Personal Finance Weekday Help Thread for the week of January 29, 2018 |
- Weekday Help Thread for the week of January 29, 2018
- Some insights into the answer to "Why did my refund go down when I entered a second W-2 form into my tax software???"
- My wife passed and my MIL wants her car...
- Teenager w/ $12,000 in savings. What should I do?
- Number of allowances to claim to keep taxes owed in the negatives while bringing the amount refunded closer to zero
- Mom just asked if she can retire...can she?
- The family I babysat for last summer requested my address & SSN to send me a 1099. Am I obligated to do this?
- Mom used my ssn
- American Express HYS just boosted APY to 1.45%
- H&R Block will not allow free Federal filing to include 5498-SA (contributions to HSA)
- PayPal locked me out of $60,000, but sent me a 1099K tax form.
- 35 Years old, made $25K in self-income last year. Turbo tax says I owe $11K
- U.S. personal savings rate falls to 2.4%, the lowest level since September 2005
- I feel like we should be more aggressive with our Investing/Saving/401k balancing act, husband disagrees. Need help building a stronger case for making changes or hiring a financial advisor.
- Hello, I’m a college student noob who knows nothing about filing taxes.
- My wife and I married in Dec 2017. Should we file joint taxes or separately?
- Recently got my first bonus. I have some questions about opening an IRA.
- Is this hurting me or helping me?
- I’m a nanny. My employer keeps saying I’m self employed?
- "Unicorn" pre-ipo ISOs set to expire - should I buy all, buy some, not buy?
- Where to start life insurance?
- Really dumb tax question... if I didn't have an income in 2017, should I do taxes? And if I do them, what happens?
- Regretting buying into Universal Life Insurance
- Friend says bank won’t take her boyfriend off account of which she is the primary holder
- Claiming repaid tuition reimbursement?
| Weekday Help Thread for the week of January 29, 2018 Posted: 29 Jan 2018 05:08 AM PST If you need help, please check the PF Wiki to see if your question might be answered there.While we never remove posts just because a question is answered in the wiki, this thread is a low-key place to ask any question no matter how "moronic" you think it might be. Make a top-level comment if you want to ask a question! Also, please don't downvote "moronic" questions! If you have not received your answer within 24 hours, you can feel free to start a discussion. A big thank you to the many PFers who take time to answer other people's questions! For past help threads, please search the Weekly Archive. [link] [comments]  |
| Posted: 29 Jan 2018 08:37 AM PST As tax filing season gets underway, people are starting to post queries indicating confusion about why their tax software shows a big refund when they've only entered one of several W-2s and then that refund indicator drops to a smaller refund or even says they owe taxes as they enter other W-2s. This can happen whether you are a Single taxpayer with multiple W-2s or are Married taxpayers filing jointly who both have incomes. The reason this happens is the interim "refund" value isn't really a valid figure, because it is misrepresenting what your income is and how it gets taxed. I'll give some numeric examples to illustrate, but first it may help to know that your W-4 "allowances" setting is going to influence how much of the income you earn at one job is going to be considered untaxed by the withholding system as it estimates your yearly tax in order to figure out what to withhold from any particular check. In 2017, for Single filers: considered not taxed = 2300 + 4050 * allowances In 2017, for Married filers: considered not taxed = 8650 + 4050 * allowances Let's see how this plays out in some scenarios. I'm using 2017 tax numbers here, since right now people are struggling with interpreting their 2017 tax situations. EXAMPLE A: Single filer with two jobs all year Suppose you are a Single filer with a 24K job and a 36K job and on both your W-4s you put "0" allowances, thinking that would cause more than typical withholding. Let's say the 24000 job had 2789 withheld and 36000 job had 4589 withheld, which is likely amounts for full year withholding. Job 1: 24000 wages, 2789 withheld using S-0 Let's see what happens when you enter just Job 1 W-2 into typical tax software. Here is what the software interprets is happening. income = 24000 deduction = 10400 taxable income = 13600 income tax = 9325 * 10% + 4275 * 15% = 1574 payments = 2789 "refund" = 2789 - 1574 = 1215 (Yay!) I put the refund in scare quotes