Bogleheads.org

Generally, the goal is to even or load-level the income and lower the taxes across many years. Hopefully you do your own taxes or are willing to learn a tax model. Do a sample "retirement" return with all income (including SS and RMDs), then see. There are TONS of threads on this site about Roth Conversions, read a few for inspiration and direction.

https://www.bogleheads.org/wiki/Roth_IRA_conversion

https://www.bogleheads.org/wiki/Boglehe ... art-up_kit

jj45 wrote: ↑Mon Mar 27, 2023 7:11 pm I am in a similar situation and was wondering about doing the following. My income drop won't change my tax bracket, I stay in the 22% bracket. Say my income drops by $50K. Can I subtract 22% x $50K from my 2022 tax owed to estimate my 2023 tax owed? Then can I use the 90% safe harbor on that number? I would check in more detail in late fall when my income will be more certain and fine tune things.

Yes, as long as your income remains in the 22% bracket.

Use tax software (or similar functionality) to do a "predictive" tax return for 2023. One can use 2022 software, since you will be within the inflation band of error (i.e. just a bit high). I do this once early in the year, the first quarter or so. Then, if your income varies, do it again the last quarter to nail down the last estimated tax payment. This isn't crystal ball forecasting, it's just controllable. In our case, we do Roth conversions, but I leave some "headroom" for December once any capital gains, other income, etc are known.

Mom would get a "step up" in the value of the house when Dad passed away, so what you really want is the approximate value of the house in about 1990. There was a big run up in real estate before then... Ask a local real estate agent (or two) at the same time you are interviewing them for the sales job, how much houses in that zip code have appreciated since ~1990, and if it's under the %250K, no taxes would be due. Don't forget the tax kicks in after expenses, so assume selling price, less expenses ~8% or so, less the 1990 estimated value. Then park the money nicely away form Mom until she passes.

placeholder wrote: ↑Sun Mar 26, 2023 4:31 pm Removing the excess is the less favorable approach and the op should not do that until recharacterization has been explored.

I'm working the same problem. If the OP has an excess due to high income, isn't any excess contribution to an IRA, Roth or regular, not allowed? I'm trying to understand how one would recharacterize it if phased out due to high income..... If he can't do a Roth, why would a regular be allowed? I don't see it.

From the Motley article:
This must be done in the same tax year if you want to avoid the 6% excise penalty, and you have to make sure you're still able to contribute more to a traditional IRA, or you'll end up in exactly the same spot.

Your question is a bit confusing. Yes, the goal is to minimize the taxes paid OVER YOUR LIFETIME, on all income, wages and investments. It seems that you might be focusing on the taxes due? Rather than the total taxes paid? What you owe the IRS on April 15 is not the thing to manage, it's the total taxes, paid from withholding and when filing, while working and after retirement (when you benefit from all those IRAs). Penalties are to be avoided like parking tickets and late fees - no upside whatsoever. Review the "safe harbor" rules to avoid a penalty in the future, and make your Roth vs regular IRA decisions in accordance with your overall tax bracket, along with any 401k and other choices....

If you don't trust the safety and security of government bonds, how much credence does she put in SSA? Hmmm. Her biggest issue is going to be on the consumption side. Yes, opening a deductible IRA annually would help (lower taxes later), but really, her budget is going to be the issue. At worse, she ends up rooming with someone or living in a smaller studio apartment. She's by no means without any assets, but ... getting a divorce settlement 20 years ago and parking it in a bank at 0.1% is sad. Point her to Mr Money Mustache or get her the Frugal Zealot book on how to radically cut lifestyle costs. Make it super clear she's on her own here! What are the lowest cost rental options near you or other family members?

Parents with high-gain assets can gift them to other (lower income) children or charities... After the account is properly transferred to the sole ownership of the student (in kind, with the loss) can he not gift it back to anyone else, like the parents later this year? I would think this works both ways but I haven't done it.....

This link might help you model different scenarios. It's a well respected, anonymous tool. I used my correct year and month of birth but obfuscated the day... You need the PIA for full retirement as an input. Look under the options.

opensocialsecurity.com

If you sell it all, the broker (Vanguard?) will send you in Jan/Feb 2024 a 1099-B which will show a long term capital gain separately from the short term loss. You will be taxed at CG rates on the $1000 gain and can take a loss on the ST loss - how exactly these two play together depends on whether you have any other losses/gains this year. But at a high level, yes, you pay taxes on the net gain (though since ST and LT are at different rates, it's arithmetically simple but descriptively messy).

Using a DAF is really only worthwhile if you plan to donate a big chunk on an infrequent (i.e. more than yearly) basis and then dole out grants for a fraction of that annually. If you are basically donating as you go, there's no real point. Some people like a DAF because you can make anonymous donations. The bigger question is where do your charitable tax donations fall within your standard deduction? If you are not benefitting from your charitable donation (taxwise, not emotionally) then bunching a DAF every few years makes sense.

