vania-janet/multiturn-rag-retrieval-data huggingface dataset:
You better consult with a tax adviser (EA or CPA) on this, my answer doesn't constitute such an advice. Basically, you're selling stuff on Kickstarter. No matter how they call it (projects, pledges, rewards - all are just words), you're selling stuff. People give you money (=pledges) and in return you're giving them tangible or intangible goods (=rewards). All the rest is just PR. So you will pay taxes on all the money you get, and you will be able to deduct some of the expenses (depends on whether its a business or a hobby, the deduction may be full or limited). It doesn't matter if you use LLC or your own account from the financial/taxation point of you, but it matters legally. LLC limits your personal liability, but do get a legal advice on this issue, and whether it is at all relevant for you. If you raise funds in 2012 you pay taxes on the money in 2012. If you go into production in 2013 - you can deduct expenses in 2013. If you're classified as a hobby, you'll end up paying full taxes in 2012 and deducting nothing in 2013. Talk to a tax adviser.
"When you pay expenses on behalf of someone, you do not Debit your expense accounts.  You credit your Bank and debit the Liability.  The method that you mentioned (debit expense then credit it back to liability) is an acceptable practice, but the method is only used when you accidentially debited your expense accounts without knowing that it is for someone else (or in the case of split transactions). You need to specify ""being expense paid on behalf of someone"" when you credit the expense account."
There are a few incorrect assumptions in your question but the TL;DR version is: All, or most, of the withdrawal is taxable income that is reported on Lines 15a (total distribution) and 15b (taxable amount) of Form 1040. None of the distribution is given special treatment as Qualified Dividends or Capital Gains regardless of what happened inside the IRA, and none of the distribution is subject to the 3.8% Net Investment Income Tax that some high-income people need to compute on Form 8960. If the withdrawal is not a Qualified Distribution, it will be subject to a 10% excise tax (tax penalty on premature withdrawal). Not all contributions to Traditional IRAs are deductible from income for the year for which the contribution was made. People with high income and/or coverage by a workplace retirement plan (pension plan, 401(k) plan, 403(b) plan, etc) cannot deduct any contributions that they choose to make to a Traditional IRA. Such people can always make a contribution (subject to them having compensation (earned income such as salary or wages, self-employment income, commissions on sales, etc), but they don't get a tax deduction for it (just as contributions to Roth IRAs are not deductible). Whether it is wise to make such nondeductible contributions to a Traditional IRA is a question on which reasonable people can hold different opinions. Be that as it may, nondeductible contributions to a Traditional IRA create (or add to) what is called the basis of an IRA. They are reported to the IRS on Form 8606 which is attached to the Federal Form 1040. Note that the IRA custodian or trustee is not told that the contributions are not deductible. Earnings on the basis accumulate tax-deferred within the IRA just as do the earnings on the deductible contributions. Now, when you make a withdrawal from your Traditional IRA, no matter which of your various IRA accounts you take the money from, part of the money is deemed to be taken from the basis (and is not subject to income tax) while the rest is pure taxable income.
@Pete B.'s answer is good, but there's an important note to consider for tax purposes.  It's too large for a comment, so I'm adding it as an answer. And that is: you cannot claim the property as a rental property under certain conditions.  This affects things like claiming mortgage interest (which you don't have), and depreciation in value (which a rental is allowed). See IRS topic 415 for details, but I've included an important excerpt below with emphasis added: If you rent a dwelling unit to others that you also use as a residence, limitations may apply to the rental expenses you can deduct. You're considered to use a dwelling unit as a residence if you use it for personal purposes during the tax year for more than the greater of:  ...   A day of personal use of a dwelling unit is any day that it's used by: Talk to a tax accountant to better understand the ramifications of this, but it's worth noting that you can't just rent it to her for a paltry sum and be able to take tax advantages from this arrangement.
"Donate buttons are meaningless with regards to taxes. This is payment for something you provided, and you cannot claim that you've received a gift. Any money you receive in this way is payment for your software. Remember, for gifts - no consideration should have been provided to the donor. Anything for which a consideration was provided - cannot be a gift. In your case the consideration is the software, and it's value is the amount you were paid. Since every person can decide how much to pay you on his own - any payment is for the software, not a gift. Any money you get is taxable to you, and you cannot claim it as ""gifts"" without exposing yourself to risks of making fraudulent claims. Consult a licensed tax adviser (EA/CPA licensed in your State) for a qualified tax advice."
