What day in December is good to calculate taxes?

[UpQuark]

Will all capital gains distributions and dividends be declared by 10 days before the end of December?

In my estimated tax payments I've planned on a certain amount of capital gains but I have left some room for the funds in my taxable account to potentially have cap gain distributions. If none happen (none have happened for the last two years) what day in December would I be able to know I can sell some stock to use up the rest of my budgeted cap gains?

 

[scrabbler1]

I don't know how every brokerage company does it, but the two I view post the dates and estimates of their December cap gain distributions around the end of October. They are only estimates, and they have sometimes been very wrong. But the distribution dates, something they do know well in advance, have been correct. We usually have a thread where us members post links to the pages which have these estimates (I know I have posted to them, maybe even started some of them, I don't recall).

Some of these distributions have been made pretty close to the end of December, giving me little time to make any big moves in the last few business days of the year, especially with Christmas and weekends taking up those precious days on the calendar.

One big reason I wanted to know what the actual distribution ended up being was my desire to make an estimated state income tax payment before 12/31 so I could still deduct it on that year's federal tax return instead of waiting a whole year. After the feds doubled the standard deduction starting in 2018, I have not had to itemize my deductions any more.

 

[SevenUp]

Although you may get the total dividend amount, the split between qualified and non-qualified won't be available until Jan. or Feb.

Using the previous year's split for an estimate is usually good enough.

 

[Koolau]

Although you may get the total dividend amount, the split between qualified and non-qualified won't be available until Jan. or Feb.

Using the previous year's split for an estimate is usually good enough.

Yeah, I rarely think about taxes until all my tax forms arrive (mailed by Jan 31, supposedly.) Used to have to wait for K-1 for the Family Business but not any more. I'm totally out of that now. Thank goodness.

 

[audreyh1]

It really depends on your funds. I still have some monthly dividends paid on Dec 31 and I have to estimate those.

I usually see all the estimates for cap gains distributions by mid Nov, so I have some idea then, but unfortunately Fidelity does not estimate dividends for their funds. However, my Fidelity funds (except for bond funds) have usually paid out by Dec 15-18 or thereabouts.

I usually get a foreign tax credit from my two international funds and those are never estimated in advance and I don’t know until Jan. This actually increases my taxable income but I don’t know Roth at until Jan either. I just have to leave some space for this major annoyance.

Although you may get the total dividend amount, the split between qualified and non-qualified won't be available until Jan. or Feb.

Using the previous year's split for an estimate is usually good enough.

That’s what I do.

 

[Al18]

Most brokers don’t send the tax forms until 2/15.

 

[braumeister]

I admire the folks who try to plan down to the dollar, but back when I tried to get close I usually got smacked with something unexpected at the end of December. So I don't try any more, I just plan to keep to around 98% at most of what I expect.
When you base your plan on a particular tax bracket or IRMAA bracket, any surprise can be extremely unpleasant.

 

[SecondCor521]

I use the calendars mentioned by scrabbler1 to figure out when my last distribution will be. It's usually around 12/22 for me but varies slightly from year to year. It's easy enough because I only have two funds in my taxable account and they're both at the same brokerage firm.

I usually sit down some time in December to do my YTD taxes and most of my Roth conversion. After my last distribution and double- and triple-checking my numbers, I'll do my final Roth conversion.

I actually over convert by some modest amount. Then in the spring, after I get all the official tax documents, I make an HSA contribution to dial my AGI back down to the exact dollar amount I want. If you are eligible, you can do a similar thing with deductible traditional IRA contributions.

 

[jebmke]

Most brokers don’t send the tax forms until 2/15.

Perhaps. I just checked my last two VG brokerage statements (2022 and 2023) -- 1/25 and 1/23 respectively. A lot depends on what you hold. If common stocks and VG funds/ETFs it will come at the end of January. If they are dependent on other fund companies for tax info, February typically.

 

[CardsFan]

I admire the folks who try to plan down to the dollar, but back when I tried to get close I usually got smacked with something unexpected at the end of December. So I don't try any more, I just plan to keep to around 98% at most of what I expect.
When you base your plan on a particular tax bracket or IRMAA bracket, any surprise can be extremely unpleasant.

I'm with you. I would much rather be 5%-10% below the IRMAA limit than 0.01% over

 

[RetMD21]

32nd

 

[scrabbler1]

Besides having to estimate the split between qualified and non-qualified dividends within the dividend distributions, trying to figure out the split between dividends and non-dividend distributions from some mutual funds has been another annoyance I have encountered when trying to estimate the tax bill for my (snake-bit) friend's portfolio. I found monthly financial reports on line for those funds which indicated the splits between dividend distributions and non-dividend distributions.

My friend sold off all the shares he had in those 3 funds back in June, so not only is there less income at stake this year but I won't have to worry about this next year.