Consider FSKAX. If one searches the Fidelity site, choosing only index and Fidelity funds, then sort by expense ratio you can find them. Fidelity overall tends to push or publicize their managed funds first.

Yup.

https://www.bogleheads.org/wiki/Tax-eff ... _placement

We shopped hard online for a 14kt white gold chain of a certain link pattern and weight. If you are buying gold, you should carefully compare the exact description, including the exact weight for that length, to ensure you are getting what you visualize. Shopping at your local shop to get a feel for what you want, or looking online at chains (box, serpentine, etc) helps. We ended up buying from an out of state jeweler that just happens to sell online, with a return policy. Take your time.

Same issue last fall. I sold my CA intermediate fund (completely) and bought a similar term Federal Mun Fund (all states). The only downside was that within 30 days, of course it went up and I had to pay Ca taxes on the ~89% other states income on my CA return. One could also choose another CA muni fund.... but I did TLH in 2022.

Same problem, different coast! If you have a New York Muni fund, it's 100% tax exempt in both federal and state tax returns (Amount A). If you have a "national" muni fund, only the portion paid by NY bonds is tax exempt (fraction of Amount B). So you have to wade through the details of the brokerage account, and then exclude all of Amount A plus (Amount B times NY-%). There's always a table listing this for each fund, or maybe in your 1099.

I believe banks don't even send 1099-INT for amounts under $10, and the step function on the tax table itself is $50 increments. I'd ignore it.

Deduction phases out. Here is the text and link: Reduced or no deduction. If either you or your spouse was covered by an employer retirement plan, you may be entitled to only a partial (reduced) deduction or no deduction at all, depending on your income and your filing status. Your deduction begins to decrease (phase out) when your income rises above a certain amount and is eliminated altogether when it reaches a higher amount. These amounts vary depending on your filing status. To determine if your deduction is subject to the phaseout, you must determine your modified AGI and your filing status, as explained later under Deduction Phaseout. Once you have determined your modified AGI and your filing status, you can use Table 1-2 or Table 1-3...

Have had issues in the past with foreign travel tour reservations, being unable to properly charge through a European vendor to my desired highest cashback card. No clue. The bank assured me they were not refusing the charge, it just died somewhere in the web. I never solved it, just had to use a different card until I found one that worked. No idea why.

First, you should read the Wiki below for an overview. There are dozens if not hundreds of threads on this blog wrestling individual examples. The high-level answer is to smooth your tax hit over your likely lifespan. Convert to the top of whatever tax bracket you are in now if it's not expected to drop, and convert further if your heirs are in a higher tax bracket, the market is down, or your feel your bracket will go up... It's mostly an optimization problem, and it's messy. Also depends on how much your future RMD will push your taxes up. 12% is a bargain.

https://www.bogleheads.org/wiki/Roth_IRA_conversion

How was the "land sale" owned? You mentioned (not in a trust) so that's why I ask. If you owned it, what was your cost basis or is the $75k all profit? If by chance it was inherited, it's likely not to be taxable or the cost basis would be the day the prior owner passed. Just wondering.

You could also review the price history on the date of the dividend. Agree that it's a small amount, but my spouse would spend an hour on this problem just on principle (so they say) and for the few bucks (I know that's the truth). Any reasonable guess probably fine.

Oddly, the RMD must come out of the total before the Roth, and it's not account specific. In other words, each separate IRA doesn't have an RMD, the total balance does and you can pull from either/any account. So.... RMD first, then conversion from either account.

Not often do we (the public) get a glimpse of such a breathtakingly complex portfolio. I shudder to even think about what your statements look like. I have some suggested reading below. The first one will allow you to pat yourself on the back (soundly, often) for your decision to DIY. The second one has basics of asset allocation. As previously mentioned, since it's all in IRAs, you can sell it all and purchase new, simple, fewer assets without tax consequences. The "usual" recommendation is to put the stock-ETF-funds in the Roth, the bonds more in the pretax IRA, and juggle the amounts to get the right balance. At most a handful of funds - 3/4/5 is reasonable. What you have is so shredded and diced that no one "winner" ...

Non-lawyer who has settled 3 various estates. Property not in the trust is governed by the will, and most real estate is too valuable to have gone through "small" estate or short probate. See if there are any probate records in your local courthouse. Wills and probate are public record though you might have to pay to print or download the filings. The lawyer won't talk to you because you are not his client. Also, one might check with the county recorder or whoever holds property title in your county, and get any change history. If you feel you are an heir and either were named or should have benefitted - the clock is ticking. You only have a short window to object, so you might need a lawyer (years later it's not going to be solva...

