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I understand it's not available for crypto (and for stocks), I just wish that weren't the case. Also if I have to report every single 401k purchase I ever made
by cableshaft 5y ago
I understand it's not available for crypto (and for stocks), I just wish that weren't the case.
Also if I have to report every single 401k purchase I ever made when I'm in my 70s when I finally cash some of it out, that's going to be a pain in the butt (I assume 401k is an exception to the rules). I basically treat my crypto purchases as another form of 401k right now (without the penalties).
- klodolph 5y agoWith stocks, your broker just sends you a 1099 at the end of the year. It includes the cost basis of all the stock you sold that year and the date of purchase. If you sell a lot of stocks, you just get it as a CSV file and stick it into your tax software. This means paying for tax software, and probably a "higher-tier" version of it, but it's not much work. The 401k works differently, as you noted. The money goes in pre-tax and then you pay income tax when you take it out. It's basically a way to defer your income, let it grow in the stock market, and pay taxes later. Roth IRA is a little similar--you pay income taxes before you put the money in, you let it grow, but you can take the money out tax-free (subject to conditions).
- jdavis703 5y agoWhen you’re 70 you’re not going to buy a latte from your 401k. Instead you’ll transfer the money into a regular bank account (say once a month). At the end of the year you’ll get a tax form form that lists out all your 401k withdrawals.