It Could Always Be Worse

[UpstateNYUPSer(Ret)]

I have been having to use the standard deduction for years. I would have to disagree with that argument. There has to be something out there for people with no home interest and a minimum amount of deductions. For someone with no job and 4 kids to get a 4k tax refund is total garbage. Get ride of earned income.

Suppose your house is paid off and you are not a very charitable person. Your standard deduction may be several thousand more than your actual deductions, giving you an unearned income credit of several thousand dollars.

 

[UpstateNYUPSer(Ret)]

Benefits are part of our compensation package. Even FedEx defines it as so. Sorry but nothing I've earned is FREE.

You've earned the match?

 

[UpstateNYUPSer(Ret)]

Our W2 subtracts your 401k contribution in the proper columns and it is never entered on our year end tax returns. The portable is not on any pay stub or tax forms.

Your 401k contributions absolutely do show up on your year end tax returns.

 

[vantexan]

Suppose your house is paid off and you are not a very charitable person. Your standard deduction may be several thousand more than your actual deductions, giving you an unearned income credit of several thousand dollars.

Doesn't the standard deduction reduce the amount of your gross that's taxed while an unearned income credit actually reduces your taxes dollar for dollar?

 

[UpstateNYUPSer(Ret)]

Doesn't the standard deduction reduce the amount of your gross that's taxed while an unearned income credit actually reduces your taxes dollar for dollar?

I have never taken the EIC so I really don't know. My only point was that if you only $2K in deductions and choose to take the $4K standard deduction you have received a credit for the $2K in income that you did not earn.

 

[MAKAVELI]

You've earned the match?

Yes.

 

[Oldfart]

Your 401k contributions absolutely do show up on your year end tax returns.

What line of the 1040? I must have missed that.

 

[Oldfart]

Suppose your house is paid off and you are not a very charitable person. Your standard deduction may be several thousand more than your actual deductions, giving you an unearned income credit of several thousand dollars.

You can spin it anyway you want. You also get a deduction for each kid. If in reality, that kid doesn't live at home and you don't support him financially like a parent should, you still get to take that deduction. That happens a lot in divorce cases when the settlement decides who gets to take the deductions but the financial support isn't what it should be.

 

[Oldfart]

Yes.

So those that are not enrolled in the 401K get the match as well? Did they not work as well? The match is a benefit for being enrolled in the 401K. It is not compensation as defined by the IRS. They have the ultimate say in any income and tax matters.

 

[bacha29]

I have never taken the EIC so I really don't know. My only point was that if you only $2K in deductions and choose to take the $4K standard deduction you have received a credit for the $2K in income that you did not earn.

Look I'm not a CPA but i worked for H&R Block for 10 years but that was years ago and I wanted to go back if not for the upcoming joint replacement. As I said earlier you can take as an adjustment to your net taxable income the higher of the standard deduction or the itemized deductions on Schedule A. today the numbers of deductions on Sch A are a small fraction of what there used to be. They discovered that it was far more cost efficient to give a larger standard deduction with reduced deductions on SchA than to have to audit all off those little deductions that used to be on SchA. If a taxpayers return is kicked out for an audit they first will look to see if there is cause for an in person audit and the potential to recover at least $1000 in additional tax. Most of the time they will send out a correspondence audit notifying the TP of a proposed change which the TP can agree to. or dispute.

 

[bacha29]

You can spin it anyway you want. You also get a deduction for each kid. If in reality, that kid doesn't live at home and you don't support him financially like a parent should, you still get to take that deduction. That happens a lot in divorce cases when the settlement decides who gets to take the deductions but the financial support isn't what it should be.

There are however rules regarding residence, age and economic support but in general the IRS doesn't care who claims the exemption as long as it is not claimed by more than one person.

 

[UpstateNYUPSer(Ret)]

You can spin it anyway you want. You also get a deduction for each kid. If in reality, that kid doesn't live at home and you don't support him financially like a parent should, you still get to take that deduction. That happens a lot in divorce cases when the settlement decides who gets to take the deductions but the financial support isn't what it should be.

Have you gone through a divorce? Part of the process is determining who gets to claim which kid. Hint: take the youngest one.

 

[MAKAVELI]

So those that are not enrolled in the 401K get the match as well? Did they not work as well? The match is a benefit for being enrolled in the 401K. It is not compensation as defined by the IRS. They have the ultimate say in any income and tax matters.

Everyone is automatically enrolled. Ttku

 

[UpstateNYUPSer(Ret)]

There are however rules regarding residence, age and economic support but in general the IRS doesn't care who claims the exemption as long as it is not claimed by more than one person.

Oh, they care, especially if both parents try to claim the same kid, even if by mistake.

 

[UpstateNYUPSer(Ret)]

Everyone is automatically enrolled. Ttku

FedEx or UPS?

 

[MAKAVELI]

FedEx or UPS?

What thread are you posting in? Ttku

 

[UpstateNYUPSer(Ret)]

Look I'm not a CPA but i worked for H&R Block for 10 years but that was years ago and I wanted to go back if not for the upcoming joint replacement. As I said earlier you can take as an adjustment to your net taxable income the higher of the standard deduction or the itemized deductions on Schedule A. today the numbers of deductions on Sch A are a small fraction of what there used to be. They discovered that it was far more cost efficient to give a larger standard deduction with reduced deductions on SchA than to have to audit all off those little deductions that used to be on SchA. If a taxpayers return is kicked out for an audit they first will look to see if there is cause for an in person audit and the potential to recover at least $1000 in additional tax. Most of the time they will send out a correspondence audit notifying the TP of a proposed change which the TP can agree to. or dispute.

I did my son's taxes and mistakenly claimed his graduate school tuition on his state return. They sent me the notice with a bill for the credit and interest. I sent them a check.

 

[bacha29]

Oh, they care, especially if both parents try to claim the same kid, even if by mistake.

That's what I said they don't care who takes the exemption UNLESS TWO PEOPLE TRY TO CLAIM THE SAME EXEMPTION Most times the divorce degree decides who gets to claim the exemption . They're cross checking the SSN's all the time and that's how How returns get bounced.

 

[UpstateNYUPSer(Ret)]

The problem starts when the non-custodial tries to pull a fast one, thinking he is screwing his ex when in reality he is screwing himself.

 

[MAKAVELI]

So those that are not enrolled in the 401K get the match as well? Did they not work as well? The match is a benefit for being enrolled in the 401K. It is not compensation as defined by the IRS. They have the ultimate say in any income and tax matters.

It's called deferred compensation. That's why you pay taxes on withdrawals. Ttku