We've got one of those! I'm absolutely gob-smacked that all their rates (including the 60 month) are in the 4% range.... and the 7 year is 0.3%? Wow, just wow. Opened a couple CDs 5~7 years back, regretted it for a while when markets were up, then happy .... but after significant incompetence rolling it back into my brokerage (first Mountain America CU LOST the IRA transfer packet which they signed for, then LOST the faxed copy, had to push this along daily for over 2 weeks) I will never buy an outside CD again. Mine matures this fall, and then I'm done with them. Keep everything in one place.

I would be surprised if any of that was covered. It's neither sudden nor catastrophic nor unexpected. You had a really old fence that finally fell apart - sounds like maintenance to me.

There might be a 9 month waiting period after the wedding, i.e. you need to survive 9 months before the new spouse gets your SSN (more correctly, theirs plus a make-up-the-total amount). At least that's what I read.

Several current posts on this exact issue. No, you are not eligible for any kind of IRA contribution without earned income - deductible or not is just the frosting on the cake. And you need to undo this BEFORE you file this year's tax return. So, undoing it (see exact same issue or clear IRS instructions) will get you the exact dollar values and then you can finish your 2022 return. The goal is to make it like it never happened, barring some incidental extra income.

If one presumes that both spouses are the primary beneficiary for each other's IRA, and will convert that sensibly to an inherited Spousal IRA, I don't think it matters. You will end up with the total balance in one account eventually, so consider it as a whole. Designating other beneficiaries, who might be in lower tax brackets, for any portion of those IRAs is your only chance to "offload" that tax implication to both of you. I'd prioritize converting the younger, and maybe add any other beneficiaries as part of the older's plan? I wish there was a "transfer my IRA to my underfunded relatives" form! Edit to add: Even a partial IRA inheritance to adult children from one spouse, will help stretch out that 10 year clock, ...

Deleted.

A good friend of mine racked up hotel and travel expenses over a year (every other week 200 miles, one hotel in La Jolla) to help an aged relative handle her finances, untangle timeshares, pay bills, hire in home help, and then at last settle the estate. She was the only one of 3 siblings who had "boots on the ground", one other managed some things online and the 3rd nada. She was too ashamed to ask for expenses ... and 2 years later admitted I was right to recommend covering at least all your real out of pocket expenses. Those should be paid by the estate - mileage, hotel, whatever. And by all means get concurrence from the other heirs/executors but don't shortchange yourself. And I agree with not claiming the taxable executor fe...

Thinking outside the box, can you make any changes to title via mail? For example, adding the other spouse, or changing title to joint? In some states, car sales are simply recorded by the seller signing the "pink", and then mailing an FYI to the DMV. Eventually the new owner has to go to DMV to register the car, but no probate.

The only assets that are not jointly held or in benefit to my mom are a residential rental property and shares in an LLC. Is 2% of the entire estate even remotely reasonable for what seems like very little work? Those are the only assets you would even discuss with a lawyer. Might get a second opinion on whether how to probate those 2 assets. Might also need a CPA (separately) if subject to estate taxes. I envy you. In CA suffering through a 3-year cluster nightmare which has so far cost $40K just for legal, plus appraisers, etc etc. For one condo and some bank accounts. You probate the Will, not the assets. Unlike California, probating a Will in New York is generally not difficult, expensive or burdensome. The lawyer needs to know about t...

What exactly is your goal? Lock your credit at the 3 majors and two minors (credit card and bank/checking opening). Monitor your bank and credit card accounts. Sleep well and save your money.

https://www.bogleheads.org/wiki/Credit_freeze

You might need to reopen Turbotax 2021 and see if there are any pages/forms that simply weren't printed in whatever version of tax return you filed. I have found that things like Schedule A, which I fill out to feed my state return, aren't printed in my federal tax return. Annoying if you don't have the old software!

FireSekr wrote: ↑Fri Mar 10, 2023 9:52 pm The only assets that are not jointly held or in benefit to my mom are a residential rental property and shares in an LLC.
Is 2% of the entire estate even remotely reasonable for what seems like very little work?

Those are the only assets you would even discuss with a lawyer. Might get a second opinion on whether how to probate (the will to settle) those 2 assets. Might also need a CPA (separately) if subject to estate taxes. I envy you. In CA suffering through a 3-year cluster nightmare which has so far cost $40K just for legal, plus appraisers, etc etc. For one condo and some bank accounts.
Edited to add correct term in parens.

I recently transferred an IRA CD from Mountain America (keystone kops nightmare). When you first login to Vanguard, before you look at holdings or Activity, I would see "Track your Transfer" right under the Rollover IRA summary. Main page. Strangely still there months later but no harm in that....

