I'm so sorry for your loss, Jasmine. Dealing with financial decisions during grief is incredibly difficult, and you're asking all the right questions. From what you've described, you'll owe ordinary income tax on about $77,500 (the gain over the $32,000 cost basis). Unfortunately, you cannot roll this into your Roth IRA - that option only exists for qualified retirement accounts, not non-qualified annuities like this one. Given your current income situation with a stable government job, the stretch payments over 5 years will almost certainly be more tax-efficient than taking the lump sum. Taking $77,500 in additional income all at once could push you into a higher tax bracket, whereas spreading it out helps manage your tax liability. A few practical considerations: - Check if your annuity company charges fees for stretch distributions (some do, some don't) - Consider timing larger distributions in years when you might have tax deductions or lower income - You can adjust distribution amounts annually as long as everything is withdrawn by the 5-year deadline - Since you're already contributing to a 457b, you could potentially increase those contributions in higher distribution years to offset some tax impact Before making your final decision, I'd recommend getting a consultation with a fee-only financial advisor who can run the specific numbers for your tax situation. Many charge $200-400 for a one-time consultation, which is well worth it given the amount involved. Take your time with this decision - you don't need to rush, and the 5-year window gives you flexibility to plan strategically.

I'm so sorry for your loss, Jasmine. Having gone through a similar situation with my grandmother's non-qualified annuity two years ago, I completely understand how overwhelming this can feel during an already difficult time. From your description, you're looking at taxable income of about $77,500 ($109,500 - $32,000 basis). The key thing to understand is that this will be taxed as ordinary income, not capital gains, so your marginal tax rate will apply to the full gain amount. Given that you're 34 with a stable government job earning what sounds like a moderate income, the stretch payments over 5 years will almost certainly be your best option. Taking the full amount in one year could easily bump you into the 22% or even 24% tax bracket, whereas spreading it out should help keep you in a lower bracket overall. A few things that helped me navigate this: - The annuity company should provide projections showing different distribution schedules - You can typically adjust the amounts each year (bigger in some years, smaller in others) as long as everything is withdrawn by the 5-year deadline - Consider coordinating with your 457b contributions - you could increase those in years when you take larger distributions to help offset the tax impact Before you decide anything, definitely get a consultation with a fee-only financial advisor who can run the actual numbers for your specific tax situation. Given the amount involved, spending $300-500 on professional advice could save you thousands in taxes. Take your time with this decision - you have the 5-year window, so there's no need to rush into anything while you're still processing your loss.

Slightly different take - I've been a FreeTaxUSA user for years and they actually have a feature that lets you enter multiple 1099-INTs from the same institution but keeps them as separate line items on the final Schedule B. Look for the "Add Another Interest Payer" button after you enter the first one, and make sure to use the same payer name but fill in the amounts from each form separately.

Great discussion everyone! Just wanted to add that if you're using FreeTaxUSA and decide to enter them separately (which I agree is the safest approach), make sure to double-check that the software isn't automatically combining entries from the same payer. I've seen tax software sometimes consolidate entries behind the scenes, which could create the exact matching issue you're trying to avoid. Also, keep copies of all your 1099-INT forms even for small amounts. If you do get a notice later, having the original documents makes resolving any discrepancies much easier. The IRS automated matching system can sometimes flag things that look perfectly fine to a human reviewer. For $6 in interest, you're probably overthinking it, but your cautious approach will definitely save you potential headaches down the road!

Emma, your timing is perfect - the market for former IRS agents has never been stronger! I made the transition from Revenue Agent to senior tax manager at a Fortune 500 company about 3 years ago, and it's been incredible. One path that hasn't been mentioned much here is going directly into corporate tax departments. Large companies are always looking for people who understand IRS procedures and can help them manage audit risk proactively. Your 7 years of audit experience means you know exactly what triggers examinations and how to structure documentation to minimize issues. The corporate route offers some unique advantages - typically better work-life balance than public accounting, comprehensive benefits that rival government packages, and clear advancement paths. My role involves tax planning, compliance oversight, and serving as the primary contact when we do get audited. Having been on the other side of those conversations gives me a huge advantage in managing relationships with examining agents. Salary-wise, I saw about a 50% increase from my GS-13 pay, plus annual bonuses and stock options. The key is positioning yourself not just as someone who knows tax law, but as someone who understands IRS operations and can help the company avoid problems before they start. Don't let the plateau discourage you - your experience is incredibly valuable in the private sector. The transition might feel daunting, but companies recognize the quality of IRS training and the depth of knowledge you bring. Good luck with whatever path you choose!