because this is an invalid number, since only one income has been entered. If this were your only income, you would indeed get this amount of refund. And this refund number certainly gets you thinking that the withholding at the first job was more than enough. What happens if instead you enter just Job 2 W-2 into software? Similarly, it would tell you you're getting a refund if that's your only income. income = 36000 deduction = 10400 taxable income = 25600 income tax = 9325 * 10% + 16275 * 15% = 3374 payments = 4589 "refund" = 4589 - 3374 = 1215 (Yay!) By the way, the apparent "refund" is the same in this example because in each case the withholding system was told to use "0" allowances instead of "2" allowances, and this made the withholding system imagine your income in each job would be 4050 * 2 = 8100 more than it really was, which causes about 8100 * 15% = 1215 too much withholding to happen for that job considered by itself. In other situations, you may find that the nonsense "refund" values you see when you decide to switch the order of entering W-2 will be different, as a consequence of how allowances settings were done and what tax bracket each income seems to put you in. Notice that no matter which W-2 you enter, the withholding systems believe that some income is not taxed, some is taxed at 10%, and some is taxed at 15%, but no income is taxed at 25%. This turns out not to be true when you actually compute your tax. Let's see what happens when you enter the second W-2 after entering the first W-2. Now the software has your actual total income information and total withholding information, and the final result is valid. income = 24000 + 36000 = 60000 deduction = 10400 taxable income = 49600 income tax = 9325 * 10% + 28625 * 15% + 11650 * 25% = 932.50 + 4293.75 + 2912.50 = 8139 payments = 2789 + 4589 = 7378 "amount owed" = 8139 – 7378 = 761 (Hey!) Instead of getting a refund, you actually owe about 761. Yikes! What happened? Was something "wrong" with the withholding at Job 2? Not really. No more than what was wrong with the withholding at Job 1. Your withholding wasn't actually enough. Using Single 0 W-4 settings at both jobs wasn't enough to account for the actual tax, because some of the income really does get taxed at 25% when you "stack" your two incomes together. One way of thinking about this is that the withholding systems at both jobs effectively thought of this as how the income falls into brackets: considered not taxed: 2300 + 2300 = 4600 (because of use of "0" allowances) considered taxed at 10%: 9325 + 9325 = 18650 considered taxed at 15%: 4275 + 16275 = 20550 considered taxed at 25%: nothing In reality, when the two incomes are combined, this is how the actual income falls into brackets: not taxed: 10400 taxed at 10%: 9325 taxed at 15%: 28625 taxed at 25%: 11650 Although the withholding had a low value 4600 for tax-free space compared to reality of 10400, the withholding had a very skewed idea of how big the tax bracket spaces are, so the withholding systems interpreted more of the income as being taxed in lower brackets. It's not fruitful to blame the withholding at each job. At each job, the withholding system is just following the instructions conveyed by "0" allowances, and it is hamstrung by not knowing the total income. Each job treats your income as if it's the only job. Solution: This taxpayer should have considered using S-0, S-0 settings but also have extra withholding taken from paychecks to send in about 760 more tax across the entire year. Extra withholding of $30 from biweekly paychecks at one of the jobs would have been enough. However, owing 760 at tax time isn't going to cause this taxpayer any underpayment penalty, because it's under $1000 shy. tldr: If your overall withholding was not enough, it's still possible for you to see an apparent interim "refund" value when you enter just one W-2 into tax software. You need to ignore this interim value because it doesn't represent a real refund you could get, since it is not based on knowing about all your income and all your withholding. Also, you should not blame the second job as having faulty withholding. I'll append another scenario in a comment, involving married taxpayers, as this post is already long. [link] [comments]  |
