Bogleheads.org

I have been using TurboTax for at least 25 years. Over that time we’ve had rental properties, self employment income, home office deduction, foreign income tax paid, QBI, and 199a dividends, K-1 trust income. No crypto and no back door Roth. I’ve never found doing my taxes difficult though sometimes time consuming.

What is a K-1 with QBO deduction?

Exile on Main Street

Full stop

Get Yer Yayas Out and Allman Bros Live at Fillmore East
For live albums

I understand that supplemental income is taxed at 22%. Your understanding is incorrect. Supplemental income (like a bonus) might be withheld at 22%, but it is taxed at whatever your marginal tax rate happens to be. If you are in the 35% bracket, it will be taxed at 35%. There are a number of ways to meet the safe harbor requirements for avoiding an underwithholding penalty. You could have additional withholding from your regular paycheck or make estimated tax payments. If this is the first time you get substantial supplemental income you might already be having enough withheld to meet the safe harbor criteria. Meeting the safe harbor criteria just means you won't owe an underwithholding penalty - you still might owe a substantial amount co...

If I read your original post correctly, your DW is no longer working. If that’s the case she could roll over her 401k to an IRA at Vanguard or elsewhere and save the 15 bps.

Pay off the debt and get a reverse mortgage.

I like these ideas.

Pay off the debt and get a reverse mortgage.

I like these ideas.

Seattle area has extremely cheap (hydro) power ($0.11-0.13 per khw), but relatively low daylight hours - economics of solar don't work well in many areas, and especially don't work well in heavily wooded suburbs due to shading. Having lived in an eastern suburb of Seattle for 10 years this is quite true. But I'm still not seeing how poor economics for rooftop solar and home batteries is all that relevant to the OP's question of whether or not to replace a gas furnace with a heat pump or conventional gas forced air furnace. Answers to the OP's question should hinge on performance of heat pumps versus gas forced air furnaces and the economics of running those types of equipment given current and expected gas versus electricity prices weighed...

I don't live in Seattle, but make sure you understand the viability of solar systems with home batteries (current technology and near term future technology).

I don't understand why solar with home batteries has much relevance to the question of whether or not to replace a gas furnace. Probably a third order consideration. The Seattle is gray pretty much all winter, so solar electricity generation would be good for powering A/C in the summer, but not so much to power a heat pump in the winter.

I've done it with my alma mater. You want to pick a charity that has good financial management, because you are depending on that charity to manage its assets well enough to pay you the promised annuity payments. Most CGA places pay the ACGA annuity rates https://www.acga-web.org/current-gift-annuity-rates#TwoLives which for two joint annuitants aged 70 currently would pay 5.2% per year. I think it works best to contribute highly appreciated assets, and contribute to an organization you would support with annual cash giving in any case. You get a 1099-R that shows how much of the income is return of capital (non taxable), capital gains (taxed at capital gains rates) and ordinary income. I think after 20 years it all turns in to ordinary inc...

My DW and I took a 2 day retirement planning course at one of my former employers. They encouraged anyone 50 and over to take the course (it was a pretty paternalistic company at the time). I came away with several insights that have stuck with me: Retirement is about a lot more than the numbers (can I afford to retire?) You should be retiring to something, not just from something If you think you will play golf every day, that will last about 6 months and you will get bored with just doing that Find something you want to get up and do every day. That might be a hobby, a volunteer activity, social activity etc. Don't plan on just sitting on your porch and relaxing your retirement away. There is some evidence that people who keep working liv...

We decided to gift each child an identical amount each year, disregarding their different financial situations.

+1

Although we may not gift each year, when we do gift we send all three the same amount.

As far as I know, the Schedule K-1 will only show income that has been paid to the beneficiaries who get the K-1. If there is any estate income which has not been paid out to the beneficiaries in a given tax year, the estate will be responsible for paying income tax on that estate income via the 1041 the estate files.

My wife received a Schedule K-1 recently which will significantly increase our tax bill this year. We've received some of the funds from the estate and are able to pay this tax bill, but I am uncomfortable paying significant taxes that are in large part based on income earned by the estate but not yet in our possession.

If you received a Schedule K-1, you must have received distributions.

I would be very surprised if you got a Schedule K-1 but did not get the distributions reported on the K-1. I suppose that is possible if the executor / trustee has screwed up, but I think it more likely that you did get the distributions and have forgotten or lost track of them.

