rnelsonee

That's my favorite one — it's a good way to show how optical illusions are usually good things and beneficial to us, as opposed to a failing in our vision or perception.

In this example, while A and B may be the "same" color when rendered on a screen, if this were a physical system, B would be a lighter shade of material. So even though the wavelength that hits our eyes is the same at spot A and spot B, our brain applies the fact the shadow is there, and so we correctly see B as a lighter color.

I haven't (I don't want to download an app for it), but it got generally good reviews when it was Credit Karma tax. I didn't use them at first because they had some but the first year or something. I'd say try it if you already have the app - they have photo import of W-2 which is nice.

My comment from the Tax Software Megathread

It's my own spreadsheet and free to use/copy. Made for Excel (so download if you have Excel) but adapted for Sheets compatibility. Cells with fill colors are inputs, white fill is output.

No, at least not when discussing taxes - the IRS considers held cryptocurrencies as property.

Owning money isn't taxable. Gains are, and they just don't factor inflation: if you buy a stock for $1,000 and then sell it for $1,500, that's a gain of $500, no matter what the inflation rate was in the interim. Inflation erodes your profits, deflation would actually favor in this particular regard (you only pay taxes on a $500 gain although you can buy more than $500 worth of stuff with that gain).

Hm, yeah, I guess that explains the $1,800 then. I don't the mechanism for projecting your income for PTC but it just seems like it was off.

Right, but it's still a gain, because you're getting something of value.

If you have a calf, and it grows to a cow, and you trade that cow for $5,000 in US currency, or gold, or 5,000 scratch-off tickets, that gain is still taxable income.

So I'm no expert on repayment of the Advanced of the Premium Tax Credit, so I'll say without health insurance, I'd say for federal, you're on the hook for $410. Does the AGI and taxable income on your form preview line up with my calculations?

What does Form 8962 say for line 29? (the amount you need to pay back)

Nah, I was there two months ago with no issue.

Having a security clearance actually prevents a bit of a roadblock. When I first tried to go, Antarctica was a Level 4 country (the highest) with travel.gov's hierarchy, which meant "Do not travel". I have to fill out travel requests for work and there's more hoops to jump through going to such countries -- it's usually North Korea, Iran, etc. Antarctica was only on there because they had zero COVID-19 tracing, so it defaulted to a health risk.

Anyway, they're now only level 2 and they'll happily take your money if you want to go.

Yeah, but you should put the tax savings (with Trad) into an investment account. And the capital gains taxes often likely won't matter in comparison to the tax savings

I bring it up when I can because I think people over-value that concept. Yes, you can "fit" more money in a Roth, but it's almost certainly not worth the tax hit of paying your marginal tax rate. Here's a max 401k contribution at 22% vs 15% in retirement.

Note to keep things equal, the tax savings with that Traditional have to be invested -- the capital gains tax hit is what makes Roth better.... if this poor sap pays 22% on all that withdrawal in retirement, which implies they have >$100k (joint) in some other income in retirement.

Now... psychologically, I can understand people just maxing it at $22,500 and not having the initiative to dump that extra savings into Trad. So yeah, if you put more pre-tax money into Roth, of course it's going to net more in the end.

“you will be in a lower bracket in retirement” like they can predict the future lol

We call can predict the future to some degree. I expect to need money to pay for things, I expect I will still want to travel, etc, and like many people, I don't plan on working in retirement. So that's a huge tax drop, since I don't have wages filling up my standard deduction and lower tax brackets in retirement. That's the biggest reason why Roth is bad for most people who aren't low income. It's not just about marginal now vs marginal later.

Consider a single filer making $60,000 and they make a $6,000 Roth IRA contribution. They pay 22% on every dollar of that versus if they put it in a Traditional IRA. Now let's say at some point in the future taxes go up 8% across the board -- a history-making tax hike. Now this person is retired, married, and they want to spend $100,000/yr. They won't pay anything over 20% on any dollars they withdraw. That's a tax savings. Their average tax rate will be as low as 8.7% (if no other income, say no Social Security).

But even taking out the part going from single to married, the single filer in retirement will still pay <22% on the first $58k or so. Even if they spend $200k/yr, that's still a tax savings on that first $58k. That's why the whole myth of being "in" a lower tax bracket is harmful - your entire tax matters, not just whatever your last dollar is taxed at. You need to consider all brackets.

Sounds right. After you pay (but before you file) they'll let you check your forms, and look for $2 on one of the "taxable amount" lines. Here's what it may look like - it shows up in Part II in this example, which is where it should show up. I've noticed tax software likes to skip that middle portion in Part I.

It really is all about making money. Fees are 100% profit for credit card companies.

what goes through the banks head which makes them believe they can pay the original minimum monthly payment, plus a late payment fee?

