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Hello Everyone, I am a new father and would like to establish an appropriate financial setup for my child. I would also like to do the same for any future children. We do have a few checks coming in from friends and family so I would like to decide my next steps in the near future. Goal: to establish money to grow. This is not intended for college savings I would like to open an account at a local credit union (they usually deposit $25 for children as a match). This can be used as a parking place for money over the years. I would also like to open a sort of brokerage account to invest in index funds (Boglehead-influenced funds of course, ex: Total Stock Market, 500, etc). What is the best type of brokerage account (I prefer Fidelity): UGMA...

Been maxing out my megacorps 401k for many years. Past few years also doing mega backdoor ROTH since they allow it. However, this month I got some strange notice that money was put into a "NON-QUALIFIED DEFINED CONTRIBUTION PLANS". When I click on transaction history I get this: https://i.ibb.co/bLBSnxq/NON-QUALIFIED-DEFINED-CONTRIBUTION-PLANS.png I am guessing it has to do with some excess/over contribution on my part? Should I withdraw the money or will it go grow tax-free? Non-qualified plans are not subject to ERISA testing requirements, so they are typically used to provide additional retirement savings for HCEs. The money will grow tax-deferred like a traditional 401(k). The money is not eligible to be rolled over if you le...

Too general of a question? With VFIAX (SP 500, in taxable of course) at Vanguard, I don't have a choice. Of course you have a choice, And, at Vanguard, you can choose SpecID at any time. If you have never sold that fund, then it applies retroactively (at least that is how it has been for me). If you have sold using average cost, then that locks in all prior lots as average cost, irrespective of brokerage. SpecID is very helpful if you want to tax-loss harvest. Average cost is helpful if you want to spread large capital gains out over all of your existing holdings. There are personal finance reasons to prefer one over the other. Would SpecID also be beneficial to separate holdings that would be subject to long term capital gains vs. short t...

bshnew wrote: ↑Mon Mar 20, 2023 5:52 pm Hi Bogleheads,

I have both SCHX and SWPPX in my Schwab taxable account. The latter I inherited from my mother when her estate was distributed. If I’m dollar cost averaging every month, which do you think I should purchase more of as my US market fund? I have about 70K in SCHX, and 7K in SWPPX.

Thanks,
Brooke

Neither. Use a total market fund (SWTSX or SCHB if you want to stay with Schwab funds, although you could just as easily choose VTI or ITOT.)

Did you ever figure this out? I am currently in your daughter's position The 1098-T instructions do not tell the institution to leave out taxable scholarships. When you think about it, how would they typically know? Box 5. Scholarships or Grants Enter the total amount of any scholarships or grants that you administered and processed during the calendar year for the payment of the student’s costs of attendance. Scholarships and grants generally include all payments received from third parties (excluding family members and loan proceeds). This includes payments received from governmental and private entities such as the Department of Veterans Affairs, the Department of Defense, civic and religious organizations, and nonprofit entities. Howev...

privateer79 wrote: ↑Sun Mar 19, 2023 7:45 pm I wish TT had a "why do you care?" button...

I donated appreciated stock this year and was stressing out because TT wanted the original basis of the shares... and once the shares departed e-Trade as a charitable transfer there was no way to find the original basis online. (I still have no idea why they wanted to know unless there is some alternative way of valuing the donation based on original cost in case you donate loosers???)

TT appears to use the same Q&A for both short-term and long-term donated shares, even though for short term shares Form 8263 does not need the date acquired and for long-term shares the form does not need the cost basis.

muel87 wrote: ↑Mon Mar 20, 2023 6:58 am

toddthebod wrote: ↑Sun Mar 19, 2023 2:22 pm In the scenario where you zero out your basis between years because the account is empty, you collectively earned $16,000 and paid tax on $16,500 in income, in order to end up with $12,000 in your Roth IRA.

Got it that makes sense. But I dont see how I have the option to "zero out my basis" when the 8606 asks for line 14 of the previous year. How can I just decide that there's no basis?

