TAX question - doing tax myself - confused

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TAX question - doing tax myself - confused

Postby confusedinvestor » Wed Mar 13, 2013 9:54 am

Hi Folks,

I do my taxes every year using Turbo Tax but this year is very complex for person like me....pls help me....

1. I invested some $$ in stocks/bonds using wells-trade retail site last tax-year (2012) but never SOLD any shares - DO I STILL NEED TO REPORT TO IRS THAT i bought stocks/bonds?.......i DIDNOT yet get any tax forms from WellsTrade for my stock/bonds purchase last year

2. I have opened a ROTH IRA for my Wife - DO I STILL NEED TO REPORT TO IRS THAT I HAVE OPENED ROTH IRA for my wife in WellsTrade?.......Which FORM should I need to submit in TurboTAX?

3. I have moved my traditional IRA from Fedelity to WellsTreade (what a mistake) - DO I STILL NEED TO REPORT TO IRS THAT I MOVE my IRA from Fido to WT?......again, i didnot get any tax forms from Wellstrade or Fedelity on this...

I am very confused and concerned what to do....my wife is telling me i am messing up her reitirement and taxes....so please help....
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Re: TAX question - doing tax myself - confused

Postby confusedinvestor » Wed Mar 13, 2013 10:42 am

any thoughs?
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Re: TAX question - doing tax myself - confused

Postby damjam » Wed Mar 13, 2013 10:54 am

confusedinvestor wrote:Hi Folks,

I do my taxes every year using Turbo Tax but this year is very complex for person like me....pls help me....

1. I invested some $$ in stocks/bonds using wells-trade retail site last tax-year (2012) but never SOLD any shares - DO I STILL NEED TO REPORT TO IRS THAT i bought stocks/bonds?.......i DIDNOT yet get any tax forms from WellsTrade for my stock/bonds purchase last year
You report sales, when you report your future sales you will also report date of purchase. So no reporting now.

2. I have opened a ROTH IRA for my Wife - DO I STILL NEED TO REPORT TO IRS THAT I HAVE OPENED ROTH IRA for my wife in WellsTrade?.......Which FORM should I need to submit in TurboTAX?
AFAIK, Roth IRAs are not reported unless you qualify for the "saver's credit," which applies if your income is = or < than $57,500 and you are filing MFJ.

3. I have moved my traditional IRA from Fedelity to WellsTreade (what a mistake) - DO I STILL NEED TO REPORT TO IRS THAT I MOVE my IRA from Fido to WT?......again, i didnot get any tax forms from Wellstrade or Fedelity on this...
Did you make the move in 2012? If so you should have received a 1099-R from Fidelity with a code in Box 7 indicating a direct rollover (Code G I think). Contact Fidelity if you did not receive that form.

I am very confused and concerned what to do....my wife is telling me i am messing up her reitirement and taxes....so please help....
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Re: TAX question - doing tax myself - confused

Postby greenspam » Wed Mar 13, 2013 11:01 am

concerning item #3, perhaps it was a trustee-to-trrustee transfer, which is not considered a rollover, hence no 1099-R:

see: http://www.irs.gov/publications/p590/ch ... 1000230568
where it says:
"Trustee-to-Trustee Transfer

A transfer of funds in your traditional IRA from one trustee directly to another, either at your request or at the trustee's request, is not a rollover. Because there is no distribution to you, the transfer is tax free. Because it is not a rollover, it is not affected by the 1-year waiting period required between rollovers. This waiting period is discussed later under Rollover From One IRA Into Another."
as always, | peace, | greenie.
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Re: TAX question - doing tax myself - confused

Postby dmcmahon » Wed Mar 13, 2013 11:03 am

I'll caveat my responses by noting that I'm not a tax expert, not an accountant, and not a lawyer. Just "some guy on the internet". Heck, I could be a dog!

