The executor has to deal with the probate assets, so it would make sense to only include the value of probate assets. In my state, that would exclude anything with a TOD or beneficiary.
Not very familiar with the BDA acronym, but if the IRA BDA was established via beneficiary, I would imagine those would be excluded. If they can be established via the probate process, I'd expect them to be included.
Search found 2054 matches
- Wed Feb 05, 2025 8:09 pm
- Forum: Personal Finance (Not Investing)
- Topic: Executor Fee
- Replies: 5
- Views: 711
- Tue Feb 04, 2025 5:59 pm
- Forum: Personal Finance (Not Investing)
- Topic: Different Address Than Where Aging Parent Lives For Tax Return?
- Replies: 11
- Views: 843
Re: Different Address Than Where Aging Parent Lives For Tax Return?
My Dad is almost 89 and in memory care. I have used my address on his tax returns for the past few years with no problems whatsoever. I do have a POA to file his taxes and file them electronically on his behalf via AARP Tax Aide, with either direct deposit or direct debit as the case may be.
It does help that he lives in the same state, so I can also do his state return using my address and that works fine too. If he lived in another state it might look odd to list an out of state address on a resident return, but I bet the state tax agency would be fine with it.
He's totally fine with me doing his taxes this way. I have not bothered filing any extra POA-type paperwork with the IRS if it exists. So what I'm doing may be technically ...
It does help that he lives in the same state, so I can also do his state return using my address and that works fine too. If he lived in another state it might look odd to list an out of state address on a resident return, but I bet the state tax agency would be fine with it.
He's totally fine with me doing his taxes this way. I have not bothered filing any extra POA-type paperwork with the IRS if it exists. So what I'm doing may be technically ...
- Mon Feb 03, 2025 8:35 pm
- Forum: Personal Finance (Not Investing)
- Topic: Tax filing for marriage in 2024
- Replies: 9
- Views: 972
Re: Tax filing for marriage in 2024
It is almost always more beneficial to file MFJ rather than MFS. One recently notable exception is if either of you have income based repayment on student loans. You can always run the taxes both ways and see for sure.
Tax software can probably handle your situation and will cost you up to maybe $50. A tax preparer can also handle your situation and will probably charge over $250.
Tax software can probably handle your situation and will cost you up to maybe $50. A tax preparer can also handle your situation and will probably charge over $250.
- Mon Feb 03, 2025 1:04 am
- Forum: Personal Finance (Not Investing)
- Topic: TurboTax Import of Vanguard 1099-R--No Document ID on Vanguard 1099-R
- Replies: 20
- Views: 1768
Re: TurboTax Import of Vanguard 1099-R--No Document ID on Vanguard 1099-R
My guess is that some of your accounts may be on the new brokerage system but the account associated with the 1099-R is still an old mutual fund platform account. It's possible to have a mixture of account types between mutual fund and brokerage (and you can see both types when logging in).
One way to tell is by looking at the account number. Old mutual fund account numbers are 11 digits long and are usually prepended with the four digit fund number. New brokerage account numbers are eight digits long.
- Sat Feb 01, 2025 7:56 pm
- Forum: Personal Finance (Not Investing)
- Topic: TurboTax Import of Vanguard 1099-R--No Document ID on Vanguard 1099-R
- Replies: 20
- Views: 1768
Re: TurboTax Import of Vanguard 1099-R--No Document ID on Vanguard 1099-R
I suspect I am missing something simple here but when I go to download our Vanguard 1099-Rs in TurboTax I am asked by TurboTax for the "Account Number" and "Document ID" on the Vanguard 1099-R. I did this for our brokerage accounts without issue, but the Vanguard 1099-Rs we have do not have a clearly stated "Account Number" or "Document ID".
What am I missing here?
I can see both the Account Number and Document ID on my 2024 Vanguard 1099-R that I downloaded from the Tax Information section of Vanguard's website.
The 1099-R is a large box which is subdivided into eight smaller boxes in roughly two columns and four rows. The contents of the cell which is the first row, first column reads "2024 Form 1099-R" in a relatively large, bold ...
- Sat Feb 01, 2025 5:34 pm
- Forum: Personal Finance (Not Investing)
- Topic: Married filing jointly
- Replies: 19
- Views: 1433
Re: Married filing jointly
From a tax perspective, if you're married on the last day of the year, you really only have two filing status choices: MFJ or MFS. In almost all cases, MFJ will produce a lower tax bill than MFS, but you can check both ways to be sure. MFS is really only designed for couples who can't find a way to agree on taxes but also don't want to face failure-to-file penalties.
State law might also come into play. I live in a community property state, and any debt created by one spouse belongs half to each, with some limited exceptions. There are also non-community property states, where the rules are different.
Negotiating with your spouse sounds like more of a relationship question than a personal finance question. Good luck on that, but probably ...
State law might also come into play. I live in a community property state, and any debt created by one spouse belongs half to each, with some limited exceptions. There are also non-community property states, where the rules are different.
Negotiating with your spouse sounds like more of a relationship question than a personal finance question. Good luck on that, but probably ...
- Sat Feb 01, 2025 4:39 pm
- Forum: Personal Finance (Not Investing)
- Topic: $80k long term capital gain this year
- Replies: 27
- Views: 2893
Re: $80k long term capital gain this year
I wouldn't go there.fivedots wrote: Sat Feb 01, 2025 4:29 pm What about "wild cat" drilling? I heard on Youtube it generates a lot of tax losses up front.
Would you give me $100 if I saved you $20 on your taxes but kept the $100? Of course not - you'd still be $80 behind. That's analogous to a lot of these tax dodges you read about.
