Final week, I requested you to electronic 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 have to preserve receipts for issues that I usually would itemize?”
Lisa’s response: “Sure, in the event you already filed your 2018 taxes and also you profit extra from taking the usual deduction underneath the brand new tax legislation, then there isn’t a have to preserve your receipts except you want to save them for different causes, such as you bought a house and you want to preserve your settlement assertion. Nonetheless, for tax yr 2019, your tax scenario may change, and you’ll have extra tax deductions that may bump you over the usual deduction, so I wouldn’t quit on itemizing your deductions while you file your 2019 taxes. You could donate extra to charity or have extra medical bills.
“To see the place you stand, you need to use TurboTax’s Normal 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) earnings 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 occasions 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.
“In the event you obtained the extra earnings in any of these quarters, it could be thought of when you determine the estimated cost.
“In some circumstances (for instance, if you’re self-employed), you might also be capable to keep away from estimated tax penalties if you need to use the annualized installment technique at tax time to replicate your fluctuating earnings and keep away from estimated tax penalties (see IRS Publication 505).
“The annualized technique determines your estimated tax legal responsibility as your earnings accumulates all year long as a substitute of dividing your whole yr’s estimated tax legal responsibility by 4 as in case your earnings was earned evenly. So, in case your earnings is concentrated, for instance, within the fourth quarter of the yr, you might be able to annualize your earnings.
“TurboTax Self-Employed guides you thru the annualized installment technique at tax time. Additionally do not forget that typically you might be required to make estimated tax funds in the event 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 slightly than rent an accountant. This has gone easily, besides for 2 issues — one among which I hope you possibly can make clear. The state tax type asks if I’ve purchased something from out of state and desires me to pay gross sales tax on something I purchased out of state. Is that right?”
Lisa’s response: “Sure, typically you might be 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 prices gross sales tax? Will they cost me gross sales tax?”
Lisa’s response: “Sure, if you are going to buy one thing and an internet retailer and different out-of-state retailers are required to gather tax in that state no matter bodily presence in that state, you need to pay state gross sales tax. States now have the fitting 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 lengthen a particular thank-you to Lisa. You’ll discover further solutions to reader questions in my weblog at www.juliejason.com/blog.
Julie Jason, JD, LLM, a private portfolio supervisor (Jackson, Grant of Stamford, Conn.) and writer, welcomes your questions/feedback (email@example.com). Her awards embody 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.