"In general, you are allowed to deduct up to $50/month per student (see page 4), but only if you aren't reimbursed. In your case, since you are receiving a stipend, the full $2000 will be treated as taxable income. But the question of ""is it worth it"" really depends on how much you will actually spend (and also what you'll get from the experience). Suppose you actually spend $1000/month to host them, and if your combined tax rate is 35%, you'll pay $700 in additional taxes each month, but you'll still profit $300 each month. If your primary motivation for hosting students is to make a profit, you could consider creating a business out of it. If you do that you will be able to deduct all of your legitimate business expenses which, in the above example, would be $1000/month. Keeping with that example, you would now pay taxes on $1000 instead of $2000, which would be $350, meaning your profit would now be $650/month. (Increasing your profit by $350/month.) You will only need to keep spending records if you plan to go the business route. My advice: assume you won't be going the business route, and then figure out what your break even point is based on your tax rate (Fed+state+FICA). The formula is: Max you can spend per month without losing money = 2000 - (2000 * T) e.g. if T = 35%, the break even point is $1300. Side note: My family hosted 5 students in 5 years and it was always a fantastic experience. But it is also a very big commitment. Teenagers eat a lot, and they drive cars, and go on dates, and play sports, and need help with their homework (especially English papers), and they don't seem to like bed times or curfews. IMHO it's totally worth it, even without the stipend..."
If the income is more than the value on the 1099-MISC - then yes. Depending on how long you've held the car, the difference would be short term/long term capital gain. You cannot deduct loss, though, since it is a personal property and not investment.
No not deductible. But - If you work more than one job, you run the risk of having too much SS withheld. Each employer doesn't know what the others pays you. Tax time reconciles this.  And much thanks to Dilip for the following clarification - Not only does each employer not know what the others pays you, but even if you tell him, he will not care. He is required to withhold Social Security tax on the wages he pays you (and send in an equal amount as his contribution) regardless of what anyone else pays you. If the sum of your taxable wages from all employers exceed the maximum wages subject to Social Security, the excess withholding is credited towards the income tax due (and thus reduces the amount to be paid or increases the refund you are owed) but the employer's (excess) contribution that he sent in is not returned to him..... Also, there is no such things as excess Medicare tax having been withheld because there is no maximum wage beyond which Medicare tax does not apply.
I found the answer I was looking for. Even though I don't have any capital gains to offset, I can deduct up to $3,000 of that loss against other kinds of income, including salary.
"I'm being taxed at a 40% rate, then I can give $500,000 to charity, write it off, and save $200,000 on my taxes. That's a net loss of $300,000. I may have paid less taxes, but it cost me 300 grand. Your logic is correct. However, here's another way to think about it. Suppose you are being taxed at a 40% rate. You wish to purchase $500,000 worth of diamonds.  How much do you have to make in income to do so?  You need to make $833,333 in income, pay 40% of that ($333,333) in taxes, and then spend the $500,000 on the diamonds.  But to spend that $500,000 on a charitable donation, you only need to make an income of $500,000, taxed at a rate of 0%, because donations to charity count against your taxable income. Or, yet another way to think about it, is that if you make $833,333 in income, you can spend it on $500,000 worth of diamonds, or $833,333 worth of charitable contributions; effectively you get to purchase $333,333 worth of charitable contributions ""for free"" over the equivalent purchase that is not a charitable donation."
No, absolutely not.  Income tax rates are marginal.  The tax bracket's higher tax rate only applies to extra dollars over the threshold, not to dollars below it.  The normal income tax does not have any cliffs where one extra dollar of income will cost more than one dollar in extra taxes. Moreover, you are ignoring the personal exemption and standard deduction.  A gross salary of $72,000 is not the same as taxable income of $72,000.  The deduction will generally be $12,200 and the exemptions will be $3,900 for you, your spouse, and any kids.  So married-filing-jointly with the standard deduction will get an automatic $20,000 off of adjusted gross income when counting taxable income.  So the appropriate taxable income is actually going to be more like $52,000. Note that getting your compensation package reshuffled may result in different tax treatment.  But simply taking a smaller salary (rather than taking some compensation as stock options, health insurance, or fringe benefits), is not a money-saving move.  Never do it.
"From Intuit: ""Yes, but there are limits. Losses on your investments are first used to offset capital gains of the same type. So short-term losses are first deducted against short-term gains, and long-term losses are deducted against long-term gains. Net losses of either type can then be deducted against the other kind of gain."" ""If you have an overall net capital loss for the year, you can deduct up to $3,000 of that loss against other kinds of income, including your salary, for example, and interest income. Any excess net capital loss can be carried over to subsequent years to be deducted against capital gains and against up to $3,000 of other kinds of income."" So in your case, take the loss now if you have short term gains.  Also take it if you want to take a deduction on your salary (but this maxes at 3k, but you can keep using an additional 3k each year into the future until its all used up). There isn't really an advantage to a long term loss right now (since long term rates are LOWER than short term rates)."
That's not especially high income, and while I can't speak for Canadians,  most of us south of the border just pay the tax. There are tax-advantged retirement savings plans, and charitable donations are often offset by a tax credit, and there are some tax incentives for mortgages, and so on.. but generally the right answer is to just accept that the income tax money was never yours to begin with.
