Don't forget to consider your tax situation too! Since you're contributing to a traditional 401k (I assume), those contributions will reduce your taxable income for this year. If you're in a higher tax bracket this year due to your full-time job earlier in the year + retirement payouts, it might be more beneficial to contribute now rather than waiting until next year when your income might be lower.

This is such a common confusion for people transitioning from government jobs! I went through the same thing when I retired from my federal position. The key thing to remember is that 457b plans are unique in that they have completely separate contribution limits from 401k/403b plans. One thing I'd add to the great advice already given - since you're only working part-time now, make sure your new employer allows you to contribute a high enough percentage to actually reach those limits. Some payroll systems have maximum percentage caps that might prevent you from contributing as much as you want with a smaller paycheck. Also, don't forget that your 457b might still be available for contributions if your former employer allows it (some do for a period after separation). But honestly, with the employer match available in your new 401k, definitely prioritize that first - it's free money that you can't get anywhere else!

Has anyone here had the IRS actually question them about GoFundMe money? I received about $12,000 last year for medical expenses and didn't report it as income, but now I'm second-guessing myself after reading this thread...

Great question, Sofía! You're handling this situation really thoughtfully by planning to redirect the excess funds as you originally promised. From a tax perspective, you're correct that the donations you received are generally considered gifts to you (not taxable income), and when you donate to other campaigns, you'll be making gifts to those recipients. One thing I'd add to the excellent advice already given - make sure to keep detailed records not just of the outgoing donations, but also screenshots of your original campaign description where you stated your intention to help other families with any excess funds. This documentation shows your intent was never to personally benefit from the extra money, which could be helpful if any questions ever arise. Also, since you mentioned the amounts would be substantial ($3,000-$5,000 per family), you might want to spread these donations across different tax years if it makes sense timing-wise. While you're well under the $19,000 annual gift limit per recipient, spreading them out can help with your own record-keeping and budgeting. You're doing something really generous here - best of luck with helping those other families!

Another thing to consider - the rules for withdrawing from Roth IRAs with pre-tax portions are a bit complex. If your sister plans to withdraw before retirement age, she needs to understand the ordering rules. Generally, Roth IRA withdrawals come out in this order: 1. Regular contributions (after-tax) 2. Conversion contributions (taxable portion first, then non-taxable) 3. Earnings So those pre-tax portions would come out after her regular Roth contributions but before any earnings. This matters for determining if a withdrawal is subject to penalties. Honestly it's a headache to track this stuff, which is why I just converted my pre-tax portions when I did my rollover.

This is a great discussion! I went through something very similar with my 401k rollover from a non-profit job. The key thing that helped me was understanding that employer matching contributions are ALWAYS pre-tax, regardless of whether you're contributing to a traditional or Roth account. What really saved me headaches was calling my new IRA provider (in your case Vanguard) and asking them to walk through the tax implications of each option before making a decision. They can actually run scenarios showing exactly how much tax your sister would owe if she converts that $820 to full Roth status versus leaving it as-is. One thing I learned: if she's young and expects to be in a higher tax bracket later, paying taxes on that small amount now could save money long-term. But if she's closer to retirement or expects lower income later, it might make sense to leave it and pay taxes during withdrawal. The amount is small enough that either choice probably won't make a huge difference, but it's worth understanding the implications. Also, make sure she keeps documentation from the rollover showing which portions were pre-tax - you'll need that for future tax filings!

Just curious - what are you planning to replace it with? I'm shopping for a business vehicle and trying to figure out if it makes sense to go for something over 6000 lbs again for the tax benefits, or if those advantages aren't worth it anymore.

Sofia, I completely understand your frustration with that Range Rover! I've been in a similar situation with a heavy business vehicle that turned into more of a financial burden than benefit. One thing to consider that might help with the depreciation recapture burden - if your business has had a particularly good year, the recapture income (which gets taxed as ordinary income) might actually be beneficial for smoothing out your tax liability across years. Sometimes it's better to take the hit in a year when you can handle it rather than waiting and potentially facing it during a year with even higher income. Also, make sure you're tracking every single business expense related to the vehicle through the end - maintenance, insurance, registration fees, etc. These can help offset some of the recapture income. And if you're financing the replacement vehicle, the interest on that loan will be deductible for the business portion. The mental relief of getting rid of a vehicle you hate is worth a lot too. Sometimes the best financial decision isn't just about the numbers on paper!

Something important no one's mentioned - the Child Tax Credit amount phases out at higher income levels. Since your ex makes more than you ($78k vs $59k), you might actually benefit more from the credit than he would. For 2024, the phase-out begins at $75,000 for single filers. So your ex is already in the phase-out range while you're still under it. Depending on his exact income, he might not get the full benefit of the credit. If you're trying to maximize the total benefit between both households, it might make financial sense for you to claim both children in some years, especially if his income continues to rise. You could then work out some other financial arrangement to make things fair.

You're absolutely right to want to handle this fairly! As someone who went through a similar situation, I can confirm that splitting the Child Tax Credit with 50/50 custody is completely doable and legitimate. Since your divorce decree doesn't specify who claims the children for tax purposes, you have flexibility. The two most common approaches are: 1) Each parent claims one child every year, or 2) Alternate years where one parent claims both children. Given that you mentioned covering most of their healthcare costs, you might want to factor that into your negotiation with your ex. You could propose that you claim one child each year, or even suggest alternating who gets to claim both kids with the understanding that whoever doesn't claim them that year contributes more to certain expenses. The key is getting any agreement in writing - even a simple email or text exchange works. This prevents the "he said, she said" situations that can happen at tax time. Also, keep detailed records of your custody schedule and any expenses you pay for the children. While the IRS doesn't require you to prove who spent more money on the kids for the Child Tax Credit (unlike the dependency exemption rules), having documentation helps if there are ever questions. Don't let what happened last year repeat itself. Have this conversation now so you both know the plan going forward!