I owe IRS $1500 !!!!

[SyahM]

just find out that I owe them freaking $1500!! why? Ok, when I was at school I part-timed as an independent contractor so the company sent me form 1099-MISC with over $15k in nonemployee compensation. I know i'm obligated to pay taxes but with that money, I pay my college fees and expenses. According to IRS website, I could request a waiver, but how am i going to go about requesting one? Can you guys recommend me a good tax lawyer/accountant that could help me with this issue. Really, $1500 is too much 🙁 🙁
BTW, i'm from st. louis.

 

[dullard]

Are you a dependant? If so, the IRS thinks your parents should be paying for your college education. Thus the IRS gives them tons of tax breaks for all those expenses. Of course, if you are a dependant and you pay for your own expenses you are screwed. There is nothing to do, since your parents are getting your tax deductions. Maybe ask them if they will share it with you.

 

[911paramedic]

That is a federal debt, so I don't think it matters where you are from. You may be able to get a payment plan but they will charge you interest on it...

 

[Queasy]

Unless you are working under the table, ALWAYS put money aside for taxes if it is not taken out of your paycheck.

You can try claiming yourself as a dependent of your parents but I don't know how much of a break that would give you. You would still end up owing something.

 

[Aceshigh]

I know i'm obligated to pay taxes but with that money, I pay my college fees and expenses.

So since you pay college fees and expenses, you don't think the income you have should be taxed?

I work full time and go to school full time. I pay taxes on all my income. Just because you were an independent contractor and not a full time employee does not give you the right to avoid taxes on your income. Claim your rightful student tax credit and stop trying to weasel your way out of paying your income tax.

 

[gopunk]

Originally posted by: Queasy
Unless you are working under the table, ALWAYS put money aside for taxes if it is not taken out of your paycheck.

You can try claiming yourself as a dependent of your parents but I don't know how much of a break that would give you. You would still end up owing something.

don't you owe more as a dependant than not? that's how it is for me, at least

 

[911paramedic]

Originally posted by: gopunk

Originally posted by: Queasy
Unless you are working under the table, ALWAYS put money aside for taxes if it is not taken out of your paycheck.

You can try claiming yourself as a dependent of your parents but I don't know how much of a break that would give you. You would still end up owing something.

don't you owe more as a dependant than not? that's how it is for me, at least

Yes you will, because your parents already used your alloted deduction.

 

[Turkey22]

On a lighter note I only owe 500 but I'm filing with my new wife so we'll prolly break even. She's kinda mad but hey I spent most of it on her anyways...

 

[Queasy]

Originally posted by: 911paramedic

Originally posted by: gopunk

Originally posted by: Queasy
Unless you are working under the table, ALWAYS put money aside for taxes if it is not taken out of your paycheck.

You can try claiming yourself as a dependent of your parents but I don't know how much of a break that would give you. You would still end up owing something.

don't you owe more as a dependant than not? that's how it is for me, at least

Yes you will, because your parents already used your alloted deduction.

That's right. I forgot how that worked because its been so long since I filed as a dependent. 🙂

Either way, what I said about putting money aside for taxes is always true.

 

[SyahM]

Originally posted by: dullard
Are you a dependant? If so, the IRS thinks your parents should be paying for your college education. Thus the IRS gives them tons of tax breaks for all those expenses. Of course, if you are a dependant and you pay for your own expenses you are screwed. There is nothing to do, since your parents are getting your tax deductions. Maybe ask them if they will share it with you.

Nope, my parents are not in the states and I'm no one else's dependent.
I know tax is everyone responsibility, but if there's a way to lessen the balance due/penalty, why would I want to miss that? No harm in asking right?

 

[Queasy]

Originally posted by: SyahM

Originally posted by: dullard
Are you a dependant? If so, the IRS thinks your parents should be paying for your college education. Thus the IRS gives them tons of tax breaks for all those expenses. Of course, if you are a dependant and you pay for your own expenses you are screwed. There is nothing to do, since your parents are getting your tax deductions. Maybe ask them if they will share it with you.

Nope, my parents are not in the states and I'm no one else's dependent.
I know tax is everyone responsibility, but if there's a way to lessen the balance due/penalty, why would I want to miss that? No harm in asking right?

The best you could probably do is setup a payment plan with the IRS to pay monthly towards what you owe.

My wife (then girlfriend at the time) underestimated what she owed on taxes on year and had to do this. Incidently, I now handle all our taxes. 😀

 

[Fritzo]

If you can help it, NEVER work as a contractor. Something similar happened to be some years ago. When you're a contractor, you essentially have your own business. Normally, your employer picks up the hefty income taxes for you, but since you're considered "self employed", you're nailed for up to 40% for your gross right off the bat. That's why you should demand top dollar if you're working as a contractor...you end up getting screwed in the taxes.

 

[dullard]

Nope, my parents are not in the states and I'm no one else's dependent.
I know tax is everyone responsibility, but if there's a way to lessen the balance due/penalty, why would I want to miss that? No harm in asking right?

Ok that was very important information. Eack country has negotiated with the US government on taxes. Some countries did very well, and some others did very poorly. Thus depending on what country you are from your taxes may be thousands of dollars different. If you filled out the forms properly and it says you owe $1500 then you owe $1500. It is possible to get a delay and spread it out in payments. But that will cost you a lot of interest. But you do have until April 15 - save up as much as you possibly can and use that as a downpayment. Your tax instructions will tell you what form to fill out to make payments on the rest.

$1500 out of $15,000 is just 10%. That is not too much tax. I know it hurts when you are a poor college student, but at least you aren't paying 30%.

