Has anyone dealt with the situation where some accounts were individual (not joint) accounts of the deceased spouse? I'm dealing with this right now - some accounts were joint, but others were solely in my husband's name. I'm the executor of his estate, but I'm confused about how to report interest from his individual accounts.

I'm sorry for your loss, Sophia. This is actually a very common situation, and you're handling it correctly by asking for guidance. Since these were joint accounts, you should report all the interest income on your single tax return, even though some 1099-INT forms show your wife's SSN. The key thing to remember is that joint account income belongs to the surviving spouse. Here's what I recommend: 1. Report all interest on Schedule B of your tax return 2. List each payer exactly as shown on the 1099-INT forms 3. Include a brief statement with your return explaining that some 1099-INT forms were issued under your deceased spouse's SSN because she was the primary account holder on joint accounts You do NOT need to file a separate return for your deceased wife in the second year after her death. That would only be necessary if she had income that belonged solely to her estate. Make sure to contact those financial institutions to update the primary account holder information so future tax documents will be issued with your SSN. Most institutions will need a certified copy of the death certificate and may have specific forms to complete. The IRS is familiar with this situation, so don't worry too much about automatic flags - your explanatory statement should resolve any questions.

As someone who's been investing in MLPs within retirement accounts for over a decade, I wanted to add a few practical points that might help Diego and others in similar situations. First, Energy Transfer LP is actually one of the "cleaner" MLPs when it comes to UBTI generation - they typically produce minimal amounts compared to some other partnerships, so your $85 UBTI that you mentioned earlier is pretty typical and nothing to worry about. Second, I'd recommend creating a simple spreadsheet to track your MLP K-1s each year, even though you don't report them. Include columns for the partnership name, account type (Roth vs Traditional IRA vs taxable), total income amounts, and UBTI. This makes it easy to monitor if you're approaching any thresholds and gives you a clear record if you ever need to reference historical data. Finally, if you decide to add more MLP positions to your Roth in the future, consider spreading them across different partnerships rather than concentrating in one. This diversifies your UBTI risk - if one partnership has an unusually high UBTI year, you're less likely to hit the $1,000 threshold that would require Form 990-T filing. But for your current situation with just the Energy Transfer position, you're in great shape. File away that K-1 and enjoy the tax-free growth in your Roth!

As a newcomer to this community, I just wanted to say how incredibly helpful this entire discussion has been! I've been holding some MLP investments in my own retirement accounts and had similar confusion about the K-1 treatment. What really stands out to me is how this thread evolved from Diego's straightforward question into such a comprehensive resource covering everything from basic tax treatment to operational considerations with custodians, UBTI thresholds, and even portfolio diversification strategies. The consensus is crystal clear - K-1 income from investments held in Roth IRAs doesn't need to be reported on personal tax returns because the income stays within the tax-advantaged retirement account structure. But the additional insights about proper registration, recordkeeping, and custodian capabilities have been equally valuable. This is exactly the kind of collaborative knowledge-sharing that makes online communities so powerful. Diego asked one question and got expert-level guidance that will help not just him, but anyone else facing similar situations with partnership investments in retirement accounts. I'm definitely bookmarking this thread as a reference and will be implementing some of the practical suggestions like the UBTI tracking spreadsheet that StormChaser mentioned. Thanks to everyone who contributed their expertise and real-world experience!

Has anyone here actually moved specifically for tax purposes and was it worth it? I'm considering leaving California for Nevada or Wyoming before selling my business next year (looking at a gain around $1.2 million), but wondering if the hassle is really worth the tax savings.

With a $1.2 million gain, you're looking at potentially saving around $159,600 in California state taxes (13.3% top rate) by establishing residency in Nevada or Wyoming before selling. That's definitely life-changing money and worth the hassle for most people. However, California is notoriously aggressive about auditing people who move right before large financial events - they call it the "golden handcuffs" audit. You'll need to be absolutely meticulous about establishing true residency. I'd recommend: 1. Move at least 12-18 months before selling if possible 2. Spend at least 183+ days physically in your new state each year 3. Change EVERYTHING - voter registration, driver's license, bank accounts, doctors, etc. 4. Keep detailed records of where you spend each day 5. Consider selling your California residence entirely to show clear intent The audit risk is real but manageable if you truly commit to the move. Just don't try to fake it - California has sophisticated methods for tracking where people actually live and the penalties for getting caught are severe.

Has anyone else noticed that FAFSA's website is completely unhelpful about the tax implications of their aid? I spent hours trying to figure this out last year and ended up having to call my school's financial aid office.

I went through this exact same situation two years ago and totally understand your stress! Here's what I learned that might help: First, take a deep breath - with your income level and withholding, you're very unlikely to end up owing money. Your $12,000 in earned income is well below the standard deduction threshold, so even if some of your FAFSA money is taxable, you'll probably still get a refund. The key thing is to separate your loans from your grants. Loans are NEVER taxable income - you're borrowing money that you have to pay back, so the IRS doesn't count it. For grants, only the portion used for non-qualified expenses (like room and board) is potentially taxable. Here's what really helped me: I made a simple spreadsheet listing all my school expenses (tuition, required fees, required books) and compared it to my total grant money. If your grants were less than or equal to those qualified expenses, none of it is taxable. If there was excess, only that excess amount gets added to your taxable income. And don't worry about not being full-time - you can still claim education credits for part-time enrollment! The American Opportunity Credit is available for the first four years of post-secondary education regardless of whether you're full or part-time. You're doing the right thing by filing your taxes. Given your situation, I'm confident you'll get money back, not owe it!

This whole thread has been incredibly reassuring! I'm actually in a very similar situation - got married last year but forgot to update my W-4, and I've been stressing about it for weeks. Reading everyone's experiences here has really put my mind at ease. One thing I wanted to add for anyone else dealing with this: if your company uses an online HR portal (like Workday or BambooHR), you might be able to update your W-4 directly through the system without having to chase down HR representatives. I just logged into mine and found the tax withholding section under "Personal Information" - was able to submit a new W-4 electronically and got an email confirmation that it would take effect with my next paycheck. Sometimes the simplest solution is right there in the employee self-service tools, but we get so focused on calling or emailing HR that we forget to check if we can just fix it ourselves online. Worth checking if your company has this option before going through the runaround with different departments!

Thanks everyone for all the helpful advice in this thread! As someone who's been navigating tax issues for years, I wanted to add that this is actually one of the most common payroll mix-ups out there. @Ravi, you're definitely in good shape - having too much withheld is always better than too little. One additional tip: when you do get your refund next year, consider adjusting your W-4 again to find that sweet spot where you're not getting a huge refund (which means you gave the government an interest-free loan) but also not owing money at tax time. The IRS withholding calculator tool that @Zara mentioned is really helpful for this. Also wanted to echo what @Xan said about being direct with HR. In my experience, the magic words are "I need to submit a new W-4 form to change my withholding status" rather than vague requests about "fixing" things. Most HR departments are much more responsive when you tell them exactly what form you need and what action they need to take. Hope you get this sorted out soon - sounds like you're already on the right track!