Here's what happened:   I made the maximum contribution to a Roth IRA this year. I thought about how my marginal tax rate now is a lot higher than I expect it to be in retirement, so I decided a traditional IRA would have been a better idea. I recharacterized this year's contributions to a traditional IRA. I realized my income is too high to qualify for a traditional IRA deduction.     Here's what I did not do, and why this question is not a duplicate of similar questions already asked:   I have not made any conversions at all. I have not taken any distributions, and thus have not received a 1099-R. I did not previously go from a traditional to a Roth, and now want to go back to a traditional. I am not rolling over any 401k or other non-IRA account.    seems like a good duplicate, but alas it's very old and has no answers.    My understanding is that (for married, filing jointly taxpayers for 2015) that someone with a MAGI above $118,000 is not eligible for a traditional IRA deduction. Below $183,000, the full Roth IRA contribution is still allowed.  I'm in this range (between $118,000 and $183,000), so a Roth IRA seems like the only rational choice. Please correct me if I'm wrong.  So, I would like to unrecharacterize (rerecharacterize?) this year's IRA contribution back to a Roth IRA. I've not yet filed a return for the contribution year, so I'm hoping I can do that.  Can I? Would I report to the IRA two recharacterizations? Or would I file as if no recharacterization ever happened?
122350
I made a $5500 contribution to my Roth IRA in 2015 (T1).   Later I recharacterized this contribution. The market had gone down and I only got $5090 in my TIRA when the recharacterization happened (T2).   Then after sometime I converted the amount in my TIRA back to a Roth IRA. This time the market had gone up and I got $5146 in my Roth IRA (T3).     Now I am trying to figure out how to file form 8606.  thread helped me a lot but it took a while to parse all of it and I think it would be useful to have this topic as a concise Q&amp;A on this site. So given the facts above, are the forms below filled out correctly? What is purpose of line 14 (the basis) in form 8606?  Form 8606:      Form 1040:      Also these are the 1099-R forms I got from my custodian (vanguard). Are these correct?  1099-R when I did recharacterization:  1099-R when I did conversion:
108249
I'm a graduating medical student, and have ~$220,000 in student loans.  The majority of this (~$180,000) is in federal student loans at 6.8%, with the rest being at a lower rate (4-5%).  I also have ~$20,000 in a Roth IRA which I've been contributing to for about 15 years.  Should I close out the Roth IRA to pay down my student loans?  I'm starting residency in a few months which pays ~$55,000/yr, and after cost of living I won't be able to contribute much over the minimum payments to my loans until after residency.
23294
I inherited my mother's $200k IRA in 2011.  I'm now 60.  I've been buying and selling mutual funds within the IRA, making a little profit, and also buying a specific stock.  How is it taxed if I take out any amount right now?
30861
So I know that:   Employer-sponsored HSA's allow you to deduct contributions directly from your paycheck, pre-tax With individual HSAs, you must contribute using post-tax dollars, then deduct those contributions from your taxable income when you do your taxes   Given those facts, I guess it's marginally better to use an employer-sponsored HSA because it means the government doesn't temporarily hold on to your taxed income, only to return it later after you do your taxes; you could theoretically put that money to work in an investment vehicle instead of having the government hold it hostage for a while.  But are there any other benefits (either way) that I'm not aware of? The  kind of threw me with the following statement:     The main advantage of making pre-tax contributions is the Federal Insurance Contributions Act tax (FICA) and Medicare Tax deduction, which amounts to a savings of 7.65% each to the employer and employee (subject to limits of the Social Security Wage Base).   But I'm not really sure what that's telling me.  My employer is offering an HSA, but is not offering to contribute to the HSA or match my contributions. So if it's all pretty much the same, I'd rather use the bank of my choosing and manage it privately.  Thanks.