| My wife passed and my MIL wants her car... Posted: 29 Jan 2018 03:30 PM PST My wife passed recently and her mother would like to have her car. Her mother asked me to think about how we can make that happen. She didn't offer anything, just asked me to think about it and let her know. I have no plans to drive the car, and I would have eventually sold it. I don't mind at all if my MIL gets it, but it's a bit awkward thinking about what I would ask her to pay for it, or if I should just give it to her. She said my wife had said she wanted her to have it, but my wife never said anything about it to me. I realize that last sentence sounds like possible trouble, but I absolutely believe my MIL - if she says my wife said that, then she said it. I am on great terms with my in-laws and will continue to be. The two of them and myself shared caretaker duties while my wife was in poor health, and I'll always be grateful for their help. They are great people. The car is in both my wife's and my name. I co-signed on the loan since she didn't have much credit built up, and I put down $1500 when we got it. The car was $16,800 new. My wife made all the payments, except I paid off the last $800. I want to avoid any potential hard feelings about this, so I'm looking here for advice. A few options come to mind:
What would you do in this situation? Thank you to all who take the time to respond. Edit: This post may have been better suited for r/relationships since I've indicated that I am not in any real need of the money (I'm not rich, but my good relationship with my in-laws is worth much more than the value of the car) , but I appreciate everyone's replies. Thank you. [link] [comments]  |
| Teenager w/ $12,000 in savings. What should I do? Posted: 29 Jan 2018 07:20 PM PST hello. so I'm in high school right now and I have an online business that brings in $2k+ a month. I have saved up $12,000 total out of this and I'm wondering how should I invest it as I don't just want it to sit. Yes I know I can invest it back into my business but I'm looking for other ways aswell. My goal when I created my business was to save enough to buy a used Jeep Wrangler (around $10,000) but I still have a few years before I can drive. Thanks! [link] [comments]  |
| Posted: 29 Jan 2018 06:09 AM PST I am single, with no dependents, and have 2 jobs, living in a state w/o income tax. I drill in the reserves and the number of exceptions I claimed on MyPay was 0 and for my full time civ job I also claimed 0. I did this out of fear, because I'd rather not owe anything in taxes, its like a terrible surprise-- like-- like a Halloween present.
On my full time jobs w-4, I just changed the number of allowances to 1. I keep reading something along the lines of "its one exemption per job" but this is foggy and does not make sense to me. ... maybe I should have posted this in eli5 haha
Addt'l info
I suppose my question now is, should I be claiming 1 allowance on both W-4's??
Id rather not have to owe taxes, but I don't care about getting a refund (I mean com'mon... Is it really a refund?) This year, after claiming 0 allowances on both w4 for 2017, I'm getting 1500 back. I could be thowing that at my student loan debt, or into an account gaining interest not giving the gov and interest free loan [link] [comments]  |
| Mom just asked if she can retire...can she? Posted: 29 Jan 2018 06:33 AM PST Mom is 61 years old, been working at a Home Depot store for what seems like forever making $12-16/hr in Houston, TX throughout her career. Through a divorce and some smart financial moves, her house is paid off (roughly $5-6k in property taxes/yr) and she has about $1M in her retirement accounts. Is this enough for her to call it quits? [link] [comments]  |
| Posted: 29 Jan 2018 04:36 PM PST Last summer (2017), I (22) babysat for a family whom I found through Sittercity. I was with them for ~2-3 weeks. I was paid weekly by personal check. In total, I earned $463 during my time with them. The dad texted me today saying he needs my address & SSN to send me a 1099. My parents file me as dependent since I'm <24 yrs old, a full-time student, and still live with them- so I always just gave them my W2's and they took care of filing taxes. Therefore, I was always clueless about taxes (I now realize how stupid and irresponsible that is and I've done a lot of research today). Anyways, there was never any discussion of my being an employee or independent contractor [i.e. they didn't have me complete a W-9] prior to my starting to babysit. I was planning to claim the $463 on the tax return as "other income." But I've (now) learned that the 1099 the dad wants to give me is for me to have to file self-employment taxes as an independent contractor. Am I obligated to provide him with my information? Could I get in trouble (legally) if I ignored his request? Does this mean I will have to pay self-employment taxes on the $463? Thanks so much in advance for any help/tips/advice. Feel free to ask for any other details. [link] [comments]  |
