This year sucked.

Sounds like you might need a financial planner. Contributing to your 401 should be relatively simple, depending if it's a company plan or a personally held plan. The planner might be able to give you more tips on how and what to do.

Disclaimer: you might find a person who combines both capabilities.

 

[TheGreekFreak]

Check with your 401K provider if they offer a backdoor ROTH.

Fidelity offers one, they do all the transfer themselves, but your employer has to be onboard with it.

Fun fact - Fidelity employees can't use the backdoor roth. At least per my admin.

I think you can fund a backdoor roth ira yourself, just need to rollover traditional ira funds. But some 401K plans offer after tax contributions which allow you to do mega backdoor roth conversions.

While it doesn't help lower your tax situation, it allows you to contribute up to like $61K a year to your 401K (instead of regular $20.5K). Some plans then allow you to instantly rollover to a traditional ira and then rollover into a roth ira, essentially raising the roth ira limit from $6K to $61K. Then enjoy tax free growth on that $61K/year going forward with no future RMDs.

It's a process and not commonly offered with most 401Ks though. Some plans even do the rollovers automatically for you which is nice.

 

[namedpipes]

I think you can fund a backdoor roth ira yourself, just need to rollover traditional ira funds. But some 401K plans offer after tax contributions which allow you to do mega backdoor roth conversions.

While it doesn't help lower your tax situation, it allows you to contribute up to like $61K a year to your 401K (instead of regular $20.5K). Some plans then allow you to instantly rollover to a traditional ira and then rollover into a roth ira, essentially raising the roth ira limit from $6K to $61K. Then enjoy tax free growth on that $61K/year going forward with no future RMDs.

It's a process and not commonly offered with most 401Ks though. Some plans even do the rollovers automatically for you which is nice.

I'm less worried about how to roll over $61k a year and more about where I can find cat food in bulk quantities... Or is it dog food poor old folks eat? Which tastes better?

 

[Broc]

I think you can fund a backdoor roth ira yourself, just need to rollover traditional ira funds. But some 401K plans offer after tax contributions which allow you to do mega backdoor roth conversions.

While it doesn't help lower your tax situation, it allows you to contribute up to like $61K a year to your 401K (instead of regular $20.5K). Some plans then allow you to instantly rollover to a traditional ira and then rollover into a roth ira, essentially raising the roth ira limit from $6K to $61K. Then enjoy tax free growth on that $61K/year going forward with no future RMDs.

It's a process and not commonly offered with most 401Ks though. Some plans even do the rollovers automatically for you which is nice.

This is what Fidelity does and they do the rollover automatically. You can choose if you want it rolled over the day after, month after or yearly.

Basically, once they set it up, all you have to do is adjust the % on their platform.

The disadvantage is it gets invested in the same funds as the 401K money.

 

[Rob Boudrie]

And when you need to set up an account online to pay them.

Welcome to EFTPS online

www.eftps.gov

You can also make a check.

 

[TrackDayRdr]

I’m going to ask now. I need a cpa to figure out how to contribute to my 401 to balance out my tax liability. This year sucked.

No you don't. If you have a 401K then you should fund it as much as you can do so. No need to ask a CPA for permission. If you owe taxes, the problem isn't your 401K participation or lack thereof, it's something else. Run your family W-2 forms through the IRA withholding estimator. If you have sources of unearned income you will need to make estimated tax payments.

 

[Stape]

Be careful as the IRS interest rate on under withholding is very high relative to current market rates. You can get an exemption for one year if you have an unexpected bump and your withholding was at least the previous tax year's liability, but you can't underpay by a large amount for multiple years in a row without an under withholding penalty. My wife runs a consulting business and we file state and federal estimated payments quarterly.

When she first started it was pretty swift business but she got kicked off FB so salesnslowed down. Our estimated quarterly based off of last year is 6k, but she hasn't even made that this quarter. She's took a month off to visit family and whatnot.

 

[GM-GUY]

My Federal Tax refund that I mailed 3/7 still won’t track on the site - good news it’s less than $200

I’m thinking about next year being worse - I might adjust withholding so we owe abit as I bet refunds will be even slower.

 

[PeterC]

My Federal Tax refund that I mailed 3/7 still won’t track on the site - good news it’s less than $200

I’m thinking about next year being worse - I might adjust withholding so we owe abit as I bet refunds will be even slower.

I filed around the same time and my refund was sitting in my checking account less than 2 weeks later. Same with the year prior right smack in the middle of Covid.
Typical homeowner, investments, charitable donations, etc done and filed with TurboTax.

Waiting this long makes absolutely no sense.

 

[GM-GUY]

I can’t E-file somewhere in the system my wife’s birthday is wrong. She has a passport and SSA has the correct date - but E-file rejects it for a bad date. Paper copies work and get processed.

 

[teamRR]

I had to fight with MA this year (out of state NH resident where I still get taxes taken but worked 0 days in the state in 2021). They sent me mail stating basically "we recalculated your taxes and determined you should get nothing back". No justification or reference of an error or legal code. And "to appeal this decision upload your documents to this website".

HR provided me a letter stating I didn't report to a MA office in '21. I uploaded it. Waited 2 months, was supposed to get a reply in "4 to 6 weeks". Then one day my full/original tax return jusr showed up - that's how they answered my appeal. But hey at least I didn't have to take them to court over it.

 

[Rob Boudrie]

The DOR claim is "If you would have reported to a MA office but for Covid WFH policies, you are still working in MA".