- Sat Feb 01, 2025 3:08 pm
- Forum: Personal Finance (Not Investing)
- Topic: Pell grant, SAI and COA question
- Replies: 2
- Views: 245
Re: Pell grant, SAI and COA question
You might find https://studentaid.gov/understand-aid/types/grants/pell to be a useful link.
The FAFSA process determines the maximum amount of Pell Grant your student qualifies for based on your financial situation. After that point, the actual Pell Grant awarded will be based on COA, your SAI, the number of credits, and the other factors mentioned at the above link. Basically, the more expensive the school, the higher the actual Pell Grant can be. I don't know how SAI impacts Pell exactly, other than it apparently does per the above link.
Other than completing the actual FAFSA, the best estimator I know of is https://studentaid.gov/aid-estimator/. You could, I suppose, fill out the actual FAFSA and just not list any schools to send the ...
The FAFSA process determines the maximum amount of Pell Grant your student qualifies for based on your financial situation. After that point, the actual Pell Grant awarded will be based on COA, your SAI, the number of credits, and the other factors mentioned at the above link. Basically, the more expensive the school, the higher the actual Pell Grant can be. I don't know how SAI impacts Pell exactly, other than it apparently does per the above link.
Other than completing the actual FAFSA, the best estimator I know of is https://studentaid.gov/aid-estimator/. You could, I suppose, fill out the actual FAFSA and just not list any schools to send the ...
- Sat Feb 01, 2025 2:28 pm
- Forum: Personal Finance (Not Investing)
- Topic: 529 to Roth IRA conversion
- Replies: 16
- Views: 1578
Re: 529 to Roth IRA conversion
Following this thread,
I too contributed $7000 for son's Roth from his left over 529 funds, now have received the 1099-Q & hoping Turbo Tax would have received & updated their software, otherwise son is up for some taxes on the earnings present in the $7000.
TurboTax is one of the most popular tax prep software on the market, and although I don't use it myself it does seem to have a good reputation for handling all of the main points in tax law adequately.
There should, therefore, be some way to indicate to TT that the 529 distribution was for a Roth rollover. Alternatively and probably even better, you can just not tell TT about the 1099-Q since there is nothing - at least in terms of federal income tax - to report on the return in ...
- Thu Jan 30, 2025 6:55 pm
- Forum: Personal Finance (Not Investing)
- Topic: 529 to Roth IRA conversion
- Replies: 16
- Views: 1578
Re: 529 to Roth IRA conversion
You'll need to decide if your plan violates the rule about the contributions needing to be in the account for five years.
Here's the exact text of the law:
"[you're OK if the 529 to Roth amount] does not exceed the aggregate amount contributed to the program (and earnings attributable thereto) before the 5-year period ending on the date of the distribution"
-- https://www.law.cornell.edu/uscode/text/26/529
There are questions out there about how the IRS is going to interpret and apply the above rule, particularly to situations such as the one you outline. The IRS has not yet published guidance on this topic AFAIK.
I can see arguments that you've met the 5 year rule, and I can also see arguments that you haven't. You get to guess ...
- Thu Jan 30, 2025 5:13 pm
- Forum: Personal Finance (Not Investing)
- Topic: 529 to Roth IRA conversion
- Replies: 16
- Views: 1578
Re: 529 to Roth IRA conversion
I have 529 plans opened for my three kids over 18+ years. Dear daughter finished Med School this year and started working past June. I've used up her 529 account and now it only has $150 there. I can transfer some money from my other two kids' accounts(yes their 529 was also opened 18+ years ago) and would like to fund her Roth from her 529 plans. Is it within the rules to do? Any problem you see in my approach?
If answer is yes and if you know how to enter that info into TT that would be very helpful! Will conversion amount be reported on her 1099-Q?
You'll need to decide if your plan violates the rule about the contributions needing to be in the account for five years.
Here's the exact text of the law:
"[you're OK if the 529 to ...
- Thu Jan 30, 2025 3:45 pm
- Forum: Personal Finance (Not Investing)
- Topic: Assisted living flat all inclusine rate how to get deduction?
- Replies: 18
- Views: 3119
Re: Assisted living flat all inclusine rate how to get deduction?
According to the Pub 502 rules, my sister will qualify for the full deduction of her entire assisted living expense. And we have a doctor's letter stating that she does qualify. I plan to use Turbo Tax to prepare her tax return, but I do not see how I can include the doctor's letter with the e file. I will appreciate any help that I can get. thanks.
Agree with the previous poster.
Also posting to add the recommendation to follow the IRS's instructions. If they want you to send something in, they'll say so. If the don't ask you to send something in, then don't send it in! If they don't ask for it, that means they don't need it or want it, and you sending it in is just making more work for everyone.
In this case, there is no ...
- Thu Jan 30, 2025 9:10 am
- Forum: Personal Finance (Not Investing)
- Topic: Home sale tax (two back to back 2 year apart)
- Replies: 3
- Views: 783
Re: Home sale tax (two back to back 2 year apart)
Oh wow..so, it's not cumulative ?! I was under the impression that even if you meet those tests, each primary residence sale profits cumulatively add towards the "life time" of 500k exemption.
One could theoretically sell as many primary residence as they want and as long as they meet those two tests from sec 121, they will always get first 500 off even if it's their 10th time selling their primary residence.
Thank you for the prompt reply. Really appreciate your help.
It is not a lifetime thing, so yes, someone could use the section 121 exclusion as many times as they are eligible.
The basic three part test is: 1 live in it for two years, 2 own it for two years, and 3 not take the sec 121 exclusion in the past two years. The ...
- Thu Jan 30, 2025 6:40 am
- Forum: Personal Finance (Not Investing)
- Topic: How to handle TurboTax exempting New Jersey tax exempt interest from New Jersey taxes
- Replies: 7
- Views: 1141
Re: How to handle TurboTax exempting New Jersey tax exempt interest from New Jersey taxes
I have the income totals and breakdown. Forget the mutual funds. In the brokerage account, if the NJ amount is less than 80% the tax exempt total, what does one do.
