Is there an easy way to get this information if you haven't kept good records? I'm in the same situation with an early distribution and have no idea how much I've contributed over the years.

You can contact your IRA custodian (the financial institution where your Roth IRA is held) and request statements showing your contribution history. Most major brokerages keep these records, but they might not go back indefinitely. You can also look at your previous tax returns if you kept them. While Roth contributions aren't deductible, they might be mentioned in some of your tax documents. As a last resort, you can request a transcript from the IRS of your past returns, which might have some of this information.

Yes! Same thing happened to me. I ended up calling my brokerage (Fidelity) and they gave me my "basis information" which is basically the total amount of contributions I've made. Since my withdrawal was less than my total contributions, I entered that info into TurboTax and it properly showed the distribution as non-taxable.

Thanks for sharing your experience! Do you remember which form they sent you? And was there any indication that this would be recorded as some kind of violation that might trigger more scrutiny in the future?

They sent a CP2000 notice, which is just their automated underreporter notice - not an audit or anything serious. It's basically "we have information that doesn't match your return" with their proposed changes. There was no indication this would trigger additional scrutiny in the future. It's such a common occurrence and such a small amount that it's handled entirely by automated systems. They don't even consider it a serious issue - more like a math correction. I've had clean returns since then with no issues or follow-up audits.

That assumes the interest income doesn't push you into a higher bracket though. If you're right at the boundary between brackets, even a small amount could increase your marginal rate.

True, but for $270 that would be incredibly rare. You'd have to be literally within $270 of a bracket threshold for that to happen. Most bracket jumps are thousands of dollars apart. For anyone concerned about this, you can check your last return to see how close you were to the next bracket threshold. The 2025 brackets have slightly different cutoffs than 2024, but they're close enough for estimating purposes.

Thank you for bringing this up! I hadn't even considered the PFIC angle. Do you know if educational non-profits typically generate enough investment income to trigger PFIC status? This organization mainly receives donations and some government grants. Also, did you determine the partnership classification yourself or did you need professional help? I'm wondering if Mexican non-profits might be viewed differently than Spanish ones.

Educational non-profits typically don't generate enough investment income to trigger PFIC status unless they have a large endowment that's actively invested. If they're primarily operating on donations and government grants for educational activities, it's unlikely to be classified as a PFIC. The PFIC test generally requires that 75% or more of the entity's income is passive (investment) income, or 50% of assets are held for the production of passive income. We definitely needed professional help to determine the correct classification. The key was looking at the organizational documents and how the entity operates rather than what it's called locally. We provided our tax professional with the Spanish equivalent of articles of incorporation and bylaws, which showed it operated more like a partnership with pass-through characteristics rather than a corporation. Mexican entity classification might differ, so I'd recommend either consulting with a tax professional familiar with Mexico-US tax matters or at minimum reviewing the actual organizational documents with that perspective in mind.

I used Greenback Expat Tax Services last year for a somewhat similar situation with interests in a Japanese non-profit. They weren't cheap (around $600 for my returns) but they knew exactly which forms were needed. For the penalties - they can be HARSH. Form 5471 penalties start at $10,000 per form per year if required but not filed. FBAR penalties are even worse. Don't mess around with this stuff!

Everything was handled remotely - I uploaded documents to their secure portal and had two video calls (initial consultation and then a review of the prepared returns). They were in a completely different time zone but made it work. They definitely provided advice for future years, which was actually the most valuable part. They suggested some changes to how I documented my involvement with the Japanese entity and recommended keeping certain records that would make future filings simpler. They also explained how getting married would affect my reporting requirements, which might be relevant to the original poster too. For what it's worth, they said most regular CPAs miss crucial details on these foreign filings because they rarely deal with them.

Thanks for these suggestions! I'm wondering about the SEP IRA option - how much could that potentially reduce my tax bill? And do you know if I can still open one for last year's taxes?

You can still open and fund a SEP IRA for 2023 until the tax filing deadline (including extensions), so that's potentially a good option to reduce your 2023 tax bill right now. For a SEP IRA, you can contribute up to 25% of your net self-employment income, with a maximum contribution of $66,000 for 2023. At your income level, this could significantly reduce your taxable income. For example, if you could contribute $5,000 to a SEP IRA, that would reduce your taxable income by $5,000, potentially saving you $750-1,200 in taxes depending on your bracket.

I did this last year and won! But be prepared - my employer was FURIOUS and I ended up having to find a new job. Worth it financially, but definitely had some fallout.

That's really helpful, thanks! How close was your estimate to the actual K-1 amounts when they finally arrived? And did you have to provide any documentation to prove you were waiting for the K-1s?

My estimates were within about 10% of the actual amounts, which seemed to be acceptable. I didn't have to provide documentation specifically showing I was waiting for K-1s - I just completed Form 2210 and attached a brief statement explaining the situation. The key is making a good faith effort to estimate accurately and pay what you can by the deadline. The IRS is generally reasonable if you're proactive about it and can show you weren't just ignoring your tax obligations.

This is the correct answer right here. The safe harbor rule saved me from penalties many times. I make sure I always hit the 110% of previous year's tax threshold through regular estimated payments, then whatever happens with investments or K-1s doesn't trigger penalties.