Final week, I requested you to e-mail me with some suggestions on the column. Because of everybody who obliged. As promised, you’ll obtain my guide “Managing Retirement Wealth” within the mail as a thank-you.
Now again to enterprise.
Let’s discuss letters you despatched to me with tax questions particular to TurboTax, an Intuit tax preparation service. I’ve collected a quantity and have solutions for you from TurboTax’s tax professional, Lisa Greene-Lewis, CPA, whom I quote within the solutions to every query.
Q: From “L,” a (San Jose) Mercury Information reader, about itemizing:
“Simply did TurboTax for 2018. Since [I’m] now taking the usual deduction, no extra itemizing, my guess is I gained’t must hold receipts for issues that I usually would itemize?”
Lisa’s response: “Sure, should you already filed your 2018 taxes and also you profit extra from taking the usual deduction below the brand new tax legislation, then there is no such thing as a must hold your receipts until you’ll want to save them for different causes, such as you bought a house and you’ll want to hold your settlement assertion. Nonetheless, for tax yr 2019, your tax state of affairs may change, and you could have extra tax deductions that may bump you over the usual deduction, so I wouldn’t hand over on itemizing your deductions if you file your 2019 taxes. You might donate extra to charity or have extra medical bills.
“To see the place you stand, you need to use TurboTax’s Customary vs. Itemized Deduction Interactive, which you’ll find at http://tinyurl.com/yacjsxo4.”
Q: From J.S. of San Ramon about estimated tax funds:
“If the elevated (capital gain-related) revenue is obtained in a month by which the estimated tax cost is due, in what month is the elevated estimated tax cost due which displays the brand new, elevated capital acquire?”
Lisa’s response: “Estimated tax funds are due quarterly (4 instances a yr), so for tax yr 2019, the primary quarterly cost is due April 15, 2019, the second is due June 17, 2019, the third is due Sept. 16, 2019, and the fourth is due Jan. 15, 2020.
“When you obtained the extra revenue in any of these quarters, it might be thought of when you determine the estimated cost.
“In some circumstances (for instance, in case you are self-employed), you might also be capable of keep away from estimated tax penalties if you need to use the annualized installment technique at tax time to mirror your fluctuating revenue and keep away from estimated tax penalties (see IRS Publication 505).
“The annualized technique determines your estimated tax legal responsibility as your revenue accumulates all year long as an alternative of dividing your total yr’s estimated tax legal responsibility by 4 as in case your revenue was earned evenly. So, in case your revenue is concentrated, for instance, within the fourth quarter of the yr, you could possibly annualize your revenue.
“TurboTax Self-Employed guides you thru the annualized installment technique at tax time. Additionally do not forget that usually you’re required to make estimated tax funds should you anticipate to owe $1,000 or extra for the tax yr.”
Q: From M.D. in San Jose about reporting gross sales tax paid:
“This yr, for the primary time, I’ll do my taxes by TurboTax quite than rent an accountant. This has gone easily, besides for 2 issues — one in every of which I hope you possibly can make clear. The state tax kind asks if I’ve purchased something from out of state and needs me to pay gross sales tax on something I purchased out of state. Is that appropriate?”
Lisa’s response: “Sure, normally you’re required to pay gross sales tax on out-of-state gross sales.”
M.D.: “What if I’ve purchased one thing from one other state that fees gross sales tax? Will they cost me gross sales tax?”
Lisa’s response: “Sure, if you buy one thing and a web-based retailer and different out-of-state retailers are required to gather tax in that state no matter bodily presence in that state, it’s a must to pay state gross sales tax. States now have the appropriate to require tax assortment from on-line retailers and different out-of-state retailers with no bodily presence of their state in the event that they meet sure financial thresholds.”
Let me prolong a particular thank-you to Lisa. You’ll discover further solutions to reader questions in my weblog at www.juliejason.com/weblog.
Julie Jason, JD, LLM, a private portfolio supervisor (Jackson, Grant of Stamford, Conn.) and writer, welcomes your questions/feedback ([email protected]). Her awards embrace the 2018 Clarion Award, symbolizing excellence in clear, concise communications. Her newest guide, a curated assortment of Julie’s columns, is “Retire Securely: Insights on Cash Administration From an Award-Successful Monetary Columnist.” To listen to Julie communicate, go to www.juliejason.com/occasions.