I can't tell if your question is one of tax law or how to get TT to handle the situation properly.
For tax law purposes (*):
1. All of your 1099 income from the NJ fund is NJ state income tax exempt.
2. None of the rest of your 1099 income is NJ state income tax exempt.
For TT:
It sounds like you're saying that TT does not have an entry for how much income to exclude on the NJ state return but it knows about the NJ 80% requirement. TT assumes that the 1099 is for a single fund that either meets or does not meet the NJ 80% requirement.
If this appears to be the case, I ...
- Wed Jan 29, 2025 10:29 pm
- Forum: Personal Finance (Not Investing)
- Topic: 529 to Roth Conversion for High Earner
- Replies: 5
- Views: 962
Re: 529 to Roth Conversion for High Earner
Unlike ordinary Roth contributions, there are no income maximums for a 529->Roth rollover.
She and her husband are limited for normal Roth contributions per the regular rules, but you can do a 529->Roth rollover for her up to her W-2 box 1 wages, which is presumably greater than $7K based on how you're talking about her.
The above are the federal rules, the previous poster mentions some CA restrictions which sound right to me but I'm not familiar with those.
She and her husband are limited for normal Roth contributions per the regular rules, but you can do a 529->Roth rollover for her up to her W-2 box 1 wages, which is presumably greater than $7K based on how you're talking about her.
The above are the federal rules, the previous poster mentions some CA restrictions which sound right to me but I'm not familiar with those.
- Wed Jan 29, 2025 4:57 pm
- Forum: Personal Finance (Not Investing)
- Topic: How to handle TurboTax exempting New Jersey tax exempt interest from New Jersey taxes
- Replies: 7
- Views: 1141
Re: How to handle TurboTax exempting New Jersey tax exempt interest from New Jersey taxes
As you may know in New Jersey, a fund has to have greater than 80% of the tax exempt interest from New Jersey in order to be exempt from New Jersey taxes.
[snip]
Or did I do something wrong?
I think you did something wrong.
I'm not very familiar with NJ state taxes, but a quick google brought me to https://www.nj.gov/treasury/taxation/pdf/pubs/tgi-ee/git5.pdf which says in part:
"Distributions and gains from a New Jersey qualified investment fund are exempt from State Income Tax if they
are derived from the qualified nontaxable debt obligations held by the fund.
A qualified investment fund must:
Be a regulated investment company;
Invest 80% or more of its funds (other than cash or receivables) in securities that are exempt ...
- Wed Jan 29, 2025 11:40 am
- Forum: Personal Finance (Not Investing)
- Topic: HSA - last month rule
- Replies: 3
- Views: 612
Re: HSA - last month rule
I believe you qualify for the full 2025 amount based on the last month rule as long as:
1. The 2025 HDHP plan you refer to is HSA eligible. Many are and if so it's usually in the name or quite obvious.
2. You have family coverage under the plan.
3. You and your family don't have other health insurance coverage.
1. The 2025 HDHP plan you refer to is HSA eligible. Many are and if so it's usually in the name or quite obvious.
2. You have family coverage under the plan.
3. You and your family don't have other health insurance coverage.
- Tue Jan 28, 2025 11:42 am
- Forum: Personal Finance (Not Investing)
- Topic: Mom's passing; her taxes, Estate taxes 2024 & 2025
- Replies: 13
- Views: 2901
Re: Mom's passing; her taxes, Estate taxes 2024 & 2025
In summary: no one needs to report any income / pay any tax on the interest income in 2025 (based on the information you provided).
Forms may not need to be filed (and I generally agree that so far they don't for OP), but the interest income is certainly taxable as ordinary unearned interest and should be reported even if the amounts are under the information return thresholds.
People have the mistaken believe that if the payer of income is not required to send a form to the IRS or the payee then the income is not taxable. This is inaccurate. All income is reportable and taxable (unless excluded by law, like tax-exempt interest) whether or not such forms are received. If you receive $5 of interest from a bank, the bank will not send ...
- Tue Jan 28, 2025 11:34 am
- Forum: Personal Finance (Not Investing)
- Topic: 529s and Forgiveable Loans as Scholarships?
- Replies: 26
- Views: 2239
Re: 529s and Forgiveable Loans as Scholarships?
I looked and the law in 26 USC 117 defines a scholarship as "a scholarship [yadda yadda]", which is recursive and not helpful.
A quick google did turn up a CFR 117 which has a more lengthy definition. I didn't do the work to see if the definition there actually is applicable, but it's at least a better definition, and the fact that the CFR and USC are both 26 xxx 117 makes me think it might be applicable. You can read it at:
https://www.law.cornell.edu/cfr/text/26/1.117-3
As to your question of why, it's because that's the law that Congress passed and (probably) the President signed. It looks like the section has been modified perhaps a dozen times, so I'm not going to go through the research work, but basically people we elected ...
- Mon Jan 27, 2025 9:29 pm
- Forum: Personal Finance (Not Investing)
- Topic: Mom's passing; her taxes, Estate taxes 2024 & 2025
- Replies: 13
- Views: 2901
Re: Mom's passing; her taxes, Estate taxes 2024 & 2025
Not an expert, but I've read up on this stuff too for when I have to do it.
I would not bother with trying to get the bank to use the EIN. They'd probably have to close "her" account with her SSN and roll it into an "estate" account with the EIN. What they are probably hoping you'll do is just withdraw the money from her account and distribute it to the lawful recipients using your state's small estate processes (which in my state would mean providing the bank with a properly completed small estate affidavit). In any case, I believe you can just use the nominee process on Schedule B to reallocate the interest from her to the lawful recipients if necessary.