Emma, I can definitely relate to feeling plateaued in government work! I made the switch from IRS Revenue Agent to a boutique tax consulting firm about 2 years ago and it's been one of the best decisions of my career. What really helped me was networking with other former IRS employees who had already made the transition. They gave me realistic expectations about the adjustment period and helped me understand which firms truly value our background versus those just looking for warm bodies during busy season. One thing I wish I'd known earlier - don't undersell your investigative and analytical skills. Private firms love that we know how to dig deep into complex financial situations and follow paper trails. That experience goes way beyond just knowing the tax code. My advice would be to start networking now, even before you're ready to leave. Attend local tax professional meetings, reach out to former colleagues who've left the IRS, and maybe even consider getting your CPA if you don't already have it. The transition takes time, but your experience is definitely valued in the private sector. Feel free to reach out if you want to discuss specific firms or have questions about the interview process. The government-to-private transition can feel overwhelming, but you've got skills that are in high demand right now!

One additional consideration that might help with your decision: if you're planning to reinvest the proceeds from your loss sales, think about the broader market timing aspect. Since you mentioned you're "cleaning up your portfolio," this could be a good opportunity to not just harvest losses but also rebalance toward investments you actually want to hold long-term. For the short-term vs long-term loss question specifically - if you're truly torn between which losses to realize and don't have gains to offset, I'd lean toward taking the short-term losses first. Here's why: those positions haven't had much time to potentially recover, and if you're already unhappy with them after less than a year, they might be the weaker investments anyway. Also, if any of those short-term losers are individual stocks (vs diversified funds), selling them removes company-specific risk from your portfolio. You can always reinvest the proceeds in broader market funds after waiting out the wash sale period. Just make sure to document everything well for tax time - keep records of your purchase dates, sale dates, and the specific tax lots you're selling, especially if you're doing any tax-loss harvesting across multiple positions.

Most major brokerages like Fidelity, Schwab, and Vanguard will provide you with a 1099-B form that has all your sales data, but I'd still recommend keeping your own spreadsheet as a backup and for planning purposes. Here's what I track in my own loss harvesting spreadsheet: purchase date, purchase price, sale date, sale price, holding period (ST/LT), and the specific reason I sold (tax loss harvesting vs portfolio rebalancing, etc.). This helps me stay organized during tax season and also helps me learn from my investment decisions. The brokerage 1099-B will have the legally required info, but having your own records helps you double-check their math and gives you better visibility into your overall tax strategy. Plus, if you're selling specific tax lots (like selling your highest-cost shares first), you want to make sure the brokerage processed those instructions correctly. One more tip since you mentioned individual stocks - consider setting up a "watchlist" of the stocks you're selling so you can monitor them during the 31-day wash sale period. Sometimes seeing how they perform after you sell them helps reinforce whether it was a good decision or teaches you something for next time. Just don't let FOMO trick you into buying back too early and triggering the wash sale rule!

This is such a valuable thread! I'm dealing with the exact same situation right now - been on F1 OPT for 8 months and my employer has been withholding about $250/month in FICA taxes despite me bringing it up multiple times. What's really frustrating is that my company's HR department keeps saying "we treat all employees the same" and doesn't seem to understand that this is actually a legal requirement, not just a preference. I've shown them my I-94 and EAD card, but they keep insisting their payroll system "doesn't have options" for tax exemptions. Reading through all these responses, it sounds like the key is really pushing back with official documentation and framing it as a compliance issue rather than just a student request. I'm definitely going to try the comprehensive packet approach that @ca96349f75f6 mentioned - seems like having everything in one official-looking package makes a huge difference. Has anyone had success with larger corporations (Fortune 500 type companies)? I'm wondering if bigger companies are more resistant to making these changes because they have more bureaucracy, or if they're actually easier to work with because they have more sophisticated payroll systems.

I've been following this thread closely as I'm dealing with the exact same FICA withholding issue on my F1 OPT! Just wanted to share what finally worked for me after months of back-and-forth with my employer. The breakthrough came when I stopped focusing on HR and went directly to our company's external payroll vendor (in our case, it was Paychex, not ADP). I called their customer support line and explained that my employer needed to set up a FICA exemption for a non-resident alien employee. The Paychex rep immediately knew what I was talking about and walked me through exactly which tax codes needed to be changed. They even offered to do a three-way call with my HR department to walk them through the system changes! Turns out there's literally a checkbox in their system for "NRA FICA Exempt" that my HR team had never noticed. The whole thing was resolved within one business day once we got the payroll vendor involved. I think sometimes company HR departments just don't know their own payroll systems well enough to handle these specialized situations. For anyone still struggling with this, I'd definitely recommend bypassing HR and going directly to whatever payroll service your company uses. Most of these vendors (ADP, Paychex, Gusto, etc.) have dealt with this exact situation thousands of times and can guide your employer through the process much more effectively than trying to figure it out internally.