Thanks, this is super helpful. So if I understand correctly - transferring to Robinhood isn't taxable, but I need to make sure I have documentation ready for my cost basis when I do sell, since Robinhood won't have that info? Would it make more sense to sell on my current exchanges where at least some transaction history exists, rather than moving to Robinhood first?

That's exactly right - transferring isn't taxable, but you need to document your cost basis for when you do sell, since Robinhood won't have that information. As for whether to sell on current exchanges versus transferring to Robinhood first, that's a great question. There's a potential advantage to selling on exchanges where you have some transaction history, as you could potentially have more documentation to support your reported cost basis. However, if those are foreign exchanges, they might not issue U.S. tax forms, which could create other complications. If your current exchanges can provide transaction history reports that show your purchases, that documentation could be valuable regardless of where you ultimately sell. The key is having a defensible way to calculate and document your gains.

Is that true even for transactions that happened before they became a permanent resident? I thought you only had to worry about US taxes once you actually became a resident.

Your accountant is partly right, but timing is crucial. Recharacterization was an option before the tax filing deadline (including extensions) for the year of the contribution. For 2019 contributions, that deadline would have been around July-October 2020 (extended due to COVID). Since we're in 2025 now, recharacterization is no longer an option for 2019 contributions. The OP will need to go with the Form 5329 and penalty approach. But your suggestion is definitely good advice for anyone who catches their over-contribution more quickly!

That's a really good point I hadn't considered. I haven't calculated the exact earnings on the excess portion, but given market performance since 2019, it's probably significant. If I'm using the "absorption" method by under-contributing in 2021, do I still need to worry about the earnings issue? Or does that only apply if I'm physically removing the excess contribution?

If you're using the "absorption" method by under-contributing in a later year, you don't need to worry about withdrawing the earnings. The earnings stay in your Roth IRA and continue growing tax-free, which is actually a nice benefit! The earnings only become an issue if you physically withdraw the excess contribution. In that case, you'd need to calculate and withdraw the proportional earnings as well. Since you've already effectively "fixed" the excess through your 2021 under-contribution, you just need to file Form 5329 for 2019 and 2020 to pay the penalty for those years. The earnings can stay put in your account.

This is so helpful! My uncle's IRA is traditional, not Roth, so sounds like I do need those annual RMDs. Is there any way to convert it to a Roth now to avoid the annual RMDs and just deal with the 10-year rule?

You can convert an inherited traditional IRA to an inherited Roth IRA, but be careful - you'll pay income tax on the entire converted amount in the year you do the conversion. This could potentially push you into a much higher tax bracket. If you decide to convert, you'd still be subject to the 10-year rule, but you'd eliminate the annual RMD requirements. Many people find it's most tax-efficient to do partial conversions over several years rather than converting the entire amount at once. I'd strongly recommend working with a tax professional to determine if and how much you should convert each year based on your overall tax situation.

I used TurboTax last year for this exact situation. It handles inherited IRA distributions fine, but you need to make sure you indicate it's from an inherited IRA when you enter the 1099-R information. There should be a specific question about whether this is an inherited IRA. The tricky part is that TurboTax doesn't calculate what your RMD should be - you need to know that number from your financial institution. As long as you distribute at least the RMD amount each year, TurboTax will report it correctly on your tax return.

Thank you! That's really helpful to know. I'll make sure to get the RMD calculation from my bank before doing my taxes. Glad to hear TurboTax can handle this if I input everything correctly.

That's actually a really good idea I hadn't thought of. I believe the owner's sister is handling his affairs, but honestly we've all been keeping our distance out of respect while she's grieving. Maybe I could reach out carefully and just ask if she has any information about the business accounts or records. The restaurant was doing well financially, so there must be some kind of bookkeeping or records somewhere.

Approaching with sensitivity is definitely the right move. You might frame it as wanting to properly close out your employment relationship with the business rather than just tax documents. The executor likely has legal access to business records that could help everyone involved. If there was a business accountant or bookkeeper separate from Paycom, they might also have records that would be helpful. Many businesses keep separate financial records beyond what their payroll service maintains.

This is 100% the way to go. I worked payroll for years and the YTD on your final December paystub should match your W2 exactly for most regular employees. Only difference might be if you had taxable benefits added after the last payroll was processed.

Can you explain the home office deduction more? I work from my bedroom at my desk - does that count? Or does it need to be a separate room?

For the home office deduction to be legitimate, the space must be used "regularly and exclusively" for business. A desk in your bedroom typically wouldn't qualify because the bedroom is also used for personal purposes (sleeping, dressing, etc.). The IRS wants the space to be a separate area used only for work. It doesn't have to be a whole room - it could be a section of a room if it's clearly delineated and used exclusively for business. But if you ever use that desk for non-business activities (gaming, paying personal bills, etc.), it wouldn't qualify. This is why dedicated home offices or converted spare rooms work best for this deduction.

The IRS worksheets are accurate but super confusing. I tried using Schedule SE directly and felt like I needed an accounting degree to understand it. Ended up making an error that cost me an extra $430 in taxes last year.