confusedinvestor wrote:1. I invested some $$ in stocks/bonds using wells-trade retail site last tax-year (2012) but never SOLD any shares - DO I STILL NEED TO REPORT TO IRS THAT i bought stocks/bonds?.......i DIDNOT yet get any tax forms from WellsTrade for my stock/bonds purchase last year


You don't have to report a purchase, since there's no income. You will have to report sales and maturations (presumably in a future tax year) since those generate gains and losses. You may not get a 1099-B from Wells if you didn't have any income on the account. Was there any interest income or dividend income? If so, then you should have gotten 1099-INT and/or 1099-DIV. In some cases, if the amounts are trivial, you might not get a form, but I'd still report them. For example, one of my accounts had $2 of interest last year and since this was below a $10 cut-off, I did not get a 1099-INT; and I had to look up the amount on-line to report it.

confusedinvestor wrote:2. I have opened a ROTH IRA for my Wife - DO I STILL NEED TO REPORT TO IRS THAT I HAVE OPENED ROTH IRA for my wife in WellsTrade?.......Which FORM should I need to submit in TurboTAX?


Did she contribute money to it? TurboTax prompts you to enter IRA contributions in the "deductions and credits" part of the program (that's the tab immediately after the "income" tab, at least on the version I use).

confusedinvestor wrote:3. I have moved my traditional IRA from Fedelity to WellsTreade (what a mistake) - DO I STILL NEED TO REPORT TO IRS THAT I MOVE my IRA from Fido to WT?......again, i didnot get any tax forms from Wellstrade or Fedelity on this...


If it was done by transferring the custodian, and you avoided actually taking a distribution, then I don't believe there's anything to report. If there was a distribution, you should get a 1099-R, and then you'd have to report both sides of the transaction (a distribution that was "rolled over"). For example, I rolled money from a regular IRA into a Roth last year, so this caused me to get a taxable distribution that I had to report. TT filled out form 8606 for the contribution side - it did this automatically.
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Re: TAX question - doing tax myself - confused

Postby damjam » Wed Mar 13, 2013 11:08 am

greenspam wrote:A transfer of funds in your traditional IRA from one trustee directly to another, either at your request or at the trustee's request, is not a rollover. Because there is no distribution to you, the transfer is tax free. Because it is not a rollover, it is not affected by the 1-year waiting period required between rollovers. This waiting period is discussed later under Rollover From One IRA Into Another."

This is interesting because I did what I thought was a trustee-to-trustee transfer last year and did receive a 1099-R. I guess it wasn't a true trustee-to-trustee transfer.
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Re: TAX question - doing tax myself - confused

Postby Meg77 » Wed Mar 13, 2013 11:13 am

If you go through Turbotax step by step and just follow the prompts, you should be fine. They will spit out the appropriate forms. It doesn't sound like you had a particularly complicated year. You bought some stocks, moved your IRA, and contributed to a Roth IRA. None of those are taxable events. A taxable event is when INCOME is generated, either by making an IRA distribution or selling stocks/bonds. When you do those things you will recieve tax forms which Turbotax will ask for.
confusedinvestor wrote:Hi Folks,

I do my taxes every year using Turbo Tax but this year is very complex for person like me....pls help me....

1. I invested some $$ in stocks/bonds using wells-trade retail site last tax-year (2012) but never SOLD any shares - DO I STILL NEED TO REPORT TO IRS THAT i bought stocks/bonds?.......i DIDNOT yet get any tax forms from WellsTrade for my stock/bonds purchase last year

No, you do not need to report this. There is no way to report this in fact.

2. I have opened a ROTH IRA for my Wife - DO I STILL NEED TO REPORT TO IRS THAT I HAVE OPENED ROTH IRA for my wife in WellsTrade?.......Which FORM should I need to submit in TurboTAX?