If you complete K-1s I agree that I think you will need to complete a federal Form ...
I would not bother with trying to get the bank to use the EIN. They'd probably have to close "her" account with her SSN and roll it into an "estate" account with the EIN. What they are probably hoping you'll do is just withdraw the money from her account and distribute it to the lawful recipients using your state's small estate processes (which in my state would mean providing the bank with a properly completed small estate affidavit). In any case, I believe you can just use the nominee process on Schedule B to reallocate the interest from her to the lawful recipients if necessary.
If you complete K-1s I agree that I think you will need to complete a federal Form ...
- Mon Jan 27, 2025 9:07 pm
- Forum: Personal Finance (Not Investing)
- Topic: "Does a Dependent College Student with Interest Income Need to File Taxes?"
- Replies: 5
- Views: 900
Re: "Does a Dependent College Student with Interest Income Need to File Taxes?"
My daughter (college student, 21 year old) redeemed previously gifted i-bonds (original value $10k) from TreasuryDirect and received $852 interest income in 2024. She doesn't have any other income. I have always claimed her as a dependent on our taxes and she never filed taxes on her own. Our MAGI in 2024 comes to around $345k.
Does she need to file her own taxes to report the $852 interest income? At the same time, can we claim her as dependent on our returns (and have her select "Someone claimed you as dependent in 2024"...)?
Do you recommend any better approach to optimize our tax return? Thank you.
invstar
It's a process:
1. First you need to determine if you can claim her as a dependent. Start on page 17 of the Form 1040 ...
- Mon Jan 27, 2025 8:59 pm
- Forum: Personal Finance (Not Investing)
- Topic: 1099-NEC or 1099-MISC
- Replies: 16
- Views: 1234
Re: 1099-NEC or 1099-MISC
You shouldn't have to unless your tax program is bad and that's the only way to get the income onto line 1 of Schedule C.
There should be a place to put in your 1099s and associate them with your Schedule C business, and then a different place to put in other regular business income. I'd put the $300 in the other business income section, but I think you should make sure it ends up on line 1, not line 6, of Schedule C.
With your later post indicating you have to choose one, I'd choose 1099-NEC box 1.
No need to create or send a 1099 of any kind to the IRS, but it sounds like you're clear on that.
There should be a place to put in your 1099s and associate them with your Schedule C business, and then a different place to put in other regular business income. I'd put the $300 in the other business income section, but I think you should make sure it ends up on line 1, not line 6, of Schedule C.
With your later post indicating you have to choose one, I'd choose 1099-NEC box 1.
No need to create or send a 1099 of any kind to the IRS, but it sounds like you're clear on that.
- Mon Jan 27, 2025 8:36 pm
- Forum: Personal Finance (Not Investing)
- Topic: 529s and Forgiveable Loans as Scholarships?
- Replies: 26
- Views: 2239
Re: 529s and Forgiveable Loans as Scholarships?
Pub 970 is general and accessible / understandable to most people. As other Bogleheads have said before (sometimes to me), it's the law that matters, not the IRS Publications.
So 529s are under 26 USC 529, and the scholarship exception you're talking about ends up pointing (after a few references), to 26 USC 25A(g)(2), which is where you could start looking to see if the program you're talking to fits the definition of the law.
It reads in part:
"(2)Adjustment for certain scholarships, etc.
The amount of qualified tuition and related expenses otherwise taken into account under subsection (a) with respect to an individual for an academic period shall be reduced (before the application of subsections (b), (c), and (d)) by the sum of ...
- Mon Jan 27, 2025 7:13 pm
- Forum: Personal Finance (Not Investing)
- Topic: 529s and Forgiveable Loans as Scholarships?
- Replies: 26
- Views: 2239
Re: 529s and Forgiveable Loans as Scholarships?
Pub 970 is general and accessible / understandable to most people. As other Bogleheads have said before (sometimes to me), it's the law that matters, not the IRS Publications.
So 529s are under 26 USC 529, and the scholarship exception you're talking about ends up pointing (after a few references), to 26 USC 25A(g)(2), which is where you could start looking to see if the program you're talking to fits the definition of that part of the law.
It reads in part:
"(2)Adjustment for certain scholarships, etc.
The amount of qualified tuition and related expenses otherwise taken into account under subsection (a) with respect to an individual for an academic period shall be reduced (before the application of subsections (b), (c), and (d)) by the ...
So 529s are under 26 USC 529, and the scholarship exception you're talking about ends up pointing (after a few references), to 26 USC 25A(g)(2), which is where you could start looking to see if the program you're talking to fits the definition of that part of the law.
It reads in part:
"(2)Adjustment for certain scholarships, etc.
The amount of qualified tuition and related expenses otherwise taken into account under subsection (a) with respect to an individual for an academic period shall be reduced (before the application of subsections (b), (c), and (d)) by the ...
- Mon Jan 27, 2025 3:08 pm
- Forum: Personal Finance (Not Investing)
- Topic: Official IRMAA notification method
- Replies: 5
- Views: 674
Re: Official IRMMA notification method
So from what I now gather, if someone has eStatements set up the IRMMA notification would be included in that eStatement and a separate letter would not be mailed out. Can someone who has eStatements set up and were hit with IRMMA any year confirm this? Thanks! I just discovered this great site.
I'm the rep payee for the aforementioned relative. I went into his online account and was able to see an online version of the same letter I alluded to before in the "Messages" area (upper right corner). It was dated 11/23/24 and the subject was "Your 2025 Social Security Benefits Increase and Medicare Premiums".
It seems you can set up SS to both print/mail and online, which is how it works for my relative. But if I didn't have print/mail, I ...