| Posted: 29 Jan 2018 07:34 AM PST My mother has used my SSN and I am 20 years old. I have a part time job to pay the rent, and I have no other kind of income/money. I have a 512 credit score now and am owing $2,603. I have no idea what to do. Will this affect where I am renting? I pay the rent on time,ect. [link] [comments]  |
| American Express HYS just boosted APY to 1.45% Posted: 29 Jan 2018 06:14 AM PST I was JUST about to pull my money out of American express and put it into a different account, but I am glad they're staying competitive at 1.45%. [link] [comments]  |
| H&R Block will not allow free Federal filing to include 5498-SA (contributions to HSA) Posted: 29 Jan 2018 05:54 PM PST I just spent the last hour entering data, filing for "free", and hit a roadblock on the HR Block site. It appears they don't like giving free filings to HSA users:
... I'm not saying "don't use them", but I am saying "if you're one of the many HSA users in the U.S., be advised." EDIT: the cherry on top! I agreed to use the $25 product, and when I was granted access to the Form, the first thing they tell me is "we already know about the $xxxx that you contributed, from your W2". Since the corresponding amount shown on my 5498-SA was already reported by my employer on the W2, there was nothing inside the $25 VIP Area. I'm absolutely fuming that I need to run this up the flagpole to file without paying $25. [link] [comments]  |
| PayPal locked me out of $60,000, but sent me a 1099K tax form. Posted: 29 Jan 2018 12:16 PM PST Hi all, I recently started a small online business and it really blew up over the last 2 months. I ended up selling $60,000 worth of goods, and all of it is in my business PayPal account. About two weeks ago, PayPal locked the account due to high risk and said funds wouldn't be released for 180 days. I already talked to them on the phone about this (a lot) and they're very firm about not unlocking the account. Now, I'm 19 and don't know a lot about tax forms, but I had assumed that either they wouldn't send me one for this year or would put some indication that I don't actually have access to the funds on the form. However, the form they sent has no indication that the funds are locked and it just has a gross amount of $60,000. I'm planning on calling them later tonight again and asking for help on the situation, but frankly, I'm not too trusting of their support services. I'm curious if anyone here has been in a similar situation or knows how to handle this, as I can't afford to pay taxes on $60,000 I don't have. [link] [comments]  |
| 35 Years old, made $25K in self-income last year. Turbo tax says I owe $11K Posted: 29 Jan 2018 01:07 PM PST Not sure how to put this into Turbo Tax, but I am finding it a bit absurd that I owe so much. [link] [comments]  |
| U.S. personal savings rate falls to 2.4%, the lowest level since September 2005 Posted: 29 Jan 2018 08:36 AM PST An uptick in consumer spending in December was accompanied by a decline in the savings rate to 2.4%, as reported in this article. Based on the Federal Reserve data available here, it looks like a new all-time low could be reached soon. I'm curious to hear what the savings rates are for the readers of this subreddit. I recently estimated that my savings rate for 2017 (as a percentage of after-tax income) was slightly above 50%. [link] [comments]  |
| Posted: 29 Jan 2018 07:05 PM PST I feel like my husband (35) and I (27) could be much more aggressive and/or smarter with how we plan for retirement, but I can't really convince him to add more to our plate or have us meet with a financial advisor for more educated guidance (he's the frugal/stubborn one, I'm the planner/worrier). I'm pitiful in an argument when I can't come up with anything more educated than, "Well the internet said we shouldn't leave money collecting dust in the bank instead of growing".
Here's how our current standing breaks down:
I feel like we should be doing some/all of the following:
My husband refuses to consider investing in real estate or anything outside of what we've already got started (because we have no idea what we're doing, and we don't wan't to screw it up guessing). He also won't consider paying a financial advisor to help us, because it's an extra expense and who knows if we'll end up with a shadowy character who takes it all and runs. Since I'm internet-self-educated in this realm, and the only one of us who's done so, I'm at a loss how to sell either option as not-so-scary.
