Darin wrote:
>Moose,
> I was planning to make an appointment to talk to an accountant about this,
>but it sounds like TurboTax makes it pretty simple.
>
Yup, my mom paid a CPA over $500 to do her taxes last year. I pay about
$20-30, depending on the particlular rebates that year.
>Do you know how much self employment income one can earn before you have to
>pay quarterly?
>
>
It's not quite that simpleYou actually have to pay estimated taxes when
withholding didn't pay a high enough % of the prior year's income taxes
and that will again be the case in the current year. I think the % is 85
or 90%. Anyway, the taxes on self employment income are combined with
taxes on other income to determine this. So if withholding were $1000
combined on employment income and self employment income and taxes due
$1050, there would be no quarterly tax due the next year. If withholding
in the same scenario was $850, then est. payments would be required in
the next year to avoid penalties if withholding plus est payments were
befow the crucial %.
However, if you know in the subsequent year that withoholding will
cover, either because you increase your withholding or have lower self
employment income, then you wouldn't need to pay ests. The whole thing
has to do with whether you pay during the year at least 85% (or is it
90%, I don't remember) of the prior year's taxes, you pay no penalties
for underpayment.
It's all just way too complicated. That's why I use TurboTax. I just
enter legitimate expenses (and you can get help on what those are in teh
program help) and let it figure out what's allowed this year and what
may go forward or back to reduce taxes in other years. The Deluxe
version (see below) includes a tax guide and all the Federal pubs you
are evre likely to need on the CDROM.
>Regarding deducting expenses, is there a limit on how much you can deduct? I
>read something on the IRS website about this, but in the end I was only more
>confused.
>
Exactly. Again why I don't figure it out myself. I just enter legitimate
expenses (and you can get help on what those are in the program help)
and let it figure out what's allowed this year and what may go forward
or back to reduce taxes in other years. The Deluxe version (see below)
includes a tax guide and all the Federal pubs you are evre likely to
need on the CDROM.
>Also, can I do my state taxes with Turbotax as well, or just federal?
>
>
Yes. They sell separate State versions, but it's cheaper to buy the
Deluxe version, which includes a full rebate on downloading your State
version. Costco had it for $35 with a $10 off coupon when I bought it a
bit ago. Net cost for State and Fed of $25.
I'm sure other tax programs are good too, maybe better, but I use what I
know and have used for many years.
Moose
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