- Mon Jan 27, 2025 2:07 pm
- Forum: Personal Finance (Not Investing)
- Topic: Official IRMAA notification method
- Replies: 5
- Views: 674
Re: Official IRMMA notification method
A family member gets their IRMAA notification as part of their annual benefit letter which comes in the mail in December. It says how much for SS benefits, how much for part B and part D, and then the net benefit. Then on the second page it says he's affected by IRMAA, and it's his (this year minus 2) AGI of $X and his tax-exempt interest of $Y which puts him in tier Z, and if that's wrong how to update them, then information on how to appeal.
The 1099-SSA does come separately in January, and it does reflect the higher IRMAA costs that he pays, but I don't recall any specific mention of IRMAA.
The 1099-SSA does come separately in January, and it does reflect the higher IRMAA costs that he pays, but I don't recall any specific mention of IRMAA.
- Mon Jan 27, 2025 12:32 am
- Forum: Personal Finance (Not Investing)
- Topic: Flight Training (Part 61) via 529: Possible Path using SECURE 2.0 Act??
- Replies: 10
- Views: 1196
Re: Flight Training (Part 61) via 529: Possible Path using SECURE 2.0 Act??
With a valid 529 to Roth rollover, the funds are treated as if they were being transferred from another Roth IRA holding contributions and gains. Therefore, if the 529 account was composed of 70% contributions and 30% gains, a transfer of 7000 to the Roth IRA would be treated as 4,900 of additional regular Roth IRA contribution basis and 2,100 of Roth IRA earnings. This breakdown will show on the 1099Q form.
Note that the IRS 5498 instructions call for the full 7000 to be reported as a regular Roth IRA contribution, and this will probably result in Roth owners that use the 5498 filing to track their Roth contribution basis to overstate their actual basis. Apparently, the IRS felt that controlling the amount of contributions was more ...
- Sat Jan 25, 2025 9:38 pm
- Forum: Personal Finance (Not Investing)
- Topic: RSUs and merit aid
- Replies: 18
- Views: 1894
Re: RSUs and merit aid
What I was thinking when I wrote that is that normally you don't have control over the vesting schedule, and RSUs become FAFSA-reportable assets when they vest. Then selling, when OP chooses to, might result in additional (FAFSA-reportable) capital gains income.TomatoTomahto wrote: Sat Jan 25, 2025 11:52 amIf we are talking normal RSUs, they hit the W2 as their fair market value in the vesting year. That is, they are earned income, and it is not available to time.secondcor521 wrote: Sat Jan 25, 2025 11:47 am Since income is counted more heavily than assets, selling RSUs will adversely impact the FAFSA results.
If you’re taking restricted options, that’s something else.
- Sat Jan 25, 2025 11:47 am
- Forum: Personal Finance (Not Investing)
- Topic: RSUs and merit aid
- Replies: 18
- Views: 1894
Re: RSUs and merit aid
Remember that financial aid is re-applied for and re-figured every year. So if you sell this year it will affect his 27/28 school year, if you sell in 2026 it will affect is 28/29 school year.
Point being, trying to avoid selling RSUs to not affect financial aid might end up being an exercise in holding off for four years, not one.
Depending on the school and the particular merit aid, the FAFSA results generally won't adversely impact merit aid. Although some (most?) schools require you to complete FAFSA in order to qualify for merit aid - the idea is the school would rather your kid get a Pell grant first (which is the federal government's money) before they give you the merit aid (which comes out of the school's money).
Since income is ...
Point being, trying to avoid selling RSUs to not affect financial aid might end up being an exercise in holding off for four years, not one.
Depending on the school and the particular merit aid, the FAFSA results generally won't adversely impact merit aid. Although some (most?) schools require you to complete FAFSA in order to qualify for merit aid - the idea is the school would rather your kid get a Pell grant first (which is the federal government's money) before they give you the merit aid (which comes out of the school's money).
Since income is ...
- Fri Jan 24, 2025 2:30 am
- Forum: Personal Finance (Not Investing)
- Topic: VA HealthCare and ACA overlap Tax Consequence
- Replies: 1
- Views: 428
Re: VA HealthCare and ACA overlap Tax Consequence
Possibly helpful quote from the instructions for Form 8962 (https://www.irs.gov/pub/irs-pdf/i8962.pdf):
" Who Can Take the PTC
You can take the PTC for 2024 if you meet the conditions under (1), (2), and (3) below.
1. For at least 1 month of the year, all of the following were true.
a. An individual in your tax family was enrolled in one or more qualified health plans offered through the Marketplace on the first day of the month.
b. That individual was not eligible for minimum essential coverage (MEC) for the month, other than coverage in the individual market. An individual is generally considered eligible for MEC for the month only if they were eligible for every day of the month (see Minimum essential coverage, later).
[...]"
Emphasis ...
" Who Can Take the PTC
You can take the PTC for 2024 if you meet the conditions under (1), (2), and (3) below.
1. For at least 1 month of the year, all of the following were true.
a. An individual in your tax family was enrolled in one or more qualified health plans offered through the Marketplace on the first day of the month.
b. That individual was not eligible for minimum essential coverage (MEC) for the month, other than coverage in the individual market. An individual is generally considered eligible for MEC for the month only if they were eligible for every day of the month (see Minimum essential coverage, later).
[...]"
Emphasis ...
- Thu Jan 23, 2025 11:14 pm
- Forum: Personal Finance (Not Investing)
- Topic: How much IRA to disclaim
- Replies: 7
- Views: 941
Re: How much IRA to disclaim
My current plan is to disclaim 3/4 of a traditional inherited IRA which I am listed as a primary beneficiary per stirpes. I have 3 kids - almost 30, almost 25, and 23. So we'll each get 1/4 of the inherited IRA.
There was a long thread discussion about whether using the approach of "John Doe per stirpes" is acceptable and workable. In my situation I believe it's fine.