 

[audreyh1]

Besides having to estimate the split between qualified and non-qualified dividends within the dividend distributions, trying to figure out the split between dividends and non-dividend distributions from some mutual funds has been another annoyance I have encountered when trying to estimate the tax bill for my (snake-bit) friend's portfolio. I found monthly financial reports on line for those funds which indicated the splits between dividend distributions and non-dividend distributions.

My friend sold off all the shares he had in those 3 funds back in June, so not only is there less income at stake this year but I won't have to worry about this next year.

This doesn’t affect IRMAA, so for the December number I don’t need to worry about qualified dividends.

I leave a pretty generous headroom for IRMAA enough to have space for the extra foreign source income, etc.

 

[TheWizard]

I "worry" about what my AGI will be for the year in December, not what my income taxes will be.

Vanguard makes it easy by having estimates of dividends for the index funds I hold I my taxable account.

And I make it easy by not holding any managed funds in my taxable account...

 

[TheWizard]

I'm with you. I would much rather be 5%-10% below the IRMAA limit than 0.01% over

You can do as you want, but 10% below an IRMAA threshold is quite a bit of foregone Roth conversion.

I use The Finance Buff's page for managing my 2024 AGI for 2026 IRMAA: 2024 2025 2026 Medicare Part B IRMAA Premium MAGI Brackets

Right now, the projected AGI limit for remaining in the 2.6x IRMAA tier is $202k, filing single, assuming zero future inflation. That might change by $1k or so by mid December, we'll see.
I've typically done Roth conversions to get my AGI to within about $2k of that threshold successfully, which is about a 1% tolerance.

I'm aware that some folks will have more uncertainty in their AGI for the year than I do...

 

[orbops]

I check on the estimated dates for any mutual funds, and for stocks/funds I look at the previous year's date to give me a good estimate. I will do my yearly Roth conversion probably early December based on last year's estimates, and if all the dates for capital gains/dividends are before Christmas, I may do a minor Roth conversion on the 30th of December.

 

[camfused]

Op, why not just follow the Safe Harbor rule and pay 110% of your prior year's taxes. IRS is happy and no penalty if you are short.

 

[jsncpa]

32nd

Yep, at 2:33 pm.

 

[audreyh1]

So I’ve cataloged all my expected estimated distribution dates although I won’t get the all the values until Nov 15.

Distributions are being paid later this year. It looks like many are being paid on Dec 20 whereas last year it was Dec 15. I won’t have much time to finish estimating my MAGI especially with family visiting Xmas week!

My first pass without all the mutual fund estimates- using last years values for a few and guesstimating Fidelity dividends - I’m definitely moving up an IRMAA level for 2026, just hoping it’s not worse. I know, first world problem!

 

[audreyh1]

Op, why not just follow the Safe Harbor rule and pay 110% of your prior year's taxes. IRS is happy and no penalty if you are short.

That is no help on trying to avoid going up an IRMAA level. Any last minute moves have to be settled by Dec 31.

I have until (close to) Jan 15 to estimate my taxes.

 

[SecondCor521]

My first pass without all the mutual fund estimates- using last years values for a few and guesstimating Fidelity dividends - I’m definitely moving up an IRMAA level for 2026, just hoping it’s not worse. I know, first world problem!

If you've already busted through an IRMAA level, it can make sense to do an additional Roth conversion, perhaps closer to the top of that next IRMAA tier (or maybe the 24% bracket or another break point).

My Dad is in this situation. I was hoping he would be just under and I could do a small Roth conversion. But he's going to be over, and there's nothing we can do, so now the question is whether to Roth convert in that next section of income.

 

[DrRoy]

We don't get all of our numbers until mid-February.

 

[big-papa]

Will all capital gains distributions and dividends be declared by 10 days before the end of December?

In my estimated tax payments I've planned on a certain amount of capital gains but I have left some room for the funds in my taxable account to potentially have cap gain distributions. If none happen (none have happened for the last two years) what day in December would I be able to know I can sell some stock to use up the rest of my budgeted cap gains?

Start by going to the providers of the funds you own to find out what their projected distribution dates are. Mine typically do their distributions in Mid December giving me a good couple of weeks to wrap things up.

Cheers.

 

[audreyh1]

If you've already busted through an IRMAA level, it can make sense to do an additional Roth conversion, perhaps closer to the top of that next IRMAA tier (or maybe the 24% bracket or another break point).

My Dad is in this situation. I was hoping he would be just under and I could do a small Roth conversion. But he's going to be over, and there's nothing we can do, so now the question is whether to Roth convert in that next section of income.

At this point it’s not clear whether I have room to bring any more income forward into 2024 until after Dec 20. Maybe a little - rather tight.

 

[Midpack]

Depending on where your assets are, it's not that hard to reasonably predict what your qualified dividends will be. I'm with Vanguard and I can see the dividend schedule and % qualified for each fund I hold well ahead of December. My final IRS estimated tax payment is mid Jan, and I will know exactly what my dividends will be before Jan 1, so I can calculate what my qualified dividends will be almost exactly - as I have successfully for several years.

https://personal1.vanguard.com/pdf/PIDIVDAT_2024.pdf

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