[Robbb]

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....

Well if a black helicopter circles around my neighborhood I will know what its about.

[kkingston57]

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....

Money market proceeds = income. This is going to affect a lot of people who have conservatively invested their money, since these funds and other investments like CD's have skyrocketed in 2023. Saw a credit union CD recently paying 5.6% recently. 2-3 years ago they were below 1%

[Boomer]

Originally Posted by kkingston57

Money market proceeds = income. This is going to affect a lot of people who have conservatively invested their money, since these funds and other investments like CD's have skyrocketed in 2023. Saw a credit union CD recently paying 5.6% recently. 2-3 years ago they were below 1%

Yep……

And……

For those on Medicare, there could be an experience lurking that was not expected…….

“Allow me to introduce myself” — My name is IRMAA!

The first AGI threshold to worry about this is higher than a lot of us will reach, but be aware. I think even crossing that threshold by a buck will cost you the same as if you cross it by a lotta bucks. (Somebody please correct me if I am wrong about that. I have some letters behind my name, but none of them have anything to do with money.)

Anyway, pay attention to that income. IRMAA can be stealthy. Pay attention if you have had a cap gain, too.

If you are of RMD age and it is starting to look like IRMAA is out to get you this year, you can possibly head her off at the pass with a QCD. Might be worth doing some projecting right now and running numbers if you think IRMAA might even come close. Maybe for you IRMAA is already a done deal. I think for singles, this can happen relatively fast. I am just doing my usual warning because I don’t like to see somebody blindsided by IRMAA.

Boomer

Yeah. I know I call IRMAA “her” but my reason is a story. I will spare you that this morning.

[manaboutown]

IRMAA and NIIT (Medicare Tax) are confiscatory, sheer evil and impossible to avoid once one reaches that level of income.

[Boomer]

Originally Posted by manaboutown

IRMAA and NIIT (Medicare Tax) are sheer evil and impossible to avoid once one reaches that level of income.

I know it is harder for a single filer. Looks like the guess for 2025 IRMAA is $105,000 for one for 2023 income. (Not sure if I am right about that though. I don’t know if or how inflation factors in when the time comes.)

Married can allow more room to try to stay out of IRMAA’s clutches.

That darned look-back can catch taxpayers by surprise. A fat cap gain can do it. Gotta think two years ahead — and you have to know you have to think two years ahead — in case you might have a chance to duck IRMAA.

I know I sound a little obsessed with IRMAA sometimes. That’s the old teacher in me. Still trying to make a difference for somebody, maybe. Once a teacher always a teacher, I guess. At least, my state pension has the word ‘teacher’ somewhere in it.

Btw, manaboutown , I saw you picking on teachers earlier in a thread somewhere. (sigh) Oh well, I like to pick on you sometimes.

Boomer

[manaboutown]

Since I took "once in a lifetime" LTCGs in both 2022 and 2023 I am stuck with both IRMAA and NIIT for two years running. I had no choice as the real estate properties were held by LLCs wherein the members were aging out. A few had already passed on or given their shares to younger members of their families and problems in dealing with 'the kids' were arising.

BTW waaayyy back in 1925 my mother at age 20 graduated from Goucher College and taught both math and French for fifteen years. I feel very fortunate to have had some wonderful teachers but I also had some awful ones.

[Stu from NYC]

Originally Posted by Boomer

Yep……

And……

For those on Medicare, there could be an experience lurking that was not expected…….

“Allow me to introduce myself” — My name is IRMAA!

The first AGI threshold to worry about this is higher than a lot of us will reach, but be aware. I think even crossing that threshold by a buck will cost you the same as if you cross it by a lotta bucks. (Somebody please correct me if I am wrong about that. I have some letters behind my name, but none of them have anything to do with money.)

Anyway, pay attention to that income. IRMAA can be stealthy. Pay attention if you have had a cap gain, too.

If you are of RMD age and it is starting to look like IRMAA is out to get you this year, you can possibly head her off at the pass with a QCD. Might be worth doing some projecting right now and running numbers if you think IRMAA might even come close. Maybe for you IRMAA is already a done deal. I think for singles, this can happen relatively fast. I am just doing my usual warning because I don’t like to see somebody blindsided by IRMAA.

Boomer

Yeah. I know I call IRMAA “her” but my reason is a story. I will spare you that this morning.

Another reason we do pay a cpa to keep us out of trouble

[Gigi3000]

Originally Posted by Haggar

A good CPA MIGHT be able to save you more taxes than his/her fee. I agree that you should get one that will listen to your questions no matter how out of left field they may be. It's much like a doctor - you can't be helped if don't you ask your questions. Your CPA should also be asking you questions to see what you may not be aware can save you money.

