Thank you! Do annuity companies typically send any documentation showing how much of the original investment has been recovered so far? This annuity was purchased 12 years ago and I'm not sure if my father-in-law still has all the original paperwork.

Most annuity companies will provide a statement showing the "cost basis remaining" if you request it. This tells you how much of the original investment still hasn't been distributed back. Just call the customer service number on the 1099-R and specifically ask for the "remaining cost basis statement" or "basis tracking information" for the annuity. If your father-in-law has been receiving distributions for several years, they might also be able to provide a history showing how much has been returned each year. Keep in mind that once all the original investment has been recovered, future distributions will become fully taxable, so it's good to know when that threshold will be reached for tax planning purposes.

Surrender charges don't actually affect the taxability though - they just reduce the amount you receive. The 1099-R reports the gross amount before any surrender charges. The taxability question is separate from whether penalties were applied.

Did you end up owing a lot more? I'm worried about making mistakes too. Did the IRS charge you penalties or just the additional tax?

Nope, unfortunately dual-status returns still can't be e-filed. I tried with both TurboTax and H&R Block last year, and both required paper filing. It's one of those weird IRS limitations that they haven't updated yet. Make sure you send it certified mail so you have proof of delivery!

This sounds interesting - I hadn't heard of an accountable plan before. Would this work even if my company doesn't typically reimburse for these kinds of expenses? Would they have to set this up for all employees or could it be specifically for my situation?

Yes, it could still work even if they don't typically reimburse these expenses. The accountable plan can be customized for different employee roles and situations - it doesn't have to apply uniformly to all employees. Your employer could create a specific arrangement for financial advisors or even just for your unique situation. Many companies have different reimbursement policies for different positions or departments. Since you mentioned you bring in more revenue through these self-funded activities, you could present it to your employer as a way to incentivize you to continue these productive activities while creating a tax advantage for both parties.

This right here is the real advice. I switched from W2 to 1099 for the tax benefits and regretted it. Health insurance alone cost me $1100/month for a worse plan than my employer offered. And don't forget retirement contributions - those matching 401k contributions add up!

Thanks for bringing this up! Do you have any recommendations for figuring out the specific tax rules for different countries? I'm considering properties in either Portugal or Greece.

For Portugal and Greece specifically, you'll want to look into their "Golden Visa" programs if you're investing enough, as these can offer some tax advantages for foreign investors. Portugal has a decent tax treaty with the US, and they offer a Non-Habitual Resident tax regime that might benefit you. For accurate country-specific advice, I strongly recommend consulting with a tax professional who specializes in expat taxes and has specific experience with those countries. Local property taxes, transfer taxes, and income tax rules vary significantly by country and sometimes even by region within countries. In my experience, spending money on good tax advice before making an international property purchase saved me from some expensive surprises later.

I did one in 2023 and it was definitely complicated but doable. The key was using a qualified intermediary who handled all the details. The hardest part was finding suitable replacement properties within the 45-day identification period in the crazy market. You absolutely need to follow the timelines exactly - no extensions. I almost lost my tax deferral because my closing got delayed, but we pushed hard to get it done just under the wire. But remember, as others mentioned, this won't work for foreign property - has to be US to US.

Wait, really? My daughter also has a savings account that my parents set up that earned like $320 in interest last year. Does that complicate things even though it's a pretty small amount?

Since your daughter's interest income is only $320, you don't need to worry about the kiddie tax complications. The rules only kick in when unearned income (like interest) exceeds $2,300 for 2024. Since she's under that threshold, she can just report both the W2 income and the interest income on her own simple return. Just make sure she receives the 1099-INT from the bank for that interest income and includes it on her return along with her W2. And remember, you can still claim her as your dependent if she meets the other qualifying requirements.

This is so confusing to me. So the kid files their own W2 income, but the parent claims the education stuff? How does TaxSlayer handle this split situation?