Another note is the IRS will look at intent to make a profit. Seems many folks are getting licenses and travelling are writing travel blogs and claiming schedule C losses.... If you don't show profits within 5 years... the IRS will normally say it's personal and not business intent. Many people try to claim truly personal expenses as business and it is up to you to prove business intent over personal... Good luck.
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Sorry you pay taxes to the state you live in no matter what. Reciprocal tax agreement just means you don't pay to the state you work in. Depending your income. DC income tax rates seem higher. The difference is not huge though.
Washington, D.C., levies income taxes from residents utilizing 5 tax brackets. 4% on the first $10,000 of taxable income. 6% on taxable income between $10,001 and $40,000. 8.5% on taxable income between $60,001 and $350,000.
The state of Virginia has a progressive income tax , with rates ranging from 2% to a top rate of 5.75%.
Virginia’s income tax rates are assessed over 4 tax brackets:
2% on the first $3,000 of taxable income.
3% on taxable income between $3,001 and $5,000.
5% on taxable income between $5,001 and $17,000.
5.75% on taxable income of $17,001 and above.
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@tagteam your credit rating can change Most creditors report to credit bureaus monthly. However, they report data at different times throughout the month, and they may report to only one or two credit bureaus instead of all three and the dates can vary, it's definitely not just the last day of the cc cycle as I've seen my credit report post with mid-cycle balances where the payment has not been made but new charges are also included. The credit bureaus add new information once it's reported to them and impacts your score as reported. I have perfect credit, we just pay balances in full monthly. Only time our credit is not perfect is 2x a year when we put our sons tuition on the cc which drops it from perfect 5 to 10 points depending on other outstanding balances. We took a hit to our credit at one point and closed all those ridiculous store cards and it dropped 50 points for a few months and we had a lines increased on a few, net result is other then those few months we are both perfect credit. All CC paid in full monthly, no exceptions here.
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You should be able to fix your w-4 to decrease taxes withheld then as you expect to owe less than $1k.
You can claim as many allowances as warranted by your personal situation. Another way to increase your withholdings is to put the actual amount you want deducted on Line 6 (“Additional Withholdings”) of the W-4.
So you can increase the allowances claimed......don't forget to fix it for next year though.
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But if you maintain a unpaid balance, the cc company starts charging you interest on all purchases as you make them. If you pay your balance in full, there is $0 in interest charged...... You get charged only if you have an outstanding balance. Pay in full monthly for the lowest cost and best credit scores.
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Your basis in the home will be the date of death or 12/31/14.... plus any costs you incurred and capital improvements. You probably won't have much of a gain, if any. What did you use the house for since inheriting, kept it as investment, rental, personal use?
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Are you an employee of the business? That would matter. As an employee Employee expenses for business use of the home no longer allowed. You can no longer claim any miscellaneous itemized deductions on Schedule A, including expenses for using your home as an employee. Miscellaneous itemized deductions are those deductions that would have been subject to the 2% of adjusted gross income limitation. See below about travel expenses and proximity and normal occurence as rules have changed.
You should read up on publication 587 if you are a business owner:
To qualify to deduct expenses for business use of your home, you must use part of your home:
Exclusively and regularly as your principal place of business (see Principal Place of Business , later);
Exclusively and regularly as a place where you meet or deal with patients, clients, or customers in the normal course of your trade or business;
In the case of a separate structure which is not attached to your home, in connection with your trade or business;
On a regular basis for certain storage use (see Storage of inventory or product samples , later);
For rental use (see Pub. 527); or
As a daycare facility (see Daycare Facility , later).
Then in regards to travel expenses:
Travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. You can't deduct expenses that are lavish or extravagant, or that are for personal purposes.
You're traveling away from home if your duties require you to be away from the general area of your tax home for a period substantially longer than an ordinary day's work, and you need to get sleep or rest to meet the demands of your work while away.
Generally, your tax home is the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home. For example, you live with your family in Chicago but work in Milwaukee where you stay in a hotel and eat in restaurants. You return to Chicago every weekend. You may not deduct any of your travel, meals or lodging in Milwaukee because that's your tax home. Your travel on weekends to your family home in Chicago isn't for your work, so these expenses are also not deductible. If you regularly work in more than one place, your tax home is the general area where your main place of business or work is located.
