gwgaccountant

[gwgaccountant]

Why would you have 24 hours left? Dawn doesn't happen at midnight!

#scheduled to go up at what I think is the earliest time dawn will happen that morning in the continental USA #income tax return #taxes #memes

[gwgaccountant]

"It's one income tax, Michael. What could it cost? 40%?"

The USA doesn't even have a 40% tax bracket any more. They only go up to 37%, and that's only for individuals with over $578k income (unless they're MFS), and of course all the income up to $578k is taxed at lower rates.

That's not even getting into the "Taxation is theft!" rhetoric. It's not theft any more than giving Christmas gifts or paying someone who successfully sued you are. It's a social contract—you pay the government, they use that money to provide everyone with services, and you vote to (theoretically) influence the amount you pay and what services they spend it on.

...I'm a tax preparer with multiple Libertarians in the family, this kind of rhetoric just grinds my gears.

A sad reminder that tomorrow is Tax Day

I only worked a couple of months last year so I got 1k back

#taxes #income tax return #us politics

[gwgaccountant]

are in game currencies you can buy with real money covered under the same laws that make nfts and bitcoin taxable?

DISCLAIMER

I am not an international tax expert. Tax laws are obviously different in different jurisdictions; something that's true in the USA might not be true in the UK or Ukraine or India or Japan or Kenya or whatever. Also, the details of individual games can affect their legal standing. You may wish to consult a local tax expert before filing your return.

Disclaimers aside, probably not.

The thing about NFTs is that you can resell them. If you buy an ugly ape for etherium, you can later sell that ape for etherium and sell the etherium for cash, hopefully more than you paid in. That's what makes crypto stuff taxable; it's an investment.

Most in-game currencies cannot be exchanged for real-world money. You can't buy Fortnite VBucks at 5¢ to the buck and resell it at 7¢ to make a profit, and you can't sell anything for real-world cash. (This the main reason why gambling regulations usually don't apply to lootboxes.)

As far as the law is concerned, buying VBucks in Fortnite is no different from buying DLC on Steam.

Aside from blockchain games like the infamous Axie Infinity, the only ways I can think of for in-game currency purchases to result in taxable transactions probably violate the terms of service. Back in ye olde World of Warcraft days, people would sell their in-game gold for real-world money—profitable, despite (or because of?) being against the TOS.

Obviously, people can buy premium video game currency with their own money; that's what premium currency is for. But hypothetically, if you used that currency to buy an in-game item that you sold for real-world money, that would be a taxable transaction. The amount you sold it for minus the price initially paid for in-game currency would be taxable game.

Again, this is probably a violation of the terms of service you agreed to without reading, which would make this a breach of contract. In the US, you are required to report illegal income; however, as per the fifth amendment, you don't have to report anything that would incriminate yourself. How you report such income without self-incrimination is an exercise for any reader running a Fortnite money laundering business.

#ask #video games #income tax return

[gwgaccountant]

Next year, please don't put it off this much.

it's unbelievable how quickly "I have all day to get this done, no big deal" can become "oh shit the deadline is in three hours" without you noticing

#income tax return

[gwgaccountant]

If only.

It would be really cool if there were someone who just filed my taxes for me, a real math guy, something of a "number man" if you know what i mean? haha sounds wild i know

#accounting #numbers #shitpost

[gwgaccountant]

I made a little diagram for two of my clients, to explain why the difference between the refund they'd get if they filed jointly and the tax they'd owe filing separately. I figured some of my followers might be interested to learn about that, too.

For those who don't know, the US federal government (and some states) has a graduated income tax. Assuming no other tax laws, the first $X you earn is taxed at A%, the next Y% is taxed at B%, the next Z% at C%, and so forth.

For US federal tax year 2023, the first $11,000 are taxed at 10%, the next $33,725 at 12%, the next $50,625 at 22%, et cetera. Well, those are the brackets for single taxpayers, as well as married taxpayers filing separately. Married taxpayers filing jointly (and qualified widow/ers) have larger tax brackets—twice as large, in fact.

