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cintrix,
I've done a little nosing around: it appears, for a US citizen, wages from the UN are reported on Form 1040 as wages, and are subject to self-employment tax (since the UN doesn't pay employer portion of social security taxes).
Most likely the rules have changed; they tend to do that with tax law!
Steve
Maybe it was a thing of the past. I could swear I heard that. I will ask my mom next time I speak with her.
Not according to this woman.
She doesn't have to file but taxes are withheld from her salary.
She was telling us that she is taxed just like a US citizen who works for the UN
My mom used to work for the UN, and I can swear that one of the perks of working there is that they DON'T pay taxes. Could that be a thing of the past? I'll have to ask her if I am remembering that correctly or not.
Thanks Steve. I'm not sure I understand it and I probably won't see her again but I thought it was odd.
hi Susie,
She is exempt from US income tax: http://www.irs.gov/businesses/small/international/article/0,,id=105252,00.html
I'm not clear about social security; possibly her work at the UN qualifies her for Australian retirement benefits.
Steve
Hi Steve,
I have a question and I hope I have all of the facts straight.
I met a woman today who is from Australia and lives in NYC.
She is not a US citizen and she has worked at the UN for the past 15 years.
She was telling us that she is taxed just like a US citizen who works for the UN but the money that is taken out of her salary for taxes goes towards whatever Australia has to pay the UN (to be a member I guess)
So even though she pays Social Security, she can never collect benefits and she isn't required to file tax returns.
Does this make sense to you?
McCain, Obama, and Taxes
By Jeanne Sahadi, CNNMoney.com senior writer
Last Updated: June 11, 2008: 3:59 PM EDT
NEW YORK (CNNMoney.com) -- John McCain and Barack Obama have starkly different philosophies about tax policy - how to raise the revenue needed to support government programs, spur growth and ensure economic fairness.
But voters really want to know one thing: How would the presidential candidates' views trickle down to their tax bills? A report released Wednesday by a nonpartisan policy group in Washington, D.C., takes a big first step toward answering that question.
According to the Tax Policy Center's findings, the common assumptions most people make about the plans of McCain, the presumptive Republican nominee, and Obama, the Democrats' pick, are not wildly off-base.
McCain: The average taxpayer in every income group would see a lower tax bill, but high-income taxpayers would benefit more than everyone else.
Obama: High-income taxpayers would pay more in taxes, while everyone else's tax bill would be reduced. Those who benefit the most - in terms of reducing their taxes as a percentage of after-tax income - are in the lowest income groups.
Under both plans, all American taxpayers could pay a price for their tax cuts: a bigger deficit. The Tax Policy Center estimates that over 10 years, McCain's tax proposals could increase the national debt by as much as $4.5 trillion with interest, while Obama's could add as much as $3.3 trillion.
The reason: neither plan would raise the amount of revenue expected under current tax policy - which assumes all the 2001 and 2003 tax cuts expire by 2011. And neither plan would raise enough to cover expected government costs during those 10 years.
"Distributionally, they're markedly different. But in terms of their impact on revenue, the two plans are not terribly different," said Roberton Williams, principal research associate at the Tax Policy Center and the former deputy assistant director for tax analysis at the Congressional Budget Office.
A closer look
In addition to making the 2001 and 2003 tax cuts permanent, McCain says he would double the exemption for dependents, lower the corporate tax rate, make expensing rules more generous for small businesses and lessen the bite of the estate tax and Alternative Minimum tax.
The net result: compared with their tax bill today, taxpayers on average would see their tax bill cut by nearly $1,200. That means their after-tax income would rise by 2%.
But those in the lowest income groups would only see their after-tax income rise by less than 1% (or between $19 and $319). By contrast, the highest-income households - those with incomes of at least $603,000 - would see a boost in after-tax income of 3.4%, or more than $40,000.
Obama's plan would keep the 2001 and 2003 tax cuts in place for everyone except those making more than roughly $250,000, and he would increase the capital gains tax.
Obama would also introduce new tax breaks for lower and middle-income groups. Such breaks include expanding the earned income tax credit, giving those making less than $150,000 a $500 tax credit per person on the first $8,100 in income, giving those making under $75,000 a 50% federal match on the first $1,000 of savings, and exempting seniors making less than $50,000 from having to pay income tax.