There's a debate on whether you can have basis with no balance, and some software programs will zero it out.

Basis is what prevents you from being taxed twice. Could you illustrate the scenario wherein I'd be taxed twice because of not having basis? You earn $8,000, pay 25% tax on that income and deposit $6,000 in non-deductible contributions in your traditional IRA. It declines in value to $5,500, and you do a Roth conversion. The next year you earn $8,000, pay 25% tax on that income and deposit $6,000 in non-deductible contributions in your traditional IRA. It increases in value to $6,500, and you do a Roth conversion. In the scenario where you keep your $500 basis despite a balance of $0 in your traditional IRA, that second conversion is tax-free. If you look at the two years collectively, you earned $16,000, paid 25% tax, and ended up with $1...

HappyPappy wrote: ↑Sun Mar 19, 2023 12:26 pm I'm looking at the effective tax rate - not marginal - on the business

How do you calculate that independently from your own effective tax rate?

muel87 wrote: ↑Sun Mar 19, 2023 10:14 am

toddthebod wrote: ↑Sun Mar 19, 2023 10:00 am Form 2441 also covers the benefit. Go look at it again. Part III.

It only covers it in the sense that, if you receive the benefit, it lessens the amount of the credit you can claim, and if you claim enough benefits it can lessen the amount of benefit you can exclude. I just ran my report again and the $5k was removed from my income properly. Seems I just hadnt entered something into FreeTax.

I mean, it covers it in the sense that you have to fill it out, and that line 26 adds the benefit back into your taxable income if you don't meet all the steps to be eligible (eligible dependent, spousal income, and qualified expenses). Anyway, I'm glad it worked out for you.

Part III of form 2441 is for deductible benefits. I suggest you go fill it out by hand and compare it to the form from the software. The only other thing I can think of is you didn't enter your expenses or for some reason they are not qualified. Are your kids more than 12 years old? My child is an eligible dependent. But Form 2441 is for a credit. The pay excluded by my employer isnt a credit, it's an exclusion. I cant claim the credit from 2441 b/c I received a $5k benefit from my employer, which is greater than the credit you can claim for 1 child (even at the lowest income level, which would be 50% * $3k = $1.5k) and thus makes me ineligible for the credit. But the credit is not the same as the exclusion from income of my employers depe...

SimplicityNow wrote: ↑Sun Mar 19, 2023 8:34 am I am making a loan to a family member and I want to charge them the minimum rate I can and still be comply with IRS regulations.

The loan will have a 10 year term so will be considered long term.

I went to the IRS website and looked at the AFR chart. I saw in one table the rate and then saw another table there was an "adjusted" rate.

Can someone explain in what circumstance one could use the lower adjusted rate?

Thanks.

The adjusted rate is for a tax-exempt obligation.

FreeTaxUSA is saying my $5k of dependent care benefits should be added back to income. During 2021, I had low enough income to qualify for the full $5k. In 2022, I made too much, and so this year I only get $3800. But that $5k should be excluded from income, per my W-2, regardless, right? Did you report your expenses? Are you filing MFJ? Did your spouse work as well? Also, I don't think there's an income limit. What do you mean by "I made too much"? If you're classified as a "highly compensated employee (HCE)" they will only allow you $3800 - not sure the exact IRS reference for it. FreeTaxUSA is telling me the Form 2441 limits what you can receive, but that form is for the Child and dependent care tax credit... Your de...

jimmy2017 wrote: ↑Sat Mar 18, 2023 10:59 pm The rationale of just having one is lower risk if one of them doesn't go to college.
Thanks!

You could always change the beneficiary on a second 529 to the first kid if that happens, so I don't think that's a compelling reason.