In determining your main place of business, take into account the length of time you normally need to spend at each location for business purposes, the degree of business activity in each area, and the relative significance of the financial return from each area. However, the most important consideration is the length of time you spend at each location.
You can deduct travel expenses paid or incurred in connection with a temporary work assignment away from home. However, you can't deduct travel expenses paid in connection with an indefinite work assignment. Any work assignment in excess of one year is considered indefinite. Also, you may not deduct travel expenses at a work location if you realistically expect that you'll work there for more than one year, whether or not you actually work there that long. If you realistically expect to work at a temporary location for one year or less, and the expectation changes so that at some point you realistically expect to work there for more than one year, travel expenses become nondeductible when your expectation changes.
Travel expenses for conventions are deductible if you can show that your attendance benefits your trade or business. Special rules apply to conventions held outside the North American area.
Deductible travel expenses while away from home include, but aren't limited to, the costs of:
Travel by airplane, train, bus or car between your home and your business destination. (If you're provided with a ticket or you're riding free as a result of a frequent traveler or similar program, your cost is zero.)
Fares for taxis or other types of transportation between the airport or train station and your hotel, the hotel and the work location, and from one customer to another, or from one place of business to another.
Shipping of baggage, and sample or display material between your regular and temporary work locations.
Using your car while at your business destination. You can deduct actual expenses or the standard mileage rate, as well as business-related tolls and parking fees. If you rent a car, you can deduct only the business-use portion for the expenses.
Meals and lodging.
Dry cleaning and laundry.
Business calls while on your business trip. (This includes business communications by fax machine or other communication devices.)
Tips you pay for services related to any of these expenses.
Other similar ordinary and necessary expenses related to your business travel. (These expenses might include transportation to and from a business meal, public stenographer's fees, computer rental fees, and operating and maintaining a house trailer.)
Instead of keeping records of your meal expenses and deducting the actual cost, you can generally use a standard meal allowance, which varies depending on where you travel. The deduction for business meals is generally limited to 50% of the unreimbursed cost.
If you're self-employed, you can deduct travel expenses on Form 1040, Schedule C, Profit or Loss From Business (Sole Proprietorship) (PDF) or Form 1040, Schedule C-EZ, Net Profit From Business (Sole Proprietorship) (PDF), or if you're a farmer, on Form 1040, Schedule F, Profit or Loss From Farming (PDF).
If you're a member of the National Guard or military reserve, you may be able to claim a deduction for unreimbursed travel expenses paid in connection with the performance of services as a reservist that reduces your adjusted gross income. This travel must be overnight and more than 100 miles from your home. Expenses must be ordinary and necessary. This deduction is limited to the regular federal per diem rate (for lodging, meals, and incidental expenses) and the standard mileage rate (for car expenses) plus any parking fees, ferry fees, and tolls. Claim these expenses on Form 2106 (PDF) and line 24 of Form 1040, Schedule 1 (PDF) and carry them to the appropriate line on Form 1040 as an adjustment to income.
Good records are essential. Refer to Topic No. 305 for information on recordkeeping. For more information on these and other travel expenses, refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses.
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you don't give enough information as to what your tax liability is. A $7500 credit and $7500 paid in may or may not meet your tax liability.
You can always update your w-4 and claim more exemptions but, do note if you did not have enough taxes paid in you could end up subject to interest and penalties depending on your income level. Failure to pay proper estimated tax - when you don’t pay enough taxes due for the year with your quarterly estimated tax payments, or through withholding, when required:
Estimated tax payments are generally required, if you expect to owe at least $1,000 in tax after subtracting withholding and refundable credits.
Generally calculated on Form 2210
We calculate the penalty separately for each required installment. The number of days late is first determined and then multiplied by the effective interest rate for the installment period.
See Publication 505 for more information.
See IRS News Release IR-2019-55 or IRS News Release IR-2019-24 (Farmers and Fishermen) to determine if you meet the criteria for a waiver of this penalty for your 2018 taxes.
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