[USER]

I need answered. I need it to make sense and it’s just not clicking. I have an IRA, I have money in a HYSA, I put some money in an annuity, I’ve got a SEP IRA and I also dumped a good bit into VTI and VTWAX.

My vanguard accounts are doing good, but I’m soo confused on all the unrealized gains and taxes and what happens down the road when I start dipping into that?

I need someone to explain this to me. I get the other accounts and the penalties and the taxes and the age requirements but if VTI does what it is projected to do what does that look like down the road.

I also have an 18yr old that would like to put some money into VTI too.

All the folks that got into VTSAX years ago…explain to me the taxes and withdrawals.

I know, it is so dumb but I literally cannot make it make sense where I don’t end up screwing something up.

Yes, I have a guy but he’s made mention of a few things that I don’t necessary agree with so what better place to get answers then the internet

[Tristan]

When you sell it becomes a realized gain (or loss but just going on your info) and you pay taxes on the gain (long or short depending on your holding period) according to your tax bracket

[Robert]

check out a Simple Path to Wealth, and get with a good CPA. Yes, you will get answers from the hive mind; and we are here to help; but you also want to be chatting with someone who is specifically there for YOU.

Good CPA’s are not cheap, but they are worth their weight in gold.

[John]

Who are these people you’re getting advice from? These are relatively basic tax questions that any financial or tax professional would know.

[John]

Ok, here’s a scenario: 20 years from now, you want to sell some of your VTSAX shares, which are worth $2 million, to pay for living expenses.

Some of those shares you bought 20 years ago, and they are worth 5 times what you paid for them.

Some shares you only bought 2 years ago, and they have no gain, because the market has been flat lately. You want to sell $50,000 worth.

If records are being kept, you can choose to sell only the recent shares that have made no money (and you’d pay no taxes).

Or you could sell the oldest shares that have made a lot of money (FIFO – first on first out), and you’d pay capital gains taxes on the difference between what you paid for the share and what it’s worth now, based on the capital gains tax laws in place 20 years from now.

You could also use an ‘average’ basis (not usually allowed for individual stocks but ok for ETFs). ‘Basis’ is the original price you paid for the investment.

[Watson]

Many people don’t invest because they think “TAXES” when in fact investing some years can help lower your tax burden. When you are investing you should take your statements to your tax preparer.

a good tax preparer doing it correct will help you avoiding paying what you are not obligated to pay. Without cheating.

The IRS isn’t going to tell you if you did it wrong in there favor.

Brokerage accounts- reported to irs and therefore you pay for those taxes every year. If you owe. It isn’t as common as you think.

Traditional Ira/401k – taxed at retirement based on your income.

Can be withheld if you chose to have it withheld.
Roth IRA/Roth 401k – taxes paid already.

Dividends- taxed differently if you have earned income versus no earned income. 0-20%.

You can earn up to about 40k (80k married) in dividends and pay zero 0% taxes.

But you can’t have earned income.

[Author]

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