I did not read AndyAndTheTuna implying that he would be owing tens of thousands of dollars in taxes at the end of the year. I'm sorry that member todthebod didn't understand my earlier nuanced response. If a taxpayer makes an overly huge 1st Quarter estimated tax payment or an overly huge voluntary withholding early in the year (maybe getting a huge bonus as a salaried employee, and had a huge amount of tax withheld, or perhaps taking an RMD in January, if over age 72), why wouldn't that taxpayer choose to reduce his withholding for the remainder of the year to try to match his actual year-end tax liability? If a single huge estimated tax payment was made before or on the 1st Quarter deadline, a taxpayer can choose to not make three other ...

exodusing wrote: ↑Fri Mar 17, 2023 1:18 pm TIPS in taxable means you have to pay federal taxes on phantom income (the inflation adjustment). This is really only a problem if you don't have the cash. In tax-deferred, you pay taxes on withdrawal, so you'll have the cash.

There are very few TIPS floating around out there where the coupon payments are insufficient to pay taxes on the inflation adjustment. We saw that briefly when we coupons were near zero (because interest rates were near zero), and we had suddenly high inflation, but in most circumstances, the bond will generate enough cash flow to pay its own tax liability.

muel87 wrote: ↑Sat Mar 18, 2023 7:44 pm FreeTaxUSA is saying my $5k of dependent care benefits should be added back to income. During 2021, I had low enough income to qualify for the full $5k. In 2022, I made too much, and so this year I only get $3800. But that $5k should be excluded from income, per my W-2, regardless, right?

Did you report your expenses?

Are you filing MFJ? Did your spouse work as well?

Also, I don't think there's an income limit. What do you mean by "I made too much"?

I just read through Publication 17 and Publication 505. I think a taxpayer is allowed to revise his or her Form W-4 throughout the year to try to have withholding match one's actual tax liability . If too much or too little tax is being withheld to match one's actual tax liability, the IRS wants the taxpayer to give an employer a new Form W-4 to change the taxpayer's withholding. I think that is the bottom line. You just have to have a reasonable basis for how you prepared your first Form W-4 and all subsequent Forms W-4 at the time you prepare each Form W-4. If you have a reasonable basis that you can explain about why you filled out the way you did, there should never be a penalty applied for how you filled out a Form W-4. I get the poin...

worthit wrote: ↑Sat Mar 18, 2023 4:19 pm
Self-directed 401k and I am the administrator.

Then I'm going to leave this one alone. Good luck.

I'm not an expert, but I just don't buy it. If I made an IRA contribution to an account at Vanguard, subsequently rolled it over to an account at Schwab, and then asked Schwab for a return of excess contributions, I would get a 1099 from Schwab but I would never hear from Vanguard. The contributions have been removed, it's been reported to the IRS, why does it need to be reported by two parties? Thanks for responding. Interesting. But perusing all the forums and reading about it, my understanding is that as the administrator I would need to capture the contribution into the after-tax sub account on a 1099 with a code P since the money was moved from an after-tax account into a Roth. This is what I am looking to find out from the forum here...

I'm not an expert, but I just don't buy it. If I made an IRA contribution to an account at Vanguard, subsequently rolled it over to an account at Schwab, and then asked Schwab for a return of excess contributions, I would get a 1099 from Schwab but I would never hear from Vanguard. The contributions have been removed, it's been reported to the IRS, why does it need to be reported by two parties? Thanks for responding. Interesting. But perusing all the forums and reading about it, my understanding is that as the administrator I would need to capture the contribution into the after-tax sub account on a 1099 with a code P since the money was moved from an after-tax account into a Roth. This is what I am looking to find out from the forum here...

My suspicion is that in this case the apparent difference is explained by the fact that Vanguard's total is described as U.S. Government Bonds, while Morningstar only says " Government Bonds." I think that is quite obviously the case if you look at the entire breakdown. Note there is no foreign category in Morningstar's list. Morningstar: Sectors Investment % Government 62.32 Municipal 0.36 Corporate 36.61 Securitized 0.13 Cash & Equivalents 0.57 Other 0.00 Vanguard: Issuer % of fund Finance 13.70% Foreign 4.30% Industrial 21.10% Other 0.60% Treasury/Agency 57.30% Utilities 3.00% When looking at this portfolio using both lists, how do you evaluate the credit risk of those foreign bonds? In round numbers, there are 57% US gove...