If both taxpayers earn $10,000, their income will all be taxed at 10%. But if one earns $19,000 and the other $1,000? Well, their combined income is still within the 10% tax bracket for MFJ returns, so that's A-OK.

The tax savings from this mixing of income vary depending on the difference between the spouses' incomes. If they earn nearly the same amount, they'll be taxed at nearly the same rate. If they earn wildly different amounts, the tax savings could be wild.

There are other differences between filing MFJ and MFS, but most of them are designed to prevent edge cases where a couple could file separately to "double up" on a benefit or otherwise profit off that bit of bureaucracy.

For instance, if one spouse itemizes their deductions, the other must also. You can't have one spouse claiming all $50,000 in deductions and the other taking the standard deduction; either they split the itemized deductions or they both take the standard deduction.

I can't say that filing jointly is always the better option—partly because of edge cases the law didn't account for, but mostly because couples sometimes need to keep their finances separate for one reason or another. But if you can (safely) file jointly, it's almost always the better option.

#taxes #tax law #income tax return #tax advisory services

[gwgaccountant]

I've seen a few memes about how being able to deduct property taxes on your taxes but not rent is class warfare. I agree with the spirit, but it mostly makes me think the people writing those memes don't actually know much about taxes.

On one hand, it's not specifically property taxes. You get to deduct all taxes you pay to state and local governments. You could say that rich people getting to deduct more taxes than poor people is class warfare, but that's true of all deductions to some extent, and the state/local tax deduction less than pretty much anything else. After all, the state/local tax deduction is limited to $10,000, no matter how much state income tax you paid.

On the other hand, home mortgage interest is also tax-deductible, without any umbrella rule that happens to include home mortgage interest, and without any cap on how much can be deducted.

#income tax return #tax law #random thoughts

[gwgaccountant]

Not true! Wizard books are a business expense (for people who write a about wizards professionally), but that reduces your taxable income, not your taxes. Reducing your taxable income by $1000 reduces your federal income tax by $100 to $370. (Assuming you don't have any credits or wahtever affected by your AGI, that your income is higher than the standard deduction, etc etc.)

Don't take tax advice from wizards. Take magic advice from wizards and tax advice from accountants.

Insane that either I can pay the government 1000$ in taxes, or I can buy 1000$ worth of wizard books for work and write it off.

#nitpick #income tax return #tax law

[gwgaccountant]

Hm. Sounds like accountants have some work to do.

So I was reading a book on the history of double-entry bookkeeping in early-modern Britain today ("A History of the Modern Fact", by Mary Poovey), and the author mentioned offhand that numbers, far from being afforded universal respect in the late 16th century, actually carried pejorative associations with necromancy and black magic. Can you comment on this?

So, for most of human history, math has kinda been associated with magic. The fact that you can write a bunch of shapes on paper, and then manipulate those symbols to make a really good bridge, is kinda fucking crazy when you think about it.

"England in the late 16th century" is right about when John Dee died. It was after his death that his wizard notebooks were discovered and published. The fact that one of the queens most trusted confidants was actually literally trying to talk to angels with magic, was kinda the story of the century. It was around this time that Shakespeare wrote The Tempest, which featured a heavily John Dee inspired Prospero.

Dee's most significant contribution to England was actually his skill at cartography. Simply by correcting some astronomical math and pouring over charts, he figured out how to shortcut weeks off trade routes to India. The relationship between astronomy, mathematics, and Dee being a wizard, was not lost on English pop culture.

So, if you were an old guy in 1626 with a beard who spent all of his time cloistered in a big castle, and all you did was weird math, people might half-seriously speculate that you might be doing some wizard shit.

Additionally, this is a period where many mathematics texts from the Islamicate world were making their way to England. And you've gotta understand that like 25% of these Arabic math textbooks straight up had spells in them. Any English collegiate mathematician at this time would at least be tangentially aware that Islamic polymaths were doing some pseudo-religious stuff with mathematics. But that doesn't mean it was taken seriously beyond commonplace orientalism.

So I'm not sure if I would go so far as to say that numbers themselves had a negative association with magic. Like, accountants had normal boring math to do all the time and nobody cared.