Like McCain, Obama would lessen the bite of the estate tax and the Alternative Minimum Tax, but to a lesser degree.
The net result: compared with their tax bill today, taxpayers on average would see their tax bill cut by nearly $160 under Obama's plan. That means their after-tax income would rise by 0.3%.
But those in the lowest-income groups would enjoy the biggest after-tax income rise as a percentage of income - between 2.4% and 5.5% (worth between $567 and $1,042). By contrast, the highest-income households - those with at least $603,000 in income - would see a dramatic decline in their after-tax income - a drop of 8.7%, or $116,000.
The campaigns respond
Jason Furman, a newly appointed senior economic adviser to Obama, said his preliminary response is that the report's findings bear out what Obama's campaign has been saying: that he's for the middle class.
"Middle-class families get tax cuts that are three times larger from Obama than from McCain," Furman said. "And the McCain plan gives nearly one-quarter of its benefits to households making more than $2.8 million annually - the top 0.1%."
Douglas Holtz-Eakin, senior economic adviser to McCain, noted that the report does not take into account the spending reforms - such as eliminating earmarks - that are central to McCain's strategy to support tax relief and help reduce the deficit.
One of the center's co-directors, William Gale, conceded in a conference call that "if McCain succeeds (in achieving his proposed spending cuts), the fiscal cost of his plan does go down."
But spending cuts can be politically difficult to achieve, said Len Burman, the Tax Policy Center's director.
Holtz-Eakin characterized McCain's plan as one geared toward "reshaping federal bureaucracies and protecting taxpayers' money. [His] plan is based on kicking down doors in Washington, and delivering tax dollars back to the American taxpayers who are struggling with record gas prices, soaring food costs and a down economy."
Not the final word
Williams said the Tax Policy Center analysis should be viewed as a work in progress. Researchers plan to update it as they get more information about the plans from the campaigns and if the candidates introduce new tax policies between now and Election Day.
The center will also incorporate the tax elements of McCain's and Obama's health care proposals when they update their findings.
How the candidates' tax plans would affect economic growth is an open question. "It depends on how the deficits are closed," Burman said.
Tax studies have shown that when tax cuts are deficit funded and they're paid for by raising taxes in the future, "the economy is worse off than if you didn't cut at all," Burman said.
http://money.cnn.com/2008/06/13/news/economy/mccain_amt_phaseout/index.htm?postversion=2008061413
Where's my rebate??!!?!?!
Are you eager to stimulate the economy, but missing a certain something from your government?
Go to https://sa1.www4.irs.gov/irfof/IRServlet?app=IRACTC&selectLanguage=en to check on your rebate.
Ok, thanks. I am surprised I never received on before.
No one should ever take my advice!!
Many many many years from now, when you are required to take distributions, the fair market value will be relevant. Until then, take Susie's advice and throw it away. If no contribution and no distribution, nothing goes on your return.
Trustee is not required to send Form 5498 until June 1.
I received probably the same thing on Friday for my Simple IRA at work.
I threw it away
I received a form 5498 for 2007 today in the mail for an IRA account. It is an account that I have had for years that has had no money in it - I think it had something like $20 in it - no exaggeration. I happened to buy a roundup play and made some money on the twenty dollars and it is now worth a little over $200. This is the first time I ever remember receiving a form for this account. Why did I receive this and was I supposed to report this anywhere on my return? It has zeros in every box except the box 5 where it says "fair market value of account" and the account amount is listed there. I have never received this form before, and why am I getting it in June?
I just bought something from Amazon and since they shipped it on May 31st I won't be charged tax. They warned me when I made my purchase that even though I ordered the item in May and the effective date was June 1st, if they shipped after June 1st they would have to tax me. Luckily for me it shipped the last day of the month.
Amazon is suing New York over this. If New York wins, they might find other large online companies to go after. For now it's just Amazon.
I read that yesterday.
Is it all online purchases now?