Well, I reached out to both my employer HR and the plan administrator (Merrill) and both said this is a tax year 2023 event and a 1099-R will be coming to me next January. This happened to me first time but upon some search on google this seems to be a common thing for HCEs, still so much confusion surrounds in regards to which year should include the corrective distribution. There seems to be no clear consensus. Please note that, I did not overcontribute from my end (i.e. it was not my fault). My 2022 pre-tax contribution was 20,500 that shows in my last paystub and 2022 W2 as well (I am under 50). It's the employer's 401k plan that failed the ADP nondiscrimination testing for 2022 triggering the corrective distribution. I would highly ap...

My suspicion is that in this case the apparent difference is explained by the fact that Vanguard's total is described as U.S. Government Bonds, while Morningstar only says " Government Bonds." I think that is quite obviously the case if you look at the entire breakdown. Note there is no foreign category in Morningstar's list. Morningstar: Sectors Investment % Government 62.32 Municipal 0.36 Corporate 36.61 Securitized 0.13 Cash & Equivalents 0.57 Other 0.00 Vanguard: Issuer % of fund Finance 13.70% Foreign 4.30% Industrial 21.10% Other 0.60% Treasury/Agency 57.30% Utilities 3.00%

I'm not an expert, but I just don't buy it. If I made an IRA contribution to an account at Vanguard, subsequently rolled it over to an account at Schwab, and then asked Schwab for a return of excess contributions, I would get a 1099 from Schwab but I would never hear from Vanguard. The contributions have been removed, it's been reported to the IRS, why does it need to be reported by two parties?

daum wrote: ↑Fri Mar 17, 2023 3:52 pm I'm selling my old house and will have ~800k after the sale. Only current debit is the new house mortgage which ~1.05MM @ 4.75%. I already max out tax advantaged accounts and live in MA. From my understanding, it'd be best to pay down the new mortgage to $750k so the interest is deductible. Just wanted to confirm that makes the most sense going forward.

Thanks!

Here's how I would think about it: is it worth paying off a $355,000 at 4.75% loan? The interest on the remaining $750,000 is deductible whether or not you pay off the first $355,000.

dkg2707 wrote: ↑Fri Mar 17, 2023 2:16 pm I got notified by my employer HR on Mar 15th that they failed ADP (actual deferral percentage) test for 2022 and I am getting a what they are calling "Corrective Distribution".

Does this impact my 2022 tax return? I almost finished my 2022 tax preparation and was planning to file it this weekend; now I am holding it off . Which tax year should include this corrective distribution?

You need to add the money back into your 2022 income.

toddthebod, I contributed $7000 to the Roth IRA in 2022 with the last contribution for 2022 on 01/21/22 and $6230 was allowed per Turbotax (I seem to have run out of deductions and had a surprise $2000 in capital gains). My last contribution to the Roth was 2/23/23 for 2023 and I am currently at $3750 of $7500 allowed (I waited in case I needed space in 2023 to roll the excess contribution of 2022 into 2023). The account as a whole is down roughly $40,000 from 2022 but up 3% since January of this year. The form on Vanguard for recharacterization says I can choose the date of the contribution and which funds I want to withdraw the excess from so that's why I was looking at those two funds. Turbotax mentioned to recharacterize so I was looki...

Just to piggyback on this thread - I did my taxes and due to unexpected capital gains I ended up over contributing to my Roth IRA by $770. I created a new nondeductible traditional IRA (tIRA) yesterday that currently has a zero balance (I have no other tIRA's). I made $500 purchases on 01/03/22 of Growth, Small Cap, 500 index, and REIT. I was thinking of recharacterizing $385 in the 500 index (purchased at $442.63, currently at $366.65) and Growth (purchased at $166.28, currently at $122.98) into the tIRA. Would I just put those funds in the Money Market Fund for the tIRA? Do I have taxes taken out as suggested by Vanguard (10%) or decline as I am choosing funds that (should) have lost money? Right now I have a warning that my settlement v...

