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Early last year, my mother revealed to me that she'd opened a UTMA account for me shortly after I was born in which she deposited some stock. I guess she'd just kind of forgotten about it or something. Upon discovering this, I sold some of the stock and transferred the rest to my personal brokerage account. But now that I'm seeing the 1099-DIV that the transfer agent sent to me (for the first time) I'm wondering who's been paying the taxes on the dividends it's been accruing all these years. I just asked her and she said that she's never really thought about it and her tax preparer always seemed to consider the account unimportant. But I reached the age of adulthood in the account's state fifteen years ago - has she mistakenly been paying taxes I should have been paying all that time? Has nobody been paying them? She's speaking with her tax preparer in a few days, and I'll take what she says to my tax preparer, but I'm hoping that someone can give me a ballpark sense of the questions to ask and the things to worry about. In terms of absolute dollars the account wasn't very big, so I expect I'll be able to absorb back taxes and penalties as long as they aren't usurious.
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Mar 7, 2021 19:03
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Admiral101 posted:edit: nevermind, I think I see. Youve been a working independent adult for some time. Yep, it’s been over a decade since I last filed as her dependent. quote:To who has the tax 1099 been issued to? You or your mother? Once I learned of the account last year, I updated it with my contact information. I received my first 1099-DIV for it this year. I presume that previously they’ve been going to her based on the fact that she said her preparer never seemed to consider the paperwork complicated because I don’t know what other paperwork it would have been. I can’t imagine the transfer agent just not issuing the 1099.
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Mar 7, 2021 22:36
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Thanks for all your help!Admiral101 posted:So far this sounds like the potential income is really nominal and this isnt something I would be losing sleep over, if I was you. I’m not really worried; it’s more that I’m trying to get out in front of questions my tax preparer might have.
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Mar 8, 2021 00:18
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Pilfered Pallbearers posted:Wanna thank the people recommending credit karma's tax file. The one time I used them they made two errors. The one I caught they refused to admit was wrong so I couldn’t fix it. The other one was caught by the state, but thankfully it was just failing to claim a credit, so there were no penalties.
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Mar 17, 2021 23:43
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I'm examining my pay information for the year and it sure looks like my employer hasn't been withholding enough federal income tax. I think I'm on pace to miss both of the safe harbor provisions! Can I just quickly have them jack up withholding for my last two or three paychecks to try to fix this, or should I try to make a direct payment to the IRS? Will either of those work? Should I just talk to my tax preparer about this? Also, I don't understand how this could have happened. I didn't claim any exemptions on my W-4, and I assumed that the withheld amount would therefore be sufficient. Am I going to need to start explicitly requesting greater withholding on a regular basis?
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Nov 14, 2021 17:08
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H110Hawk posted:Do you just have straight salary? Or is there a significant non-salary source of income? Are you married dual income? What does your employer have down as your w-4 information? It's possible that they messed it up. Straight salary, filing single, no kids. My employer has me down with zero W-4 exemptions (at least on their website).
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Nov 14, 2021 18:00
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I read my paystubs and problem was actually that I was an idiot in a different way: I’d been comparing my taxes withheld this year to my total tax last year and seeing that it was substantially lower but forgetting about the signing bonus I got last year that significantly raised that year’s income  Using an actual tax estimator put me on the track to realize the discrepancy.
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Nov 16, 2021 15:35
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Cacafuego posted:I started a new job 12/6. I had already maxed my 401k at the previous job. When I completed the new job 401k paperwork, I selected 15% contribution because it stated it would take 1-2 pay periods to go into effect, which I figured would be in 2022. The first paycheck for my new job is tomorrow and they've taken 15% out of my pay for the 401k. This means that I'm now over the $19,500 max. Both old job and new job 401ks are with Fidelity. What happens? Is there any way I can fix that? Can I just get in contact with Fidelity to have them return it or something? Yeah but the process might take a few weeks and involve annoying steps like snail-mailing a signed letter, depending on the specifics of how Fidelity does it. Just get a customer service rep on the phone, say you have a 401k overcontribution, and do what they tell you. You have until you file your 2021 taxes to sort it out.
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Dec 16, 2021 20:29
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MadDogMike posted:Pretty sure all of them only give you the long term capital gains rate if you hold them for more than a year after exercise, unless I’m forgetting something? Obviously if you don’t want to worry about it dropping in a year and don’t mind the ordinary tax rate then sell away though. RSUs don’t give you any capital gains if you sell immediately at exercise so it doesn’t matter what the tax rate is. There’s nothing to tax.
