As a newcomer to this community, I'm incredibly impressed by the depth and quality of advice being shared here! Reading through this entire thread has been like getting a masterclass in Roth 401k withdrawal strategies. @Giovanni Mancini - your situation really highlights how different Roth 401k rules are from what most people expect. I had always assumed they worked similarly to Roth IRAs, but the pro-rata rule completely changes the game for early withdrawals. The staged approach that several people mentioned (loan first, then rollover for the remainder) seems like it could be your best bet if your plan allows it. What struck me most was @Connor O'Neill's success with the in-service rollover - that could potentially save you thousands in taxes and penalties if your employer permits it. Given the complexity everyone's outlined and the substantial amount you need ($120K), I'd echo the advice about getting professional help. The difference between a well-executed strategy and just taking a straight withdrawal could easily be worth tens of thousands of dollars. One question I haven't seen addressed - when you do speak with your plan administrator, would it be helpful to have a list of specific questions prepared based on all the strategies mentioned here? It seems like getting comprehensive information in one conversation could save multiple follow-up calls and help you evaluate all your options more efficiently. Thanks to everyone for sharing such detailed insights - this thread should be required reading for anyone considering early Roth 401k withdrawals!

As a newcomer to this community, I have to say this thread has been incredibly educational! The complexity of Roth 401k early withdrawals is way beyond what I initially understood. @Giovanni Mancini - after reading all these expert responses, it's clear you have several potentially viable paths, but the devil is really in the details of your specific plan. The pro-rata rule is definitely going to be your biggest challenge, but the rollover strategy that @Connor O'Neill successfully used could be a game-changer if your employer allows in-service distributions. What I find most valuable about this discussion is how it highlights the importance of understanding your specific plan's provisions rather than relying on general rules. The fact that some plans have unique hardship provisions, different loan structures, or special rollover options really emphasizes why that first call to your plan administrator is so critical. Given the substantial amount you need ($120K) and the potential tax implications with the pro-rata rule, I'd strongly echo the advice about getting professional guidance. The staged approach combining a loan with a strategic rollover seems like it could minimize your tax hit significantly, but the timing and execution details will be crucial. Have you been able to reach out to your plan administrator yet to start gathering the specific information about your plan's options? That seems like the logical first step before you can evaluate which of these strategies might work best for your situation.

Quick question - I paid for my spring 2025 semester tuition in December 2024. Do I claim that on my 2024 taxes (filing now in 2025) or on next year's taxes? My 1098-T is confusing me because the amounts don't match what I actually paid during the calendar year.

One thing that helped me a lot when dealing with my 1098-T was understanding that you don't have to use the amounts exactly as shown on the form. The IRS allows you to use either the amounts on the 1098-T OR your actual payment records, whichever is more accurate for your situation. In my case, my school's 1098-T showed different amounts than what I actually paid because of timing differences with financial aid disbursements. I kept all my tuition payment receipts and was able to use those actual amounts instead. This is especially important if you made payments across different tax years or if your school's accounting doesn't match your payment schedule. Also, don't forget that you can claim required course materials even if you bought them from Amazon or other retailers - just make sure you can prove they were required for your courses. I saved all my course syllabi that listed required textbooks and supplies, which helped justify those expenses.

Has anyone here actually TRIED switching from life-expectancy to 10-year rule? My uncle (who's an EDB due to disability) started with life-expectancy method last year but now wants to switch to 10-year rule for tax planning reasons. His financial advisor says it's not allowed but I've read conflicting info online.

Based on my experience working with inherited IRAs, yes, as an EDB you can choose either the life-expectancy method or elect the 10-year rule. However, I want to clarify something important that seems to have caused some confusion in the comments above. Once you make your initial election and begin taking distributions under either method, you generally cannot switch between them. So if you start with life-expectancy distributions, you're typically locked into that method going forward. The comment suggesting you can switch from life-expectancy to 10-year rule later appears to be incorrect based on current IRS guidance. Given that you're chronically ill and qualify as an EDB, you have a valuable benefit in the life-expectancy option that most beneficiaries don't get. I'd strongly recommend running detailed projections under both scenarios before making your decision, considering factors like your current tax bracket, expected future income changes, and the size of the inherited IRA. Since this is a one-time choice with potentially significant long-term tax implications, it might be worth getting a second opinion from a tax professional who specializes in retirement accounts and SECURE Act provisions.

11 I was in the same boat last year and researched all the options. Here's the simplest explanation: 1) Single-member LLC (default): File Schedule C with your personal return. Only the profit hits your personal income, but all details are on Schedule C. 2) LLC with S-Corp election: File Form 1120-S (separate business return) AND report profits on your personal return via Schedule K-1. More separation but more complexity. 3) LLC with C-Corp election: Completely separate business return with separate taxation. Highest separation but potential double taxation and highest complexity. For most small business owners, option #1 is simplest and most cost-effective. The business activity IS separate (on Schedule C) even though it's attached to your personal return.

One thing to add that might help with your mental separation - even though your LLC taxes flow through to your personal return via Schedule C, you should still maintain completely separate bank accounts and credit cards for your business. This creates a clear paper trail and makes tracking business expenses much easier. I'd also recommend keeping a simple spreadsheet or using accounting software to track your business income and expenses throughout the year. This way, when tax time comes, you'll have everything organized and won't have to scramble to separate business from personal transactions. The key insight that helped me was realizing that Schedule C IS your business tax return - it just happens to be attached to your personal 1040. All your business details, deductions, and calculations are isolated on that schedule, giving you the separation you want while keeping things simple from a filing perspective. Good luck with your first year of business taxes!

Something everyone's missing - if you win under like $600 at blackjack, the casino doesn't report it to the IRS so nobody would ever know if you didn't report it. Just saying... the IRS has bigger fish to fry than someone who won $270 playing cards lol

I just went through this exact situation last year! Won about $400 at a poker tournament and was totally confused about reporting it. Here's what I learned: Yes, you technically need to report ALL gambling winnings as income, even your $270. The threshold for casinos to issue a W-2G is $1,200+ for most table games, but that's just when THEY have to report it - you still owe taxes on smaller amounts. For your situation, report it as "Other Income" on Schedule 1 of Form 1040. The tricky part is you can deduct gambling losses against winnings IF you itemize deductions (not just take the standard deduction). So if you lost money gambling elsewhere during the year, keep those records! Honestly, for $270 the practical risk is low, but it's better to be safe than sorry. Plus once you start reporting gambling income properly, you'll be prepared if you ever hit bigger winnings in the future. Just make sure to keep better records going forward - date, location, amount won/lost, type of game. Your phone camera is your friend for documenting everything!