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Re: Transfer from Vanguard I401k to Rollover IRA?

One downside is that assets in Rollover IRA will trigger the IRA prorata calculation if you need to use the backdoor into Roth IRA.
by DSInvestor
Fri Mar 27, 2015 11:23 pm
 
Forum: Investing - Theory, News & General
Topic: Transfer from Vanguard I401k to Rollover IRA?
Replies: 1
Views: 140

Re: How are qualified dividends taxed?

Taxcaster is useful for estimating the federal tax which could be quite low as livesoft's numbers show. However your state will probably not give your QDI any preferential tax treatment and tax it as ordinary income.
by DSInvestor
Fri Mar 27, 2015 7:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: How are qualified dividends taxed?
Replies: 6
Views: 611

Re: Completed taxes, need to file new Fed & State W4

IRS Pub 15 has lots of information on tax withholding with tables.
http://www.irs.gov/pub/irs-pdf/p15.pdf
Jump to page 43.
by DSInvestor
Fri Mar 27, 2015 10:21 am
 
Forum: Personal Finance (Not Investing)
Topic: Completed taxes, need to file new Fed & State W4
Replies: 10
Views: 647

Re: Contribute to Traditional IRA?

Was she covered by an employer plan at work for 2014? If MAGI for Traditional IRA purposes exceeds 70K, no deduction for Traditional IRA contributions is allowed. Full deduction allowed if MAGI < 60K. These numbers are for a single filer. If not covered by an employer plan, full Traditional IRA dedu...
by DSInvestor
Thu Mar 26, 2015 11:27 am
 
Forum: Personal Finance (Not Investing)
Topic: Contribute to Traditional IRA?
Replies: 7
Views: 278

Re: Ad Valorem tax on new car

I believe the new ad velorum tax replaces the sales tax and the yearly ad velorum tax. Schedule A - Itemized Deductions is the place where you would itemize state sales/income tax and personal property tax. Schedule A allows you to deduct either state income tax or State Sales tax. If you claim the ...
by DSInvestor
Thu Mar 26, 2015 9:49 am
 
Forum: Personal Finance (Not Investing)
Topic: Ad Valorem tax on new car
Replies: 8
Views: 859

Re: Is my income tax too high?

I could be better about some things, like keeping track of sales taxes. The sales tax deduction may work well if you don't have a state income tax. If you didn't save your receipts, you can use the general sales tax table method which uses your income and your exemptions to come up with a sales num...
by DSInvestor
Wed Mar 25, 2015 10:36 pm
 
Forum: Personal Finance (Not Investing)
Topic: Is my income tax too high?
Replies: 8
Views: 1223

Re: One single investment in a taxable account

For whatever reason, I have for the most part been uncomfortable holding equity funds. That's why I have gone to balanced funds. It has allowed me to stay in the market during its many ups and steep downs. Most folks would suggest Total Stock Market for your relatively small taxable account as it i...
by DSInvestor
Wed Mar 25, 2015 1:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: One single investment in a taxable account
Replies: 10
Views: 1157

Re: Need Help with Portfolio

Hello DSInvestor, Clearly, i need education on expense ratios :happy Is this your suggestion ? --> Open Roth IRA with Vanguard, transfer funds and invest in Admiral Shares When one is investing in index funds it is easy to compare funds. For funds that track the same index, the fund with the lower ...
by DSInvestor
Wed Mar 25, 2015 12:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Need Help with Portfolio
Replies: 4
Views: 319

Re: Need Help with Portfolio

You cannot add the expense ratios for all the funds. You should take a weighted average. For example your AA calls for: 60% Stocks - Vanguard Total Stock Market Index er=0.05% 40% Bonds - Vanguard Total Bond Market Index er=0.08% The expense ratio for the portfolio is weighted average = (0.6 X 0.05%...
by DSInvestor
Wed Mar 25, 2015 11:57 am
 
Forum: Investing - Help with Personal Investments
Topic: Need Help with Portfolio
Replies: 4
Views: 319

Re: Which Bond Fund should I use?

What funds are available in your 401k? Total stock market index fund, non-us global fund and bond market fund are all available (through Fidelity) in my 401k Hold the entire bond allocation in the 401k using a total bond market index fund. Does your 401k have the Fidelity Spartan US Bond Index fund...
by DSInvestor
Wed Mar 25, 2015 11:43 am
 
Forum: Investing - Help with Personal Investments
Topic: Which Bond Fund should I use?
Replies: 12
Views: 1192

Re: Which Bond Fund should I use?

