The Tax Questions Blog

Archive for the ‘Is This Taxable’ Category

Question: Is Income-Based Jobseeker's Allowance taxable?

On my P46 I have to fill in whether I have been recieving taxable Jobseeker's Allowance or not. I don't know which to tick because I have been recieving JSA but it is income-based, not contribution's-based so I don't think it's taxable?

Answer: Yes - all INCOME (no matter where from ) is 'potentially' taxable (that's why they call it 'Income Tax' ) = see link

The reason why most people on benefits pay no tax is because their total benefits is less than their Personal Allowance ..

However, if you have other income (unlikley, if you are receiving Income Based JSA) when this is added on top of the JSA it may take you over the PA limit ..

Question: How do I avoid or minimize taxes on a one-time $60k gift from my parents?

Mom & dad just completed a refi on their home. They have paid off their bills and are debt free. They want to give me $60k as an early inheritance of sorts. I want to put the money in a money market account and keep it available just in case they need it a few years down the road. Mom wants it out of her name to avoid conflict with siblings just in case she passes unexpectedly. How do I receive this money without it being considered taxable income. After all, it will probably be going back to mom and dad eventually.

Answer: Your parents are going into debt to give you money you might give back to them? Something is missing from your question.

However, gifts are not taxable income as others have pointed out. The earnings on the invested gift will be taxable to you.

The Bulgaria 2010 Review: Finance

Bulgaria's Finance Minister Simeon Djankov. Photo by BGNES Bulgaria's center-right government revived its plans to apply to join the bloc's exchange-rate mechanism, the so-called Eurozone waiting room, after it was forced to drop the euro bid in April this year over a larger than expected 2009 deficit.

Question: I sold home last year, I'm single and owned it for three years - profit from sale was 45k, is that taxable?

Do I have to report the money I made (45k) from the sale of my condo which was my main and only residence when I file my income taxes? I owned it for almost three years and I'm single.

Answer: The previous responses are accurate (125K if you're single, the 250 is joint). You still must claim it on Schedule D. You write "Sale, Prim Res" on the line, the sale price, adjusted cost basis, etc to get your "gain". The very next line, write "Sect 128 Deduction" and write in the exact opposite of your gain. Hence, you still report it, but it zeros out.

Form guide to the race for riches

GET with the trend is usually wise advice for an investor, even if that trend is hard to spot, as it was this past year.

Question: Why am I getting so much less this year Part 2?

ok, so I dont know how to reply to these after an answer.
last years return (2006) my gross income was $28,850, and $0 on Standard Deductions, Exemptions, and Taxable Income. I claimed $1500 or so in student loan interest paid.

This year (2007 return) I have 2 jobs instead of one, with a total gross income of $42,452. The fed tax withheld is $4,506.01, SS withheld $2,632, and Med withheld is $615. These are all totals from both W2s together.
I paid 1420.22 in student loan interest this year.

2007 Standard Deduction $5,350
07 Exemptions $3,400
07 Taxable Income $32,281

why were the above all $0s for '06, but not now? heh, Did I go into some other bracket that screws up my ability to get money back? My refund over the past 4 years has been between 700-800$, but this year inputting the same info I seemingly get a grand total of $13.
what else should I post numbers-wise? Is there anyone who has a possible answer as to why I'm getting so much less bak?

Answer: If those are actually your numbers from your '06 return, it sounds like there was a serious mistake made.

Just think about it for a minute. You earned $28,850. You then claimed zero in deductions (when you really should have claimed the standard deduction, but that's beside the point right now) and zero in exemptions (when, again, you should have claimed at least yourself, so that would have been even more to deduct from your income before you calculated your tax)

Anyway -- if you deducted NO deductions from your income, then your taxable income should still have been $28,850! The fact that you reported NO taxable income, in my opinion, means your taxes were not done properly.

I'll be interested to see if anyone else has another possible explanation. I hope for your sake that it turns out I'm wrong.

The 10 Money Moves to Consider Before 2010 Expires

New Year's Eve is almost here, but don't let that stop you from making some important money moves now, before Dec. 31, so you can reap the benefits in 2011.

i wanna be a big CEO, santa!

Question: I get a SS income yearly and a IRA traditional distribution yearly. What part is taxable?

$l4000.SS income yearly and $6000. Ira traditional distribution yearly. What is taxable?
State of Rhode Island.
Thank you

Answer: The formula for taxation on SS benefits is as follows. Take one half of the SS benefit, $7,000 in your case and add that to all of the other taxable income you received during the year, $6,000. For you that would be a total of $13,000. The threshold for a single person is $25,000 and a married couple would be $32,000. Since you total is less than those thresholds your SS is not taxed. Therefore you have $6,000 of taxable income. If you are single you would have a $5,700 standard deduction and $3,650 personal exemption. That would reduce your tax liability to zero.

Should You Take A Tax Loss In December?

Naysayers are telling you that tax loss harvesting can backfire. On the contrary, the most common mi

Gold and Silver Bullion: Yes! Your American Silver and American Gold Eagles Can Fall into Taxation!