Author Topic: Tax Question  (Read 2566 times)

treehugger

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Tax Question
« on: February 23, 2014, 09:23:44 PM »
Let's just go with the assumption that I am a tax novice or idiot. In the last two years I started doing consulting work. In 2013 I earned more than I thought I would. I've been working on my taxes and I think I could be doing a better job. I'm used to just entering our w-2 and other deductions and calling it a day. Last year I didn't earn that much consulting so it didn't have that much of an impact.

I'm married, have two kids, my husband is a school teacher with a pension and no 401k. I also teach as an adjunct at a local university. I have the max contribution to my IRA for 2013. I'm wondering what other deductions I'm missing or how I can do better on my taxes next year. Our Adjusted Gross Income is $69,000.

I've never been good with taxes but think I might need to start paying quarterly taxes for 2014 if things continue on the path they are with the consulting work. I will be earning less teaching though in 2014 as obamacare will limit the number of courses I can teach and I have not lined up any courses at other universities, if this matters at all.

RhythmKats

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Re: Tax Question
« Reply #1 on: February 23, 2014, 10:00:28 PM »
If your consulting work is a self employment situation, you could look into setting up a solo 401(k) or a SEP IRA, I believe. That would probably help you you shelter some of that income. There are others on these forums that will certainly know more about this than me, but I don't think either are terribly difficult to get started.

Gin1984

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Re: Tax Question
« Reply #2 on: February 24, 2014, 07:00:14 AM »
Has your husband maxed out his 401k?
How old are your kids?
Are they in daycare or afterschool care or summer care?  If so, does your husband have access to a daycare FSA?  Are you getting the daycare tax credit?
How is your health insurance, does that have access to a HSA or FSA?  Do you spend enough for a FSA (mine has a $100 minimum).
You can just increase the amount your husband pays instead of paying quarterly.  How much was your federal tax and % this year? 

treehugger

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Re: Tax Question
« Reply #3 on: February 24, 2014, 07:16:07 AM »
If I opened a SEP IRA is it better to just contribute to that and not the traditional one I have. I'm wondering of the impact of having 2 separate accounts on longterm earning?

My husband does not have a 401K, just the pension although he does have a rollover IRA that we are not contributing to at the moment. My son who is 3 does go to preschool while I work and the school is going to provide me with the fees I paid last year. My daughter is 6 and in first grade and my schedule allows me to drop her off and pick her up.

I will have to check on the health insurance with the school district. My husband is more clueless than me but swears there is no HSA or FSA, but we are generally healthy and don't spend much each year. I could always increase the with holdings from my teaching jobs to make up the extra tax. It's hard to figure the right amount as things with the consulting and teaching are a bit uncertain each year.

I am not sure of my federal tax and %. I can find this information in turbo tax? I am at work now, but will check when I get home. Thanks for the advice. I'm realizing that as things having gotten more complex with my work situation, I need to get a better handle on these things.

Gin1984

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Re: Tax Question
« Reply #4 on: February 24, 2014, 07:22:06 AM »
If I opened a SEP IRA is it better to just contribute to that and not the traditional one I have. I'm wondering of the impact of having 2 separate accounts on longterm earning?

My husband does not have a 401K, just the pension although he does have a rollover IRA that we are not contributing to at the moment. My son who is 3 does go to preschool while I work and the school is going to provide me with the fees I paid last year. My daughter is 6 and in first grade and my schedule allows me to drop her off and pick her up.

I will have to check on the health insurance with the school district. My husband is more clueless than me but swears there is no HSA or FSA, but we are generally healthy and don't spend much each year. I could always increase the with holdings from my teaching jobs to make up the extra tax. It's hard to figure the right amount as things with the consulting and teaching are a bit uncertain each year.

I am not sure of my federal tax and %. I can find this information in turbo tax? I am at work now, but will check when I get home. Thanks for the advice. I'm realizing that as things having gotten more complex with my work situation, I need to get a better handle on these things.
Sorry, facepalm, I meant IRA.
Yes, it should be on the first page of your federal return for %.  The other would be on the last page of your 1040 form.  Both need to be filed for this to be there.
If your husband works for a public school, it would be unusual that he does not have a ton of benefits to take advantage of, including the FSA (daycare and health). 
As long as you pre-pay the amount you owed the year before, you won't have penalties so don't worry about that.
« Last Edit: February 24, 2014, 07:26:16 AM by Gin1984 »

MustachianAccountant

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Re: Tax Question
« Reply #5 on: February 24, 2014, 08:06:10 AM »
Also, if your husband teaches K-12, and had any out -of-pocket costs to buy classroom supplies, those can be deducted as well. Up to $250 on line 23 of the 1040, and anything over that goes on Sch A, Line 21.