How many Schedule C filers would be better off as a S Corp? Are you taking all the deductions that may be available. Are you making contributions that can reduce your taxes that all not deductible because you use the standard deduction? Many CPA's will give to an introductory no charge meeting to see if there's a way to save you money.

I've seen too many filers that missed deductions.

I believe that the services we provide are beneficial to our clients. If the taxpayer can do it him/her self I'll tell them.

I contacted a well respected CPA. Is $1500 for a consult about average or were they trying to get rid of me?

[CoachKandSportsguy]

Originally Posted by Gigi3000

I contacted a well respected CPA. Is $1500 for a consult about average or were they trying to get rid of me?

way too expensive, imo for your simple questions.

[dewilson58]

Originally Posted by Gigi3000

I contacted a well respected CPA. Is $1500 for a consult about average or were they trying to get rid of me?

Unless he/she is going to review a few years of tax returns, meet with you to understand you & your situation................$1500 is aggressive.

$1500 is three to five hours of time.

[spinner1001]

Originally Posted by Gigi3000

I contacted a well respected CPA. Is $1500 for a consult about average or were they trying to get rid of me?

Many CPAs don’t want to bother with prospects for very small fees and, thus, they might not be very interested. If you want cheaper, you might look to an Enrolled Agent working at H&R Block rather than a CPA. That might be good enough for what you want.

[Boomer]

Originally Posted by Gigi3000

I contacted a well respected CPA. Is $1500 for a consult about average or were they trying to get rid of me?

Gigi,

I just looked at what we paid to have our taxes done by a CPA last year -- $325. I know ours are easy though because I always know what she will need and I hand over everything organized. The office runs the numbers in whatever program it is, and if there is anything else we need to know, we find out then. That $325 was for state and federal returns. Where we lived before, there was an extra form for the school district that cost a few extra dollars to file, but not much. I am talking about Ohio.

I hesitate to say this because I don't actually know anything about what all is involved in your situation, but from what I am piecing together from your posts, I am wondering if you might be worrying too much about this.

An inheritance can sometimes make the heir feel outside the comfort zone when it comes to handling the money carefully and wisely. I can see that you are trying to be careful and wise and it sounds like you have a handle on things, in general.

But. . .unless there is absolutely a decision you have to make before the end of the tax year, maybe the best thing to do is simply to have your 2023 taxes done by a CPA when the time comes. They always look at the previous year. . .I think. . .or they should anyway.

Get some recommendations though.

Boomer

[Gigi3000]

Originally Posted by Boomer

Gigi,

I just looked at what we paid to have our taxes done by a CPA last year -- $325. I know ours are easy though because I always know what she will need and I hand over everything organized. The office runs the numbers in whatever program it is, and if there is anything else we need to know, we find out then. That $325 was for state and federal returns. Where we lived before, there was an extra form for the school district that cost a few extra dollars to file, but not much. I am talking about Ohio.

I hesitate to say this because I don't actually know anything about what all is involved in your situation, but from what I am piecing together from your posts, I am wondering if you might be worrying too much about this.

An inheritance can sometimes make the heir feel outside the comfort zone when it comes to handling the money carefully and wisely. I can see that you are trying to be careful and wise and it sounds like you have a handle on things, in general.

But. . .unless there is absolutely a decision you have to make before the end of the tax year, maybe the best thing to do is simply to have your 2023 taxes done by a CPA when the time comes. They always look at the previous year. . .I think. . .or they should anyway.

Get some recommendations though.

Boomer

I'm sure you are right. I had a lot of decisions I had to make with this inheritance and feel like I'm in overdrive. I don't want to be frivolous with money my grandparents worked hard to save all their lives. They passed it to my aunt and she passed it to me, never spending a dime of it. Its not a lot of money but its the principle. I do know a CPA at H@R block that i will consult if my financial advisor can't help me.
Retirement is too much work!

[Boomer]

Originally Posted by Gigi3000

I'm sure you are right. I had a lot of decisions I had to make with this inheritance and feel like I'm in overdrive. I don't want to be frivolous with money my grandparents worked hard to save all their lives. They passed it to my aunt and she passed it to me, never spending a dime of it. Its not a lot of money but its the principle. I do know a CPA at H@R block that i will consult if my financial advisor can't help me.
Retirement is too much work!

Sounds to me like you are going to be OK.

Boomer