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Discussion in 'Off topic' started by NYCFC_Dan, Apr 24, 2018.

  1. NYCFC_Dan

    NYCFC_Dan Senior Member Staff Member Seasoned Supporter

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    Kidding. But seriously. I’ll be switching jobs at he end of May and receiving a good amount of money from the job I currently hold. I’ve never been in that position before and quite frankly the only thing on my mind now is accounting for taxes.
    I’ll likely be hiring a financial advisor but if it’s more simple than that maybe some of you here with expertise can lend your advice?
    If I receive 55k of untaxed income what will be my expected tax burden and is there anything I can do to minimize that amount?
    Currently I don’t have many write offs so I’m at a standard deduction.
     
  2. LeeNYCFC

    LeeNYCFC Regular Member Elite Donor Seasoned Supporter

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    Do you have a reason to believe they won’t withhold anything? If they’re saying you won’t, can you elect to have them withhold?

    ETA the brackets. If you can have them withhold from that payment then you could estimate where this extra income will fall in the 2018 brackets based on what you’ll earn for the rest of the year.

    32D0E121-580B-4332-A642-8F27CFF51F48.jpeg
     
  3. NYCFC_Dan

    NYCFC_Dan Senior Member Staff Member Seasoned Supporter

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    Yeah I was thinking of that as well (what bracket I will fall in).
    Best bet is to put that percentage away I guess.
    To answer your question, no. They won’t send it taxed.
     
  4. LeeNYCFC

    LeeNYCFC Regular Member Elite Donor Seasoned Supporter

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    If that’s the case I’d talk to an advisor because you’re getting into the realm of needing to make an estimated tax payment to avoid having had too little withheld during the year when you reconcile 2018.
     
  5. mgarbowski

    mgarbowski Senior Member Elite Donor Donor Seasoned Supporter

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    To the extent you cannot shield it from taxation though deductions (as you indicate you cannot do) then you should do more than set the tax hit aside. As LeeNYCFCLeeNYCFC just said, you need to make quarterly payments to avoid late fees. Believe it or not, the first was due April 17 when last year's taxes were due. The others are usually due in June, September and January. I agree with Lee it's time to engage an advisor if you do not want to try to figure this out yourself.
     
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  6. Ulrich

    Ulrich Senior Member Elite Donor Donor Seasoned Supporter

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    If Dan hasn’t left the company yet, can he designate a chunk of it (up to $17k for the year?) to go towards his 401k, thus reducing the tax burden while still “keeping” it for retirement purposes? When he leaves in May, they issue him a smaller check (subject to taxation) and then he rolls that 401k into either an IRA or his new company’s retirement account, right?
     
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  7. NYCFC_Dan

    NYCFC_Dan Senior Member Staff Member Seasoned Supporter

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    That’s one of the things I was looking at as well. Unfortunately we can not do more than 10% of our weekly pay into our 401k. So I couldn’t put a lump sum into it. Our 401k is based on our company stock, and to do what you just said they’d just direct me to purchase shares in the appropriate window.
     
  8. SoupInNYC

    SoupInNYC Senior Member Elite Donor

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    I believe the untaxable limit from a percentage standpoint is 6% anyways (could be wrong).
     
  9. Rimil

    Rimil Regular Member Elite Donor Seasoned Supporter

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    Not sure what a financial advisor costs, never hired one personally, but if you just ballpark scratch out your taxable income then make your quarterly pre-payments (even now despite missing April's payment) i am willing to bet the lost interest on over-payment or penalty from underpayment will be substantially less then the cost of his services for this particular issue alone. I even think there might be a provision if you end up paying 90% of your final bill from regular withholding and the total bill has grown year over year by like 110% then there is no late fee at all for underpayment (someone fact check that).

    I mean if you are intending on establishing a relationship and he will be providing you with other services beyond this tax prep, then ok sure hire him. This might actually be a nice icebreaker for starting said relationship. But really, if you are just a w-2 wage earner with a non-taxed bonus and are taking standard deductions its not gonna be all that hard to figure out. You could seriously get to 85-115% accuracy with minimal effort.

    I am not sure how it is for the rest of you guys, but I am pretty anal retentive with my finances. I have an excel spreadsheet that I keep all my investments, expenses, tax estimates, ect. Back when my taxes were super simple (read: 1040 EZ) I made a tab to record year over year tax bill and even now with my taxes being much more complex I can still mostly fit it into the original columns i set up back in the day (with a little fudging and hard coding numbers for stupid shit like AMT). I actually still use this tax tab to estimate my taxes as i have some chunky ass income courtesy of being bonus heavy and a few k-1 schedules that surprise me at year end with a burden. For the most part i get it pretty close on my prepayment. For example this year i ended up having a late payment penalty of $1. Those pricks actually deducted my refund for a de minimis amount like that, go figure.
     
  10. mgarbowski

    mgarbowski Senior Member Elite Donor Donor Seasoned Supporter

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    I agree it is very doable. Indeed if Dan was planning anyways to set aside the estimated amount, he can take that figure and divide it by 4. Make the 1st payment as soon as he has the cash in hand (or even better now if he has savings available and can manage the cash flow hit), and the rest when due.
    https://www.irs.gov/payments
     
  11. NYCFC_Dan

    NYCFC_Dan Senior Member Staff Member Seasoned Supporter

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    I wasn’t aware about the quarterly payments. So if that’s all it really is then I’ll just send in 25% as soon as I receive the amount. I was under the impression that all owed taxes are paid when you do your taxes the following year. Wasn’t aware of the accrued interest and quarterly payments. Appreciate the info everyone.
     
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  12. 413Blue

    413Blue Active Member Seasoned Supporter

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    Small potatoes in comparison, but fund an HSA. It is triple tax exempt. If you are focused on reducing tax burden and not in need of the money, max out your 401k contributions to 18.5k combined, and max IRA of 5,500 if you are eligible for traditional.

    However, I do recommend to everyone who is not absolutely financially savvy to work with a financial advisor at least once. You can gain so much which will pay for itself, if not immediately, over time. This would be a good time for you to sit down with an independent pro.
     
  13. Midas Mulligan

    Midas Mulligan Senior Member Elite Donor Donor Seasoned Supporter International Liaison

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    Wow. Impressed at you folks paying your quarterly estimates.

    I just slough it all off, file an extension and then take the hit.

    I realize it's less than ideal, and I'm not proffering it as advice.
     
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  14. Angela Miller

    Angela Miller Regular Member

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    NYCFC_DanNYCFC_Dan Boss OH Boss use this win fall as an investor in the New Stadium with of course free tickets as it's dividends!!!!
     
  15. Kangaroo Jack

    Kangaroo Jack Regular Member

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    Don't forget you will need to pay quarterly estimates to the state as well. No need to worry about the 1st quarter estimate as the income wasnt earned during that period.
     
  16. NYCFC_Dan

    NYCFC_Dan Senior Member Staff Member Seasoned Supporter

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    I’ll be moving back to Florida and will be there when I receive the money so I should be clear of that no?
     
  17. Kangaroo Jack

    Kangaroo Jack Regular Member

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    id say no, you would technically have to declare the taxes where the income was earned. So you'd be a part year resident of whatever state youre in/working now. No need to worry about filing in Florida though.
     
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  18. dannd23

    dannd23 Active Member

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    I have nothing to contribute other than enjoy the fact there is no state income tax.
     
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  19. CP_Scouse

    CP_Scouse Regular Member

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    Buy a stadium
     
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  20. Gotham Gator

    Gotham Gator Senior Member Donor

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    I thought laundering money was what the DanBucks were for...
     
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