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Re: What I learned in 1040 class.
Old 12-19-2005, 12:59 PM   #21
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Re: What I learned in 1040 class.

Quote:
Originally Posted by retire@40
Unless the payer can claim safe harbor under Sec 530, I don't see where filing payroll tax returns with no employees would help in not having the IRS look back the full nine years.
I think the three year limitations period would run on questioning a 941/940 return that said 0 employees as soon as that return was filed. A good argument anyway that the IRS could not question the independent contractor status if it failed to audit the 941s timely.

Section 530? I thought this applied as a safe harbor only to certain erroneous mis-characterizations of employees as independent contractors.* Whether the safe harbor applies would be irrelevant if the limitations period has run.

But then again, I could be full of it.* I haven't researched this particular issue.
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Re: What I learned in 1040 class.
Old 12-19-2005, 01:01 PM   #22
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Re: What I learned in 1040 class.

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Originally Posted by retire@40
Electronic filing catches (some) mistakes (like wrong social security numbers) early and rejects returns before they can be processed to allow you to fix those problems first.

If you file a paper return with an error (like double counting a dependent), the IRS could wait until month 35 to let you know.* At that point the paper return could cost you some penalties and interest for the 35 months.

The only part I hate about filing electronically is that it costs money.* Why

In any case, go with electronic filing if you qualify.
Maybe the answer is that electronic filing is good for catching mistakes early, but bad if you are pushing the limits of legality on your returns.

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Re: What I learned in 1040 class.
Old 12-19-2005, 01:03 PM   #23
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Re: What I learned in 1040 class.

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The only part I hate about filing electronically is that it costs money. *Why
I think that is screwy, too, that it costs money although the off the self software has been rebating the fee, but it still a hassle (and you have to mail that rebate in ). If you have a refund and request direct deposit and file a paper return, you get the money fast anyway.
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Re: What I learned in 1040 class.
Old 12-19-2005, 01:48 PM   #24
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Re: What I learned in 1040 class.

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Originally Posted by Martha
Retire@40, do you electronically file returns? At the seminar, the speaker recommended against electronic filing because the downloads to the IRS enable the IRS to cross check many things that they simply are not equiped to cross check when returned are filed manually. She also believes that a number of coding items that don't actually appear on the return are transmitted along with the return. I am thinking about not filing my own returns electronically anymore.

Your thoughts?
I have used turbo tax for many years and even though tt offers it for free, good old fashion paranoia has kept me from electronically filing my returns. Why should I make it easy for the IRS to check my return. Now if the IRS offered us a decent tax deduction to do it, I probably would take advantage of that option.

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Re: What I learned in 1040 class.
Old 12-19-2005, 01:56 PM   #25
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Re: What I learned in 1040 class.

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Originally Posted by Martha
but bad if you are pushing the limits of legality on your returns.
nice way of saying it.
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Re: What I learned in 1040 class.
Old 12-19-2005, 02:58 PM   #26
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Re: What I learned in 1040 class.

Quote:
Originally Posted by davew894
I wonder how the SSA can determine whether or not one is 'making up' income.* If a self employed person files a return and pays the tax due and the IRS doesn't return the tax paid saying this income is 'disallowed', who is the SSA to say it isn't income?* If the SSA doesn't like people generating income (and paying all applicable taxes) to reach the $4,000 threshold, they shouldn't have a threshold.*

I would really like to learn more about this.* Sounds like the feds are once again trying to use an unfair taxing system to cause regular folks undue trouble under the guise of 'fairness.'
Don't waste too much of your time on this. It's not happening as much as you think, if it's happening at all.

If you report income and pay tax on it, neither the IRS nor SS is going to force you not to report that income as nontaxable.
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Re: What I learned in 1040 class.
Old 12-19-2005, 03:43 PM   #27
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Re: What I learned in 1040 class.

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Originally Posted by retire@40
Don't waste too much of your time on this.* It's not happening as much as you think, if it's happening at all.