Since I don’t own any ETFs and still hold all my assets at Vanguard I don’t think it affects me directly. Perhaps indirectly it attracts more assets to Vanguard allowing them to continuously lower ERs, which is a benefit to all who invest through Vanguard.

The first issue as I started to investigate this is which figures to use from an earnings perspective. The SS statement lists two, Earnings Taxed for Social Security and Earnings Taxed for Medicare.

Your Social Security benefit is calculated on the earnings taxed for Social Security. There has been a cap on earnings taxed for Social Security for many years. For 2023 that cap or taxable maximum is $160,200. There is no cap on earnings taxed for Medicare.

When you say “suddenly”, realize that this law went into effect in 1993, increasing it from the 50% ratio enacted in 1983.

+1

The plan is terminated when the assets are distributed, not when you get a 1099.

I'm not sure this is correct. I think the plan is terminated when the plan administrator sends notice to the plan participant that the plan is terminated. That may or may not coincide with when the assets in the plan are distributed. But I agree with the sentiment that a 1099 has nothing to do with the plan termination.

I believe the SS website now has 2022's SSA-1099 forms online. You might want to check if you have 2 of them.

Thanks for your thoughts, prd1982. I just checked the mySocialSecurity site (ssa.gov) and I only have the one SSA-1099 form which only includes the three months I got benefits under my own Social Security account. The person I spoke with at Social Security did tell me that they will not issue a 1099 form for any months in which the beneficiary got no net benefits, which was my situation for the first nine months of 2022.

I guess I wonder how the IRS will ever know that I "got" that income if they never get a 1099.

During the first 9 months of 2022 I was getting one half of my DW's Social Security benefit, which was entirely going to pay for my Medicare Part B premiums. Thus I got $0 per month net from Social Security for those months. My own benefits started in October, 2022 after I turned 70 years old. The SSA-1099 I got included only the benefit payments I got for October through December, 2022. When I spoke with Social Security they said that I would not get a SSA-1099 for the benefits I got from January - September because I got $0 for those months after deduction for my Medicare Part B premium. I requested and just received from Social Security a Report of Confidential Social Security Benefit Information with my DW's social security number follo...

Thank you, LadyGeek. The time zone setting may have gotten unmoored in an upgrade and I just recently noticed it.

Thanks to all the moderators of this board. This is one of the most useful places on the whole internet, in my experience.

[Thread merged into here --admin LadyGeek]

The time stamp for forum posts seems incorrect. The latest post has a time stamp of 4:47 PM, Friday February 10, where the actual time seems to have been 11:47 AM, Friday February 10 (unless we want the time stamp to be set to UTC or GMT). In the past it seemed the time stamp was set to Eastern U.S. time.

As I understand it, with a Durable Power of Attorney for your mother you have a fiduciary duty to act only in your mother’s best interest. I am not a lawyer, but I have read that an agent with a DPOA is legally barred from making gifts from the principal’s assets to their own. That is, you may lack the legal right to transfer assets from your mother’s account to your own. Of course if your mother is competent to make such a decision she could do it herself.

Although it appears to be legal (I'm not expert), I have a moral objection to removing assets which could be used to pay someone's expenses and instead calling upon the rest of us taxpayers to pay for their care while enriching their heirs. Plus, do you want your mother to be in the kind of facility that accepts Medicaid? But it is up to you.

So I spoke with Social Security today. They started working on my appeal of the erroneous deduction for ~$2,000 from my September 2022 benefit (paid in October). They said it may take them 60 days to process the appeal. They said I did not get a SSA-1099 from the payments from my wife's Social Security account because the entire benefit went to pay for my Medicare premium. They will send me a statement showing the total of those payments for 2022 (but it is not a SSA-1099). I asked if I should report that as income on my Federal Tax return, even though it will not show up on any 1099. They said yes I should include it in my Social Security income all going to my Part B Medicare premium. I then asked if Social Security figures out that they ...

I got an increase in the credit line on my Citi Costco VISA card this morning of $7,000. I asked on line and they asked questions about income and mortgage payment. The $7,000 increase is what their algorithm spit out.

The only insurance I hold more than the minimum required is health insurance. I have yet to experience an event where insurance would have helped me compared to self-insuring. Umbrella insurance is popular with people of high net worth on this forum.

