How much tax you need to pay in 2019: a tax specialist answers readers' questions ForumDaily
Taxes in the United States are not an easy topic for many immigrants, because in their home countries most of them did not need to file declarations annually. Therefore, after relocation, many have to quickly master a complex system of deductions, forms, and several levels of taxation.
In addition, after the tax reform of Donald Trump, carried out in 2018, significant changes have occurred in the system of American taxation. Accordingly, now even those who have previously mastered the current rules have to re-examine the requirements for declarations, new tax rates and deduction rules.
To simplify this task for you, ForumDaily asked Ilona Dovidatiene, a tax specialist from the company United States Tax Services, answer readers' questions regarding new tax rules in the US.
Below we publish her answers to questions that readers have sent us via various channels of communication.
A Ukrainian entrepreneur wants to launch a fundraising campaign on one of the American crowdfunding platforms for his project. But an account must be opened at a US bank to transfer the funds collected to it by the campaign. If an American resident will receive at his own expense the money collected by the campaign, and after deducting his remuneration he will transfer them to the project owner, what risks does he incur? And most importantly, how this amount of funds will affect the taxes of the resident? What contract must be entered into so that the amount of funds received on the account of the resident is not taken into his total income?
This is a very complex issue that requires more detailed information. If you respond as a whole, the resident will have to pay income tax on the amount he received, based on his income at the end of the year.
What kind of tax forms should I fill out? What additional expenses are subject to write-off, in addition to business expenses? And is it possible to pay taxes online (which resource to use) without sending checks, etc.?
As I understand it, this is the second part of the previous question. A resident must complete Form 1040 and a state income tax return. If we talk about commission, then there are not so many expenses, the main ones are: the Internet, buying a computer, paying for banking services. Deductable ("deductable") are expenses that occurred in the process of generating income. But if we are talking about the situation described in the previous question, then there are few costs. Yes, a resident can file and pay taxes online through IRS.gov or through certified tax professionals.
Students coming to the United States on a three-month Work and Travel visa with J1. What form should they use to file a tax return?
The student must submit the form 1040NR or 1040NR-EZ, where NR means non-resident.
Since January 1, 2019, Russia has abolished the discriminatory 30% tax on the sale of real estate by non-residents, I immediately decided to sell my Moscow apartment, which had fallen in price by today (<US $ 100K), which I inherited from my parents five years ago, in the new year. Following the completion of the sale and purchase transaction from the escrow account of a Moscow notary, I plan to receive dollars into my account in the United States in accordance with Russian currency regulation rules when settling with 100% non-residents. Please advise the optimal purpose of payment and the need to declare in the USA the amount received from Russia under one or another sauce. My answer is an inheritance, which, in my opinion, does not require a mandatory declaration, but maybe, after all, declare the received 100K as a return on capital associated with a serious capital loss (0% tax) for better argumentation during the audit?
US citizens and green card holders are required to file a US tax return showing income from all sources, both domestic and foreign. You need to report and calculate your base at the time you inherit your property, convert it to dollars and pay tax based on your tax scale. The inherited property will appear on your tax return as a sale of the “capital asset”.
Hello. When will it still make sense to use Itemized deductions vs. Standard?
As you probably know, the standard deduction this year has doubled. I think most people will no longer use detailed deductions, since it will be quite difficult to exceed the standard deduction limit. The standard deduction for a family of 3 and more people will be 24 thousands. To increase it, you need to have more than 24 thousands of detailed deductions. Such a deduction includes: medical expenses (only if you spent more than 7,5% of the amount Adjusted gross income), mortgage interest, state tax paid (now it is limited to 10 thousands only). Thus, it makes no sense to use a detailed deduction, today the standard is more profitable.
I moved to the USA in the middle of the 2017 year. That year, he filed a declaration with his wife. When I was looking for medical insurance for the 2018 year, I indicated that I was not working, and received the Essential plan 0 deductible. In the middle of 2018, I found part-time first, and then full-time work, but did not report it in the marketplace. When choosing insurance for 2019, the year indicated everything as it is. How to calculate how much I have to pay the IRS for the time I used free insurance, but I had a salary?