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Feb 9, 2022 17:59
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In 2021 I rolled some money from an IRA into a 401k. Should I have received a tax form for this? I can't identify a specific one I'm missing, but my IRA's 5498 shows money just disappearing (thousands of dollars of contributions but no current account value) and I'm surprised that there's no paper trail for the last step of the process.
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Mar 5, 2022 18:33
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Epi Lepi posted:You should probably have gotten a 1099-R with a code G for a rollover. If you still have an online account with the company that held your IRA check if they have one available to download. There's no tax document from the 401K company that you would receive to my recollection. Ah, found it. I received a different 1099-R from the same provider for something else, so I missed that there were two of them. Thanks!
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Mar 5, 2022 20:10
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KOTEX GOD OF BLOOD posted:I mean, I think all of the contributions are for 2022 because I opened the Roth at my new job in February. If they are, should I open the traditional IRA to reduce my tax obligation? IRAs (Roth or traditional) aren't through employers. Whatever you've got at your new job isn't a Roth IRA. It might be a Roth 401k? You have to set IRAs up yourself, and if you haven't done that, you don't have one, so theoretically still can make contributions to one for 2021, but getting everything up and funded before Monday (the deadline for 2021 contributions) might not be possible because there isn't enough time. raminasi fucked around with this message at 16:26 on Apr 14, 2022 |
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Apr 14, 2022 16:23
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Now I’m curious - my tax preparer doesn’t make me sign the docs before she submits them (she tells me to sign them but submits them before I do and doesn’t complain if I never get around to it). Does this work because she has to “sign” them so at least someone is vouching for them?
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Apr 19, 2022 01:38
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I wonder if there’s a way to report that to AWS.
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May 21, 2022 13:43
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My girlfriend just exercised some ISOs for a non-public company. (She figured that the shares might eventually be worth something, and the strike price was low enough that she was comfortable taking the risk that they won't.) If I understand what I'm reading right, the difference between the strike price and their valuation factors into her AMT calculation, but what's the appropriate valuation to use? Is that something her employer should tell her?
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Jul 6, 2022 19:44
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H110Hawk posted:I forgot to say - her company will give her the docs. She should ask when to expect it but I believe I got mine around tax time. And yes, the upside if any from Strike to FMV is income on the AMT form line 2a-i. She should reserve money to pay this amount when taxes come due. If she is clever she will run this number and not exercise more than causes her to owe taxes over time. Ok, thanks. If she ends up paying AMT, could this cause double taxation because the cost basis didn’t actually move up? (I.e. she pays AMT on the upside now and then capital gains taxes if and when she eventually sells?) Is that the clawback you’re referring to?
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Jul 8, 2022 18:50
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Also, some employers will reclaim some of the stock when it vests as income tax withholding, and some won't. Make sure you know which one is happening!
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Nov 22, 2022 21:18
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Methanar posted:I've only ever seen pre-ipo companies offer ISOs. Do some actually give out RSUs? ISOs factor into AMT when exercised, right?
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Nov 25, 2022 15:22
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Does anyone here have experience with the IRS tax withholding estimator? I plugged my numbers in and the topline "Expected tax withholding" number doesn't equal the sum of the estimated withholding for each income source I entered. The difference is approximately equal to the supplemental withholding I expect for a bonus payment I'm receiving this year. Could this just be a bug in the software? Am I missing something else? e: oh I think I'm dumb. I'm switching jobs, and obviously the new job isn't going to know about the old job's bonus or salary, so it won't withhold correctly. Jeez I need a ton of extra withholding to avoid a big tax bill 
raminasi fucked around with this message at 16:10 on Feb 1, 2023 |
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Feb 1, 2023 16:05
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KYOON GRIFFEY JR posted:It's an exceptional year when you switch jobs, so I'd probably rather just plan to save the money for the tax bill rather than loving about with withholdings. It is, after all, the same money and same obligation. It just depends on whether you want to hold on to it or you want the government to hold on to it for you. The difference is potentially enough to put me below the safe harbor threshold, and I don't want to pay an underpayment penalty.
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Feb 1, 2023 16:23
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The tool is estimating underpayment of about $28000. The suggestion to just calculate based on the safe harbor threshold after a couple of paychecks from the new job is a good one though.
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Feb 1, 2023 18:33
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Hadlock posted:This is for primary house Are you saying that you made an early withdrawal three years ago, never paid taxes on it, and now want to retroactively do the paperwork? If so, that's definitely "pay money to a professional" territory.