If you report income and pay tax on it, neither the IRS nor SS is going to force you not to report that income as nontaxable.
I agree it probably isn't happening much. But I understand that the issue is on the radar screen with the SSA. Think about it. You are a few credits short of eligibility and are no longer working. You are divorced and were married less than 10 years so you aren't covered under your spouse. Why not claim a couple of thousand bucks income from babysitting, pay the self employment tax, and get a couple of credits towards your 40 credits? The IRS won't care but the SSA might.
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Re: What I learned in 1040 class.
Old 12-19-2005, 04:09 PM   #28
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Re: What I learned in 1040 class.

I don't quite the "40 credits" thing...is it really enough to get the 40 credits? If your 40 credits are all from making $1000 per quarter for 10 years, you'll probably only get a pittance from SS anyway...right?

Isn't it more important to get 40 credits with high earnings in order to qualify for max benefits?

I've defintely got my 40 quarters...and all at max contribution (and then some)...wonder what it will do to my SS benefits if I don't get any more working quarters for the next 25 years...?
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Re: What I learned in 1040 class.
Old 12-19-2005, 04:17 PM   #29
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Re: What I learned in 1040 class.

Quote:
Originally Posted by farmerEd
...wonder what it will do to my SS benefits if I don't get any more working quarters for the next 25 years...?
We discussed that subject here:

http://early-retirement.org/forums/i...86007#msg86007

Bottom line, you'll need to go to the SS calculator on their website and plug in your numbers to estimate the impact to your individual benefits.

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Re: What I learned in 1040 class.
Old 12-19-2005, 04:19 PM   #30
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Re: What I learned in 1040 class.

You bet you want the maximum benefits.

But qualifying by having enough credits/quarters of work have a number of benefits.* Think Medicare.* Think social security disability coverage.

BTW, there is a calculator on the SSA website (http://www.ssa.gov/planners/calculators.htm) where you can find the effect of no future earnings on your future social security benefit.
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Re: What I learned in 1040 class.
Old 12-19-2005, 06:11 PM   #31
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Re: What I learned in 1040 class.

Taxes suck!

This entire thread is a living testimony to just how badly they suck.

The fact that our political system is incapable of fixing this disaster is proof that it sucks.

End of rant.
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Re: What I learned in 1040 class.
Old 12-19-2005, 07:23 PM   #32
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Re: What I learned in 1040 class.

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Originally Posted by . . . Yrs to Go
Taxes suck!

This entire thread is a living testimony to just how badly they suck.*

The fact that our political system is incapable of fixing this disaster is proof that it sucks.*

End of rant.* *
Could be. But anyone who has a wife, son, daughter, husband, next door neighbor who hasn't qualified for SS benefits should try to explain to them what a really good deal it is to qualify for minimum benefits. Can you imagine buying medical insurance in the US at age 70 without Medicare to back you up? If nothing else, your minimum benefit would qualify you for Medicare, and pay for it and your Medigap and Part D plan too.

And as Martha mentioned, the survivor benefits and disability benefits can be lifesavers.* Get in a really bad accident, and become disabled you will become eligible for Medicare at any age- given a certain (2 years?) waiting period.

BTW, Martha, very helpful post.!

Ha
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Re: What I learned in 1040 class.
Old 12-19-2005, 07:36 PM   #33
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Re: What I learned in 1040 class.

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Originally Posted by HaHa
Could be. But anyone who has a wife, son, daughter, husband, next door neighbor who hasn't qualified for SS benefits should try to explain to them what a really good deal it is to qualify for minimum benefits. Can you imagine buying medical insurance in the US at age 70 without Medicare to back you up? If nothing else, your minimum benefit would qualify you for Medicare, and pay for it and your Medigap and Part D plan too.

And as Martha mentioned, the survivor benefits and disability benefits can be lifesavers.* Get in a really bad accident, and become disabled you will become eligible for Medicare at any age- given a certain (2 years?) waiting period.

BTW, Martha, very helpful post.!

Ha
You can have the benefits without the complexity. The idea that you should even need a 1040 class is mind blowing.

I agree, though, that thanks are owed to Martha for sharing.
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Re: What I learned in 1040 class.
Old 12-19-2005, 07:48 PM   #34
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Re: What I learned in 1040 class.

I have found that I am so much better at taxes now with the help of Turbo Tax rather than decades ago slogging through the forms and hard copy tax manuals. *I have always done my own taxes, and believe it is an essentail part of being in the know regarding my financial health.

