[OT] I'm In Shock!

jmcquown wrote:

I had it "rolled over" into an IRA when I lost my job a year ago.
Again, I paid into that fund with my own hard-earned money; it
came
out of my paycheck. It's *my* money. I have no problem paying
taxes on it. But you should be able to use it when needed without
being hit with a double-whammy called a "penalty" for early
withdrawal *after* electing to pay the taxes on it up front when
you
need to use some of it.

Jill

But then it becomes a savings account and not an IRA.

That's silly. If I'd rolled the entire thing into my savings account
it
wouldn't be held in mutual funds and wouldn't be tax-free until I
decide to
withdraw from it. I have a savings account; they are two totally
different
things.

You misread what I said. I know they are two totally different things.
The point is - if an account holds no penalty it is basically a
savings or investment account. The point of the institutions
forming/offering 401Ks is that they have the benefit of knowing you
can't withdraw the money early. *That* caveat is one of the parameters
that makes a 401K a 401K - it is LONG TERM investement account. If
you want access to the money without penalty, then it shouldn't be
placed in a 401K.



penalty is there - so that the money is somewhat insured for the
investemt group that holds the IRA. It's a payoff - you generally
get
better returns and tax bennies on an IRA in exchange for
"promising"
not to withdraw the money early - and the penalty is part of that
promise.

The Penalty is for the IRS, not the IRA.

Correct, but the penalty benefits the account holder (institution) - it
(the penalty) is an incentive for long-term investment by the investor.


Institutions get tax benefits for maintaining IRAs, as well.

The mutual fund stockholders could
care less what you do with your shares in said fund.

Wanna bet? Investment institutions have guidelines you have to follow
in selling/devesting of all sorts of vehicles. Some are more lenient
than others.

Consult your tax
advisor.

No need to get snippy.

-L.

I apologize. That was kind of over the top. I'm not ****ed of at you. But
its April 14th, I do taxes and I'm kind of steamed at the whole world.

Any so called tax preparer that would tell you such a thing however should
be tarred and feathered. You could get into so much trouble relying on that
kind of advice. And I didn't want to leave it unchallenged here and have
anyone else believe it to be true.

Jo
"Jo Firey" wrote in message
...

"CatNipped" wrote in message
...
"Jo Firey" wrote in message
...

"CatNipped" wrote in message
...

Our own company - yes and no. I work for a company but I do web
architecture on the side. That was yet another reason we got hit so
hard this year - a company filed a tax form on me when they really
didn't have to and *I* had to pay extra for it to the IRS! Again,
SHEESH!!!


Sorry you don't get to gripe on this one. You are supposed to pay taxes
on all the money you receive for work you do. Whether the
person/company files a 1099 form or not. Not reporting what you receive
is cheating on your taxes. Sorry.

Oh, no - I didn't mean I didn't want to pay taxes I really owe, but if
you make less than $500.00 on a job the person paying you does not have
to submit that tax form and you *legally* don't have to pay taxes. At
least that's what the (admittedly not too informed) tax rep at H&R Block
told me. She said that since they *did* turn in the form I had to pay the
taxes (or some other penalty or fee).

Sorry to burst your bubble. But the hell you don't.. Everyone is
required to pay tax on ALL their income. If anyone at HR Blockheads told
you otherwise they should be reported to management (and the IRS)
immediately.

Jo

(I've been a CPA and Tax Specialist for thirty years)

Jo Firey wrote:
I apologize. That was kind of over the top. I'm not ****ed of at
you. But
its April 14th, I do taxes and I'm kind of steamed at the whole
world.

Any so called tax preparer that would tell you such a thing however
should
be tarred and feathered. You could get into so much trouble relying
on that
kind of advice. And I didn't want to leave it unchallenged here and
have
anyone else believe it to be true.

Jo

Isn't there some "rule of thumb" that waiters have to use to claim
tips, though? A certain percentage of their receipts, or something?
I'm just curious because my sister mentioned this the other day - I had
never heard of it.

-L.

Karen wrote:
They always look at me and say you need a spouse. Or a house. And
some
children.

Sure made a *heck* of a lot of difference for us. Pluse we got an
adoption tax credit this year. The gov't is *way* sprog-centered.

-L.

"L. (usenetlyn)" wrote in message
oups.com...

Jo Firey wrote:
I apologize. That was kind of over the top. I'm not ****ed of at
you. But
its April 14th, I do taxes and I'm kind of steamed at the whole
world.

Any so called tax preparer that would tell you such a thing however
should
be tarred and feathered. You could get into so much trouble relying
on that
kind of advice. And I didn't want to leave it unchallenged here and
have
anyone else believe it to be true.

Jo

Isn't there some "rule of thumb" that waiters have to use to claim
tips, though? A certain percentage of their receipts, or something?
I'm just curious because my sister mentioned this the other day - I had
never heard of it.

-L.


No. They are supposed to keep track of and pay taxes on the actual tips
they receive. And are supposed to report them to their employer as well so
the proper taxes can be withheld and paid.

Their employers - if they have over a certain number of employees - are
supposed to keep track of sales by employee and report a percentage of that
(I think its either 7 1/2 or 8 1/2 percent) on the employees W-2. Just so
the IRS gets some idea of the least they should be paying taxes on.

Kind of a notice that the employees get tips and most likely got at the very
least that much. Many waitpersons just go ahead and use that figure as
income. But if they got twice that amount they owe tax on twice that
amount.

