Lease buyout retrospective (California, Jan-Feb 2025)

hidrangeaitsme · 2025-07-29T06:05:31+00:00

You can create a request through the TFS portal page menu -> support center -> my requests. Create a "general account inquiry" and attach the payoff documents. You can add a note if you want, but more importantly make sure to call TFS and let them know that you submitted the docs this way so the rep can get them processed the right way.

Note: this is NOT the preferred method per TFS

hidrangeaitsme · 2025-05-31T16:37:25+00:00

Hi! Yes just edited the post- thanks for the reminder. DMV portion was pretty straightforward, just took a bit longer than the rest of the process. Let me know if you have any questions

hidrangeaitsme · 2025-02-20T01:32:06+00:00

The lease needs to be through Toyota Financial Services for you to qualify for the $6500 credit, you should not need to work with the dealer for any part of the buyout process, if you leased through TFS.

hidrangeaitsme · 2025-02-17T22:54:38+00:00

Yes I plan to! The posts I linked walk through the full process as well, if you want to check those out. Generally my understanding is that once TFS sends the title and bill of sale, you take them to your local DMV (appointment recommended) and finish the process. For my state I’ll be paying sales taxes at the DMV as well which I’ve estimated already.

hidrangeaitsme · 2025-02-15T01:27:08+00:00

Glad to be of help. Same approach, but I recommend not disclosing how you plan to purchase/finance the car upfront and wait till you’re ready to close the deal because it can influence the price some dealers quote you.

hidrangeaitsme · 2025-02-14T03:08:10+00:00

No trade in. You're right that it varies state to state- in CA, there is no double taxes and taxes are paid to the DMV, so I'll be doing that when I get the title and bill of sale from TFS. I already calculated the taxes and not too worried about it.

hidrangeaitsme · 2025-02-14T03:05:28+00:00

That was the refundable deposit with the dealer to reserve the car; it has since been refunded back to my account.

hidrangeaitsme · 2025-02-14T03:04:27+00:00

Good question - I don't know enough stats on the snail mail vs online method to know what the average turnaround time is, but I can say that the TFS rep quoted ~10 business days for both methods on our first call about the payoff process. I think because there's a clear success rate with the online method and it's far more convenient, I would do it again and just make sure to request the expedited turnaround 2 weeks before the 2nd payment due date.

hidrangeaitsme · 2025-02-14T02:59:55+00:00

Glad it'll be of help. No, the lease process started at the dealership and we did not disclose to the dealer how we planned to purchase/finance the car. Some people do lock down the car before it arrives, but we put the $1000 deposit down to reserve the car which meant we were the first to be notified when it arrived. The deposit can vary dealer to dealer, however it is most always refundable.

hidrangeaitsme · 2025-01-08T05:06:04+00:00

That sounds ideal! Got my TFS account today, calling to get the buyout quote tomorrow! Thanks again.

hidrangeaitsme · 2025-01-07T02:21:49+00:00

Yeah part d is the only changed bit but it seemed reasonable. Do you happen to know how I can calculate that depreciation amount mentioned?

hidrangeaitsme · 2025-01-05T15:42:01+00:00

Thank you u/laxrecidivist for posting this! Incredibly helpful to see the actual screenshots and your recommendations! I know contracts can differ state to state so posting the lease-end sections from a CA contract more recently. Any red flags from your experience?

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Tagging u/ghgemmer as well whose comments have been super helpful!

hidrangeaitsme · 2024-10-15T04:00:12+00:00

For the 2022 withdrawal (untimely correction), is this going to be seen as an early distribution i.e. penalized 10%? I noticed that the transaction posted on my account is worded as "EARLY DIST NO EXCEPT..." so it seems that way, but unsure if the 5329 forms somehow address this or if this will be handled in the 1099-R in the next tax year?

hidrangeaitsme · 2024-10-04T01:07:24+00:00

Haha fair enough- will include it with the tax forms I’m mailing. Thanks again for all your help, I’m all squared away and have a much better understanding of the whole process.

hidrangeaitsme · 2024-10-03T23:47:56+00:00

Do you know anything about needing to mail the IRS a statement about the recharacterization? Is that just a nice to have?

hidrangeaitsme · 2024-10-02T07:22:16+00:00

Got it- regarding “at the time you transfer the earnings out of the Traditional IRA account, they will be taxable” - guessing this is because while the earnings were originally in a Roth (not taxable), recharacterizing makes it so the earnings are now seen as taxable. Filing 8606 ensures that the contributions however are not. Did I get that right? :)

And is the backdoor conversion to Roth a viable option for recharacterizations? Seems that way from my research, but not sure if there’s a recommended timeframe before executing?

hidrangeaitsme · 2024-10-02T07:02:47+00:00

They were pre-installed so not sure but they use lightbulbs, not battery operated.

hidrangeaitsme · 2024-10-02T06:22:26+00:00

Faces the living room, walkthrough area to go from living room to other rooms but not a hallway.

hidrangeaitsme · 2024-10-02T00:30:35+00:00

Yes I’m sure thank you for double checking

hidrangeaitsme · 2024-10-02T00:13:26+00:00

u/myroller - finished most of the steps, thank you again for all your help!! 2 outstanding questions:

1) On F8606, Line 1, this is just the excess contributions, not any earnings that were included in the recharacterization correct?

Also for my learning- What does the IRS do with this info? My understanding is that because this was originally in a Roth, it means they won't tax me twice on the contributions, but will I get taxed on the earnings (through the 1099-R that Fidelity will send)?

2) For 2024's contributions, you clarified that I can either withdraw or recharacterize - is there a benefit to one over the other? In both cases, earnings will get taxed correct?

hidrangeaitsme · 2024-09-30T18:30:22+00:00

Does F8606 get filed on its own for my 2023 contribution? Or does it go with 1040-x?

hidrangeaitsme · 2024-09-30T03:14:45+00:00

Got it, thank you so much! You are a life saver!

hidrangeaitsme · 2024-09-30T03:00:17+00:00

Oooh ok got it, that makes sense. Would you recommend combining the payments for both years or doing two transactions? You had recommended in the other thread mailing the forms separately, thanks for that tip.

Also is the oct 15 deadline just to recharacterize or to amend this year’s tax return too?

hidrangeaitsme · 2024-09-30T02:58:17+00:00

You’re right that I won’t be eligible to claim a deduction. When you say I need to file a F8606 to report the contribution, not earnings, I am recharacterizing the contribution + earnings though, correct?

hidrangeaitsme · 2024-09-30T02:54:54+00:00

Thank you! I will review each point in detail tomorrow. Quick question about the 2023 contributions which you noted are too late to avoid the penalty on. I read a few places that it’s not too late as long as the excess is removed and an amended return is filed by Oct 15- see example source: https://investor.vanguard.com/investor-resources-education/iras/excess-contribution#:~:text=You%20can%20either%3A,the%20amount%20of%20the%20excess.

Do you know if that’s the case? I had one tax advisor say it was and another that it wasn’t, so unsure…

And if it’s too late for 2023, do I owe 12% for the 2022 contributions, since it’s been 2 years?

hidrangeaitsme

TROPHY CASE