I would say that mathematics were occasionally regarded with suspicion under specific circumstances.

#math #history

[gwgaccountant]

It's important to double-check your work. Even if you're 100% certain that you input all the numbers correctly, you never know when you might have correctly input the client's social security number in the income blank.

#based on a thing I did earlier today #needless to say the client did NOT have enough withholding for a ten-digit income #not sure how to tag this

[gwgaccountant]

I was reading something about Whitestown, Indiana and my eyes nearly popped out of my head thinking it was one of THOSE comically racist towns. Nice to know, at least the name, wasn’t that.

#names #unfortunate implications #irony #but the bloody kind

[gwgaccountant]

The stereotype of a Bad Tax Client is probably the self-employed individual who brings you a bag of loose receipts. Now, those can be frustrating, but I find the ones who just hand you a bank/credit card statement to be so much worse.

It's usually safe to assume that any receipt the client stuffed in their bag is relevant, and easy to figure out why they made that business transaction. There's an itemized list of everything cash was spent on, after all! (And a lot of the receipt folks stick different categories of receipt into different bags.) It's just data entry.

Bank statements, though? You have to squint at the business name, maybe do some googling, and then guess why the business owner might have spent money there. Was he renting the space? Buying tickets? Purchasing an unusually large quantity of merchandise? Was it actually a business transaction at all, or did the client put personal purchases on a business credit card?

#income tax return #business #I wrote this post because of a specific egregious example #he has two (related) businesses employing close to a dozen people with 6-digit revenue #but apparently doesn't care enough to hire an accountant to track expenses month by month #or even make a basic-ass spreadsheet to keep track of his expenses #which I know he *can* do because he does that for his rental properties! #ugh #I don't know if he even looks at the spreadsheets we make for him #also he either tries to pass off checks he writes to himself from his business account off as a salary expense #that or he just. does not understand how sole proprietorships work. #I don't want to complain too much but I don't like the data divination he makes me do #bonus: he uses the same credit card for both businesses #yeah thanks I'll just allocate all of that to the more-established business #dunno why you made two LLCs in the first place

[gwgaccountant]

I was pretty deep into calculating the answer before I noticed that the Times was being delivered in Ank-Morpork.

#discworld #accounting homework #(well technically this is a quiz but I'm not making a new tag for that)

[gwgaccountant]

I've been meaning to write some posts explaining basic accounting principles for curious laypeople. I've finally started!

The Fundamental Law of Debit and Credit

Equity

The fundamental laws of any field of study often seem unrelated to the final result. To discover why mixing baking soda and vinegar makes bubbles, you must learn atomic theory. To understand why a map never needs five colors, you must study triangles. To read a 10-K, you must know what the word "equity" means.

If you've heard the word "equity" (in a context where it doesn't mean "being equal"), you have probably heard of home equity loan—a way of obtaining cash based on the value of your house, assuming you could somehow afford one.

Home equity is quite simple; it's the difference between the current value of your house and the amount you owe to the bank. In a sense, it's the amount of house you own.

Assets, Liabilities, and Equity

Imagine that you are not only rich enough to own a house, but rich enough to own two houses. You took out a separate bank loan for the new house, but that's fine—you're ready to become a landlord, and rent payments are going to exceed loan payments.

This second house is essentially a small business. The house is a resource for which you expect to receive a future benefit, or in business terms, an asset. The loan is an obligation to fork over assets (specifically cash) in the future, or a liability. And the difference between them, as with your actual home, is your equity.

Houses don't literally just sit there and print money. You might take out a smaller loan to add a swimming pool to the lot, for instance. Or you might build a tree house, or realize you forgot to pay your handyman's fees. This complicates the situation slightly, but not by that much.

Total Equity = Total Assets - Total Liabilities

A real estate corporation managing hundreds of houses and loans, plus a bank account and salaries it hasn't paid yet and so on, its ownership split among dozens of shareholders, follows this same equation. But stating it like this isn't helpful for most accounting purposes; more commonly, you'll see it stated like this:

Total Assets = Total Liabilities + Total Equity

This highlights another perspective on what liabilities and equity represent. Liabilities are, in a sense, the portion of the company owned by (or at least owed to) its creditors, while equity is the portion of the company owned by its owners.