For our elderly Mom, we put the proceeds of her home sale (her only asset) into one Vanguard Total Bond fund, set one of us up as "agents" with proper login credentials to manage the account remotely, and then tied it to her existing B&B bank. Once a month or so, they agreed on how much she wanted that month transferred over, Sibling made it happen, and she kept her walk in bank! Very easy to ensure proper TOD as well. This can all be done online at either Vanguard, Fidelity, Schwab and you can pick your asset.

HR Block Taxcut Deluxe (no state) is $25 on Amazon. You could play for days with this..... You do have a lot of complex forms so the basic versions may not work. Edit to add - you can also override values in the basic schedules for esoteric forms you don't have. It will prevent you from efiling which you don't want anyway, but look into override. The Deluxe vs Premier (ok, that's too much) differences are on their website.

https://www.amazon.com/Block-Software-D ... 148&sr=8-4

This definitely sounds creepy. They are in way too deep to make waves. More like a cult than a business! That golf cart and boat got paid for somehow.... Ponzi scheme? No partnership agreement, no return on investment, no tax paperwork, no insight into rental income, depreciation... I wonder if all the "grantees" put in $50K each? Did your Dad sign that loan? Where exactly does the rent go? Is Tina on loan? Your best option at this point might be to circle the wagons to protect any other cash they have. And yes, your parents have every right to spend and enjoy every penny of their money - but it's a bit tricky to count on dying before you blow it all and they end up in your spare room.....

Newb From WI wrote: ↑Wed Mar 08, 2023 6:17 pm [Confused... I can't get either this link or the excel1040 link to successfully download a copy. It just loops back to another downloaded copy which then creates another copy to open and that just creates another copy to open...
Both lead me to a web site but the download links there do nothing.

Ok, so you go to excel1040.com. Then you click the button "navigate to download page", pick the year you want, hit "download". Yes, then it just sits there because it's done the job! Now go look in your PC downloads folder, there should be a shiny new Excel template that you can open from Excel. Try this!

Tax software would vastly improve the ease of this.....

I'm assuming you have all the updates installed? Check for current software, otherwise clueless....

How do you do your taxes - by hand, filling in PDFs? If your taxes are super simple, replicate that arithmetic in a spreadsheet, use formulas for the "add income" and "subtract deduction", then calculate tax. I like nerdwallet's presentation on brackets better, it's simple a lookup - e.g. single take $$$ and add bracket * (income-start of bracket). The 2023 federal brackets are published and settled. If you sensibly use tax software (and the best time to buy it is Black Friday, but could find some deals in Spring), use the 2022 software and you will be within a few percent. There are several models out there as well, here's a free one (looks complex, just enter your applicable numbers). The work is mostly in accurate inc...

And of course you are prorating that Roth conversion? I don't do these... but I thought it really wasn't feasible if you had an after tax basis in your IRA because of the prorating issue, in that some of that conversion will also be taxed? Then you really need to amend every back tax form. Not sure..... dragons.... I'm confused about which account has the basis. Ignore me.

Were there any other words on the deed, like "Joint tenants with rights of survivorship" or "tenants in common" or whatever passes for legal in Florida? Could your parents reasonably ask for your Father's portion to be retitled "Tenants in common" which gets rid of the survivorship issue? I have an Aunt who bought into an unknown share in an extended family compound, and she never could get out of it. After she passed, the rest divided up the spoils (aka equity). It would be good to see the bookkeeping on that property. Possible more relevant were an earlier poster's concerns about illegal investment/ partnership issues. With only $160K down, they should own more than 1/6???? Any details about how to pay for ma...

If there is no change to your tax return (i.e. net income or tax owed), can you just file the amended 8606 forms? I would fill out the corrected forms for each year, send them in together, then use that number for your 2022 tax return. Pray it all gets resolved together, or that you can correctly and properly (and you can) explain it should anyone ever inquire. Just a thought.

An excellent anonymous model, which uses SS rules and allows for lots of model options (you input ages, PIA, etc) is:

opensocialsecurity.com

I would just mail it first class, no fuss. But I would consider using a black gel ink pen, if you are that worried, so no one can "rinse" the check. Inside a regular piece of paper, it won't be an issue.

I did not realize the lower earning spouse got such a benefit that they can make more than the higher earning spouse as a surviving spouse. If the number is right no benefit to being the higher earning one after they lower earning one dies. These are all Open social security .com number - it shows if she outlives me her benefit is her benefit plus her “annual survivor benefit” as i wrote in original post. The higher earning survivor gets only their own benefit, no change. The lower earner gets their own benefit, plus (strangely) a second benefit that makes up the difference between (higher-lower) so the net benefit will be either survivor gets the higher benefit . They never get "more" than the higher earner, in my understanding....