86398
I own an LLC, of which I am currently the sole member. It's my main source of income.  I am wondering if there is a reason why I could not do the following:   Hire my child as a part-time employee of the LLC, for an annual salary of $5500. Start a Roth IRA for the kid and put the $5500 into it. Deduct the $5500 as a payroll expense for my LLC, thereby reducing my amount of taxable income.   To me, this seems attractive because I'd lower my LLC's tax liability. Meanwhile, my kid would not have to pay any taxes on the $5500 because it is lower than the standard deduction. And by putting the money in a Roth IRA, he'd get an investment that would grow tax-free. It would essentially be like getting the pre-tax benefits of a traditional IRA with the post-tax benefits of a Roth.  The way I see it, I'd win, my kid would win and the IRS would lose, for once.  Is there any reason this wouldn't work? There is no minimum age or income for contributing to a Roth IRA. So as long as I could legally hire my kid, I don't see any obstacles.
96762
I sold an investment in a standard brokerage account at a small loss because I needed the money for a down payment.  I still think it is a good investment, can I buy the same investment in a standard IRA without running into wash sale problems?  I will probably just wait the 30 days any way to avoid any headaches, but I want to know if there is a definitive answer on this.    Being as the cost basis in the traditional IRA doesn't matter, I wouldn't think there would be a problem.
48270
My friend wants to consolidate his various retirement account accumulated over the past 20-30 years to make it easier to manage/track his retirement savings. He doesn't recall immediately all the accounts he currently has (one of the reasons to rollover), but we've determined he has at least the following types of accounts: 401(a), 401(k), 403(b), 457(b), and "something from the city". He's trying to track down all the relevant paperwork for all of the accounts, but we'd like to know what kind of limits he might have to watch out for.   Are there any restrictions on the types of the accounts that can be rolled over? Is there a limit to the number of accounts that can be rolled into a single IRA (whether all at once or over the lifetime of the IRA)? Is there a limit to the number of times accounts can be rolled over (can/should he do 1 or 2 at a time as he gets the paperwork in order, or wait until he has everything sorted out)? Is this a yearly limit or lifetime? Is there a dollar limit on the amount that can be rolled over? Is there a limit to the age of accounts that can be rolled over?   As far as we know, all of the accounts are pre-tax/non-Roth accounts, and that Roth vs. traditional accounts should be rolled over to separate (Roth vs. traditional) IRAs.
53509
I filed an 83(b) election for stock I purchased in 2011 with the IRS with the 30 days window, but later did not include a copy of it in that year’s tax return.   The the purchase price and the fair market value was the same, so no capital gains tax was applicable that year.   Does this matter? And if so how would I remedy this?  Thanks
38206
In the discussion around  it was said that a loan must be at market rate, or it is not considered a loan.  Respecting the wisdom of the people who said that, I'm unclear about how this would work in the general case, since plenty of people do make interest free loans to family and friends, and the IRS would seem to be unlikely to be in the business of policing loan rates.   Ignoring the issue in the original question about later paying off the loan through a gift,  let's say I make an interest free loan to someone, with the genuine intention that they pay it back in full at some later date, and with no intention of cheating the tax system. It would seem to me that he has no income to declare (because only the loan has occurred) and I have no income from the transaction. What exactly do he and I have to declare on our tax forms? Some links to tax office docs would be nice.  EDIT: Since it's been pointed out that it's hard to distinguish between loans and gifts, let's imagine that both parties have made a written loan agreement.
96123
Early non-exempt withdrawal from a Roth-IRA results in a "10% penalty". A 10% penalty on what amount: The amount withdrawn? The remaining balance of the Roth IRA? Both?   Insight appreciated
29464
After researching online, I found many websites that said wire transfers are not reported to the IRS, but others said that they were reported. I just want to make sure that I do not have to pay taxes on a loan. I am planning on depositing this loan in a traditional brokerage account for investment purposes and I hope that the only time I need to pay taxes is when I sell the securities that I end up buying.   Are there any pitfalls that I should watch out for as far as taxes go by receiving a loan as a wire transfer? Also, how would I report capital gains on trades that I have made? Do I actually have to send every single trade I make to the government and show profits and losses on each trade?