My thought is that since the traditional IRA has to be drained in 10 years and taxed as it is removed, and since my kids and I have very roughly the same taxable income, that dividing it equally roughly will minimize additional taxes owed on the traditional IRA distributions.
It's also a bit of a "gift with a warm hand" and also does help reduce my estate tax exposure.
I ...
There was a long thread discussion about whether using the approach of "John Doe per stirpes" is acceptable and workable. In my situation I believe it's fine.
My thought is that since the traditional IRA has to be drained in 10 years and taxed as it is removed, and since my kids and I have very roughly the same taxable income, that dividing it equally roughly will minimize additional taxes owed on the traditional IRA distributions.
It's also a bit of a "gift with a warm hand" and also does help reduce my estate tax exposure.
I ...
- Tue Jan 21, 2025 3:59 pm
- Forum: Personal Finance (Not Investing)
- Topic: Estate executor/POA questions
- Replies: 26
- Views: 1258
Re: Estate executor/POA questions
My mom just passed away Friday, my sister is her estate executor, and she asked me some questions that I thought BHs could help me answer. My sister had my mom's POA and continues to have my dad's. She knows I'm posting this and she'll read the responses. My parents and the two siblings mentioned below live/lived in California. Thanks in advance for your help. Our questions:
1) Our dad is still living and the estate is in a trust; is there any reason why it would make sense for him to file his 2025 taxes as Married Filing Single? We didn't think so, but someone else suggested it.
2) As POA, my sister has been gifting another sibling funds from both my parents for being especially helpful. All siblings agree this should be happening ...
- Mon Jan 20, 2025 4:29 pm
- Forum: Personal Finance (Not Investing)
- Topic: Who sends K-1s from trusts?
- Replies: 14
- Views: 1638
Re: Who sends K-1s from trusts?
I believe it's normally the responsibility of the trustee, so in this case your MIL would send it to your wife and the other beneficiaries.
- Mon Jan 20, 2025 2:21 pm
- Forum: Personal Finance (Not Investing)
- Topic: Excess HSA contribution in 2024, but FreeTaxUSA isn't generating Form 5329
- Replies: 5
- Views: 684
Re: Excess HSA contribution in 2024, but FreeTaxUSA isn't generating Form 5329
If you remove the excess contribution from your HSA before the filing date of the return including extensions, then you can treat the amounts removed as never having been contributed. Therefore, no penalty and no 5329 necessary.
See "Excess Contributions You Make" at https://www.irs.gov/pub/irs-pdf/i8889.pdf (bottom left of page 8).
See "Excess Contributions You Make" at https://www.irs.gov/pub/irs-pdf/i8889.pdf (bottom left of page 8).
- Sat Jan 18, 2025 8:29 pm
- Forum: Personal Finance (Not Investing)
- Topic: Reimburse HSA and invest in brokerage for step-up basis inheritance?
- Replies: 45
- Views: 4428
Re: Reimburse HSA and invest in brokerage for step-up basis inheritance?
I disagree with your quick, misguided interpretation of my initial post. Have a good day.
People believe a lot of inaccurate things about taxes which I see and hear frequently as a tax prep volunteer. For example, someone might think that one can do a tax free distribution from an HSA to a 529. That's not really that implausible of an idea now that we have 529->Roth tax free rollovers, even though it's still inaccurate.
While it's now clear to me after your followup comment that you do not hold such a misguided belief, what you wrote originally was ambiguous to me and could be read that way. My reply was to try to point that out to you in case you did (again, you don't) AND to try to prevent other folks who from being misguided.
I ...
- Sat Jan 18, 2025 8:10 pm
- Forum: Personal Finance (Not Investing)
- Topic: Reimburse HSA and invest in brokerage for step-up basis inheritance?
- Replies: 45
- Views: 4428
Re: Reimburse HSA and invest in brokerage for step-up basis inheritance?
Because 529 contributions are not qualified medical expenses, the portion of your HSA distributions that you used for that purpose are taxable, not tax free. Any HSA distributions for 529 contributions that you made after age 65 would have escaped the 20% penalty.
Hmmmm, I take qualified medical expense distributions (reimbursements from past eligible medical expenses I incurred and paid out of pocket) from my HSA, which are later documented on IRS form 8889 along with the 1099-SA reported by the HSA custodian. The distributions go into my checking account, and the funds in my checking account are used for 529 contributions. What’s wrong with that?
Nothing. The way you wrote it originally was misleading because you left out the ...
- Sat Jan 18, 2025 7:31 pm
- Forum: Personal Finance (Not Investing)
- Topic: Reimburse HSA and invest in brokerage for step-up basis inheritance?
- Replies: 45
- Views: 4428
Re: Reimburse HSA and invest in brokerage for step-up basis inheritance?
Hmmm, I’ve been taking $20k tax-free distributions from my HSA the last several years, and paying LTCi premiums monthly and funding 529 plans for 3 grandkids from the distributions. I’ll probably exhaust my HSA account balance of $92k in 4 or 5 years; then we’ll work on wife’s HSA balance of $26k. We’re 71 and 73 years old and have only a few years remaining for the account balance to be completely exhausted by reimbursement of eligible medical expenses. Oh well, it was a good ride when we started funding the accounts in 2008 and ended contributions in 2018 when I went on Medicare.
Because 529 contributions are not qualified medical expenses, the portion of your HSA distributions that you used for that purpose are taxable, not tax free ...
- Sat Jan 18, 2025 4:29 pm
- Forum: Personal Finance (Not Investing)
- Topic: First year of taking an RMD in 2028 plus still doing a Roth Conversion.
- Replies: 11
- Views: 1266
Re: First year of taking an RMD in 2028 plus still doing a Roth Conversion.
The RMD and Roth conversion amounts will be totaled together by the IRA custodian, reported to you in box 1 of his 1099-R, and reported by you on Line 4b of your Form 1040.