Unless you have a mortgage, homeowners insurance is not required. Even when we pay off our mortgage I will continue to purchase homeowners insurance. The consequence of our house burning down or someone being injured on our property is so large that I will want to have adequate insurance coverage.

And yes, we also have a $2 million umbrella insurance policy through RLI.

Thank you again to all who have provided advice. There's not enough data: ie: a portfolio review format to give answer your questions in a comprehensive manner. a) not enough financial data b) not enough data on legacy concerns and estate planning c) not enough data on tax consequences and strategy (how and when and in what sequence to deploy your inheritance, and in what forms, etc). d) etc. I'm not looking for a portfolio review. I was specifically asking about the wiki advice to wait 6 to 12 months before doing anything. I do have a session lined up with a fee-only financial advisor who is widely respected in the Bogleheads community. Delays in obtaining a death certificate will mean we have probably at least 2 months before the funds ca...

Thank you to everyone for their thoughtful advice.

Some more info which might be helpful. About 80% of this inheritance must go into an existing trust where I am the income beneficiary and the corpus passes to my kids when I die. The remaining 20% comes to me directly but has embedded unrealized capital gains representing about half of the current market value. (Generation skipping trust established ~80 years ago)

I do have an appointment set up to talk to a fee-only financial advisor who is well regarded by the Bogleheads community. The assets probably won’t get to me for 1 to 8 months from now, so I do have time to figure out what to do. In general,I think this inheritance will be invested for our kids.

I will shortly be receiving an inheritance in the low 7 figures. This represents about a 35% increase in our financial assets. I will also be receiving an annuity paying me about $1,500 per month for the next 10 years. My wife and I are in our early 70s. Between Social Security benefits and earnings on non-IRA assets we probably need withdrawals of 1% or so to fund our lifestyle. We don't have an explicit emergency fund since we have significant financial assets which include some cash positions, from which we could withdraw in an emergency. My question is about the Wiki advice for dealing with a windfall. The Wiki advises putting the windfall into cash or money market assets for 6 months to a year before doing anything else. Beyond paying ...

TurboTax Home & Business gives you some extra hand holding, but a single member LLC is a disregarded entity for income tax purposes and the income and expenses flow to the Schedule C (self employment) of your federal tax return. TurboTax Deluxe would probably be fine for your situation. Why are you setting up an LLC? Will you have employees, inventory, be purchasing capital assets and depreciating them? If it is only for asset protection / shielding from liability you should speak with your attorney to see if that is advisable. I was informed by my attorney that an LLC would not shield me from any liability for my own personal actions. Since my self employment income was entirely from my own labor, an LLC seemed unnecessary for me. Thou...

My mother passed away last week. I have been the trustee of her Revocable Living Trust for almost 8 years. My understanding is that her trust is now Irrevocable, but still with the same name, viz: The Jane J. Doe Revocable Living Trust Dated February 28, 198x. I understand that I will now need to get an EIN for the trust. The on-line IRS website gives several choices for different kinds of EINs to get, including Estates and Trusts. I imagine that I don't want an Estate EIN, but rather a Trust EIN. Under Trust EINs, the IRS website gives several choices, including Revocable Trusts and Irrevocable Trusts. I am thinking I need an EIN for an Irrevocable Trust. I've asked the estate attorney this question but have not gotten an answer yet. Hopef...

Have you looked at your online SSA account? Maybe there's more detail or a summary there.... IDK

My online SSA account is no help.

Perhaps the spousal benefit you were previously collecting will get reported on a separate SSA-1099? Thanks for replying and linking to the earlier thread. We got my wife's SSA-1099 and it only shows the benefits that she received, with their numbers exactly matching my calculation. So unless I get a second SSA-1099, this seems to have gone into limbo. I posted an earlier question about Medicare losing track of the premiums I had been having deducted from the benefit I got from my wife's Social Security account. They charged me $2000+ for unpaid Medicare premiums, deducted from my first benefit on my own account. I filed an appeal with Social Security a couple of months ago but have heard nothing back from them yet. This all seems to be co...

So I got my SSA-1099 form and I think it is incorrect. I turned 70 years old last September and started my own Social Security benefit, which started in October. But for the previous several years I had been collecting 1/2 of my DW's Social Security benefit, from which my Medicare premium was deducted. The SSA-1099 form I just got only reflects the 3 payments I got in 2022 on my own account - it does not include anything for the benefits I was getting on my DW's account, nor does it reflect the Medicare premiums that were deducted for the January - September period.