What funds are available in your 401k? Total stock market index fund, non-us global fund and bond market fund are all available (through Fidelity) in my 401k Hold the entire bond allocation in the 401k using a total bond market index fund. Does your 401k have the Fidelity Spartan US Bond Index fund?
by DSInvestor
Tue Mar 24, 2015 8:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Which Bond Fund should I use?
Replies: 12
Views: 1192

Re: Not maxing out 401k and/or Roth to retire by 45-50?

If you will not have a defined benefit pension that starts in your 40s, you will need substantial assets to retire at age 45. The savings rate required to accumulate those assets may be much larger than what is allowed for tax advantaged plans. Tax advantaged space can vary significantly depending o...
by DSInvestor
Tue Mar 24, 2015 8:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: Not maxing out 401k and/or Roth to retire by 45-50?
Replies: 8
Views: 1483

Re: Solo 401k Question

Please help me get this straight. I have W2 income and contribute $18,000 to a company 401k. I also have a LLC producing Schedule C income. Can I contribute up to $53,000 into a solo 401k and write it off as a business expense for the LLC? Solo 401k allows for two types of contributions: 1. Employe...
by DSInvestor
Tue Mar 24, 2015 7:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: Solo 401k Question
Replies: 4
Views: 283

Re: Are simple Ira contributions taxed?

SIMPLE-IRA contributions are pre-tax. They will reduce your Fed and state income tax. They will not reduce your payroll taxes (social security/medicare). If your SIMPLE-IRA has high cost investment options, I believe there is a rule that allows rollover to another IRA after two years in the plan. ht...
by DSInvestor
Tue Mar 24, 2015 7:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: Are simple Ira contributions taxed?
Replies: 4
Views: 340

Re: solo 401k contributions

For an S-Corp with W-2 salary, the employee salary deferral must be withheld from the paycheck. If she waits until say December to make the employee contribution, she must make sure the december paycheck can support the 18K 401k contribution, payroll tax, and income taxes. Employer contributions are...
by DSInvestor
Tue Mar 24, 2015 11:22 am
 
Forum: Investing - Help with Personal Investments
Topic: solo 401k contributions
Replies: 4
Views: 356

Re: Total International Stock Index includes small caps or n

Vanguard Total International does include small cap. According to Morningstar:
29 26 23 Large cap
07 05 05 Mid cap
02 01 01 Small cap

Vanguard's FTSE All World ex-US VFWIX/VFWAX/VEU ETF does not include small caps:
33 29 26 large cap
05 04 04 mid cap
00 00 00 small cap
by DSInvestor
Tue Mar 24, 2015 12:28 am
 
Forum: Investing - Theory, News & General
Topic: Total International Stock Index includes small caps or not?
Replies: 9
Views: 1294

Re: Dividend timing

At vanguard.com, look up each fund and click on distributions tab. Here's a link to TSM's distributions tab where you will see the distribution dates from last 18 months: https://personal.vanguard.com/us/funds/snapshot?FundId=0585&FundIntExt=INT#tab=4 I believe most vanguard bond mutual funds di...
by DSInvestor
Mon Mar 23, 2015 11:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Dividend timing
Replies: 2
Views: 404

Re: Should I recharacterize 2014 Roth contributions?

Do you want the Traditional IRA tax deduction? Are you even eligible for the Traditional IRA tax deduction? If you're not eligible for the Traditional IRA tax deduction, you should keep your Roth IRA contribution. Roth IRA contribution beats non-deductible contribution to Traditional IRA any day. If...
by DSInvestor
Mon Mar 23, 2015 6:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: Should I recharacterize 2014 Roth contributions?
Replies: 7
Views: 346

Re: Exchange option in Vanguard

Any exchange out of that fund held in the taxable account will trigger capital gains tax event. The point of the MMF in the IRA to minimize the fluctuation in value from the time of the TIRA contribution to the Roth conversion . If you contributed $5500 to TIRA and it grows to 6000 before the conver...
by DSInvestor
Mon Mar 23, 2015 12:41 pm
 
Forum: Personal Finance (Not Investing)
Topic: Exchange option in Vanguard
Replies: 4
Views: 402

Re: Exchange option in Vanguard

Hi, I'm thinking of moving some funds from my Vanguard account and would like some advice from the experts. I have an account that I invested $30K in tax-managed balance fund in 2013. Today the account has grown to $38K without putting additional money since opening. Can I use the Exchange option a...
by DSInvestor
Mon Mar 23, 2015 12:14 pm
 
Forum: Personal Finance (Not Investing)
Topic: Exchange option in Vanguard
Replies: 4
Views: 402

