This is such a timely question! I just went through this process last month with my son's leftover 529 funds. One thing that caught me off guard was the requirement that the 529 account must have been open for at least 15 years before you can do the rollover - definitely check that first. Also worth noting: the beneficiary (your son) needs to have earned income equal to or greater than the rollover amount in the tax year. If he's not working or doesn't have sufficient earned income, that could be a roadblock. The 5-year conversion rule that others mentioned is definitely correct, and it applies to the entire amount regardless of whether it was contributions or earnings in the 529. I learned this the hard way when I was hoping to access some of those funds sooner for an emergency. One silver lining though - at least unused 529 funds now have this option instead of just sitting there or facing the 10% penalty on earnings if withdrawn for non-education purposes!

One additional consideration that hasn't been mentioned yet is the impact on financial aid if you have other children who might still need college funding. When you roll 529 funds to a Roth IRA, those assets shift from being counted as parental assets (which have a lower impact on financial aid calculations) to retirement assets (which aren't counted at all for FAFSA purposes). This could actually be beneficial for financial aid eligibility for your other kids, but it's something to factor into your decision timeline. If you have younger children who will be applying for financial aid in the next few years, the timing of this rollover could affect their aid packages. Also, make sure to coordinate with your tax preparer since there are specific reporting requirements for these rollovers on your tax return, even though the rollover itself isn't a taxable event.

Just want to add that if you're caring for a disabled dependent (even if not blind), you might qualify for different tax benefits like the Credit for Other Dependents or potentially even the Child Tax Credit depending on the situation. Never assume that just because there's no specific checkbox, there aren't benefits available!

This is such a great question! I work as a tax preparer and see this confusion all the time. The blindness checkbox exists because it triggers a specific additional standard deduction that was written into the tax code decades ago. But you're absolutely right that it seems arbitrary compared to other disabilities. What many people don't realize is that there are actually tons of other disability-related tax benefits scattered throughout the code - they're just not as obvious as a simple checkbox. Things like the Disabled Access Credit for business owners, various medical expense deductions, and even some lesser-known credits for specific conditions. The problem is that these benefits are buried in different sections and forms, making them much harder to find and claim. I always tell my clients with disabilities (beyond blindness) to keep detailed records of all their disability-related expenses because there are often deductions available that aren't immediately obvious from the standard forms.

Has anybody calculated whether it's still worth adding your partner to your insurance after all these extra taxes? I'm doing the math and it seems like separate marketplace insurance might be cheaper once you factor in the tax hit.

Great breakdown from everyone! Just want to add that timing matters too - if you're adding your partner mid-year, the imputed income will be prorated for the months they're covered. So if you add them in July, you'd only have 6 months of imputed income added to your W-2. Also, don't forget that the imputed income affects more than just your federal taxes. It also increases your Social Security and Medicare tax liability since those are calculated on your total taxable income. In the original example with $630/month extra employer contribution, that's an additional $580 per year in FICA taxes (7.65% of $7,560). One last tip - if your company offers an HSA with your health plan, the increased coverage cost might make you eligible for higher HSA contribution limits since you'd be switching from self-only to family coverage. The extra tax-deductible HSA contributions could help offset some of the tax impact from the imputed income.

Just wanted to add one more important point that I learned when I went through this with my own gold coin sale - make sure you understand the difference between numismatic coins and bullion coins for tax purposes. Most gold coins like American Eagles, Maple Leafs, etc. are treated as collectibles regardless of whether you bought them for their gold content or numismatic value. But if you have something like a rare collectible coin with significant numismatic premium, the tax treatment is the same (28% rate) but the IRS may be even more interested in your basis documentation. Also, if you're planning to sell more coins in the future, consider the timing. Since you're already looking at the 28% collectibles rate, bunching sales into one tax year vs. spreading them out won't change your marginal rate, but it could affect other aspects of your tax situation depending on your overall income. The $635 gain you calculated sounds right based on your numbers. Just make sure when you do sell that you get a clear receipt from the dealer showing the exact sale date and amount - you'll need those details for your Schedule D.

One thing I'd recommend that hasn't been mentioned yet - consider timing your sale strategically within the tax year. Since you're already committed to the 28% collectibles rate, think about whether you have any capital losses from other investments that could offset some of this $635 gain. Capital losses can offset capital gains dollar-for-dollar, including gains from collectibles. So if you have any losing stock positions or other investments, you might want to harvest those losses in the same tax year to reduce your overall tax burden. Also, just a heads up - some states have additional taxes on capital gains that you'll want to research based on where you live. The federal 28% rate is just part of the picture. Given that you have all your documentation in order and a clear understanding of your basis, you're in a much better position than many people who sell precious metals. Just make sure to file Form 8949 along with Schedule D when you do your taxes next year.

I'm wondering how the whole concept of "buy term and invest the difference" works out when you actually calculate it? Like with actual numbers?

One scenario that hasn't been mentioned is using whole life insurance for business succession planning. I work with family businesses and see this strategy used effectively for buy-sell agreements. Here's how it works: Two business partners each own a $2M whole life policy on the other. When one partner dies, the surviving partner receives the $2M death benefit tax-free and uses it to buy out the deceased partner's share from their family. Meanwhile, the cash value that builds up over time can be used for business purposes through policy loans. This solves several problems at once: guarantees funding for the buyout regardless of market conditions, provides tax-free transfer of the business, and creates a forced savings mechanism that builds cash value the business can access if needed. The premiums are also typically tax-deductible as a business expense. For a traditional "buy term and invest the difference" approach, you'd need to ensure your investments perform well enough AND are liquid at exactly the right time. With whole life, the death benefit is guaranteed regardless of market performance when it's needed most. The math works especially well when the business partners are older (50+) since term life becomes very expensive at those ages, making the cost difference between term and whole life much smaller.