In an environment where bond yields had fallen from the teens to 6-7% over the previous 15 years, it's not unreasonable to think the government was looking for a way to get more people to invest in Treasury bonds, and news from the time backs up that they thought they could sell more bonds and overall it would be cheaper: From the LA Times in 1996: In financial markets, you rarely get something for nothing. If the Treasury is going to lower the inflation risk of holding a bond, that bond is likely to pay less interest upfront than regular Treasury bonds. In other words, if a regular 10-year Treasury note pays an annual yield of 6.7%, an inflation-adjusted 10-year note might pay about half that yield, because of the inflation-protection feat...

yosemite_mountain wrote: ↑Thu Mar 16, 2023 10:44 pm

toddthebod wrote: ↑Thu Mar 16, 2023 9:38 pm
I suspect this is also not going to be helpful, but consider calling them and requesting to switch versions from the online to the offline:
https://www.hrblock.com/tax-center/supp ... y-account/

Do I have to re-enter all my information when switching from the HR block online version to the desktop version?

Probably.

yosemite_mountain wrote: ↑Thu Mar 16, 2023 8:19 pm

toddthebod wrote: ↑Thu Mar 16, 2023 8:14 pm
I suspect this is not going to helpful, but it looks like it should just work:
https://thefinancebuff.com/mega-backdoo ... tware.html

I followed finacebuff.com instructions step by step and still get the error unfortunately.

I suspect this is also not going to be helpful, but consider calling them and requesting to switch versions from the online to the offline:
https://www.hrblock.com/tax-center/supp ... y-account/

Thank you! Can I ask...? I thought I had only to file form 5329 for 2021, to show the excess and pay the penalty. What goes into form 5329 for 2022? I am not going to have excess in 2022 year and so do not have to pay the penalty. Why would I need 5329 for 2022 than? Basically once you start filing 5329, you have to file every year until the excess contributions are accounted for (either distributed or counted against the new year's limit) and you calculate $0 for the last line. Once you look at it, it's really straightforward. Additional Tax on Excess Contributions to Roth IRAs. Complete this part if you contributed more to your Roth IRAs for 2022 than is allowable or you had an amount on line 25 of your 2021 Form 5329. Line 25 is the 6% ...

Lana2016 wrote: ↑Thu Mar 16, 2023 8:10 pm Hi,

I made an excess contribution into my Roth IRA in 2021. I realize I have to pay 6% penalty for 2021.
No contribution in 2022.
Can I move the excess from 2021 to 2022 tax year (my income allows me)?

Thanks!

Yes, you don't even have to do anything. When you file Form 5329 for 2022 (which you will have to file no matter what), it will automatically count your excess contribution in 2021 against your limit for 2022.

yosemite_mountain wrote: ↑Thu Mar 16, 2023 7:44 pm

Duckie wrote: ↑Thu Mar 16, 2023 5:43 pm
I'm not sure that is going to work, but if this were a conversion from a non-deductible TIRA to a Roth IRA, box 7 would have code 2—Early distribution, exception applies (under age 59 1/2).

I see. No, this is a direct rollover from an employee sponsored plan to a Vanguard Roth IRA.

I suspect this is not going to helpful, but it looks like it should just work:
https://thefinancebuff.com/mega-backdoo ... tware.html

It is included in your federal income in the current year because you deducted it in the prior year, assuming you itemized your taxes the prior year. It's a subtraction from your state's income because you did not get a state deduction in the prior year, assuming your state does not have itemized deductions. If you didn't itemize the prior year, you don't include it in income for federal. :sharebeer I didn't need the state deduction on the first year. Forget Federal deducttions modifications (I understand them) My 2018 state return I paid $2000 in taxes, but I should have paid $1500. On 2018 I itemized federal tax. On January 2020, I do an amendment for my 2018 state taxes , they return me $500 in a check a few months later (consider inter...