Re: determining cost

Yes. Each purchase and each reinvestment of dividends/capital gains distribution will be a tax lot with a cost basis for those shares acquired. When you sell shares, your brokerage firm will allow you to select which tax lot to sell.
by DSInvestor
Mon Mar 23, 2015 11:58 am
 
Forum: Investing - Help with Personal Investments
Topic: determining cost
Replies: 1
Views: 159

Re: 401k to backdoor Roth

Let's say I have $12000 in a 401k with horrible fees. I'd like to transfer it to a Roth IRA at vanguard. So I rollover into a traditional Ira. Then when I do the backdoor Roth for $5500, how will the rest of the $6500 be affected? If the 12K in the 401k is from employee salary deferral contribution...
by DSInvestor
Mon Mar 23, 2015 11:40 am
 
Forum: Investing - Help with Personal Investments
Topic: 401k to backdoor Roth
Replies: 8
Views: 836

Re: Does it make sense to pay off this mortgage?

You indicated that you're contributing 17.5% to 401k, 403b, IRAs. What are your annual contributions in dollars to retirement plans? Are you contributing to Roth or Traditional 401k/403b? Your mortgage interest rate is quite low. I suggest maxing out Tradtional 401k/403b first and then attacking th...
by DSInvestor
Mon Mar 23, 2015 10:29 am
 
Forum: Personal Finance (Not Investing)
Topic: Does it make sense to pay off this mortgage?
Replies: 24
Views: 2103

Re: Calculator to determine tax owed on selling mutual fund?

unrealized capital gain = current value - cost basis.

Cost basis = sum of all purchases + sum of all reinvestments.

Do you know the cost basis for your holdings?
by DSInvestor
Mon Mar 23, 2015 12:02 am
 
Forum: Personal Finance (Not Investing)
Topic: Calculator to determine tax owed on selling mutual fund?
Replies: 7
Views: 619

Re: Solo 401k and complexity

If you want lower cost options for the money in her old 401k, you can get that by rollover to an IRA at Fidelity or Vanguard. However, a Rollover IRA does not give the option to defer her self employed income. To defer self employed income, she'd need a small business retirement plan like Solo 401k,...
by DSInvestor
Sun Mar 22, 2015 10:35 pm
 
Forum: Personal Finance (Not Investing)
Topic: Solo 401k and complexity
Replies: 9
Views: 663

Re: Differences in costs of funds

IMO, there is no need to hold 500 Index as well as the Fidelity Total Market Index. Consolidate to just Fidelity Total Market Index for your US stocks. Do you have substantial assets in other accounts? if yes, 400+K in REIT may make sense. If not, this is a huge overweight to REIT. edit: I see from ...
by DSInvestor
Sun Mar 22, 2015 10:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: Differences in costs of funds
Replies: 10
Views: 611

Re: Calculator to determine tax owed on selling mutual fund?

For now would love to find a freebie online calculator where I could punch in account values and tax rates to calculate cost basis AND the fed and state taxes owed for each fund should I sell. THere is no calculator that can calculate your cost basis with just the account values. The tax for sellin...
by DSInvestor
Sun Mar 22, 2015 8:53 pm
 
Forum: Personal Finance (Not Investing)
Topic: Calculator to determine tax owed on selling mutual fund?
Replies: 7
Views: 619

Re: Does it make sense to pay off this mortgage?

You indicated that you're contributing 17.5% to 401k, 403b, IRAs. What are your annual contributions in dollars to retirement plans? Are you contributing to Roth or Traditional 401k/403b? Your mortgage interest rate is quite low. I suggest maxing out Tradtional 401k/403b first and then attacking the...
by DSInvestor
Sun Mar 22, 2015 8:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Does it make sense to pay off this mortgage?
Replies: 24
Views: 2103

Re: Robo-advisors Betterment, Weathfront and tax loss harves

I do and I do it myself. Last TLH was in March 2009.
by DSInvestor
Sat Mar 21, 2015 7:06 pm
 
Forum: Investing - Theory, News & General
Topic: Robo-advisors Betterment, Weathfront and tax loss harvesting
Replies: 4
Views: 638

Re: Whats a good Pistol to buy?

If your travels take you into Canada, do your homework. Here's a page from the US Embassy in Canada on Bringing Weapons into Canada: http://canada.usembassy.gov/traveling_to_canada/bringing-weapons-into-canada.html Here's a link to a page at Canada Border Services Agency: http://www.cbsa-asfc.gc.ca/...
by DSInvestor
Sat Mar 21, 2015 4:12 am
 
Forum: Personal Consumer Issues
Topic: Whats a good Pistol to buy?
Replies: 109
Views: 7733

Re: Individual 401(k) questions.