All employees must pay rougly a 14.5% tax for Social Security and Medicare (Not even the tax friendly president Bush will cut that 14.5% tax). Then you must pay income tax on the rest of the money. There is a law that the employeer must pay half of that 14.5% - unless you work as an independant contractor. That is where you were screwed.

Can you deduct education expenses? (It depends on the country you came from.)

 

[SyahM]

Originally posted by: axiom
If your employer was not witholding the tax money already then you will have to pay taxes. $15,000 is pretty damn good pay for a college student. In fact, that is probably the best pay I have ever seen for a full time college student. I'm sure that amount raises an alarm with the IRS. In my work study program to contribute towards my college costs I only managed $2500 per year. What kind of work are you doing?

I delivered newspaper in the morning, very tough job but the pays is good. I need to see someone expert in tax to help prepare my tax. Tried the online tax return but there are like 10 errors.
How's H&R Block in this business, are they recommended?

 

[dullard]

How's H&R Block in this business, are they recommended?

Any company like H&R Block will work fine. But before you pay for that, check out your college. Many colleges have free tax advice for foreign students.

 

[Double Trouble]

First, you have to get a little more information to determine what you really do (or don't) owe. It sounds like you've done a return on Turbotax or Taxcut, but that's not always the best solution. Those apps follow standard lines, they don't explore all possible avenues.

As a student, you can claim tuition tax credits as well as a host of other potential credits, but in your situation I'd go see my local H&R Block rep (or someone who's a tax pro). Then, once you've established your real tax liability, if it turns out you'll owe a substantial amount and you can't come up with it, you can request a payment plan from the IRS. It's not too difficult to do, but you can only do it once per x years (I don't remember what the number is), so make sure you don't end up in the same boat next year.

Whatever you do, don't just let it sit and ignore it or forget to file or something, that will really mess ya up.....

 

[athithi]

How's H&R Block in this business, are they recommended?

Not by me. For the fee that they charge, they do little else but fill out your information in their Tax s/w (maybe an advanced version of TaxCut) and don't offer a single piece of advice. When I used them in 1999, I had to pay $4000 to the IRS - the H&R Block guy quipped, "You make too much money"

But you may get better service depending on the people you go to, I guess. I was grossly underwhelmed by my experiences with H&R Block in two place, - MD and VA. I won't try them again.

 

[SyahM]

Originally posted by: tagej
First, you have to get a little more information to determine what you really do (or don't) owe. It sounds like you've done a return on Turbotax or Taxcut, but that's not always the best solution. Those apps follow standard lines, they don't explore all possible avenues. As a student, you can claim tuition tax credits as well as a host of other potential credits, but in your situation I'd go see my local H&R Block rep (or someone who's a tax pro). Then, once you've established your real tax liability, if it turns out you'll owe a substantial amount and you can't come up with it, you can request a payment plan from the IRS. It's not too difficult to do, but you can only do it once per x years (I don't remember what the number is), so make sure you don't end up in the same boat next year. Whatever you do, don't just let it sit and ignore it or forget to file or something, that will really mess ya up.....

ok, will do that. I did use turbotax online 🙂 this issue really make me down for the past few days.

 

[n0cmonkey]

10% is too much? Jeez, I wish I only had to pay 10% in taxes...

 

[Viper GTS]

Originally posted by: SyahM

Originally posted by: tagej
First, you have to get a little more information to determine what you really do (or don't) owe. It sounds like you've done a return on Turbotax or Taxcut, but that's not always the best solution. Those apps follow standard lines, they don't explore all possible avenues. As a student, you can claim tuition tax credits as well as a host of other potential credits, but in your situation I'd go see my local H&R Block rep (or someone who's a tax pro). Then, once you've established your real tax liability, if it turns out you'll owe a substantial amount and you can't come up with it, you can request a payment plan from the IRS. It's not too difficult to do, but you can only do it once per x years (I don't remember what the number is), so make sure you don't end up in the same boat next year. Whatever you do, don't just let it sit and ignore it or forget to file or something, that will really mess ya up.....

ok, will do that. I did use turbotax online 🙂 this issue really make me down for the past few days.

Try H&R block's free file, it picked up a lot more for me than TurboTax did.

Viper GTS

 

[kranky]

When you determined you owe $1500, did you subtract all your expenses to offset against your income?

 

[SyahM]

Originally posted by: kranky
When you determined you owe $1500, did you subtract all your expenses to offset against your income?

i think i did but i must've missed a lot, that's why i need to talk to someone expert.

 

[rufruf44]

Are you on I-20? If you're, you might have more problem coming if INS find out. AFAIK, I-20 limits students to campus work only, and even that might not exceed 20hrs/week(there might be exception). Defintiely check with the International Student office. While you're there, definitely check for the tax treaties as well. Like Dullard said, your income might be totally tax-free depend on the treaty.
Personally, I don't think Turbo Tax Online do 1040NR or 1040NR-EZ though.

 

[SyahM]

Originally posted by: rufruf44
Are you on I-20? If you're, you might have more problem coming if INS find out. AFAIK, I-20 limits students to campus work only, and even that might not exceed 20hrs/week(there might be exception). Defintiely check with the International Student office. While you're there, definitely check for the tax treaties as well. Like Dullard said, your income might be totally tax-free depend on the treaty. Personally, I don't think Turbo Tax Online do 1040NR or 1040NR-EZ though.

i have OPT now and I think I should be fine. On my way to International Office to make sure everything is fine.

 

[dirtboy]

I go to school full time and I work full time, as I am self employed. I sent the IRS all kinds of money every quarter. Just because you're in school doesn't mean you're exempt. Yes, you can write off some of your school expenses, but otherwise you're going to have to pay like the rest of us.