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Mar 17, 2023 07:15
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Gabriel Grub posted:I'm curious if the lower fees in the index funds will really offset the hit of immediately losing 15% of the investments to tax, over the long term. Well, it's not 15% of the investment, it's 15% of the investment's current unrealized gains. You're right that there's a hypothetical region of the parameter space in which it makes sense to stay put (depending on how much of the position is currently unrealized gains, how long the position will be held, and what the market does while it's held) but the expense ratio difference is getting exponentiated, and exponential growth always dominates in the long run. (And that's without even factoring in the additional ongoing tax drag generated by an actively-managed fund.) Popete posted:I don't remember ever paying taxes on my index fund gains which makes sense as they are unrealized. Seems like you would be paying a lot more in taxes from a mutual fund that is constantly buying/selling than just holding onto index funds and paying one tax bill when you sell. Am I missing something? But you paid taxes on your index fund distributions. You might have just mentally bucketed them as dividends. Actively-managed funds generate more of these than passive index funds.
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Apr 21, 2023 05:58
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Popete posted:Ah right the dividends that makes sense. My index fund holdings are pretty small so I probably just never noticed much of an affect on my tax return comparatively. Just as a point of nomenclature here, index funds are a type of mutual fund. You’re considering moving from an “active” mutual fund to a “passive” “index” mutual fund. Because it’s not held in a tax-advantaged account, you might also consider an ETF; the long-term investment thread can give you more information about that.
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Apr 21, 2023 06:18
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Missing Donut posted:You are not reading that right. The 8952 is only when the employer wants to correct its behavior, voluntarily and unprompted. An employee who wants to challenge the 1099 files Form 8919 and SS-8, and if the employee is found to be correct, the employer is liable for the full half of the social security and Medicare taxes. My first job misclassified me this way. Being the naive weirdo I was, I simply didn't pay the self-employment tax when I filed (because in my mind I didn't owe it), and I also filed an SS-8. For two years, every six months, the IRS sent me a "we're looking into it" letter, and eventually followed up with "after our investigation your employer is reclassifying you so there's nothing more to do." I never tried to reclaim any back taxes because I never paid them, and the IRS never complained to me about any of it. My employer did reclassify me, but it was a huge bureaucracy and I never suffered any personal blowback.
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Jul 17, 2023 18:56
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Missing Donut posted:Sounds like you were fortunate. I guess I usually see blatant misclassifications in small businesses without professional HR departments where blatant retaliation is common. I'm pretty sure that the misclassification was my boss trying to save budget without HR knowing he was doing it. Once it came to their attention they made him fix it, but they never said "the IRS is making us do this because of a complaint" because he was breaking internal rules. At the time, he grumbled about the paper-pushers making him do it correctly but he never found out that I instigated the change in the first place. (I'm also pretty sure he never understood that he did anything wrong, because understanding and following rules was never exactly in his wheelhouse. His thinking was "if I do this one way the budget hit is less so that's how I'll do it.")
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Aug 9, 2023 16:22
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BUG JUG posted:I am not sure if this should go in the investing thread or here, but it feels like more of a tax question than an investing one. If i need to move it, I will. There's not really one straight answer - you're going to have to learn about tax lot accounting and then figure out what specifically you want to do, and what your broker supports. It's not hard but if you're not unloading your entire position it's not trivial either.
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Aug 17, 2023 14:40
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Dyscrasia posted:My wife had a job she ended up not staying with and had a 401k with about 300$. It cashed out in January 2023. Is there a way for me to avoid the penalties? It sounds like medical bills might allow bypass of the 10% penalty? Otherwise I can get her an IRA and add the money ,but I understand we are past the time limit. Am I missing any angles? Do you mean literally $300, and not $300k or something?
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Jan 21, 2024 02:24
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Centzon Totochtin posted:2) I maxed out my traditional IRA contribution for 2023. Am I supposed to receive a form 5498 from the financial institution for my taxes? I still haven't gotten one. You'll get an informational copy of a 5498 eventually but you don't need it to file your taxes.
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Mar 5, 2024 20:54
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I performed an IRA -> 401k rollover a couple of months ago and just received a residual check for $0.04 in the mail. Is there a compelling reason not to just ignore it? Forwarding it to the 401k administrator will be annoying.Centzon Totochtin posted:So I don't get a tax deduction for it? You might, depending on your income. You just don't need to include your 5498 when you file. I think the deduction amount (which is determined by a whole formula and worksheet) goes on Schedule 1 but I'm just Some Guy With Google, not an accountant or professional tax person or anything (and I've never made a deductible IRA contribution myself, only non-deductible ones.)
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Mar 7, 2024 23:11
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