Have you tried calling the Vanguard small business retirement group? They can help you fill out the forms and answer most if not all of your questions. I spoke with them when I was evaluating solo 401k plans and spent lots of time with them on the phone. Every small business rep I spoke with was kno...
by DSInvestor
Sat Mar 21, 2015 12:18 am
 
Forum: Personal Finance (Not Investing)
Topic: Individual 401(k) questions.
Replies: 8
Views: 942

Re: Roth IRA MAGI and Taxes

Thanks a lot DSInvestor once again. I will check those links. Thanks again. BTW, If you find that you're eligible for Roth IRA contributions for tax year 2014, make sure you get them in before the deadline (April 15, 2015). If you prepare your tax return with tax software, try to enter Roth IRA con...
by DSInvestor
Fri Mar 20, 2015 10:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA MAGI and Taxes
Replies: 27
Views: 1531

Re: Roth IRA MAGI and Taxes

Thanks a lot DSInvestor for your response. Since I am the main income holder, that's why I mentioned "He". Here is my situation in details: He: $160K currently She: $10-$20K "His" income might grow 10%. So assuming, by year end it's $180 + $20K (very unlikely) but may be around ...
by DSInvestor
Fri Mar 20, 2015 6:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA MAGI and Taxes
Replies: 27
Views: 1531

Re: Roth IRA MAGI and Taxes

One quick question on the same topic: So does that mean, if someone's income is $195K and if he max-out his traditional 401k for that year, then he is still eligible for Roth IRA contribution for that year? As $195K - $18K = $177K which is less than $181K for married filing jointly? Thanks in advan...
by DSInvestor
Fri Mar 20, 2015 5:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA MAGI and Taxes
Replies: 27
Views: 1531

Re: Roth IRA MAGI and Taxes

Agree that backdoor Roth IRA is great if there are no other pre-tax IRA assets. OP is contributing to SEP-IRA so he will have pre-tax IRA assets according to form 8606.
by DSInvestor
Fri Mar 20, 2015 12:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA MAGI and Taxes
Replies: 27
Views: 1531

Re: Lowest income at which able to Max 401k and IRA

I agree with bigred77. Consider switching your 401k contributions to Traditional 401k contributions which would increase your take home pay. Use the extra cash flow to attack the car debt. Paying off that car loan will free up 700/month. What is the balance on the car loan?
by DSInvestor
Fri Mar 20, 2015 1:39 am
 
Forum: Investing - Help with Personal Investments
Topic: Lowest income at which able to Max 401k and IRA
Replies: 31
Views: 2614

Re: Lost job, should I contribute heavily to 401k?

I gave this some more thought, and since I have the taxable account as a last resort, I am going to elect a 70% contribution. I re-calculated my emergency fund and I expect it to cover 9.5 months. I can't tell the future but I plan to start looking for new work in about a month. Iced Tea If you're ...
by DSInvestor
Thu Mar 19, 2015 8:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Lost job, should I contribute heavily to 401k?
Replies: 18
Views: 1428

Re: Filed my 2014 taxes in February - then I bought a house.

I can't think of any situation where your 2014 taxes would be affected by buying a home in 2015. You may want to look into whether the mortgage interest deduction you will be claiming next year might indicate a change in your withholding rate through the rest of this year. I agree with the previous...
by DSInvestor
Thu Mar 19, 2015 8:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: Filed my 2014 taxes in February - then I bought a house...
Replies: 5
Views: 533

Re: Do I have this right? Cost basis question.

One would have lost money only on paper. The distributed gains would be actual money. Not always. If an investor buys $1MM of a fund just before dividend distribution of 2%, the fund will distribute 20K dividend that is taxable to the investor. The day before the dividend, the investor had $1MM wor...
by DSInvestor
Thu Mar 19, 2015 8:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do I have this right? Cost basis question.
Replies: 20
Views: 935

Re: Lost job, should I contribute heavily to 401k?

If you were retiring, I'd say sure max it out while you can. If you have any doubts about whether your emergency fund is adequate, maybe skip the 401k and boost reserves. If you start at another job in July or August, hopefully you'll be allowed to contribute to that 401k right away and give you the...
by DSInvestor
Thu Mar 19, 2015 3:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Lost job, should I contribute heavily to 401k?
Replies: 18
Views: 1428

Re: Roth IRA MAGI and Taxes

Regarding the SEP IRA contributions: Is there a difference in the benefits of tax deductions if my wife contributes to her own account as the employer or using herself as the employee? Both contributions reduce your AGI, which in turn reduces your Taxable Income (line 43 on 1040) which reduces your...
by DSInvestor
Thu Mar 19, 2015 2:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA MAGI and Taxes
Replies: 27
Views: 1531

Re: Do I have this right? Cost basis question.