You can (and it seems, should) report the Roth conversion amount on Line 16 and 18 of Form 8606, although I can't see why in the scenario you describe. I thought you could skip this when over 59.5, but I can't find anywhere in the instructions where it is permitted to skip.
No need as far as I can see to complete 8606 for the Roth distribution, assuming the likely situation that he's had a Roth for more than 5 years - see instructions for Form 8606 Line 19, bullet point 4 where it says you can skip reporting "Distributions made on or after age 591/2 if you made a ...
You can (and it seems, should) report the Roth conversion amount on Line 16 and 18 of Form 8606, although I can't see why in the scenario you describe. I thought you could skip this when over 59.5, but I can't find anywhere in the instructions where it is permitted to skip.
No need as far as I can see to complete 8606 for the Roth distribution, assuming the likely situation that he's had a Roth for more than 5 years - see instructions for Form 8606 Line 19, bullet point 4 where it says you can skip reporting "Distributions made on or after age 591/2 if you made a ...
- Sat Jan 18, 2025 1:23 pm
- Forum: Personal Finance (Not Investing)
- Topic: Final Social Security Payment
- Replies: 31
- Views: 5822
Re: Final Social Security Payment
I haven't signed up for SS either; I've just read about it.dlm2827 wrote: Fri Jan 17, 2025 10:49 pmThanks for your response. Neither DW nor I have signed up for SS yet, and I had no idea they could do that. Is there something you sign or otherwise agree to online that give them permission to debit your account?
My understanding is that you agree to let them pull it back in the paperwork you sign when you sign up for direct deposit.
As an aside, I've seen similar wording when signing up for direct deposit from my employers. If they deposit the wrong amount due to a payroll glitch, they reserve the right to fix it which may involve removing some of the money they put in.
- Fri Jan 17, 2025 7:41 pm
- Forum: Personal Finance (Not Investing)
- Topic: Reimburse HSA and invest in brokerage for step-up basis inheritance?
- Replies: 45
- Views: 4428
Re: Reimburse HSA and invest in brokerage for step-up basis inheritance?
^ All true. FWIW Medicare IRMAA (both B and D) are qualified medical expenses for purposes of HSA distributions.
- Fri Jan 17, 2025 7:39 pm
- Forum: Personal Finance (Not Investing)
- Topic: Final Social Security Payment
- Replies: 31
- Views: 5822
Re: Final Social Security Payment
Yes, they do.dlm2827 wrote: Fri Jan 17, 2025 7:32 pm Wondering how "they snatched it back". If SS is direct deposited, do they also have the authority to debit your bank account?
- Fri Jan 17, 2025 2:55 pm
- Forum: Personal Finance (Not Investing)
- Topic: 1099-K and 1040 Schedule 1 (TurboTax)
- Replies: 1
- Views: 273
Re: 1099-K and 1040 Schedule 1 (TurboTax)
I agree with everything you wrote except the very last bit. I would only use 8949/Schedule D for a personal item sold for a gain, which apparently doesn't apply in your scenario.
You can either put the entire 1099-K amount in the area at the top of Schedule 1, which is probably what the IRS would prefer but TT doesn't handle perfectly, or I would think you can still do the 8z/24z approach. The 2024 IRS instructions for this are pretty readable (https://www.irs.gov/pub/irs-pdf/i1040gi.pdf page 84).
You can either put the entire 1099-K amount in the area at the top of Schedule 1, which is probably what the IRS would prefer but TT doesn't handle perfectly, or I would think you can still do the 8z/24z approach. The 2024 IRS instructions for this are pretty readable (https://www.irs.gov/pub/irs-pdf/i1040gi.pdf page 84).
- Fri Jan 17, 2025 1:29 pm
- Forum: Personal Finance (Not Investing)
- Topic: Reimburse HSA and invest in brokerage for step-up basis inheritance?
- Replies: 45
- Views: 4428
Re: Reimburse HSA and invest in brokerage for step-up basis inheritance?
I like the tax-free growth aspect of my HSA. I don't like the inheritance tax treatment of my HSA (single with three offspring who are my HSA beneficiaries). I therefore have decided:
1. I'll leave the HSA money in there as long as I can.
2. I'll try to drain my HSA before I die. This requires estimating both my qualified medical expenses in the future and my date of death. Based on my SWAGs, I'll start draining at age 70 hoping to zero it at age 85.
3. I'm strongly considering changing the beneficiary on my HSA from my three offspring to a favorite charity. My HSA is less than 0.5% of my assets, and my kids will still get the other 99.5%.
1. I'll leave the HSA money in there as long as I can.
2. I'll try to drain my HSA before I die. This requires estimating both my qualified medical expenses in the future and my date of death. Based on my SWAGs, I'll start draining at age 70 hoping to zero it at age 85.
3. I'm strongly considering changing the beneficiary on my HSA from my three offspring to a favorite charity. My HSA is less than 0.5% of my assets, and my kids will still get the other 99.5%.
- Tue Jan 14, 2025 3:15 pm
- Forum: Personal Finance (Not Investing)
- Topic: Help navigate decision to extend college by pursuing dual degree by CS major senior
- Replies: 27
- Views: 1876
Re: Help navigate decision to extend college by pursuing dual degree by CS major senior
Almost every degree program I've ever seen has options which your son is ruling out for whatever reason.
If his school will let him stay a fifth year and get a dual degree, I would be willing to bet dollars to donuts that they would also let him take the same classes and get a second bachelors or a masters from them in the finance area. And if they don't, he can certainly work a few years, take the GRE or GMAT and get a masters degree from somewhere else. Most employers in that area probably don't care what coursework was done as part of what degree; they probably would prefer to see the several years work experience. The work experience might also have the added benefits of beefing up his balance sheet and giving him additional ...