New York now collects sales tax on Amazon purchases
The end of tax-free e-commerce
By Jia Lynn Yang, writer-reporter
NEW YORK (Fortune) -- One of the great things about shopping on sites like Amazon has been not having to pay a dime in taxes (or shipping, if you've spent enough). Since the dawn of Web commerce, the rule was that as long as a retailer didn't have a physical presence in the shopper's state, the company didn't collect a sales tax.
Well, it was fun while it lasted. Starting June 1, Amazon (AMZN, Fortune 500) will charge a sales tax to shoppers who live in New York, even though the retailer maintains no physical operations in the Empire State.
Why the crackdown? With the economy in the tank, the State of New York was getting desperate to fill its budget gap. So it expanded its rules about what constitutes a business presence in the state. Amazon lets other sites earn commissions by linking to products on its pages as part of a program called Amazon Associates. And because some of those sites are based in New York, the state considers the Seattle-based retailer fair game.
Amazon, for its part, has filed suit in the New York Supreme Court arguing the law is unconstitutional. The company says these third-party sites shouldn't be counted as agents of Amazon in New York because they're totally independent from the retailer. Instead, they act merely as advertisers who are compensated with commissions. Also in its complaint, Amazon points out there are hundreds of thousands of associates in the program, and the company can't always determine whether these sites are actually run by New Yorkers.
Some online shoppers in New York may be howling over this new law but technically they shouldn't feel a difference. In truth, all purchases on Amazon have always been subject to taxes. Until now, only four states required Amazon itself to collect the tax: Washington (where Amazon's HQ is), North Dakota (the site of customer relations operations), Kentucky and Kansas (those last two contain large Amazon distribution centers). In other states, shoppers are supposed to keep track of their untaxed out-of-state purchases and report them in their state income tax returns every year. Needless to say, this doesn't always happen.
The state doesn't pursue people for failing to report their tax-free online shopping, or at least that's not enough to alarm the authorities. "The sales tax itself isn't going to raise enough concern to prosecute anybody," says Tom Bergin, spokesman for the New York Department of Taxation and Finance. "Now, if there were other red flags involved with that tax return, then we'd look at everything."
Starting in the 2003 tax year, the state of New York added a new line on its income tax forms specifically for untaxed out-of-state purchases, and last year, the state collected $45.2 million in sales taxes that way. But states know they stand a better chance of getting all the money they're due if they require retailers to collect it, and in the case of New York, the state expects to get as much as an extra $47 million a year from Amazon and others.
The state of Texas, applying some more conventional legal reasoning, is looking closer at an Amazon distribution center in Irving that could quality as sufficient physical presence in the state to pick up some extra money. But with the economy continuing to slow, other states will surely be watching what happens in New York. If the courts uphold New York's line of thinking, the rest of the Union could be headed in this direction.
http://money.cnn.com/2008/05/30/technology/yang_amazon.fortune/index.htm?postversion=2008053017
Great, and that question you cut and pasted - I would think that if someone were depositing and withdrawing that quickly it would probably be for the the tax deduction reason. Thanks, Steve.
hi cintrix
I couldn't find anything saying you can't make a contribution, take a deduction, and withdraw the money in the same year. That probably means it's okay.
Some interesting reading at http://nysaves.uii.upromise.com/content/programInfo/faq.html including
How soon can I begin making withdrawals after depositing?
You can withdrawal money at any time, but if the withdrawal includes uncollected assets, your withdrawal proceeds will be held until the recent contribution has been collected. Contributions by check normally clear within 10 business days while contributions by electronic transfer usually clear within 5 business days.
rotf I know! You're finally done with that!
Poor you!
And I mean that literally!!!
Is your daughter starting college in the fall?
Steve, I got a 529 question for you. In NYS married couples are permitted to take up to 10k per year deduction if they deposit that amount into a 529 plan. Now, can I deposit money into that account this year, take the deduction, even though I plan on withdrawing comes Aug for my kid's tuition? So, say I decide to deposit 5k in June into my 529 for my daughter, then in Aug I withdraw say 10k for tuition. Can I still take the 5k New York State deduction for that June deposit for 2008?
