Quote:
Originally Posted by Gigi3000
I'm fairly new to investing and have never talked to a CPA. According to Vanguard, I've made $15,000 taxable income so far in 2023 so i should make around $21-23,000 by year end. Most of this taxable income is from my VMFXX Money Market at Vanguard where i have 60% of my funds. I know that a large part of the income from that fund is government securities. On my taxes last year, which i did myself on turbo tax, it asked if my income was from government securities and i said yes so i assume I didnt pay taxes on it. Long story short, do i need a CPA consult this year? Appreciate any enlightment....
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Unless you're very wealthy and keep all your OTHER money in cash or zero-interest bank accounts, you have other income. I'm assuming that $15,000 taxable income is - the income from the Vanguard accounts. Not your total income. I doubt Vanguard keeps track of any income you earn that isn't one of their accounts.
If you receive social security, then that's income. If you receive a pension, that's income. If you receive interest from the other 40% of the funds you say you have, then that's income. If you rented out a room in your house for a month, that's income.
ALL of that income is tallied when it's time to figure out how much (if anything) you owe to the IRS. You take whatever deductions you're eligible to take - either itemizing or the standard deduction. Whatever is left, you pay income tax on. The amount and percentage will depend on the difference.