Tax advisor

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Schwing1985
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Joined: Sun Nov 10, 2019 9:28 am

Tax advisor

Post by Schwing1985 » Thu Nov 14, 2019 3:29 pm

I think a tax/estate planner may be needed in the future but I really don't know how to accomplish this.

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Mullins
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Re: Tax advisor

Post by Mullins » Thu Nov 14, 2019 5:50 pm

What are the circumstances that make you think this?

Topic Author
Schwing1985
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Re: Tax advisor

Post by Schwing1985 » Fri Nov 15, 2019 2:21 pm

A tax person is probably needed after inheritance between 1.5 and 2m.

123
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Re: Tax advisor

Post by 123 » Fri Nov 15, 2019 2:28 pm

Here's a recent thread about an inheritance that may be helpful: viewtopic.php?f=1&t=294694&p=4832805#p4832805

There are a number of people who say they are "Tax advisors" who are merely financial product salespeople looking to make a big commission. Lots of financial products like annuities, real estate investments, and other schemes have high commissions to the salesperson and often little benefit to the customer.

Many people on this board have portfolios greater than a couple of million $ and have no problem self-managing those assets with the advice posted here.
The closest helping hand is at the end of your own arm.

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LilyFleur
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Re: Tax advisor

Post by LilyFleur » Fri Nov 15, 2019 2:35 pm

123 wrote:
Fri Nov 15, 2019 2:28 pm
Here's a recent thread about an inheritance that may be helpful: viewtopic.php?f=1&t=294694&p=4832805#p4832805

There are a number of people who say they are "Tax advisors" who are merely financial product salespeople looking to make a big commission. Lots of financial products like annuities, real estate investments, and other schemes have high commissions to the salesperson and often little benefit to the customer.

Many people on this board have portfolios greater than a couple of million $ and have no problem self-managing those assets with the advice posted here.
If your inheritance is not in a tax-advantaged account, you will probably want to spend a good amount of time on this forum, studying the best investments to make in a taxable account and the tax implications of your various options. Even investing this amount of money in a money market account at 1.8% and receiving dividends taxable at the regular income tax rate will change your own tax situation. Take your time and really study this web site!

senex
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Re: Tax advisor

Post by senex » Fri Nov 15, 2019 4:09 pm

If you're inheriting simple stuff (stocks, bonds, etfs, mutual funds), some advisors (a majority of cases known personally to me) actually create more tax liability than the basic boglehead approach.

I have seen bogleheads say "once you've learned enough to choose an advisor, an advisor is of no benefit to you." That is largely my opinion too, unless you need the psychological benefits of an advisor (you're prone to panic sell, etc).

If you're inheriting real estate, partnership interests, or other potentially complicated things, yikes, I'm not sure how to deal with that.

Emg
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Re: Tax advisor

Post by Emg » Fri Nov 15, 2019 4:34 pm

When I was handling my parent's estate, I had put together a list of questions. I then went to one of the reputable local tax prep companies and paid an hourly rate to get their advice. Only needed one hour of advice but I did use them to prepare the taxes for the trust.. I had 4 siblings and I didn't want any of them to suffer for my mistakes. I made a point of requesting someone who had actually worked with a trust. It all went very smoothly.

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Schwing1985
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Re: Tax advisor

Post by Schwing1985 » Sat Nov 16, 2019 10:28 am

I know where and how I will invest and save,the question is when tax time comes up where do I go? All previous years have been short form,no capitol gains or interest,just earned income through my employer. Next year will be different as SS,union pension,interest and gains from investments,and earned income will all be in the picture. In past years all I received was a W-2 from my employer,where will all the tax info come from since I have assets in multiple accounts?

dbr
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Re: Tax advisor

Post by dbr » Sat Nov 16, 2019 10:41 am

Schwing1985 wrote:
Sat Nov 16, 2019 10:28 am
I know where and how I will invest and save,the question is when tax time comes up where do I go? All previous years have been short form,no capitol gains or interest,just earned income through my employer. Next year will be different as SS,union pension,interest and gains from investments,and earned income will all be in the picture. In past years all I received was a W-2 from my employer,where will all the tax info come from since I have assets in multiple accounts?
Go to a firm of tax accountants to do this the first time. Your situation is basically very simple but just new to you. After the first year you can do it yourself. The data you need will be sent to you in the mail and consists of forms W2 and 1099's of different sorts from all the institutions with which you do business, including SS and whoever issues your pension. Tax accountants will send you a questionnaire to fill out so you don't miss anything. Your forms will also be available on line.