Economic Stimulus Rebate - Direct Debit of Balance Due means paper check
Q. I chose direct debit to pay my tax bill. Will my stimulus payment be direct deposited to the same account?
A. No, the account information used for an incoming direct debit payment to the IRS cannot be used as the account information for the direct deposit of the stimulus payment. People who choose direct debit to pay a balance due will receive their stimulus payments by paper check through the mail. [Updated 3/3/08]
http://www.irs.gov/newsroom/article/0,,id=182718,00.html
Ok, great - that is what I though! Thanks.
meaning if it was included in your federal return. Schedule B if interest or dividends > 1500, Schedule D.
They all say "if required".
That sounds about right. Look at the IT-201, see which lines say "attach Schedule xx".
Steve,
I have to file an amended NY State return. They said I have to mail it in with all schedules that are required with the state. I have electronically filed this for the past few years so can't recall exactly what backup they want. Is it a sch D and a sch B if over 1500 plus any NY state credits?
Some Tax Rebates will be Early
NEW YORK (CNNMoney.com) -- The federal government, eager to boost the flagging economy, will start distributing special tax rebates on Monday - five days earlier than expected, the Treasury Department said Thursday.
The department had said last month that it would begin giving rebates on May 2.
Instead, 800,000 tax filers daily will get rebates on Monday, Tuesday and Wednesday. No rebates will be distributed on Thursday, and 5 million payments will be made on Friday.
The payments will go out ahead of schedule because of a new computer program that updates records daily - faster than an older program that updates weekly, according to Andrew DeSouza, a Treasury spokesman.
Overall, the Treasury will distribute more than $110 billion to 130 million taxpayers by July and hopes to get the first $50 billion out by the end of May, DeSouza said.
The checks are the centerpiece of an economic stimulus program signed into law by President Bush in February. The aim is to boost consumer spending and help mitigate problems caused by the slowing economy.
Checks are being distributed to people who file 2007 tax returns. Those who opt for direct deposit with the Internal Revenue Service will start getting rebates before those who use the mail.
The program calls for rebates of up to $600 for single filers making less than $75,000. Couples making less than $150,000 would receive rebates of up to $1,200. In addition, parents would receive $300 rebates per child. Tax filers who do not owe income taxes but have at least $3,000 in income would get a $300 rebate.
Rebates to taxpayers slated to get paper checks will start to go out on May 9 - one week earlier than originally planned.
The order in which tax filers will receive their rebates will be based on the last two digits of their Social Security numbers.
http://money.cnn.com/2008/04/24/pf/taxes/Stimulus_checks/index.htm
Wesley Snipes gets 3 years for tax fraud
http://abcnews.go.com/Entertainment/FedCrimes/story?id=4718482&page=1
Thanks Steve, I'll try to find out more; last year it worked.
"Various" is fine for federal. I don't deal with Massachusetts, but it seems they feel differently.
Steve, I did a schedule D for Fed and used "various" now MA state say that I have a Form 8824, like kind exchanges, 6781, contracts and stradles, or 4684, casualties and theft, and want dates instead of "various" and want the amounts. It also says to enter type "C" even though it now says type "A". I'm not sure if there is an error on my fed return, I've been checking it and kind find it. Any help would be appreciated so much. These are all stocks that I purchase and sell. TIA
Thanks Steve!
Based on that, he should be getting his in May.
I hope that they use my husband's SS# for ours and not mine!
The primary (or first) social security number - usually the husband's.
Wow, glad I electronically filed. Now, if you file joint, who's ss# are they basing it on?
Better safe than sorry. Aren't the checks going out in May? It depends on his ss# regrading who gets them first.
Thanks Trixie and Steve!
That's what I was thinking also. Another few months won't kill him.
ditto what cintrix said. Rebate will be direct deposited to same account as refund.
I would hold that bank account open until he receives that check. From what I understand, whatever is on your tax return is how you will receive the rebate. So, if they try and direct deposit it into an account that isn't open anymore it will probably cause a huge delay in receiving it.
Quick question on the rebate.
My son electronically filed his income tax return and had his refund direct deposited into his bank account.
He received his refunds already and since he is in California now instead of NY, he was going to close out the NY bank account and open one in California.
Will his rebate be electronically deposited or will he receive a check?
TIA
You're right, it doesn't amount to much because of the 2% category rule.
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