No, you do not need to report this. However Turbotax will ask you in the retirement section whether you contributed to any IRAs. You can put "yes" and say how much you put it, but when you tell Turbotax it was a Roth contribution it will disregard the info and not spit out a form regarding the contribution. This is because Roth contributions are "after tax" and don't concern the IRS. The reason Turbotax asks is so it can alert you if you contributed too much or make too much to contribute anything.

3. I have moved my traditional IRA from Fedelity to WellsTreade (what a mistake) - DO I STILL NEED TO REPORT TO IRS THAT I MOVE my IRA from Fido to WT?......again, i didnot get any tax forms from Wellstrade or Fedelity on this...

You probably should have gotten a form, but maybe not...Either way again this is not a taxable event so it doesn't matter whether you tell TurboTax about it; the IRS does not care whether you moved your IRA from one company to another.
I am very confused and concerned what to do....my wife is telling me i am messing up her reitirement and taxes....so please help....

It sounds like you may want to go to a professional in the future for tax prep. If you are this confused and your wife is anxious then it may serve you better to pay a couple hundred bucks to a professional for peace of mind.
"An investment in knowledge pays the best interest." - Benjamin Franklin
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Re: TAX question - doing tax myself - confused

Postby Petunia » Thu Mar 14, 2013 12:10 pm

confusedinvestor wrote:3. I have moved my traditional IRA from Fedelity to WellsTreade (what a mistake)


Why do you feel it was a mistake? I love my WellsTrade account with its 100 free trades per year. :)
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Re: TAX question - doing tax myself - confused

Postby confusedinvestor » Fri Mar 15, 2013 12:41 am

thank you everyone for your help.

1. I called wellstrade and they told me i have to file taxes as i have Divident income altough I didnot sell anything and Dividents are auto re-invested - as i was paperless, i have to download the tax forms so i didnot get it in mail....

2. thanks for TT advise on Roth

3. Looks like Fido messed up again - i moved a rollover IRA from Fido to WT and given everyone's input, i think , it is a truste-trustee move but oh welll....i have to call Fido again....

thx to everyone again....
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Re: TAX question - doing tax myself - confused

Postby Default User BR » Fri Mar 15, 2013 5:51 pm

confusedinvestor wrote:1. I called wellstrade and they told me i have to file taxes as i have Divident income altough I didnot sell anything and Dividents are auto re-invested - as i was paperless, i have to download the tax forms so i didnot get it in mail...

That all sounds correct. The dividends are issued to you by the stock or the fund. If in a taxable account, you will owe taxes on the dividend. It doesn't matter what you did with the dividend. You could spend it. You could buy another investment. You could have it reinvested in the original holding, which is just a short-cut for taking the dividend and buying the fund. The custodian takes care of it for you.

So, I don't at this point see any reason to be upset with Wells Fargo.
3. Looks like Fido messed up again - i moved a rollover IRA from Fido to WT and given everyone's input, i think , it is a truste-trustee move but oh welll....i have to call Fido again....

What do you think Fidelity did wrong? Assuming it was a transfer, they should have done nothing.


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Re: TAX question - doing tax myself - confused

Postby JW Nearly Retired » Fri Mar 15, 2013 9:22 pm

confusedinvestor wrote: Looks like Fido messed up again - i moved a rollover IRA from Fido to WT and given everyone's input, i think , it is a truste-trustee move but oh welll....i have to call Fido again....

What exactly did you have them do? Tell us exactly.
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Re: TAX question - doing tax myself - confused

Postby Cut-Throat » Sat Mar 16, 2013 4:24 pm

My advice is to never do your taxes alone. I pay my tax prepayer about 175.00 a year. He has saved me thousands. Why do it yourself, unless you like paying the irs more money. Some people are so cheap, it costs them real money.
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Re: TAX question - doing tax myself - confused

Postby sscritic » Sat Mar 16, 2013 4:30 pm

Cut-Throat wrote:My advice is to never do your taxes alone.

Yes, never do your taxes alone. Always have the instructions beside you.