When you file your tax return, make sure you get the 1095a form from the marketplace. This form will provide you with the exact amount of subsidy you received. Based on your actual income in 2018, the tax computer program calculates the difference. For example, in the 2017 year, you expected to earn 2018 thousand dollars in the 20 year. The total cost of insurance was 400 dollars per month, and the government gave you a subsidy of 300 dollars, so you paid only 100 dollars per month throughout the year. Now in the declaration you submit your actual income in the amount of 40 thousand dollars. This means that you may not have been eligible for subsidies at all, so you pay the difference. In the example, this would be $ 300 * 12.
Good day! Is there still a penalty for not having health insurance?
Yes, it is still valid for 2018 of the year. However, there are no such penalties for 2019 year.
I work in the family as a nanny. Salary get on a bank card, checks and transfers. I send almost the entire salary to the bank card of my student daughter to pay for my studies and accommodation. Will these transfers be deducted from my taxes?
No, it will not be deducted from your taxes. When you work as a nanny, you can deduct the cost of this business, for example, if you use your car, phone. You can also deduct a gift from taxes.
I am retired and work a little. How do I make an Incom?
You need to fill out the form 1040.
I worked 9,5 for years in California and got sick, did not work for a long time. Now I have turned 65 years, I decided to become a pensioner. I came to arrange the papers, and they say to me, they say, work out another six months so that the experience in the USA is 10. I am very interested in whether the salary that I will receive will affect the amount of the pension?
The income that you earn will be taken into account in your average income to calculate your pension. However, do not expect that if you pay 2 thousands of taxes, your pension will increase by 2 thousands. The increase will be distributed proportionally.
If there is no SSN yet, is it possible to get a tax number and work as a self-employer?
True, you can get an ITIN number and pay taxes, or you can open a corporation. We can help you with your ITIN number, and you don’t have to send your original passport to the IRS.
Every month I receive money from Europe - $ 800-900. This is not a salary - the old debt is being returned to me. The card is not American, I withdraw money from an American ATM. Does the IRS see this money and should I add it to my income when I fill out my tax return?
If it is money to pay the debt, you do not have to pay income tax on them, but the interest that you receive from the borrower must be indicated in your declaration. The IRS system is based on the reporting of all financial institutions, so if no one reports about you to the IRS, they do not have this information. To report you, a third party must have your SSN, or ITIN, or Tax ID.
My mom has a green card. Starting in 2017, she arrives in the US for 3 months, then home, then again in the USA for 3 months. And so the whole year. Does not work. Should she file declarations for 2017 and 2018 years? Is it a violation that she did not file it? What to do in such cases?
No, your mother should not file a tax return if she did not receive any income.
I will say it as it is - I bake pies at home and sell for cash. There are no permissions. But I want to pay taxes. How to be in this situation and can I pay taxes for several years at once? Will there be any punishment if I confess that I have been working illegally for 3 years and have not paid taxes?
Yes, you can pay taxes, starting from your cash income. Yes, you can pay taxes for any year. And yes, you face a penalty for late filing a declaration, but these penalties are small and sometimes they can be challenged.
I have an apartment in Kiev, which I bought in 2010 year. Should I make it to the declaration? And if at some point I decide to sell it, will I need to pay some taxes here in the USA?
If you receive income from your property, yes, you must report it. When you sell your property (regardless of where it is located), you must pay taxes if you make any profit based on your tax scale.
How is the child care tax credit now? We have a child goes to kindergarten. How much can we write off taxes if we spent about 4 thousand per year?
I am assuming that you have all the information you need to apply for a child care loan. The calculation of this loan has two variables: your income and qualified expenses. The loan accounts for 20% to 35% of your qualified expenses. The maximum loan is 3 thousand dollars. Thus, provided that you meet all the requirements, you will have 3 thousand loans, not four.
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