This is such a helpful thread! I was in the exact same situation and was getting really worried that my employer had made some kind of mistake with my Roth 401k contributions. One thing I'd add is that if you want to be extra sure everything is correct, you can also request a "Summary Plan Description" from your HR department. This document explains exactly how your company's 401k plan works and should clarify how Roth vs traditional contributions are handled on your paystubs and tax documents. I also learned that some payroll systems will show a breakdown on your final pay stub of the year with separate lines for "401k Roth" and "401k Traditional" contributions, which makes it easier to track. But even if your pay stubs don't break it down that clearly, as long as your total retirement contributions match what you intended to contribute, you should be good to go. The key thing to remember is that Roth 401k contributions are treated like regular income for tax purposes (since you pay taxes on them now), while traditional 401k contributions reduce your current taxable income (which is why they show up separately in box 12a).

I went through this exact same confusion last year! What really helped me was creating a simple spreadsheet to track everything. I listed my gross pay, traditional 401k contributions, Roth 401k contributions, and other deductions, then calculated what my Box 1 wages should be. The formula is basically: Gross Pay - Traditional 401k - Other Pre-tax Deductions = Box 1 Wages (which includes your Roth 401k contributions since they're after-tax). Once I did this calculation and compared it to my actual W-2, everything made perfect sense. My Roth contributions were indeed "invisible" on the W-2 because they're already included in the taxable wages amount. It's definitely counterintuitive at first, but the math works out correctly. If your numbers don't match up when you do this calculation, then you might have a legitimate issue to discuss with your HR department. But in most cases, everything is probably correct even though it doesn't look like what you'd expect.

From my experience helping families navigate these decisions, I'd strongly recommend consulting with both a tax professional and estate planning attorney before moving forward. The tax implications can vary significantly based on your specific state laws, your parents' total estate value, and your family's long-term financial goals. One consideration I don't see mentioned yet is the potential impact on your parents' Medicare premiums. If you go with option #2 and they have significant liquid assets from selling their current home, they could face higher Medicare Part B and Part D premiums due to IRMAA (Income-Related Monthly Adjustment Amount) thresholds. Also consider creating a care agreement regardless of which option you choose. This documents the arrangement and can be crucial for Medicaid planning if long-term care becomes necessary. The agreement should specify responsibilities for maintenance, taxes, insurance, and modifications needed for aging in place. Given the complexity involved, it might be worth modeling both scenarios over a 10-15 year timeline to see which approach better aligns with your family's financial situation and care planning needs.

Great question! For care agreements, each state has different requirements, but generally they need to be in writing, signed before services begin, and specify fair market compensation for any care provided. Many elder law attorneys have templates, but the agreement should be tailored to your situation. Key elements include: specific services provided, payment terms, duration, and what happens if circumstances change. For modeling scenarios, I'd recommend using a combination of approaches: 1. IRS Publication 590-B for required minimum distribution calculations 2. Social Security Administration's life expectancy tables for actuarial planning 3. Historical real estate appreciation data for your area (usually 3-4% annually) 4. State-specific Medicaid asset limits and lookback rules Some families find it helpful to create spreadsheets modeling both options with different scenarios (parents need care at 80 vs 85, property appreciation rates, etc.). The key variables to consider: property value changes, tax bracket changes, long-term care costs in your area, and potential changes to tax laws. One often-overlooked factor: if your parents need care but want to stay in the home, option #2 might give you more flexibility to modify the property for accessibility since you'd already own it.

Has anyone actually received notices from the IRS about excess Roth IRA contributions? I'm in a similar situation (discovered I overcontributed by about $1,200 three years ago), but I'm wondering if the IRS even catches these things? Not trying to avoid paying what I owe, just curious if they actively look for this or if it's more of a "fix it if you realize it" situation.

One thing nobody's mentioned yet - check if you might have been eligible for those contributions after all! I thought I had made excess Roth contributions for two years, but when I reviewed my tax returns more carefully, I realized my MAGI calculation was wrong. I had included some one-time items that shouldn't have been in the calculation, and I was actually under the limit for those years. Worth double-checking your MAGI calculation before going through the hassle of removing excess contributions. The definition of MAGI for Roth IRA purposes is pretty specific.

One more thing to consider - state taxes! Depending on which state you last lived in, you might still be considered a resident for state tax purposes even while living abroad. Some states are SUPER aggressive about keeping you as a tax resident (looking at you, California and New York). Make sure you properly terminate your state residency before moving abroad. This usually means getting rid of state driver's license, voter registration, bank accounts, etc. I didn't do this properly when I moved to Singapore and ended up owing CA taxes for 2 years until I fixed my residency status!

This is such a helpful thread! I'm in a similar situation but working in Germany. One thing I'd add - make sure you understand the timing of when you can start claiming the Foreign Earned Income Exclusion. You need to qualify for either the bona fide residence test OR the physical presence test for the specific tax year you're claiming it. The physical presence test requires 330 full days outside the US in any 12-month period, but it doesn't have to align with the calendar year. So if you just moved to China, you might not qualify for the full exclusion in your first tax year depending on when you arrived. Also, Hugo, since you mentioned your income will be around $45,000 USD equivalent, you'll likely be able to exclude all of it under the FEIE (the limit is $120,000 for 2025). But definitely keep good records of your days in/out of the US and your Chinese tax payments just in case you need them later! The investment income advice from Nasira is spot on - those dividends and capital gains will still be taxable in the US regardless of the FEIE.

14 Has anyone had issues with their cost basis not being reported correctly on their Robinhood 1099-B? I'm noticing a bunch of my transactions say "cost basis not reported to the IRS" and I'm not sure how to handle that in FreeTaxUSA. Will the IRS flag my return if what I enter doesn't match what Robinhood reported?

One thing that helped me when I was in the same situation - make sure you have all your documentation ready before you start entering transactions in FreeTaxUSA. I learned the hard way that you need your original purchase confirmations from Robinhood for any transactions where the cost basis wasn't reported. You can usually find these in your Robinhood app under Documents or Account Statements. Having the exact purchase dates and amounts makes the whole process much smoother in FreeTaxUSA's investment income section. Also, double-check that any dividends you received are entered in the 1099-DIV section separately from your stock sales - I almost missed those my first year! The key is just taking it slow and entering one transaction at a time if you're doing it manually. FreeTaxUSA's interview process will make sure everything ends up on the right forms automatically.