If you only own one or two houses, the exact numbers don't matter much. As long as you make enough money to pay all the bills, you're doing fine. But a big company has obligations to dozens of people—its owners, its creditors, possibly the SEC and similar agencies. A company needs to keep careful track of its assets and liabilities.

Double-Entry Bookkeeping

The origin of the most fundamental accounting technique has been lost to the sands of time. Some say it was invented in Israel under the early Roman Empire, or in Korea during the 11th century, or in Italy during the 13th century, or in India during a century not listed on Wikipedia.

It wouldn't surprise me if it was invented more than once, because the basic concept is dead simple. Your page has two columns. Write assets on the left, write liabilities on the right. Equity goes on the right, too, or something equivalent.

Modern accounting has a lot more rules. But they're all about what you write in each column; this structure has remained constant for almost as long as we have detailed accounting records that haven't crumbled to dust.

The Balance of Debit and Credit

Debits and credits are just the name we give to entries in those books. Increases to assets are called "debits"; increases to liabilities and equity are called "credits". But decreases to assets are credits, and decreases to liabilities or equity are debits.

Speaking very loosely: Debits are things the company wants, while credits are what it pays to get those things.

Remember that equation I showed you earlier? Assets equal liabilities plus equity? If an asset increases, one of three other things happened: Another asset shrank, or a liability or equity grew. If you acquire a new liability, you got rid of another, lost equity, or gained an asset. And so on.

This is the immutable axiom of accounting. 1 × a = a, ΔU = Q - W, debit equals credit. Or to put it another way:

Every transaction must have an equal balance of debit and credit.

What's up with the cards?

Might as well explain this real quick.

From a bank's perspective, your savings account is literally a liability. When you deposit your paycheck, the bank recognizes both cash and an obligation to return that cash. When you withdraw money, the bank reduces its cash, and also your account. Reducing your bank account is a debit, and that's true whether you're withdrawing physical cash or using a plastic card to pay for groceries electronically. It's a card that debits your account.

As for credit cards...well, that's just a case of one word having multiple meanings. "Credit" has its accounting definition, and also the definition of "letting someone borrow money". They're not unrelated—a business borrowing money credits some liability to represent that debt—but credit cards aren't related to accounting credits.

#accounting basics #accounting #debit #credit

[gwgaccountant]

Accounting terminology is dumb and I want to complain about it.

State and local governments (at least in the US) categorize their revenue and expenditures into numerous "funds," a word which here basically means "sets of accounting documents"; of which is handled differently for various legal reasons. Funds earmarked for building a new highway go in a capital project fund, toll toad income and expenses go into an enterprise fund, pension trust funds contain money the government set aside for government pensions, etc.

Funds fall into three broad categories. Fiduciary funds are money held by the government in some fiduciary capacity, so no complaints there. Activities which collect significant user fees are accounted for with proprietary funds. I don't know why they're called that, but it's distinct.

Then there are the funds which account for services provided to citizens by governments. Road-building, fire-fighting, education, etc.

They're called governmental funds.

Could the GASB have picked a less descriptive name??

#accounting #terminology #ambiguity #why

[gwgaccountant]

I don't know what the tax laws are in the Netherlands, but if they're like US ones you should be able to delete the column with the donation text.

doing my taxes rn i cant be showing these donations to my accountant man come on

#taxes #income tax return

[gwgaccountant]

In my Advanced Financial Accounting class, we were taught about the SEC. Among its divisions and offices is the Office of the Chief Accountant, which mainly serves to advise the commissioners about accounting and auditing matters which are relevant to securities law. It also works with private groups like the FASB and AICPA.

But most importantly for Tumblr, there is indeed a specific person whose title is Chief Accountant. His name is Paul Munter. [citation] That is such an amusingly specific yet superficially grandiose title. Chief Accountant.

#us politics #securities and exchange commission #job titles #random stuff