I received $40,000 from Wells Fargo as compensation for placing me in a higher mortgage rate than I qualified for. They mentioned I might have to pay taxes on this money. Why would this be considered income, and should I expect to pay taxes on it?

May 28th, 2024

I need to withdraw $35,000 from my IRA on January 2, 2014, and I do not qualify for any withholding exemptions. I am not yet 59-1/2, and my husband and I make about $250,000 annually with no significant tax write-offs. We are in a high tax bracket. Should I request no tax withholding on the IRA withdrawal to receive $35,000 and settle up with taxes and a $3,500 penalty at tax time, or should I withdraw more, say $70,000, and have about 50% withheld to net the $35,000? The $35,000 withdrawal adds less to our overall income and results in a smaller penalty, but I'll have to come up with all the tax money when I file my 2014 taxes. The $70,000 withdrawal with withholding solves the 'paying taxes' situation but results in a higher income, a higher penalty, and a bigger hit to my overall IRA funds.

June 13th, 2023

As an aircraft mechanic paid on a 1099, can I deduct the cost of tools and work clothes used exclusively for work on my taxes? Additionally, if I buy tools in 2014 before filing my 2013 taxes, can those tools be deducted on the 2013 taxes?

June 2nd, 2024

My father, a retired US citizen living in Germany, did not pay taxes on his US Social Security income to the German system. What was their tax liability and what part of their annual Social Security income was exempt from German taxation? How much might my father owe in back taxes and penalties, and is it possible he may not owe anything due to an exemption amount under the US-Germany tax treaty?

June 18th, 2023

What is the tax liability for a wife who has declared bankruptcy and is separated from her husband, considering various scenarios of debt forgiveness and NOLs (Net Operating Losses)?

August 1st, 2024