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Filling out tax forms!
Topic Started: Apr 3 2004, 04:04 PM (166 Views)
Dandandat
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Time to put something here
Don’t you just love it when you get money back! I finally got around to filling out my taxes today, and boy was I happy to see that I wouldn’t have to pay anymore, and that in fact I was going to be getting some of the withhold back.
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doctortobe
Speak softly, and carry a 57 megaton stick!
Here is a question about taxes, my income for the year is usually only four digits. At what point should I start filing tax returns? Would I owe anything with an income this low? Would I get money back? The whole tax process is very confusing to me (obviously it must be simple for everybody else ;) )
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Dandandat
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Time to put something here
my wife had an income this year of only $4,500 and because one of he employers only took $7.11 out in federal taxes she had to pay $80.

you should file to get money back, that is if your employers with held.
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gdog243
Rear Admiral
Well, this year is my first time filling out a tax return, and I am thrilled that the US government will be paying me something. I can't wait till that check comes in the mail.
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doctortobe
Speak softly, and carry a 57 megaton stick!
Dandandat
Apr 3 2004, 04:33 PM
my wife had an income this year of only $4,500 and because one of he employers only took $7.11 out in federal taxes she had to pay $80.

you should file to get money back, that is if your employers with held.

All my income is either from scholarships or from stipends from the Army. I don't think that they took anything away. I also got a rather large (for me) inheritance from a deceased great-aunt. I believe that the death tax has been repealed though, right?
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Dandandat
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Time to put something here
doctortobe
Apr 3 2004, 05:45 PM
Dandandat
Apr 3 2004, 04:33 PM
my wife had an income this year of only $4,500 and because one of he employers only took $7.11 out in federal taxes she had to pay $80.

you should file to get money back, that is if your employers with held.

All my income is either from scholarships or from stipends from the Army. I don't think that they took anything away. I also got a rather large (for me) inheritance from a deceased great-aunt. I believe that the death tax has been repealed though, right?

Acording to the federal instructions you should file if you made more then 7,800, or to get back any withheld taxes. So if they didn’t withhold anything from you I would have to say you should not file.

As for your grandmother’s inheritance, If it was more then 7,800 you may want to file. I say this because I am not sure if inheritance is considered a part of income as there is no line for it on the 1040 (federal tax form). But they do have an “other” line which may be for things like this. I’m sure one of the older members on this board knows the facts on this though.

Is inheritance considered income … Any one?
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Wichita
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The Adminstrator wRench
My father died this year so I got an inheritance from that. It was 5 figures, but it was not enough for me to have to pay taxes on it. (That's the official legal opinion from a lawyer and a CPA.)

My brother and sister who were executors did have to pay taxes on their executor fee because it is considered income earned and not inheritance. I also received a sheet from the lawyer stating his fees (or my share of them) because I was able to deduct those this year. You probably didn't make enough for that to matter, but you can check on it.
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Swidden
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Adm. Gadfly-at-large; Provisional wRench-fly at large
gdog243
Apr 3 2004, 01:41 PM
Well, this year is my first time filling out a tax return, and I am thrilled that the US government will be paying me something. I can't wait till that check comes in the mail.

The US government isn't paying you anything. They're just giving you your money back, that you let them borrow and not pay you interest on... :P :angel: :whistle:
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Dana
Ensign
Simply put, if you had income that was reported by another party, you should file taxes whether or not you plan on getting a refund. The amount of federal withholdings depends on your W-4 status, which you can change at any time. The more exemptions, the less they take out: for example, if you claim single and 1 exemption and your weekly income is between 187 and 549, your federal w/h will be somewhere in the neighborhood of $13.65 plus 15% of anything in excess of 187, a 6.5% medicare deduction, and a 1.2% Social Security deduction. Your state, if they have state taxes there, will then tax a percentage of what's left after your standard withholdings are taken out (in SC, it's 7%). However, if you claim married with 9 exemptions (the maximum that you can do), your federal withholdings will be much less. The IRS doesnt just count income that you *earned* as your only income. There's also income from dividends, interest, sale proceeds, capital gains, etc. It depends on how the person paying you the money presents it (the end of the year statement) to you, whether it be in form W2 or 1099-(fill in the blank). Yes you can write off legal fees, you can also write off tax preparation fees, job search expenses, unreimbursed mileage ($.36/mi for 2003, going up to 37.5 cents in 2004) and other work expenses. As far as owing anything with an income that low, it would really depend on your filing status compared to your standard deduction or itemized deductions as well as what the federal government took out in taxes. However, if you want to reduce your taxable income, there's always the option of putting money into an IRA and use that on your 2003 return. You can do the IRA thing up until Aug 15, 2004 and still count it on your '03 return. If you see that in the end, you have to pay in, I'd still file if I were you. The IRS can tack on some rather ugly penalties. And yes, inheritance and cashed-in insurance policies count as income. If you need help with your taxes, I do this crap for a living. :geek:
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doctortobe
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:huh:
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Dandandat
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Time to put something here
Dana
Apr 6 2004, 12:30 AM
The more exemptions, the less they take out: for example, if you claim single and 1 exemption and your weekly income is between 187 and 549, your federal w/h will be somewhere in the neighborhood of $13.65 plus 15% of anything in excess of 187, a 6.5% medicare deduction, and a 1.2% Social Security deduction. Your state, if they have state taxes there, will then tax a percentage of what's left after your standard withholdings are taken out (in SC, it's 7%). However, if you claim married with 9 exemptions (the maximum that you can do), your federal withholdings will be much less.

I always claim Zero exemptions. I Rather they take more money out pay cheek by pay cheek, then to be slammed at the in April.
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Admiralbill_gomec
UberAdmiral
Well, now that I'm a sole proprietor, I pay money once a quarter. Actually, my taxes were done a few weeks ago; I simply have to write them a (huge) check. This will be done next Wednesday, and mailed on the same day. I want to be sure to get the check off, and the government is less likely to audit you if you file before April 15th!

I don't understand why anyone would want to get money back from the government, unless it is in the form of a tax cut. Here's the reasoning (I got this from an Economics prof at Annapolis 25-odd years ago, and it always stuck):

Why give the federal government an interest-free loan on YOUR money for a full year?

I know of people who count on getting back a refund as a way to balance their budgets. Their logic is, "well someone has to hold it for me!" I don't get that. Wouldn't you rather have the money to use, whether spent or saved or invested, over the course of a full year? I know someone who is getting back $3000 in a tax refund this year. Think about it, that's nearly $60 a week that this person does not have. It takes a little discipline, but it is easy to do.

I've always owed, whether just a little while I was salaried, or a lot now that I consult. This way I have my own money working for me year-round. If I have the money I owe the IRS ahead of time, I usually put it in a 90 day CD. I only get about 1.3% on it, but I take what's left out of the CD and put it in my IRA. I haven't done that this quarter or last, due to the house, but I will do that come October 15th.

(Love to spend money, hate to waste it!)
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Dandandat
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Time to put something here
I guess you can chalk it up to the fact that I have not yet fully immersed my self in the idea of "having my money work for me" the last few years are the only in my life time that I have had money to use in that way, and I am now just becoming stable enough not to worry about money month by month. Further I am still trying to figure out how the system works.
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Dandandat
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Time to put something here
Ok Dana I have a question for you (or any one who knows the answer). What if I made a mistake on my wifes tax return - what should I do about it?
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