70376
I wanted to see if folks were using decimal for financial applications instead of double.  I have seen lots of folks using double all over the place with unintended consequences . .  Do you see others making this mistake . . .
50966
I realized I don't fully understand something. It almost embarrassing to admit.  In 2016 we have 18k max contribution limit for 401k. Does this mean that employee can contribute at most 18k or that total contributions made on behalf of employee should not exceed 18k (company match)  To make is simple, if you make 100k, by contributing 18% you got your limit. But if your company matches 5%, actual contributions will be 18.9k. In the above example, if one wants to maximize benefit should one contribute 18% or less?
48409
First, my understanding is that the long-term capital gains tax rate is 0% for those whose marginal rate on ordinary income is 10% or 15%, and (ignoring the highest 39.6% bracket) the rate is 15% for everyone else. (See  and .)  My interest is in what happens at the crucial break between the 15% and 25% bracket, which is $73,800 for married/joint returns in 2013 (and presumably will be higher in 2014, though I haven't been able to find out what that is or if it has even been set yet). Let's say a household has $64,000 in wage income, and sells stock for a $10,000 profit.   Does their income for the purposes of establishing their tax bracket go to $74,000? If so, is the entire $10,000 profit subject to the 15% long-term capital gains rate? Is any part of the wage income subject to the higher marginal tax rate?   Since the amount of income subject to the higher marginal rate is, well, marginal, part 3 seems somewhat less important than part 2. The real issue is whether the capital gains rate hits the entire profit, since, in that case, it seems the household should only sell enough stock to generate a $9000 profit, and sell the remainder in a future year.
52816
I was very frustrated with 401s the other day and did a search on SO for 401.  I got ().  Not a list of questions about 401.  This appears to work for any number entered into the search.
70341
I am a basic 30 year old filing Single, W2, healthy working individual. No dependents, no additional schedules, capital gains or losses other than Student Loan interest expense.   I started a new job in January 2019 and somehow during my new hire enrollment, "I or someone" marked in my file as Exempt... I am pretty familiar with filing my own 1040 (as its pretty basic)and I know for a fact that I would never for under any reason think that I am Exempt from absolutely anything tax related. Nobody in my new job's HR department reached out to confirm whether this Exemption was correct or not with me personally. My CPA said that anytime they receive an Exempt W-4 form, that they automatically return the form to the employer to confirm.   I unknowingly went 11 full months in 2019 without any taxes being withheld. Of course my paycheck was more than before, but I also got a better/higher salary job, so I never thought about the difference being from not paying taxes. And, no I do not print out my paystubs. It’s all through Paycom and it clearly shows you your gross pay &amp; a "$XXX" amount in deductions/withholdings - kicker is, you have to click the drop down menu to actually see the entire breakdown. At which point, I never saw the big $0 in taxes being withheld... I know the taxes have to be paid one way or another, but I don't feel like I should be entirely responsible for a $5k-$6k tax liability for a HR clerical error. Even if I did actually input it incorrectly the first time.   Is there a way to check with the IRS to see if they indeed receive my file as Exempt and if they did actually return it to my Employer? I’m just wondering if either HR forgot to follow up with me or even IF the IRS does actually cull these exempt requests in the first place? I don't have the liquidity to simply pay the IRS all at once.   What would be my best option going forward?
40308
My son is a freshman this year.  We live in and he attends school in California.  We pulled out the first $ from our Utah 529 plan.  I had the money deposited in my account since I paid the registration and dorm &amp; meal plan.  Our friend has a son a year ahead and he has the exact same 529 plan.  He warned me that he got hit with a small tax penalty when he withdrew the money to his account and not to an account in his son's name.  I called the 529 administrator and they said it shouldn't matter either way.  Other online blogs agree.  They say the only difference is that my son would get the tax forms and have to file if it went to his account. Nevertheless, my friend did get a penalty.  Any clarity would be appreciated!