Should we be doing more, and more aggressively? If the verdict is that we should absolutely be consulting with a financial professional instead of Reddit, how does one find a trustworthy source outside of reading Yelp reviews? [link] [comments]  |
| Hello, I’m a college student noob who knows nothing about filing taxes. Posted: 29 Jan 2018 06:38 PM PST So essentially I was working part time at a store from November 2016-June 2017 and never filed any taxes. I was wondering if I could still file them(I have the W2s) and when I should do it? I guess how I should do it too since I know nothing about taxes. Any help is appreciated!!! Thanks! [link] [comments]  |
| My wife and I married in Dec 2017. Should we file joint taxes or separately? Posted: 29 Jan 2018 02:34 PM PST We both work jobs with W2's, have 401k, own a house, no kids... I'm just not familiar enough with the lay of the land on this topic. Was hoping to learn some pros/cons if anyone has wisdom to impart, or suggestions of good info to read. Feel free to take an explain-it-like-I'm-5 approach. [link] [comments]  |
| Recently got my first bonus. I have some questions about opening an IRA. Posted: 29 Jan 2018 05:05 PM PST So I recently got my first bonus at work. I have worked for 6 months so far. The bonus was for 15k and I took right around 10k net home. My employer does not have a 401k match yet (we are a small company) I figured I would start an emergency fund of one months worth of net income ($3200). I want to put the rest into a Roth IRA and probably start a taxable account with the leftover from that. Was thinking about doing the Vanguard target date fund for my taxable account. I have no student debt. I wanted to run my plan by r/personalfinance to see if I am thinking about this correctly and if anyone had any tips for me. Thanks in advance! [link] [comments]  |
| Is this hurting me or helping me? Posted: 29 Jan 2018 06:25 AM PST Throwaway for personal reasons. Thanks to this sub, I am slowly but surely trying to get my act together financially. I had no guidance growing up, and even now my only real guidance is this sub and whatever research I can do. It hasn't been easy to figure it out and I constantly feel like I am drowning. I need to refinance my student loans and apply for an apartment this year. I want to do that with the best credit score possible. I paid off all of my credit debt about six months ago, and don't carry balances on my cards. However, my father put me on his credit card when I was in college, and he carries a balance on that. I want to take myself off of the card, but I want to make sure it won't hurt me in the long run. My stats: Credit score: 769 (Mint), 755 (CreditWise) Yearly earnings: $65,000 Loans: Student Loans: $60,000 Car Loan: $17,000 Average age of credit, with his card: 5 years, 10 months Newest credit line: 2 years, 2 months Oldest credit line: 12 years Without his card, my oldest credit line will be 8 years. 20 total credit accounts 11 open accounts 9 closed accounts 0 credit inquiries His card has a limit of $17,000 and carries about 5-7k balance every month. It is always paid on time. My cards total a credit limit of 14,450 with no balance (not including my student and car loans). Should I take myself off of my father's card? I have a similar, smaller issue with my mother's card – she gives me $6,400 in credit limit but carries a balance of about $3,000 on that card. I want to make sure that what these two cards are giving me in terms of age of credit and amount of credit isn't more beneficial than carrying the balances. Altogether, if I stay on the cards, I carry about $8,000-$10,000 in credit card debt and have a limit of $40,000. If I take myself off, I carry no credit card debt but only have a limit of $14,450. Thank you for reading this. I appreciate any advice. [link] [comments]  |
| I’m a nanny. My employer keeps saying I’m self employed? Posted: 29 Jan 2018 06:08 PM PST I am a nanny. My employer gave me a 1099 misc. I made 3140 last year. The person who hired me says I'm supposed to be doing quarterly taxes, and she says I'm self employed. However, they did not inform me of this until January 5th. I started working for her in late July Also, according to care.com and the IRS, if you pay someone more than 2k then you're employed not self employed. Well in turbo tax I chose 1099 misc and now at the end of the process it says "your self employed summary" and that I owe $440. I'm not self employed. Why is it telling me this?
