Client will eventually file Federal, NC Resident and AL NR. He wants to make sure he owes nothing when he files. So the question is how much to have him send in.
He has $23K of ordinary Federal income (wages mostly but also some section 1231 income that the notes on the K1 say are ordinary income in this case.) He has $20K of standard deduction personal exemptions and tuition and fees deduction. He also has $58228 of interest, qualified dividends and capital gains on forms K1. The reason he can't file timely is that instead of one K1 he has a letter telling what will be on the K1 which will come out next week when the family member who must sign the documents that go to the IRS gets around to signing them.
Nothing goes to NC except what comes from Federal but the K1s say that for Alabama there is $10224 of additional ordinary income and $2340 of dividends.
He has had 1253 withheld for Fed, 815 for NC and 3K for Alabama.
My thinking is that is tax for the Fed will be zero because so little of his income is ordinary and so much is tax advantaged.
My thinking is that for NC his taxable income will be $63628 and his tax 4454 or 3638 more than his withholding. But wait his credit for tax paid to AL is 58298 taxed by both times 5% or 2915 so he is actually only going to be $723 short.
My thinking is that for Al his taxable income will be 70292 and his tax will be 3540 which is 540 more than he has already paid in.
Can anyone see any holes in my work? He's particularly anxious to pay Al all he is going to owe them because their ftp penalty is draconian.
He has $23K of ordinary Federal income (wages mostly but also some section 1231 income that the notes on the K1 say are ordinary income in this case.) He has $20K of standard deduction personal exemptions and tuition and fees deduction. He also has $58228 of interest, qualified dividends and capital gains on forms K1. The reason he can't file timely is that instead of one K1 he has a letter telling what will be on the K1 which will come out next week when the family member who must sign the documents that go to the IRS gets around to signing them.
Nothing goes to NC except what comes from Federal but the K1s say that for Alabama there is $10224 of additional ordinary income and $2340 of dividends.
He has had 1253 withheld for Fed, 815 for NC and 3K for Alabama.
My thinking is that is tax for the Fed will be zero because so little of his income is ordinary and so much is tax advantaged.
My thinking is that for NC his taxable income will be $63628 and his tax 4454 or 3638 more than his withholding. But wait his credit for tax paid to AL is 58298 taxed by both times 5% or 2915 so he is actually only going to be $723 short.
My thinking is that for Al his taxable income will be 70292 and his tax will be 3540 which is 540 more than he has already paid in.
Can anyone see any holes in my work? He's particularly anxious to pay Al all he is going to owe them because their ftp penalty is draconian.
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