Yes, you may make non-deductible contributions to an IRA. The main benefit of a non-deductible IRA is tax-deferred earnings. If the investment pays out dividends, they will be kept in the IRA (whether you take them in cash and put them in a Cash Management Account, or you automatically reinvest them). You do not get taxed on these earnings until you withdraw from the IRA during retirement. If your income at that time is significantly lower than your income while you're working, you will be in a lower tax bracket (unless tax rates change drastically between now and then), so the taxes you pay on these earnings will be lower than if you'd invested outside the IRA and paid taxes along the way. You also get the benefit of compounding of the tax-deferred earnings. There's one caveat -- when you withdraw from the IRA, all the growth is treated as ordinary income. Even if some of it is capital gains, it will be taxed at your ordinary income rate, not your capital gains rate. So this is most beneficial for investments that produce dividends.  If you have a mix of deductible and non-deductible contributions to your IRA, the tax on the principle portion of your withdrawals is pro-rated based on the ratio of deductible to total contributions. This ensures that you eventually get taxed for the deductible portion (it's not really tax-free, it's tax-deferred), but don't get taxed twice for the non-deductible portion. Another option, if your 401(k) plan allows it, is to make after-tax contributions to the 401(k). At the end of the year, you can make an in-service distribution of these contributions and their earnings from the 401(k) to a Roth Conversion IRA. This allows you to contribute to a Roth IRA even if you're above the income limit for normal Roth IRA contributions. You can also do this even if you're also making non-deductible contributions to your regular IRA.
My basic rule of thumb is that if the the bill come from a government office of taxation, and that if you fail to pay the amount they can put a tax lien on the property it is a tax. for you the complication is in Pub530: Assessments for local benefits. You cannot deduct amounts you pay for local benefits that tend to increase the value of your property. Local benefits include the construction of streets, sidewalks, or water and sewer systems. You must add these amounts to the basis of your property. You can, however, deduct assessments (or taxes) for local benefits if they are for maintenance, repair, or interest charges related to those benefits. An example is a charge to repair an existing sidewalk and any interest included in that charge. If only a part of the assessment is for maintenance, repair, or interest charges, you must be able to show the amount of that part to claim the deduction. If you cannot show what part of the assessment is for maintenance, repair, or interest charges, you cannot deduct any of it. An assessment for a local benefit may be listed as an item in your real estate tax bill. If so, use the rules in this section to find how much of it, if any, you can deduct. I have never seen a tax bill that said this amount is for new streets, and the rest i for things the IRS says you can deduct. The issue is that if the Center City tax bill is a separate line or a separate bill then does it count. I would go back to the first line of the quote from Pub 530: You cannot deduct amounts you pay for local benefits that tend to increase the value of your property. Then I would look at the quote from the CCD web site: The Center City District (CCD) is a business improvement district. Our mission is to keep Philadelphia's downtown, called Center City, clean, safe, beautiful and fun. We provide security, cleaning and promotional services that supplement, but do not replace, basic services provided by the City of Philadelphia and the fundamental responsibilities of property owners. CCD also makes physical improvements to the downtown, installing and maintaining lighting, > signs, banners, trees and landscape elements.
It is generally best to avoid such situations. Any credits to your accounts need to be explained to tax authorities whenever they enquire.  This cannot be treated as income as you did not work in exchange for the amount. It can be treated by tax authorities as GIFT. Gift upto certain amount is tax free. Beyond the amount its taxable. Gifts from close relatives has not amount limit and is tax free. Whenever the scrutiny happens, if you can convince the tax authorities that the action was more for convenience, it maybe fine.
"Yes, you can deduct up to your Adjusted Gross Income (AGI) or your contribution limit, whichever is lower. Note that this reduces your taxable income, not your taxes.  This is self-employment income, which is included as compensation for IRA purposes.   You still have to pay self-employment taxes (Social Security and Medicare) though.  You pay those before calculating AGI.  So this won't entirely shield your 1099 income from taxes, just from income taxes.   Note that if you have both W-2 and 1099-MISC income, you don't get to pick which gets ""shielded"" from taxes.  It all gets mixed together in the same bucket.  There may be additional limitations if you are covered by a retirement plan at work."
Yes. This income would be reported on schedule SE. Normally, you will not owe any tax if the amount is less than $400.  Practically, $100 in a garage sale is not why the IRS created the form SE. I wouldn't lose sleep over keeping track of small cash sales over the course of a year. However, if you have the information I'm not going to tell you not to report it.