These are two separate accounts. "Self" is my solo brokerage account. "Jt" is an account that I own jointly with spouse. I do have the data in spreadsheet format. Just not sure how to attach it here. Based on the responses above, my understanding is that I do not have wash sale issues. You no longer hold any shares of VTI? I just had about $200 or so of VTI remaining that I sold today. (I do have total stock market in retirement but I think that is irrelevant for this exercise.) Actually, all your accounts, your spouse’s accounts, and any of your corporate accounts are relevant. And your parents’ and children’s accounts are relevant if you use them to purposely evade the wash sale law. Congress was serious about restric...

itispossible wrote: ↑Thu Mar 16, 2023 3:02 pm

toddthebod wrote: ↑Thu Mar 16, 2023 2:59 pm

itispossible wrote: ↑Thu Mar 16, 2023 2:54 pm These are two separate accounts. "Self" is my solo brokerage account. "Jt" is an account that I own jointly with spouse.

I do have the data in spreadsheet format. Just not sure how to attach it here.

Based on the responses above, my understanding is that I do not have wash sale issues.

You no longer hold any shares of VTI?

I just had about $200 or so of VTI remaining that I sold today. (I do have total stock market in retirement but I think that is irrelevant for this exercise.)

Do you hold VTI or VTSAX in an IRA?

itispossible wrote: ↑Thu Mar 16, 2023 2:54 pm These are two separate accounts. "Self" is my solo brokerage account. "Jt" is an account that I own jointly with spouse.

I do have the data in spreadsheet format. Just not sure how to attach it here.

Based on the responses above, my understanding is that I do not have wash sale issues.

You no longer hold any shares of VTI?

yes, because now that we know you had a $7000 loss but you purchased >$7000 worth of replacement stock those $7000 earlier losses are now disallowed. However the disallowed loss can be used to adjust upwards the cost basis of $7000 worth of the $42,000 replacement shares you bought. You're not adjusting all the shares, just $7000 worth so when you sell them later, you're using a higher cost basis for those shares you purchased that were worth the disallowed $7000 loss. That's my understanding of adjusting the cost basis due to disallowed loss due to wash sale. That is just totally wrong. The relative values of the losses ($7,000) and the price you paid for the replacement shares ($42,000) are completely irrelevant. fine, I corrected that w...

If he bought for $107,000, sold for $100,000, and bought $42,000 more, he can recognize $4,060 in losses (58% of the total) and his basis in the new shares is adjusted upwards to $44,940 ($42,000 plus 42% of the losses). i don't think this is correct. From the wiki: For example, you bought 100 shares of a mutual fund at $40. On March 1, you sold 100 shares at $30. On March 10, you bought 100 shares at $35. Your sale on March 1 was a wash sale, so you could not deduct the $1,000 loss at the time, but your basis in the March 10 shares is $4,500, not $3,500, so you will reduce your capital gains or increase your losses when you sell those shares https://www.bogleheads.org/wiki/Wash_sale While my calculations are obviously not applicable to OP...

You can purchase VOO because it's not substantially identical to VTI. Just because you sold $100k of stock doesnt mean you had $100k in losses. You first should look at how much in losses you had hoped to have from sale. Then the $42k of replacement shares you bought within 30 days would wash $42k of the losses you hoped to claim. Does that make sense? No it doesn't. I am not understanding what you wrote. Let's say: Purchase 10 shares at $100 per share on 1/1/2022 Sold 10 shares at $20 per share on 2/13/2023 Bought 5 shares at $15 per share on 3/13/2023 Loss = $200 - $2000 = $1800 What is the purchase price of the 5 shares bought for $75 (total) going to be after the wash? Think your math is off. He doesn't have an $1800 loss. He has an $8...

Then the $42k of replacement shares you bought within 30 days would wash $42k of the losses you hoped to claim. That doesn't sound right to me. It's on a per share basis, isn't it? So if he bought 1,000 shares for $110 ($110,000), sold them for $100 ($100,000 or a $10,000 loss) and immediately bought 420 replacement shares ($42,000), he would still realize $5,800 of losses, while the basis of his 420 shares would be adjusted upwards to $110 share. you're right. the number of SHARES sold for a loss claimed are washed by the number of shares purchased with replacement shares, not the dollars. My only point was that the OP said he SOLD $100k of stock, but we don't know how much of that resulted in LOSSES, because we didn't have the details an...

arcticpineapplecorp. wrote: ↑Thu Mar 16, 2023 8:32 am Then the $42k of replacement shares you bought within 30 days would wash $42k of the losses you hoped to claim.