If his school will let him stay a fifth year and get a dual degree, I would be willing to bet dollars to donuts that they would also let him take the same classes and get a second bachelors or a masters from them in the finance area. And if they don't, he can certainly work a few years, take the GRE or GMAT and get a masters degree from somewhere else. Most employers in that area probably don't care what coursework was done as part of what degree; they probably would prefer to see the several years work experience. The work experience might also have the added benefits of beefing up his balance sheet and giving him additional ...
- Tue Jan 14, 2025 1:35 pm
- Forum: Personal Finance (Not Investing)
- Topic: Gift to Plan 529
- Replies: 1
- Views: 182
Re: Gift to Plan 529
I have a 529 account for my son, and we have already contributed the maximum limit of 2025.
Additionally, his grandparntes gave him $3000 as gift. Since his grandparents reside overseas, I needed to bring this cash into the United States. My plan is to deposit it into my bank account and then transfer it to the 529 account.
Which maximum limit did you hit - the 529 contribution limit, the 529 maximum for any state income tax benefit, or the IRS annual gift exclusion amount?
My question is: would the $3,000 be considered to exceed the limit since it is passing through my bank account?
I highly doubt it.
Or is it not considered as the money is coming from my parents?
Exactly.
Furthermore, how can I prove this (if ...
- Mon Jan 13, 2025 9:51 pm
- Forum: Personal Finance (Not Investing)
- Topic: Covered California - Revised 1095-A form
- Replies: 4
- Views: 1176
Re: Covered California - Revised 1095-A form
Thank you. Perhaps if I call Covered California (our Marketplace people), and just ask for different SLCSP instead of a revised 1095-A form they will be more accommodating. It would also avoid trying to follow painful IRS instructions in Pub 974.
Right, they should be.
Really all you need to know is the SLCSP for your family size and zip code for 2024, and you'd need to know which months she wasn't eligible (which is probably any month or part of month in which she was enrolled in the school's insurance).
In rare cases the SLCSP can change during the year, but the agent should be able to tell you if so.
Then you just replace the SLCSP in column (b) of Form 8962, probably lines 19 through 23. The biggest pain is that you have to do ...
- Mon Jan 13, 2025 7:36 pm
- Forum: Personal Finance (Not Investing)
- Topic: Covered California - Revised 1095-A form
- Replies: 4
- Views: 1176
Re: Covered California - Revised 1095-A form
Apparently you do not need to get California to issue a corrected 1095-A. From the 2023 instructions for Form 8962 (page 4 left column at https://www.irs.gov/pub/irs-pdf/i8962.pdf):
"Also, if you had a change in circumstances during 2023 that you did not report to the Marketplace, the SLCSP premium reported in Part III, column B, may be wrong. In either case, you must determine your correct applicable SLCSP premium. You do not have to request a corrected Form 1095-A from the Marketplace. See Missing or incorrect SLCSP premium on Form 1095-A, later."
And that later section says in relevant parts (bottom of page 12 / top of page 13 at above link):
" Missing or incorrect SLCSP premium on Form 1095-A. Generally, there are two situations ...
"Also, if you had a change in circumstances during 2023 that you did not report to the Marketplace, the SLCSP premium reported in Part III, column B, may be wrong. In either case, you must determine your correct applicable SLCSP premium. You do not have to request a corrected Form 1095-A from the Marketplace. See Missing or incorrect SLCSP premium on Form 1095-A, later."
And that later section says in relevant parts (bottom of page 12 / top of page 13 at above link):
" Missing or incorrect SLCSP premium on Form 1095-A. Generally, there are two situations ...
- Mon Jan 13, 2025 7:19 pm
- Forum: Personal Finance (Not Investing)
- Topic: How much is too much for term life?
- Replies: 47
- Views: 3877
Re: How much is too much for term life?
When I was married, I bought the amount of life insurance my wife wanted. She wanted enough to raise the kids and keep her at our lifestyle level until her age 95. She divorced me, after which I realized my life insurance needs were enough to get my kids launched, and since my retirement savings were enough for that and I wouldn't use them if I died, I didn't own any life insurance after that point.
OP, I think there is a reasonable argument for less life insurance than my ex wanted. It would not be unreasonable (IMHO) to pick a time frame of something like 5 years to 10 years and fund enough life insurance for the family to transition to surviving without your income during that timeframe.
Given that your expenses would no longer exist ...
OP, I think there is a reasonable argument for less life insurance than my ex wanted. It would not be unreasonable (IMHO) to pick a time frame of something like 5 years to 10 years and fund enough life insurance for the family to transition to surviving without your income during that timeframe.
Given that your expenses would no longer exist ...
- Mon Jan 13, 2025 6:49 pm
- Forum: Personal Finance (Not Investing)
- Topic: IRS 2024 Form 1099-R Box 7 filing rejected with single code - Resolved
- Replies: 17
- Views: 3805
Re: IRS 2024 Form 1099-R Box 7 filing rejected with single code
I'm vaguely familiar with IRIS. Is there another upload method option besides using a CSV? Since you only have four, if there is a non-CSV option it may be workable.
The other option is to use a place like tax1099.com and pay ~$3 per form. You might not want to pay $12, but it might be better than being on hold with the IRS for another 2 hours.
The other option is to use a place like tax1099.com and pay ~$3 per form. You might not want to pay $12, but it might be better than being on hold with the IRS for another 2 hours.
- Mon Jan 13, 2025 3:12 pm
- Forum: Personal Finance (Not Investing)
- Topic: 59 unemployed and uninsured. healthcare.gov
- Replies: 9
- Views: 1546
Re: 59 unemployed and uninsured. healthcare.gov
For the purposes of ACA, yes. That's probably why the application is asking you about them.