Google says I need a w4. Employer said " oh don't worry I checked it over with my accountant he said I need to give you a 1099 misc" Who's right? [link] [comments]  |
| "Unicorn" pre-ipo ISOs set to expire - should I buy all, buy some, not buy? Posted: 29 Jan 2018 06:08 PM PST Hi all, throwaway account for transparency purposes. Quick rundown on my situation: 27 y/o, $105k annual income, strong credit. I have about $22k cash in the bank and investment accounts (company IRA and independent roth) with apprx $20k more (about half invested). Credit debt is currently $3k, I pay it all off monthly. I rent my apartment and don't have a car. NOW I recently left a company called DocuSign that has been labeled as a tech "unicorn." News indicates that the company is set to go public sometime this year. I accumulated ISO shares that are going to expire soon. The strike price is around $16 and I have ~1400 vested shares available to purchase. I am fairly decided on purchasing some number of them but I can't figure the amount. Should this be a no-brainer and I should purchase them all? It seems so risky staking half my net worth though I do feel that the shares will rise. Any sage advice here? Is there anyway to see what they sell for on the secondary markets? Thank you. [link] [comments]  |
| Where to start life insurance? Posted: 29 Jan 2018 07:40 PM PST Background info: 27yo Married Male with 2 kids both less than 2yo. I'm not sure where to start looking for life insurance, I hear about scams so much and I wouldn't know who to trust when looking for advisors. Are there any well known, reliable options? Or reliable comparison sites? [link] [comments]  |
| Posted: 29 Jan 2018 12:57 PM PST |
| Regretting buying into Universal Life Insurance Posted: 29 Jan 2018 04:39 PM PST Hi, I made a huge mistake and I need help on how to manage my money. I was 22 y/o (I'm 26 now) when I was urged by my brother to attend a seminar with him. It was a life insurance seminar. To cut the long story short, we bought one of their products (Life insurance worth 1M that was recommended by the agent) - BIG MISTAKE! One of the agents encouraged me to pay a large amount of money for the first couple of years which would help my money grow exponentially. She showed me the money projection and I was enthralled. So I was started paying $1000+ per month for couple of months but sometimes I would pay less. I wasn't paying any mortgage during this time so it wasn't a problem for me. However, now that I partially own a house and own a car. It's difficult for me to sustain it. Currently, I'm paying $50 which is way below the premium: $165 and the target per month is $450 Year 1: $6k Year 2: $4k Year 3: $5k Year 4: — so I basically put in $15,000 in it with a cash value of $9000+. What I remember is that I can withdraw the money after 15 yrs and if I loan it out in less than 15 years, there would be a penalty. Now, from all the things I've learned about this company, I would like to pull out. However, the wouldn't let me loan since my surrender value is $0. The surrender value will only equate to the cash value if it's already been 15 years since enrollment.Now I don't know what to do.. Should I continue to pay until 15 years and get what it's left? Or enroll to a new one, cancel out this insurance, cut the $15k loss before it grows? Or Lower the policy about $100k? Or cancel this policy and invest in mutual funds? [link] [comments]  |
| Friend says bank won’t take her boyfriend off account of which she is the primary holder Posted: 29 Jan 2018 07:23 PM PST My friend and her boyfriend have had some pretty bad problems over the last year to the point where she's been heavily depressed, borderline suicidal. She's tried leaving him, but he's threatened terrible things including ruining her credit if she ever tried to leave. She added him to her bank account and when she asked the bank to remove him, they said they weren't able to do so and now their finances are connected. She made it sound like the bank could not take him off of the account, nor close it without his consent. I mentioned she should open another account and start putting her money only into that one, but he could still overdraft the current account. Do bank accounts really work this way? What can she do? [link] [comments]  |
| Claiming repaid tuition reimbursement? Posted: 29 Jan 2018 07:08 PM PST My previous employer made me repay about $2,500 of tuition reimbursement (it was right in our contract). My questions is: is there any way to claim this on my taxes or is it just considered a wash because it was me paying them back for paying me back? [link] [comments]  |
| You are subscribed to email updates from Personal Finance. To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google, 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States | |
No comments:
Post a Comment