Miscellaneous Tax Questions
I'm getting a bonus. Should I have my company withhold taxes?
Most definitely. Why? You do the math: A traveler receives a 5000$ bonus and is in the 25% federal tax bracket. The traveler also lives in a state that taxes income at 5%. 5000$ X 27% = 1350$ PLUS the sate tax of 5000$ X 5% = 250$. 1350$ + 250$ is 1600$ of taxes. That's not all. When you owe a large sum at the end of the year, you may be liable for penalties and/or interest charges for not enough during the course of the year.
My Company sent me a 1099's that I was not supposed to receive. Is that wrong?
There are two reasons that you might receive a 1099.
1) If the agency and hospital that you worked for split the housing and salary, you may get a 1099 from the one that provided the housing
2) You are an independent contractor.
If neither of these apply to you, your company should NOT send a 1099 to report any income or stipends. It should all be included in the w-2 as a supplemental wage. By doing this, they are attempting to transfer the payroll tax to you. If they refuse to issue a correct W-2 or issue you a 1099 along with a W2, you can still file an accurate return. If this is a continual problem and you are ambitious, you can file an SS-8 with the IRS, and they will determine your status as an employee for you and make the appropriate contacts with the agencies payroll department. The downside of this approach is that you may want to sever your relationship with the company after filing the form. TravelTax has some documented SS8 cases that you can refer to if necessary.
Other issues: Many local jurisdictions will screen filed returns to "discover" businesses running in their community that are not licensed with the state or municipality. When 1099's are issued for housing under "non employee compensation" and reported as business income, this triggers a review. Make sure your tax preparer reports the income initially as business income but transfers the amount to reimbursements.
See www.irs.gov/govt/tribes/article/0,,id=135046,00.html
If I Sell my House, How long do I have to live in my home to exclude the gain?
You must live in and occupy your primary residence 2 out of the last 5 years to get the exclusion. The rules are different for members of the military and any other taxpayers who are involuntarily separated from their home.
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