Note that instructions come from the IRS. TurboTax comes from Intuit, a company that is trying to sell you products.
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Re: TAX question - doing tax myself - confused

Postby Cut-Throat » Sat Mar 16, 2013 4:41 pm

sscritic wrote:
Cut-Throat wrote:My advice is to never do your taxes alone.

Yes, never do your taxes alone. Always have the instructions beside you.

Note that instructions come from the IRS. TurboTax comes from Intuit, a company that is trying to sell you products.

And it also helps to have someone that prepares thousands of tax returns. But, only do this, if you want to save money.
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Re: TAX question - doing tax myself - confused

Postby fishnskiguy » Sat Mar 16, 2013 4:50 pm

Cut-Throat wrote:My advice is to never do your taxes alone. I pay my tax prepayer about 175.00 a year. He has saved me thousands. Why do it yourself, unless you like paying the irs more money. Some people are so cheap, it costs them real money.


I don't mean to be snarky, but would you please cite a couple of examples where your tax pro "saved you thousands"?

I did my taxes with pencil and hand held calculator for twenty five years, and Turbo Tax the last dozen or so, and I seriously doubt I've left a single dollar on the table.

Now, if we owned a business, I'd definitely use a CPA.

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Re: TAX question - doing tax myself - confused

Postby sscritic » Sat Mar 16, 2013 4:53 pm

Cut-Throat wrote:And it also helps to have someone that prepares thousands of tax returns.

How does it help? Someone doing thousands of returns can devote only a small fraction of the time to your return that you can. I guess if you think he can read better than you can, you can pay someone else to read for you. In my case, when Schedule E asks for what I paid for insurance on my rental, I know what the word insurance means. Even if you need someone to read the word insurance for you one year, do you really need someone to read it for you again the next year?
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Re: TAX question - doing tax myself - confused

Postby Cut-Throat » Sat Mar 16, 2013 6:09 pm

fishnskiguy wrote:
Cut-Throat wrote:My advice is to never do your taxes alone. I pay my tax prepayer about 175.00 a year. He has saved me thousands. Why do it yourself, unless you like paying the irs more money. Some people are so cheap, it costs them real money.


I don't mean to be snarky, but would you please cite a couple of examples where your tax pro "saved you thousands"?

I did my taxes with pencil and hand held calculator for twenty five years, and Turbo Tax the last dozen or so, and I seriously doubt I've left a single dollar on the table.

Now, if we owned a business, I'd definitely use a CPA.

Chris


I'll give one example and then I'm done trying to save some misers a few bucks.

A few years back there was a 'major bug' in our state tax tables that made 'Married Filing separately a Screaming Deal. The net result was that We filed separately and paid more in Federal tax, But made up for it and saved Thousands in State Income Tax. The State had figured out that it would cost them more money to try and correct the error that year and let it ride, because most of the 'lemmings' would file Jointly because it was a better deal on the federal. And you always File Federal First.

I would have never known this, if had not had a professional preparer.

Do what you wish, I am done with this now.
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Re: TAX question - doing tax myself - confused

Postby Cut-Throat » Sat Mar 16, 2013 6:11 pm

sscritic wrote:
Cut-Throat wrote:And it also helps to have someone that prepares thousands of tax returns.

How does it help? Someone doing thousands of returns can devote only a small fraction of the time to your return that you can. I guess if you think he can read better than you can, you can pay someone else to read for you. In my case, when Schedule E asks for what I paid for insurance on my rental, I know what the word insurance means. Even if you need someone to read the word insurance for you one year, do you really need someone to read it for you again the next year?


It's not 'just' the time the preparer spends on your return, but the total time he spends on taxes in general. If you think you know more than a preparer, you are truly fooling yourself. $175...is not a lot of money.

Listen...I don't recommend that you don't look at your return and compute your tax, I just recommend having another 'pair of eyes' also prepare the return.

Do what what you wish, I am only trying to save you a few bucks. If I didn't think it was worth it, I would also do my own taxes. All by myself.
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