"In a word, no. If your income is high enough to have to file a return, you have to file a return. My accountant has a nice mindset for making it more palatable. I'll paraphrase: ""Our tax system is ludicrously complicated. As a result, it is your duty as an American to seek out and take advantage of every deduction and credit available to you. If our politicians and leaders put it into the tax code, use it to your advantage."" A friend of mine got a free golf cart that way. It was a crazy combination of credits and loopholes for electric vehicles. That loophole has been closed, and some would say it's a great example of him exercising his patriotic duty."
You should ask a CPA or tax lawyer to what extent living in specific housing provided by the employer as a job requirement is exempt from taxation. You might find a nice surprise. Your tax professional can also help you to report the items properly if mis-reported. Much of this is in the article you cite in the question, but perhaps a look at some of the original sources is warranted and will show why some expert advice might be useful. I would argue that an RA who is required to police and counsel undergrads in a college dorm in exchange for a room or a flat is closer to a worker with quarters on a ship or at an oil well than a full professor who receives a rental home in a neighborhood near the university as a benefit. In the first case living at the provided premises is necessary to do the job, but in the second case it is merely a benefit of the job. The IRS Publication 15-B guidance on employer provided housing is not entirely clear, so you might want to get some additional advice: Lodging on Your Business Premises You can exclude the value of lodging you furnish to an employee from the employee's wages if it meets the following tests. It is furnished on your business premises. It is furnished for your convenience. The employee must accept it as a condition of employment. Different tests may apply to lodging furnished by educational institutions. See section 119(d) of the Internal Revenue Code for details. If you allow your employee to choose to receive additional pay instead of lodging, then the lodging, if chosen, isn’t excluded. The exclusion also doesn't apply to cash allowances for lodging. On your business premises. For this exclusion, your business premises is generally your employee's place of work. For example, if you're a household employer, then lodging furnished in your home to a household employee would be considered lodging furnished on your business premises. For special rules that apply to lodging furnished in a camp located in a foreign country, see section 119(c) of the Internal Revenue Code and its regulations. For your convenience. Whether or not you furnish lodging for your convenience as an employer depends on all the facts and circumstances.
No, you cannot write off time, period. You should price the time spent into your product. I, occasionally, work on side projects of my own and forgo the   possibility of earning direct income for that time. Income not earned is income not taxed, so there's nothing to deduct.
DAFs require a higher one-time commitment but are much simpler and more efficient after that. If you are planning to give $5000 in a single year, save it up and open a Donor Advised Fund account. A DAF is itself a charity. You donate to the DAF, and take the tax deduction for charitable contributons. Then, you tell the DAF to donate it to other charities on your behalf, or anonymously. Their concept is, you use the DAF as a ""buffer"" so you can easily make the tax-deductible donation when you need to for tax purposes, then at your leisure research charities and support them. However, I asked my DAF - most people donate and then immediately re-donate the money, leaving the fund at zero balance. My DAF doesn't mind that at all, and they charge zero fees for this. (Its expenses are paid by those of us who leave money sitting around in the DAF. Mine charges 0.6% a year. This money can be invested sort of like in a 401K, and each investment also has an expense ratio, such as 0.18% a year in my chosen index fund.) Websites like ""justgive.org"" will take any amount of your money and re-donate it to the charity you select. They deduct 3-5% for their expenses (notably paper, stamps, and the 2-3% it costs them to process your credit card)."
You have two options for deducting childcare expenses in the US. Both are discussed in Publication 503.  You can claim the Childcare Tax Credit using Form 2441, which has instructions here. First, you can enroll in a dependent care FSA.  You enroll in this through your employer; either you or your spouse can.  $5000 can be deducted pre-tax from your paycheck to pay for childcare this way.  This does not have income limits. Second, you can claim a credit based on expenses up to $3000 per child, up to two children ($6000 total), for the Child Care Tax Credit.  This is combinable with the FSA, only for the last $1000 if you have 2+ children (so $6000 total between the two).  That has income limits to claim over 20% of the credit; so if you are in the 25% bracket, you will only get to claim 20% of the total, either $200 if you have an FSA or $1200 if you do not. Both spouses must work full time or have other qualifying details (such as being a full time student) in order to qualify for the credit; see publication 503 above for more information.
This is possible.  In fact in the cases of debt settlement the collection companies typically issue a 1099 for the difference on what is owed and what is settled, making that taxable income.  So the IRS sees it as income (in the US). However, this kind of dishonesty is not conducive to building long term wealth or wealth of significant means.    As others have said this is fraud, but provided that one is truthful on the loan application, it would be impossible to prove.  How can one prove that a person has no intention of paying a loan back? Doing this once or twice may ruin your ability to receive a loan for legitimate purposes for life.
Straight line in this example should be just the $2MM per year.  I don't think the author of the problem intended you to use anything in the actual tax code like MACRS.  I think the goal of the problem is to get you to identify the value of the depreciation tax shield and how the depreciation does affect your cash flow by reducing your taxes, even though depreciation itself is not a cash event.