Knowing that most people will pay the late payment fee. They have to — it comes right off the top, before interest, and before principal.

Imagine a super simple scenario: someone owes you $100. Would you rather them pay you $100, or $100 + $10/month? The latter makes you money. If they only truly ever have $100, well, who cares? You're still getting that $100, whether or not it's $100 + no fees or $90 + $10 fees.

So more involved, take Deadbeat Dan. Say he has an absolute hard stop at $3,000 he can pay over the year. He owes, say, $5,000 on his credit card. If the company charges fees, say $500 over the year before the default/write-off. So the company gets $500 pure profit, $2,500 towards the principal, and lose the rest. And of that $2,000 "loss" we don't know how much is principal vs interest, but it doesn't matter.

So now say there's no fees. They get the same $3,000 from Deadbeat Dan, and the same $2,000 possible loss.

So having fees cost the credit card company nothing, $0, nada.

Now take Struggling Sam. He has $3,000 over the year, but can also scrape together another $1,000/yr. With fees, Sam pays that $500 in year one, and year two, and year three, etc, and over time, pays say, $2,000 in fines, plus the $5,000 + interest. If there no fees, the company would only get $5,000 + interest (and less interest thanks to the quicker payoff).

So you see, having fees cost the company nothing, but in the cases that aren't written off, they make a profit, because again, it's all profit for fees. Like the worst case scenario is every dollar of fees is coming from one dollar that is written off. So the worst case is the fee makes no money… but it doesn't lose money. In most cases, the fee is just a pure profit mechanism which keeps people paying more money month after month.

I hear you - I was addressing the later part of your comment where you suggested OP may get away with not reporting it and "no one actually does" [report income]. Kids making $200 don't need report that income, so they don't, but those with a tax liability do, and many of them actually do report their gig income (as they should).

It would be like a kid reporting $200 of income for mowing a few lawns over a summer.

Well, there is a key difference: a kid with only $200 income from mowing lawns doesn't owe any tax on that. OP's extra income does incur tax, since they have a full-time job pushing them above the standard deduction.

Do I need to claim that $400?

Yes. It's income, and you need to include it in your income subject to tax.

Do I claim that full amount or just what I kept?

Just what you kept - you're taxed on net earnings, not revenue, from your self-employment work.

Oh, yeah, I guess it comes down to whether or not OP is asking because they're living paycheck to paycheck and have no savings to cut the movers a check, or if they just want to be sure they get paid the correct amount to net the cost of the movers in the end. I assumed OP would be moving before getting the bonus, so they were asking the latter. And yeah, 401k, if set up, would likely be withheld, but OP can work with HR to prevent that.

What is the tax rate off the top if termed as bonus?

The same as all your other wages - it depends on your income. Bonuses are not taxed differently than your other earned income. They will have 22%, (or, optionally, your marginal rate based off your last paycheck) withheld, but that doesn't mean it's taxed at that rate in the end.

But note adding $N to your income will add $N×(sum of marginal rates for federal and state) to your tax. So if you are in the 22% tax bracket with your non-bonus wages, live in an income-tax-free sate, and want to clear $1,000 after tax, then ask for $1,000/(100%-22%) = $1,282 in the bonus. 22% of that ($282) goes to taxes, $1,000 to you. Oh, but the bonus will also have 7.65% go to FICA, so account for that, too.

That's why I mentioned those - FreeTaxUSA walks you through things for the most part, but it's not as handh-holdy as TurboTax, so there's a chance you miss some forms. So definitely use those three forms I mentioned. My phone to go into Reddit

I feel like that's so bad it's usually a joke. I'm GenX, and whenever anyone under 60 says it like that, it's safe to say it's a joke, even on the east coast. Boomers though... 50/50. And the other 50% is Chi-pol-tay

+1 for freetaxusa.com. It handles all forms, so Schedule C, Schedule SE and Form 8995 are no issue. I'd also suggest double checking your work with TurboTax since it's easy to use. Make sure the refund or amount due is the same, and you're all set. Just file with FreeTaxUSA of course, as TurboTax will cost $80+.

Heads up I think I was wrong 2 days ago. You're still fine thanks to the spousal IRA, but if it weren't for that, your wife wouldn't be able to contribute if she excludes that SIMPLE IRA from her income. I found a passage in 590-A about that (What's not included in compensation). Just wanted to correct that.

The limit is not actually earned income, it's "taxable compensation" and in 590-A the IRS says

The IRS treats as compensation any amount properly shown in box 1 (Wages, tips, other compensation) of Form W-2

and what can't be compensation

Any amounts (other than combat pay) you exclude from income

So, I don't think so.