[huge-pigeons]

Will you pay federal taxes on that small amount? Probably not. I’m not a tax guy but I’ve been doing this for many years, If you make < $89,000 and married filing jointly, using the standard deduction of $13k each, you will pay no federal tax. That $89k income is based on normal taxable dividends, short and long term capital gains (they are calculated differently), interest, maybe a part of your social security, etc..

If you take money out of your Ira/401k, non-taxable assets, then things change.
I have been using turbo tax premier because of the easy way it accesses all the brokerage accounts.

You don’t need to wait until next year (receiving your 1099’s) to do what you need to do for this years filing (2023 tax year). During the last week of December, I know exactly what all my 2023 dividends, short term and long term capital gains, my social security income was for 2023, and from this info, I can calculate my taxes and do any tax harvesting/selling/etc before dec 31. Been doing this for years. I will get the 2023 turbo tax app in December, calculate all my last minute gains/income/tax harvesting/etc, and will start playing the different scenarios in turbo tax to see what are my best moves to make in 2023 for my taxes. Then I don’t file my taxes until i actually get my 1099’s electronically.

[MidWestIA]

cpa won't stop you paying tax why not just do turbo tax or signup for aarp to do it at colony rec

[crash]

Originally Posted by Gigi3000

Even on this little bit on income huh? This year on my year to date earnings, Vanguard says its $45000( fell from $60000 high for this year) total but taxable earnings are only $15000 so far.

Don’t forget your SS will be taxed if your income including your SS is over $37,000. 85% of social security is taxed if you exceed the threshold. Turbo tax will handle it just fine.

[dewilson58]

Originally Posted by Gigi3000

My situation is quite simple. I have no other income currently. Haven't collected SS yet. I'm 64. Vanguard is it along with my small bank balance interest which might hit $8 this year. My expenses are minimal. I keep things simple or try to.

If quite simple.............I would say no.

TT asks a lot of questions and walk you thru the process.

The year-end tax forms provide information regarding taxability and exemptions.

Worse case.........try TT early in 2024, if you hit a wall, sniff out help......either TT or a local body.

[Caymus]

Originally Posted by manaboutown

While I currently hold a significant portion of my portfolio in VFMXX it is there for short term purposes only, as in 'cash on hand'. I keep far more short term funds in a T-bill ladder. Ironically I just found this article informative about VFMXX. It brings up points I had never taken the time to research or discover. Eight Reasons Not To Own Vanguard VMFXX.

Do you know if the income is treated as interest or ordinary/qualified dividends?

[Caymus]

If anybody wants free tax preparation software, check out Cash App. I used it for the past 2 years without any issues. Before that I used the free version on Credit Karma. After Turbo Tax's owner (Intuit) bought Credit Karma they eliminated that benefit.

During the year I also do "now look" estimates with Excel based "freeware" developed by Glenn Reeves. Federal Income Tax Spreadsheet Form 1040 (Excel Spreadsheet) Income Tax Calculator

[retiredguy123]

Originally Posted by Caymus

Do you know if the income is treated as interest or ordinary/qualified dividends?

VFMXX is a money market fund that generates interest or ordinary dividend income, and maintains a stable one dollar per share asset value. Vanguard does not distribute any qualified dividends from the VFMXX fund. All income is taxed at your ordinary income tax rate. Vanguard reports the income to you on a 1099-DIV form, even though some of the income is actually considered interest income. So in that respect, the terms "interest" and "ordinary dividends" basically mean the same thing.

[PVR]

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....

Turbo tax can also download your info into your form so it will be correct. They will also show you how to do it

[Haggar]

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....

I'm a CPA. My answer is no - you do not need to consult a CPA. If your tax last year was more than $1,000 you will need to make sure that the tax you paid in through withholding or estimates are at least what your tax was in 2022 to incur no penalties - just a balance due in April 2024 depending upon what your final tax is for 2023.

