Making Work Pay Question

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Subject Author Date Making Work Pay Question scott s. 06-01-2009  Re: Making Work Pay Question Phillip Marti 06-02-2009  Re: Making Work Pay Question Harlan Lunsford 06-02-2009  Re: Making Work Pay Question scott s. 06-02-2009  Re: Making Work Pay Question Harlan Lunsford 06-03-2009  Re: Making Work Pay Question scott s. 06-03-2009  Re: Making Work Pay Question Paul Thomas, CPA 06-03-2009  Re: Making Work Pay Question Mark Bole 06-03-2009  Re: Making Work Pay Question Phillip Marti 06-04-2009  Re: Making Work Pay Question Don Priebe 06-04-2009
Posted by scott s. on June 1, 2009, 5:48 pm Please log in for more thread options Have to start work on my Q2 federal estimates. My wife and I receive military pensions. Our witholding has been reduced, but as I understand our tax liability is unchanged, so we must adjust witholding or balance it out in estimated payment. We also receive VA disability compensation and I guess we both will get $250 which is not taxed, but would be applied against any credit for employment income. What I haven't seen is that my wife has a sked C business. How is this affected? Does she get a credit minus the VA $250 against SE or regular tax? scott s. .. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Phillip Marti on June 2, 2009, 6:55 am Please log in for more thread options "scott s." wrote: > What I haven't seen is that my wife has a sked C business. How is > this affected? Does she get a credit minus the VA $250 against SE > or regular tax? On your joint return the maximum credit (assuming no AGI-related phaseout) is the lesser of $800 or 6.2% of earned income, which includes net income from self-employment. Subtract from that any $250 payments you get. The balance is available as a refundable credit on your 1040. -------------- Phil Marti, VITA Volunteer Clarksburg, MD -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Harlan Lunsford on June 2, 2009, 3:41 pm Please log in for more thread options Phillip Marti wrote: > "scott s." wrote: > >> What I haven't seen is that my wife has a sked C business. How is >> this affected? Does she get a credit minus the VA $250 against SE >> or regular tax? > > On your joint return the maximum credit (assuming no AGI-related phaseout) > is the lesser of $800 or 6.2% of earned income, which includes net income > from self-employment. Subtract from that any $250 payments you get. The > balance is available as a refundable credit on your 1040. > The only quibble I have with this is in reference to $800 being the max, since there is only one spouse with the schedule c business. After all, I don't think the $800 will apply to me, what with my spouse not working and only I have wages. ChEAr$, Harlan Lunsford, EA n LA -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by scott s. on June 2, 2009, 9:50 pm Please log in for more thread options > Phillip Marti wrote: >> "scott s." wrote: >> >>> What I haven't seen is that my wife has a sked C business. How is >>> this affected? Does she get a credit minus the VA $250 against SE >>> or regular tax? >> >> On your joint return the maximum credit (assuming no AGI-related >> phaseout) is the lesser of $800 or 6.2% of earned income, which >> includes net income from self-employment. Subtract from that any >> $250 payments you get. The balance is available as a refundable >> credit on your 1040. >> > > The only quibble I have with this is in reference to $800 being the > max, since there is only one spouse with the schedule c business. > After all, I don't think the $800 will apply to me, what with my > spouse not working and only I have wages. > > ChEAr$, > Harlan Lunsford, EA n LA > thanks. I take it the point is there is a credit available to someone either with W2 wage income or sked c income. Max is $400 even if MFJ assuming ony one spouse has this income? So would 1 $250 VA payment go against this or both ($500) so no additional credit is allowed? scott s. .. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Harlan Lunsford on June 3, 2009, 7:53 am Please log in for more thread options scott s. wrote: > >> Phillip Marti wrote: >>> "scott s." wrote: >>> >>>> What I haven't seen is that my wife has a sked C business. How is >>>> this affected? Does she get a credit minus the VA $250 against SE >>>> or regular tax? >>> On your joint return the maximum credit (assuming no AGI-related >>> phaseout) is the lesser of $800 or 6.2% of earned income, which >>> includes net income from self-employment. Subtract from that any >>> $250 payments you get. The balance is available as a refundable >>> credit on your 1040. >>> >> The only quibble I have with this is in reference to $800 being the >> max, since there is only one spouse with the schedule c business. >> After all, I don't think the $800 will apply to me, what with my >> spouse not working and only I have wages. >> >> ChEAr$, >> Harlan Lunsford, EA n LA >> > thanks. > > I take it the point is there is a credit available to someone > either with W2 wage income or sked c income. Max is $400 > even if MFJ assuming ony one spouse has this income? So would > 1 $250 VA payment go against this or both ($500) so no additional > credit is allowed? > > scott s. It's like this. My wife and I both get Social security, just as you and your both get VA disability. So we both got out 250$ last month. She doesn't work, so that's all she gets. I still do, and will compute my maximum credit of $400 next year at tax time, but will have to subtract my 250$ from that. Mine is based on wages, but could be from schedule c instead. Results are: wife got 250, and I got the 400. ChEAr$, Harlan Lunsford, EA n LA -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted live in NY, work in NJ tax question January 25, 2007, 2:43 am FSA dependent care question - my math doesn't work!!!??? January 10, 2007, 9:38 pm IRS made a mistake and making me pay November 12, 2007, 12:11 am "creative" suggestions for making child care a business expense November 6, 2006, 12:19 am how does IRA recharacterization tax work? 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