That doesn't sound right to me. It's on a per share basis, isn't it? So if he bought 1,000 shares for $110 ($110,000), sold them for $100 ($100,000 or a $10,000 loss) and immediately bought 420 replacement shares ($42,000), he would still realize $5,800 of losses, while the basis of his 420 shares would be adjusted upwards to $110 share.

iZibSolutions wrote: ↑Thu Mar 16, 2023 8:09 am Any updated advice on how we handle this?

The 65 day rule only applies to complex trusts as far as I can tell. So while you will probably get an attorney responding here, it sounds like you need to distribute that income immediately as required by the trust document and then file your 1041 and check the complex trust box for last year.

Retirednurse wrote: ↑Wed Mar 15, 2023 9:15 pm Thanks.
Oh. I just read another blog. Someone mentioned that actually I can contribute $ 7500 for my Roth IRA and husband $1500 for his Roth IRA right .or half and half , correct ?. Because we are married and retired
Please advise. Thanks.

So he has no income? Then together you can contribute the whole $9,000 split anywhere from $7,500/$1,500 to $1,500/$7,500. To put it another way, neither of you can contribute more than $7,500, and combined you cannot exceed your earned income.

Open a traditional IRA account. Recharacterize 2022 and 2023 Roth to traditional IRA. I need to do the 2022 one as soon as possible since the deadline is April 18, 2022. (I thought I have until October 15 to do so?) I believe you need to request a filing extension to have until October. After I recharacterize 2022 I will need to file 2022 Form 8606. No need to amend my 2022 tax return. You need to amend 2022 to file form 5329 and form 8606. You also need to attach a statement as described in the form 8606 instructions. Remove the 2021 excess contribution (not earnings). Amend my 2021 tax return and file 2021 Form 5329, and pay 6% penalty for 2021 and 2022 ($720). You have to file two separate 5329 forms for 2021 and 2022, paying $360 with ...

texasfight wrote: ↑Wed Mar 15, 2023 7:23 pm Trying to open 3 GST irrevocable trusts with a single trustee.

Has anyone done this? Their website makes it seems like it has to be revocable.

Any other suggestions besides Vanguard. Concern is leveraged, inverse fund availability.

Thanks!

https://www.schwab.com/public/file/P-22 ... -57-01.pdf

The online form does seem to be only for revocable trusts.

Open a traditional IRA account. Recharacterize 2022 and 2023 Roth to traditional IRA. I need to do the 2022 one as soon as possible since the deadline is April 18, 2022. (I thought I have until October 15 to do so?) I believe you need to request a filing extension to have until October. After I recharacterize 2022 I will need to file 2022 Form 8606. No need to amend my 2022 tax return. You need to amend 2022 to file form 5329 and form 8606. You also need to attach a statement as described in the form 8606 instructions. Remove the 2021 excess contribution (not earnings). Amend my 2021 tax return and file 2021 Form 5329, and pay 6% penalty for 2021 and 2022 ($720). You have to file two separate 5329 forms for 2021 and 2022, paying $360 with ...

Thank you for your thorough explanation. I will contact Schwab to remove the excess. I don’t think I can just remove any contribution myself. I will need to fill out a form in order to have Schwab remove the excess from each year. If I decided to remove the excess contribution, does it matter what order I do it in? I will probably submit the forms in order from 2021 to 2023. Also, I’ve invested most of the money in my Roth with little cash sitting. Do I need to sell to make sure I have $18500 to distribute? Or will Schwab do that? By looking at the form, it looks like I can ask Schwab to do it? This is the form I need to fill out: https://www.schwab.com/resource/ira-roth-recharacterization-request-form Work backwards for withdrawal, forwar...