I will always file my taxes using hard copies and demanding a return receipt proof of mailing. MJ, Martha, I do not press the evelope, but I believe that providing electronic 1040 and schedlue A data helps the feds in their audit red flag program. *Why help them in their quest to become more of a problem than they already are? *The paper forms are old fashion, but so are the Federal Rules of Evidence and the tendancy for most judges to want to see the original docments when a dispute is at trial. *Its an archaic tax system, and having e-filing is not going to fix it anymore than putting a digital clock on the dashboard of an Edsel.

These are all stop gaps. *Even Russia has a more equitable tax system than the US these days.
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Re: What I learned in 1040 class.
Old 12-19-2005, 07:51 PM   #35
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Re: What I learned in 1040 class.

Quote:
Originally Posted by . . . Yrs to Go
The idea that you should even need a 1040 class is mind blowing.

I agree, though, that thanks are owed to Martha for sharing.
Martha is very thoughtful and helpful. *Re. the "1040 class", mind-
blowing is a bit much. *I'll bet that 98% of the population could
not absorb the 1040 instructions. *Thus. a "class" may be necessary.
I am not defending it. *That's just the way it is.

JG
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Re: What I learned in 1040 class.
Old 12-19-2005, 08:07 PM   #36
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Re: What I learned in 1040 class.

No wonder e-filing has not caught on here... Too many IRS phobias. I believe it is only a matter of time before e-filing will be customary and manual filings will be penalized.
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Re: What I learned in 1040 class.
Old 12-19-2005, 08:12 PM   #37
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Re: What I learned in 1040 class.

Quote:
Originally Posted by MRGALT2U
Re. the "1040 class", mind-
blowing is a bit much. *I'll bet that 98% of the population could
not absorb the 1040 instructions. *Thus. a "class" may be necessary.
I am not defending it. *That's just the way it is.

JG
Sorry for not being clear in any of my posts.

Taxes are too complicated. It is unfortunate that there is a need for 1040 classes, or Turbo Tax, or tax accountants.
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Re: What I learned in 1040 class.
Old 12-19-2005, 09:03 PM   #38
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Re: What I learned in 1040 class.

Quote:
Originally Posted by LEX
I have found that I am so much better at taxes now with the help of Turbo Tax rather than decades ago slogging through the forms and hard copy tax manuals. *I have always done my own taxes, and believe it is an essentail part of being in the know regarding my financial health.

I will always file my taxes using hard copies and demanding a return receipt proof of mailing. MJ, Martha, I do not press the evelope, but I believe that providing electronic 1040 and schedlue A data helps the feds in their audit red flag program. *Why help them in their quest to become more of a problem than they already are? *The paper forms are old fashion, but so are the Federal Rules of Evidence and the tendancy for most judges to want to see the original docments when a dispute is at trial. *Its an archaic tax system, and having e-filing is not going to fix it anymore than putting a digital clock on the dashboard of an Edsel.

These are all stop gaps. *Even Russia has a more equitable tax system than the US these days.
I don't know if you were trying to be funny, but almost everything you state in this post is the opposite of the truth.
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Re: What I learned in 1040 class.
Old 12-19-2005, 09:56 PM   #39
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Re: What I learned in 1040 class.

Quote:
Originally Posted by Martha
You are divorced and were married less than 10 years so you aren't covered under your spouse.
I have always wondered, do the ten years have to be consecutive? If A and B are
married seven years, divorce for a decade, then remarry for five years, then
divorce again, is B covered by A's SS (assuming A works full time the whole
period and B works sporadically) ?
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Re: What I learned in 1040 class.
Old 12-20-2005, 07:01 AM   #40
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Re: What I learned in 1040 class.

Quote:
Originally Posted by AltaRed
No wonder e-filing has not caught on here... Too many IRS phobias. I believe it is only a matter of time before e-filing will be customary and manual filings will be penalized.
I remember seeing an article or two last year indicating that e-filed returns seemed to be getting audited at a higher rate than paper returns. I gave up on e-filed returns because 1) no way am I about to pay for the privilege and 2) I have had problems getting the filing to go through. Simpler to just print it out and put it in the mail.
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