Here is the kicker. Then I have to get back to work. If the IRS comes
after someone, and says they didn't report all their income. The IRS can
come up with a number and they don't have to prove it. The taxpayer
actually has to prove they are wrong. And it isn't easy to prove a
negative. Of course this doesn't happen very often, but it does happen.
And if the IRS can show you made deposits into the bank you can't account
for, or spent money you can't account for you are in big trouble.
Essentially they get to guess, and they are known to guess high. If they
can prove you cheated a little it is almost impossible for you to prove you
didn't cheat a lot.

Jo

Oh, no - I didn't mean I didn't want to pay taxes I really owe, but
if you
make less than $500.00 on a job the person paying you does not have
to
submit that tax form and you *legally* don't have to pay taxes.

Let me get this straight. If you're paid under contract labor law, and
your income for that job is less than $500, you don't have to pay taxes
on it?
If you have several clients, but each individual job paid less than
$500, you don't have to report any of it?
Now I"m really confused.
I didn't get a 1099 for one of my oil/gas lease bonuses. I thought I
was sailing in the wind, till the tax guy said, that's no excuse. You
still have to report it. But I guess what you're talkinga bout applies
to earned money specifically from doing work for someone.

Sherry

In OUR eyes, certainly, Mary. But I was talking about reasoning with
the IRS. =o) Would they TRULY understand how demanding one pussycat can
be?

Melissa

wrote in message
ups.com...

Oh, no - I didn't mean I didn't want to pay taxes I really owe, but
if you
make less than $500.00 on a job the person paying you does not have
to
submit that tax form and you *legally* don't have to pay taxes.

Let me get this straight. If you're paid under contract labor law, and
your income for that job is less than $500, you don't have to pay taxes
on it?
If you have several clients, but each individual job paid less than
$500, you don't have to report any of it?
Now I"m really confused.
I didn't get a 1099 for one of my oil/gas lease bonuses. I thought I
was sailing in the wind, till the tax guy said, that's no excuse. You
still have to report it. But I guess what you're talkinga bout applies
to earned money specifically from doing work for someone.

Sherry


She got some bad advice. It's taxable. Including Self Employment tax.

Jo

"Jo Firey" wrote in message
...
I apologize. That was kind of over the top. I'm not ****ed of at you.
But
its April 14th, I do taxes and I'm kind of steamed at the whole world.

Any so called tax preparer that would tell you such a thing however should
be tarred and feathered. You could get into so much trouble relying on
that
kind of advice. And I didn't want to leave it unchallenged here and have
anyone else believe it to be true.

No problem - I didn't take it as you going off on me, I understand. In
fact, I filled out the H&R Block survey (that then send you the day after
you've been there) and I let them know just how bad the preparer was (and
lots of other things I haven't even related here)!

Hugs,

CatNipped

Jo
"Jo Firey" wrote in message
...

"CatNipped" wrote in message
...
"Jo Firey" wrote in message
...

"CatNipped" wrote in message
...

Our own company - yes and no. I work for a company but I do web
architecture on the side. That was yet another reason we got hit so
hard this year - a company filed a tax form on me when they really
didn't have to and *I* had to pay extra for it to the IRS! Again,
SHEESH!!!


Sorry you don't get to gripe on this one. You are supposed to pay
taxes
on all the money you receive for work you do. Whether the
person/company files a 1099 form or not. Not reporting what you
receive
is cheating on your taxes. Sorry.

Oh, no - I didn't mean I didn't want to pay taxes I really owe, but if
you make less than $500.00 on a job the person paying you does not have
to submit that tax form and you *legally* don't have to pay taxes. At
least that's what the (admittedly not too informed) tax rep at H&R
Block
told me. She said that since they *did* turn in the form I had to pay
the
taxes (or some other penalty or fee).

Sorry to burst your bubble. But the hell you don't.. Everyone is
required to pay tax on ALL their income. If anyone at HR Blockheads
told
you otherwise they should be reported to management (and the IRS)
immediately.

Jo

(I've been a CPA and Tax Specialist for thirty years)

Jo Firey wrote:
"CatNipped" wrote in message
...
"Jo Firey" wrote in message
...

"CatNipped" wrote in message
...

Our own company - yes and no. I work for a company but I do web
architecture on the side. That was yet another reason we got hit
so hard this year - a company filed a tax form on me when they
really didn't have to and *I* had to pay extra for it to the IRS!
Again, SHEESH!!!


Sorry you don't get to gripe on this one. You are supposed to pay
taxes on all the money you receive for work you do. Whether the
person/company files a 1099 form or not. Not reporting what you
receive is cheating on your taxes. Sorry.

Oh, no - I didn't mean I didn't want to pay taxes I really owe, but
if you make less than $500.00 on a job the person paying you does
not have to submit that tax form and you *legally* don't have to pay
taxes. At least that's what the (admittedly not too informed) tax
rep at H&R Block told me. She said that since they *did* turn in the
form I had to pay the taxes (or some other penalty or fee).

Sorry to burst your bubble. But the hell you don't.

Okay, Jo... so why is it companies do not have to report "for hire" income
with a 1099 for anyone earning $500.00 or less? When I worked for my last
job we'd crank out 1099's to report doctor's fees paid for Work Comp
patients but ONLY if the fees totalled $500.00 or more. The Doc got a copy,
the IRS got a copy. The doc was obligated to report it knowing we'd already
done so. But anything under that was not reported and how would the IRS
know?

Jill