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Old 01-23-2019, 09:29 AM
 
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Without going into details, i needed to increase my tax liability for 2018 to be able to take advantage of some fed tax credits that are tied directly to 'total tax liability'; I converted some traditional ira into roth (about 38k worth), but now that i'm doing the math, i see that it wasn't nearly enough to get the full fed credit :-(
i'm really bummed out because i'm essentially leaving thousands of dollars (not rollable to future years) on the table.

Can anyone think of any LEGAL ways to directly or indirectly increase my tax liability for 2018 right now? (Jan 2019). I know rolling iras, selling stocks, etc. all need to happen before 1/1/2019; so i know those options are all out. but are there any other possibilities i'm missing? perhaps indirectly? Is there anything for instance i can do with 'depreciation' on a rental property i currently have? (i will be selling it in 2019). Can i give some of that depreciation back in 2018?


I would NOT be surprised if the answer is a solid NO! but any insight would be greatly appreciated.
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Old 01-23-2019, 09:53 AM
 
798 posts, read 920,511 times
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How much more income do you need?


Report Gambling Income- dosent require any forms. It would be weird to the IRS to see income reported without a W2G from a non professional but people do report this income. Mostly to then offset it with losses. If you reported less than 10,000 in this area I doubt it would raise any questions at all.

Other income from gigs I.E. income that would not show up on a W2.

Did you sell a car or anything you can say you made a profit on.

If you made a traditional IRA contribution in 2018 you could forget to deduct it. Very easy to do since those tax forms go out in April and most do taxes before then.

Omitting deductions you're eligible for will increase your tax liability. Visit the uncommon income areas of the tax software for ideas where you may be able to manufacture income.

I'm sure others have good ideas.

Last edited by UntilTheNDofTimE; 01-23-2019 at 10:41 AM..
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Old 01-23-2019, 10:22 AM
 
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It sounds like this wouldn't work for you since you have rental income...when I do my taxes I always take the standard deduction. Although there's no rule that says you have to. You can literally itemize your taxes and if that amount is lower than the standard deduction, you could still elect to take it. Conversely you can take the standard deduction and not itemize even if you have higher itemized deductions. Again I'm not sure how negatively that would affect you in other areas.

Just throwing some ideas out there.
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Old 01-23-2019, 09:22 PM
 
3,673 posts, read 4,936,279 times
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So, i've entered most of my numbers in Turbo Tax. I'm still trying to figure out my "tax liability" as the credits depend on this figure. So in the Tax summary form of Turbo tax, For Tentative Tax, i show 22,851. Total Credits: 6000 (from dependents i believe). other taxes: 153. Total Tax: 17,004.

Does that mean my tax liability is 17,004 or is it 22, 851?
I think it's the former....which would SUCK big time cause again, it would mean i'm going to be leaving $$$$$ on the table.

any insight appreciated.
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Old 01-23-2019, 09:36 PM
 
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Your tax was $23,004 and reduced $6,000 for your credits and now it's $17,004?

What am I missing?

Generally people want to pay LESS tax not more.
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Old 01-24-2019, 06:47 AM
 
1,155 posts, read 526,666 times
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Quote:
Originally Posted by Thinking-man View Post
So, i've entered most of my numbers in Turbo Tax. I'm still trying to figure out my "tax liability" as the credits depend on this figure. So in the Tax summary form of Turbo tax, For Tentative Tax, i show 22,851. Total Credits: 6000 (from dependents i believe). other taxes: 153. Total Tax: 17,004.

Does that mean my tax liability is 17,004 or is it 22, 851?
I think it's the former....which would SUCK big time cause again, it would mean i'm going to be leaving $$$$$ on the table.

any insight appreciated.
since you haven't said what credits you're looking to use it's kind of hard to tell you exactly which number represents "tax liability" definitively, but since line 15 of the 1040 is labeled "total tax" I would expect that the $17,004 number is the one you would use.
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Old 01-24-2019, 07:25 AM
 
3,673 posts, read 4,936,279 times
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Quote:
Originally Posted by wheelsup View Post
Your tax was $23,004 and reduced $6,000 for your credits and now it's $17,004?

What am I missing?

Generally people want to pay LESS tax not more.
hehe yeah, i know what you mean...but in this case, having more tax liability means i can take all of the credits due to me, and not having enough tax liability means i'll be leaving money on the table (ie. won't be able to take the full tax credit if i don't have a certain amount of tax liability)

Quote:
Originally Posted by SuiteLiving View Post
since you haven't said what credits you're looking to use it's kind of hard to tell you exactly which number represents "tax liability" definitively, but since line 15 of the 1040 is labeled "total tax" I would expect that the $17,004 number is the one you would use.

Yes, i actually finally found it on turbo tax' website. The 'Tax Liability' is indeed the "Total Tax" line on form 1040. Thank you for the reply.
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Old 01-24-2019, 01:08 PM
 
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I'm essentially leaving about 5500 on the table by not having a high enough tax liability! Hard cold cash!

Now I'm just trying to mitigate the pain.....is there anything anyone can think of? Are there any deductions that I can forego taking this year, and instead take them in 2019? 529 contributions? (But, no....that only impacts the state taxes I think....)

Anything else anyone can think of?
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Old 01-24-2019, 03:30 PM
 
Location: NC
889 posts, read 677,093 times
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Are you required by law to take the child tax credit?
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Old 01-24-2019, 04:51 PM
 
362 posts, read 228,136 times
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My daughter bought an electric car this year and thought she would get a $7500 tax credit. Before she bought it I did some research and found the following-

To qualify for the full amount available, you must have a federal tax liability in the year you purchase the vehicle that meets or exceeds the incentive amount. If the EV has a $7,500 tax credit available, and you only have a tax liability of $2,500, you can only take a $2,500 vehicle tax credit. Excess credits cannot be carried from year to year. The incentive is a one-time offer. You can only claim the tax credit the year you purchase the EV.

She bought it anyway, but if she could have shifted some 2019 taxes into 2018 she could have benefited more from the car purchase. I assume the original poster has a similar situation although I can't think of anything that would give him an almost $22,000 tax credit.
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