An alternative is basic tax preparation software such as TurboTax which will walk you through everything. Tax preparation programs can electronically download all your tax data if you want. I prefer to install my own copy of TurboTax every year because I can do multiple returns including experiments on alternate tax scenarios.

To make this less daunting it might be a good idea to get and read one of those "Taxes for Dummies" books or some other basic read on tax preparation.

senex
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Re: Tax advisor

Post by senex » Sat Nov 16, 2019 10:13 pm

Schwing1985 wrote:
Sat Nov 16, 2019 10:28 am
I know where and how I will invest and save,the question is when tax time comes up where do I go? [...] where will all the tax info come from since I have assets in multiple accounts?
Each financial account or pension will mail you (or make available for download) a Form 1099. There are different types of 1099 for each type of income: 1099-div for dividends, 1099-int for interest, 1099-r for retirement distributions, etc.

Collect your 1099s and W2 and type them into TurboTax or take them to any tax accountant. The things you listed are common and usually straightforward.

Topic Author
Schwing1985
Posts: 9
Joined: Sun Nov 10, 2019 9:28 am

Re: Tax advisor

Post by Schwing1985 » Sun Nov 17, 2019 5:54 am

I was thinking it would be more complicated than it really is,but having the guidance gotten here I think turbo tax will be used to file our taxes.Thank You all

trueblueky
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Joined: Tue May 27, 2014 3:50 pm

Re: Tax advisor

Post by trueblueky » Sun Nov 17, 2019 9:17 am

dbr wrote:
Sat Nov 16, 2019 10:41 am
Schwing1985 wrote:
Sat Nov 16, 2019 10:28 am
I know where and how I will invest and save,the question is when tax time comes up where do I go? All previous years have been short form,no capitol gains or interest,just earned income through my employer. Next year will be different as SS,union pension,interest and gains from investments,and earned income will all be in the picture. In past years all I received was a W-2 from my employer,where will all the tax info come from since I have assets in multiple accounts?
Go to a firm of tax accountants to do this the first time. Your situation is basically very simple but just new to you. After the first year you can do it yourself. The data you need will be sent to you in the mail and consists of forms W2 and 1099's of different sorts from all the institutions with which you do business, including SS and whoever issues your pension. Tax accountants will send you a questionnaire to fill out so you don't miss anything. Your forms will also be available on line.

An alternative is basic tax preparation software such as TurboTax which will walk you through everything. Tax preparation programs can electronically download all your tax data if you want. I prefer to install my own copy of TurboTax every year because I can do multiple returns including experiments on alternate tax scenarios.

To make this less daunting it might be a good idea to get and read one of those "Taxes for Dummies" books or some other basic read on tax preparation.
Did you contribute to your pension? If so, some of the money you receive each month will be an untaxed return of your contribution. The 1099 may show this. First box will say pension; second will say taxable pension (something like that). There is also a checkbox that says "taxable amount not calculated".

Ask an AARP TaxAide site to run the Bogart calculator. This will give you the untaxed amount for the next 30 or so years, until you get your contributions back. Print this out and keep it. In preparing taxes I have found that most pensions get it right for the retiree, but do not report the untaxed amount at all for spousal pension beneficiaries.

Note that while the monthly return of contributions eventually ends, it never changes, even when the pension has COLA or a spouse takes it. Any return that is lost because the pensioner and spouse die before recovering it all is a deduction on the final return.If

EDIT: removed link that may be restricted use.
Last edited by trueblueky on Sun Nov 17, 2019 4:14 pm, edited 1 time in total.

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Stinky
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Location: Sweet Home Alabama

Re: Tax advisor

Post by Stinky » Sun Nov 17, 2019 9:51 am

Schwing1985 wrote:
Sun Nov 17, 2019 5:54 am
I was thinking it would be more complicated than it really is,but having the guidance gotten here I think turbo tax will be used to file our taxes.Thank You all
Congratulations to you for deciding to do your own taxes. By entering your numbers into the tax software and seeing the results, you'll come to understand your tax situation much better than if you pay someone else to do the work for you.

A lot of folks on this Forum do their own taxes. If you have questions that come up as you prepare your taxes, please post back on the Forum.
It's a GREAT day to be alive - Travis Tritt

livesoft
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Re: Tax advisor

Post by livesoft » Sun Nov 17, 2019 10:39 am

One can use tax prep software and ALSO use a tax prep service (i.e. paid tax preparer) if one find the tax prep software not easy enough.
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