Has anyone had a similar problem with Social Security doing their accounting incorrectly? Any suggestions as to how to resolve this?

My 2023 federal tax [refund] was $654

Is the IRS accepting 2023 returns already? I'm still waiting on my 2022 1099's.

I won't know my 2023 federal tax liability until February 2024 at the earliest. How do you know what your 2023 federal tax refund was/will be?

I don’t have a problem with the backup sound on our RAV4 Prime PHEV. Of course most of the time when the car is backing up I’m in the car itself, so it is not as loud for me as it is for someone outside the car. I understand some people might find the sound irritating, but some people found seatbelts to be irritating. Given how quiet these types of cars are at slow speeds, some sort of warning sound is probably a good idea.

Another possibility would be to move to a CCRC, but the ones that provide lifetime care if you run out of money might have similar medical underwriting. Worth looking into.

Probably a good idea to shop around. I no longer live in Hawaii, but as a veteran you are eligible to get USAA insurance and probably GEICO. Unless you are on the Big Island I wouldn’t think earthquake is a big risk.

I have been mainly using the ratio from prior year and for my purposes that is accurate enough.

+1

With real property in other states your heirs might be looking at probate in 2 or 3 states, which might argue for a trust where all real estate was in the trust.

If your DW and her sister are named as beneficiaries in their aunt’s will, they should have standing to require an accounting from the executors. Do you have a copy of the will?

Thanks. My mom has an attorney that she has worked with to put together her trust and update it over the years. Do you think they would suffice for answering these questions or do we need to actually seek out another elder care lawyer for this? I know nothing about how this stuff works I would think that the attorney who drafted your mother's estate planning documents would be perfect, if she has been satisfied with his work so far. Attorneys on this forum have sometimes stated that many elder care lawyers specialize in medicaid, disability and long-term care issues, which is not the main issue here. An estate planning attorney would be the professional who would advise on wills, trusts, etc. Note that your mom's investment accounts, which...

I hit someone with my car, get sued (assuming major injury/death etc..), they could go after my mom's accounts (since I am joint on it). My mom files bankruptcy (for whatever reason) that could affect me somehow since I am linked to her accounts My mom passes away, the accounts go directly to me (instead of what is designated in her Trust). Could make things more complicated IANAL but from my understanding: 1) Yes, this is correct. But if you just keep a few thousand $ in the joint account it's not a big risk. 2) I don't think this is a valid concern. Your mom's debts are hers, not yours. 3) This is a potential issue, but if the amount is relatively small and you are on good terms with the other heir(s), use the account to settle final deb...

I am trustee of my 100+ year old mother's trust. I am also joint on her checking account, which I use to pay her bills. While I am also her POA, I have never had to use that authority. It is convenient to be joint on her checking account, knowing that when she passes there will be money available to pay her last expenses. When the checking account runs low I transfer some cash from her trust brokerage account into her checking account. I try to keep about 2 months of cash in that account. So far this system has worked well for us.

When I meet with my mom/brother in a cpl weeks one of the things we are going to look at is her Trust to see what changes to it we need to make. If this is one of those changes (clause to allow POA) to make it easier we certainly can do that.

If you are already going to meet with the attorney, you might as well be added as a trustee to your mom's trust now. Your POA will expire when your mom passes. If you are already a/the trustee of her trust then your management of her investment accounts would continue without interruption.

The IRS has not updated their official publications yet to reflect the new age requirement of 73. See this link: https://www.irs.gov/retirement-plans/pl ... tions-rmds

So it is not surprising that investment companies like Vanguard haven’t yet incorporated this change in their procedures. I imagine that once the IRS changes their official publication Vanguard and other investment firms will make the change in their procedures.

Yes, I also don't see the SSA 1099 available on the SSA website. I think I saw that the replacement 2022 SSA 1099 will be available on the SSA website after February 1. I wouldn't sweat it. It's only January 9.

I use It’s Deductible. Or you could do a search of EBay for sold items.

If you created the trust you are the trustor. You may be the trustee as well while you are alive. The trustee is the one responsible for managing your trust. I think you are looking for backup trustees, not backup trustors (I'm not sure a backup trustor is even possible).