My wife and I are about to invest in some mutual funds. What we are concerned about is who should be first on the forms. She is a legal, resident, alien, and I am a U.S. citizen. Does it really matter who goes first? We share the same bank accounts, etc.
Also, are these reported to any credit agencies to make us look better? Is there really a difference as far as IRS reporting goes if one or both of us are on the funds? Like, should she just be on them since she makes less? Or, both of us?
Should we reinvest any gains? Or, just directly into our bank account? Are any of the gains taxed if its immediately reinvested or only if it goes to our bank account.
Capital gains and dividend distributions are taxed either way. Whether or not you want to reinvest them is up to you, but if you aren’t using the funds for generating income that you intend to use, reinvesting them is probably the easiest thing to do. It saves you from having to periodically pick up the money and invest it yourself, and, presumably, the mutual fund is expected to offer a better return than your bank account. The only complication is that you will then have an adjusted cost basis when you eventually sell the mutual fund shares, and possibly a combination of short and long term gains from the sale, but your broker will give you an appropriate statement fro your taxes.
I’m presuming, of course, that this is a non-sheltered account, or you are buying direct from the fund company. Taxes don’t apply, for instance, to an IRA, but having the payouts placed into your bank account would not be an option.