As to the poster who said anyone on TOTV doesn't need an accountant there are many situations where a good CPA CAN save a taxpayer money. Yes there are many on TOTV who do know many aspects of the tax law but this is what I do full time, reading extensively, and attending seminars and webinars and having discussions with colleagues to keep up on the latest and greatest from the IRS. There are over 60,000 pages of tax code, regulations and issuances from the IRS! Good luck to the preparer who doesn't know all the the key items to reduce your taxes. Turbo tax is excellent (I use the professional version - Pro Series) and it asks a lot of questions but IMHO it doesn't replace a professional tax preparer for all taxpayers.

[Wondering]

Why are you asking us? Either Google or call a CPA.

[Ecuadog]

Originally Posted by PVR

Turbo tax can also download your info into your form so it will be correct. ...

Always check the info that gets downloaded. One year, Vanguard reported one of my transactions twice in the TurboTax download. I caught it by checking the worksheets.

[Whitley]

Originally Posted by Gigi3000

Even on this little bit on income huh? This year on my year to date earnings, Vanguard says its $45000( fell from $60000 high for this year) total but taxable earnings are only $15000 so far.

I need to be prudent as I do not want to risk my license, so let's start off with it always being a good idea to work with a licensed professional. One may say that with the modest numbers you are talking about, a program like Turbo Tax should suffice. Anything a licensed professional "may" be able to save, would most likely be more than offset by their invoice to you. This is especially true if you are a Fl Resident. Other states (NY) can get a bit complicated. I had my office in NYC, warehouses in NJ, residence in NYS. That can get a bit complex. Good luck.

[Boomer]

Originally Posted by Wondering

Why are you asking us? Either Google or call a CPA.

Wondering, huh?

Me, too.

I am wondering why the need to barge into a conversation among posters who are contributing and enjoying the thread — only to try to make the OP feel like she is not smart.

Geez.

Some of us learn from each other here by asking questions….

Good questions usually mean the asker is looking for a starting point to learn more through extending research or equipping oneself with the working vocabulary that can help when speaking with a professional.

Comparison: These threads are basically a little bit like Wikipedia. Any serious asker of questions knows that Wikipedia can be a starting point, but it is not a definitive reference source. Those who understand that always know to back-source Wikipedia.

Also — there is the value of remaining anonymous when talking about our money.

I think our OP might be from Ohio. So am I. We Midwest women who are interested in talking about investing and taxes don’t go around talking about such things with our friends and family — unless there is a good and private reason to do so.

Our OP is doing her homework. She has indicated elsewhere that she has found a fee-only advisor that she is happy with. Smart move.

Smart Midwest women do not take up with those guys who only want to buy them dinner first.

And, thank you to all of our regularly helpful posters who have added information here to be helpful to the OP.

(I always count on retiredguy123 to come through — and in this thread, may I especially thank Haggar the CPA.)

Please, carry on. This is such a good thread — for some of us. The rest don’t have to look.

Boomer

[spinner1001]

Originally Posted by Gigi3000

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.

You likely needed to report your income from the Vanguard fund for Federal tax purposes.

You might look at your form 1040 tax return of last year. Page 1 of the standard form 1040 on line 15 (see form at link below) is your taxable income. Above that line you will see a line for dividend income on line 3. Your Vanguard fund dividend income from your form 1099 is likely in the line 3b amount and perhaps explicitly stated on Schedule B of your tax return as Ordinary Dividends.

You can determine whether the dividend income from the Vanguard fund is part of your total reportable income on line 9 by using a calculator to add the amounts on the earlier lines identified on line 9 (i.e., add lines 1z, 2b, 3b, 4b, 5b, 6b, 7, and 8) and comparing the calculator result to line 9. Then you will know whether your dividend income from the Vanguard fund was part of your reportable income for Federal tax purposes.

STANDARD FORM 1040 FOR 2022:

https://www.irs.gov/pub/irs-pdf/f1040.pdf

[spinner1001]

Originally Posted by Caymus

Do you know if the income is treated as interest or ordinary/qualified dividends?

Vanguard Mutual Fund Profile | Vanguard (look in the Distributions section)

Topic No. 404, Dividends | Internal Revenue Service