Capital gains taxes and dividend taxes are two distinctly different taxes. Yes, you've paid every year on your dividend taxes. But, the part that confuses me is a fund that distributes LT and ST capital gains regularly that you've paid taxes on already and how that fits into calculating your own ca...
by DSInvestor
Thu Mar 19, 2015 2:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do I have this right? Cost basis question.
Replies: 20
Views: 935

Re: Do I have this right? Cost basis question.

If you have never sold any shares and have sold all shares in one transaction, it doesn't matter which cost basis method you use. The result will be the same. Your cost basis is the sum of all purchases and reinvestments. If you're certain that you made a total of 12K in purchases, that's a start. N...
by DSInvestor
Thu Mar 19, 2015 2:24 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do I have this right? Cost basis question.
Replies: 20
Views: 935

Re: Estimating LTCG/dividend taxes in early retirement

With preferential tax treatment for QDI and LTCG, your tax liability will be very low while spending down the taxable account. It would be ideal conditions for tax free or near tax free Roth conversions. I hope you're maxing out pre-tax traditional contributions to your workplace plans while working...
by DSInvestor
Thu Mar 19, 2015 2:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: Estimating LTCG/dividend taxes in early retirement
Replies: 8
Views: 722

Re: how much mortgage would you be comfortable with?

IMO, buy or borrow an amount that you can comfortably afford on one income, preferably the lower income. In your case, the lower income isn't low. BTW, which HCOL area are we talking about? If SF Bay Area, a $2 million house may have property tax of 22-25K/yr but it could be substantially higher for...
by DSInvestor
Thu Mar 19, 2015 1:38 pm
 
Forum: Personal Finance (Not Investing)
Topic: how much mortgage would you be comfortable with?
Replies: 43
Views: 4232

Re: Roth IRA MAGI and Taxes

For sole proprietors, I believe SEP-IRA show up on line 28 of the 1040 form. I'm not sure if the SEP-IRA contributions that the business made to her employee(s) are included in that line or if those reduce net income for the business. IRS form 1040: http://www.irs.gov/pub/irs-pdf/f1040.pdf Yes, she ...
by DSInvestor
Thu Mar 19, 2015 12:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA MAGI and Taxes
Replies: 27
Views: 1531

Re: Tankless Hit Water Heaters

I believe that the tankless heaters are rated to increase water temperature by X degrees at a given flow rate. I have noticed big differences in the temperature of the cold water by region. In louisiana, the cold water is never cold but quite warm. In Washington and British Columbia, the cold water ...
by DSInvestor
Thu Mar 19, 2015 12:02 pm
 
Forum: Personal Consumer Issues
Topic: Tankless Hot Water Heaters
Replies: 29
Views: 2504

Re: Roth IRA MAGI and Taxes

The MAGI for Roth IRA purposes starts with Adjusted Gross Income (AGI) which is the number at the bottom of page 1 of the 1040 tax form. Here's a link to IRS Pub 590A worksheet 2-1 showing how to calculate MAGI For Roth IRA purposes: http://www.irs.gov/publications/p590a/ch02.html#en_US_2014_publink...
by DSInvestor
Thu Mar 19, 2015 11:07 am
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA MAGI and Taxes
Replies: 27
Views: 1531

Re: Backdoor Roth in depreciated traditional IRA

I calculated the AGI, and none of the deductions that need to be added back, as listed in the link in retiredjg's post, apply to me. We just squeezed into the eligibility zone by $19 :D I called Vanguard again, and they said they'll do it, and I should see the change in my account tomorrow or Monda...
by DSInvestor
Thu Mar 19, 2015 10:27 am
 
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth in depreciated traditional IRA
Replies: 51
Views: 2798

Re: Backdoor Roth in depreciated traditional IRA

sawhorse, how do you prepare your tax returns? 1. Tax software can tell you if you're eligible for Roth IRA contributions or Traditional IRA deductions after examining your tax situation. Simply enter a Roth IRA contribution or a Traditional IRA contribution and see if there any warnings pop up for ...
by DSInvestor
Thu Mar 19, 2015 9:42 am
 
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth in depreciated traditional IRA
Replies: 51
Views: 2798
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