Small tip that helped me understand this better: think of bank fees like you think of any other service fee you pay - like a Netflix subscription or ATM charge. You don't report those on your taxes and the same goes for savings account withdrawal fees. The only "fees" that matter for taxes are those that are actually penalties for early withdrawals from tax-advantaged accounts or time deposits (CDs), and those will always be on your 1099-INT or other tax forms.

Thanks everyone for all the helpful responses! This makes so much more sense now. I was definitely overthinking it and trying to account for every little fee. Just to make sure I understand correctly - so the only thing I need to worry about from my 1099-INT is what's actually printed on the form itself, and regular banking fees like withdrawal charges, overdrafts, monthly maintenance fees, etc. are just personal expenses that don't affect my taxes at all? I feel so much better about filing now. First time doing taxes is pretty overwhelming but you've all been super helpful!

Another tip - make sure you know which of your grandma's investment accounts have automatic dividend reinvestment. This affects the cost basis on the 1099-B because reinvested dividends increase the basis. My dad's accounts had this feature and we were showing more gains than we should have been because the reinvested dividends weren't being properly tracked in the basis. Had to go through years of statements to correct it!

This is such a helpful thread! I'm dealing with something similar for my elderly aunt. One thing I learned the hard way - make sure to check if any of the 1099-INT forms show tax-exempt interest income in Box 8. My aunt had municipal bond funds across several accounts and we almost reported that income as taxable when it shouldn't have been. Also, when you're organizing everything for the accountant, I found it helpful to create a simple spreadsheet listing each 1099 form, which institution it's from, and the key amounts. It makes the appointment go much smoother when you can quickly reference which form has which information. The accountant will definitely appreciate having everything organized beforehand, especially with multiple investment accounts. Good luck with your appointment next week!

You're absolutely not alone in feeling frustrated by this! The IRS tracking system is honestly pretty outdated - they get all the raw data but don't provide the calculations we actually need as taxpayers. For your situation with the lost documents, Gabriel's suggestion about requesting old tax returns is spot on. But here's another tip that might help: if you had the same financial institution for your IRA over those 8 years, try calling them first. Many brokerages can provide historical contribution summaries going back several years, which might be faster than waiting for IRS transcripts. Also, if you used tax software like TurboTax or H&R Block in previous years, they often store your old returns online. You might be able to log into your old account and download your Form 8606 from previous years to reconstruct your basis. The whole system definitely needs modernizing - other countries handle this much more efficiently by calculating taxes for their citizens instead of making everyone figure it out themselves!

This is such a helpful thread! I've been dealing with the same confusion about Form 5498 and non-deductible IRA contributions. What really clicked for me after reading everyone's responses is that the Form 5498 serves multiple purposes - it's not just about what I need to report on my current tax return, but also creates a paper trail for the IRS to track things like RMDs and conversions down the road. @Eli Wang - your original question really resonated with me because I had the exact same confusion about why the fair market value gets reported if we don't use it directly. Now I understand it's more about the IRS having complete records of account growth over time. One thing I'd add for anyone in a similar situation: make sure you're filing Form 8606 every single year you make non-deductible contributions, even if your tax software doesn't explicitly prompt you for it. I almost missed this one year because I was using a different tax program that didn't walk me through IRA basis tracking as clearly. That form is crucial for maintaining your basis records with the IRS, and it's what will protect you from double taxation when you eventually withdraw those contributions.

Great thread everyone! As someone who also got tripped up by MAGI calculations, I wanted to add one more consideration that might be relevant. If you have any employer stock purchase plans (ESPP) or receive restricted stock units (RSUs), these can also impact your MAGI calculation. The discount from ESPP or the value of vested RSUs gets included in your W-2 income, which then flows into your MAGI. I mention this because a lot of people forget about these when they're trying to estimate whether they'll hit the Roth IRA phase-out limits. If you get RSUs that vest throughout the year, it can push your income higher than expected and potentially disqualify you from direct Roth contributions. The good news is that if you realize mid-year you're going to be over the limit, you can either recharacterize your Roth contribution to traditional, or do the backdoor Roth strategy that others mentioned. Just make sure to track all your income sources when planning your IRA strategy!

This has been such an informative thread! I'm in a similar situation as the original poster and had no idea there were different MAGI calculations for different purposes. One thing I wanted to add that might help others - if you're using tax software like TurboTax or H&R Block, they usually calculate your MAGI automatically for IRA contribution purposes, but they don't always make it clear which version they're showing you. I learned this when I was trying to figure out my ACA premium tax credit eligibility and the MAGI number in my tax software didn't match what I needed. Also, for those mentioning the backdoor Roth strategy - my CPA warned me that if you do this, make sure your IRA custodian can handle the conversion process smoothly. Some brokers make it really easy with online forms, while others require paperwork and phone calls. Fidelity and Vanguard both have pretty streamlined processes from what I've experienced. The strategic 401k contribution adjustment to stay under the Roth limit is brilliant advice. I wish I had known about that earlier - I ended up having to do a backdoor Roth when I could have just shifted more money to my traditional 401k instead!

Does anyone know if bonuses are treated differently for Social Security tax purposes? I'm getting a $40k bonus in December and I'll have already earned about $155k in regular salary by then.

Great question about the 2025 Social Security tax maximum! Just to add some additional context to what others have shared - the $168,600 wage base limit is set by the Social Security Administration and applies to all earned income, including salary, wages, bonuses, and self-employment income. One thing that catches people off guard is that if you have multiple jobs throughout the year, each employer withholds Social Security tax independently without knowing about your other income sources. This can result in overpayment, but as others mentioned, you can claim the excess as a refund when filing your return. Also worth noting: if you're self-employed in addition to having W-2 income, the limit applies to your combined earnings. So if your W-2 wages already reach the $168,600 threshold, you won't owe Social Security tax on your self-employment income (though you'll still owe Medicare tax). The annual adjustments to this limit have been pretty substantial lately - it jumped from $147,000 in 2022 to $168,600 in 2025, so it's definitely worth keeping track of if you're in that income range!