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Re: Pay taxes for parent to convert to Roth?

I understand where you're coming from, but it may put your father (or mother, as his likely primary beneficiary) in an uncomfortable position. Family dynamics can vary, but if anyone involved has a tendency to obsess over ethical dilemmas, here's a plausible scenario. Fast forward 10+ years. Mom is ...
by House Blend
Mon Apr 20, 2015 5:24 pm
 
Forum: Investing - Theory, News & General
Topic: Pay taxes for parent to convert to Roth?
Replies: 4
Views: 487

Re: U.S. stocks in freefall

Bump.
by House Blend
Mon Apr 20, 2015 8:52 am
 
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 1248
Views: 235617

Re: question regarding elective deferral limits (401(a) and

The elective deferral limit of $18K + $6K catchup applies to 403(b)+401(k)+401(a) combined. The limit for 457(b) is separate from that, and also allows for catch-up, so that's another $18K+$6K you can do. (Unless maybe the employer limits 457 contributions for other reasons.) My employer's plan has ...
by House Blend
Sun Apr 19, 2015 8:31 pm
 
Forum: Personal Finance (Not Investing)
Topic: question regarding elective deferral limits (401(a) and 457)
Replies: 1
Views: 189

Re: Coming to terms with low risk tolerance

I settled on 40% stocks, 5% real estate, 55% bonds/cash. I know that in the long run this will hurt me financially. But I rationalize it with the intangible cost of financial anxiety. Maybe tomorrow I'll wake up with a more rational mind and switch to the "ideal" asset allocation for my a...
by House Blend
Sun Apr 19, 2015 7:54 am
 
Forum: Investing - Help with Personal Investments
Topic: Coming to terms with low risk tolerance
Replies: 33
Views: 2223

Re: Can I have a ROTH account?... I'm so confused!

We are a one-income family. My husband contributes to a 401K through his job. I have a Spousal Traditional IRA account I have contributed to for the last few years, just enough to make sure we don't need to pay any income tax that year (never the full amount until 2014, when I put in $5500). Please...
by House Blend
Fri Apr 17, 2015 1:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Can I have a ROTH account?... I'm so confused!
Replies: 6
Views: 940

Re: How do you quickly cool food?

FWIW, if your beer needs to be ice cold to be drinkable, it isn't beer. The dilemma for me is whether to store it in the fridge or in the basement, where the temp stays in the low 50s most of the year. Fridge storage improves the shelf life, but then you need to let it warm up at room temp for an ho...
by House Blend
Fri Apr 17, 2015 8:59 am
 
Forum: Personal Consumer Issues
Topic: How do you quickly cool food?
Replies: 33
Views: 2186

Re: How many baskets for your eggs?

For 403(b), you can have umpteen 403(b) accounts at umpteen different vendors, but as long as they are all in your name, you can satisfy the RMD by taking it all out of one 403(b). 401(k) accounts do not have this feature. And as mentioned already, you can meet your IRA RMD by making a withdrawal f...
by House Blend
Thu Apr 16, 2015 5:14 pm
 
Forum: Investing - Theory, News & General
Topic: Retirement expenditure concept
Replies: 46
Views: 3469

Re: How many baskets for your eggs?

Simplicity is good, but do you have to have it for RMDs? Can't you take the full RMD out of one account or provider and calculate it for yourself? Nice thought, but TSP RMD is separate from IRA RMD. The TIAA RMD may also be separate -- is it IRA or 403b or 457? The first RMD from TSP requires decis...
by House Blend
Thu Apr 16, 2015 11:54 am
 
Forum: Investing - Theory, News & General
Topic: Retirement expenditure concept
Replies: 46
Views: 3469

Re: Is it ok to NOT have significant taxable investments?

The most important feature to look for is are you saving enough for retirement? (For younger folks this is harder to know, and you have to rely more on guesswork, such as making sure at least 15% of gross is being salted away. YMMV.) If the "enough" is below the maximum contributions of yo...
by House Blend
Wed Apr 15, 2015 3:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is it ok to NOT have significant taxable investments?
Replies: 48
Views: 4607

Re: Is state tax refund taxable in this case?

My hunch is that you haven't guessed the correct way to respond to the TurboTax interrogation[*], because the Line 10 Worksheet for reporting state and local tax refunds cannot be used in exceptional situations. Yours is exception number 6. 6. You made your last payment of 2013 estimated state or lo...
by House Blend
Wed Apr 15, 2015 8:29 am
 
Forum: Personal Finance (Not Investing)
Topic: Is state tax refund taxable in this case?
Replies: 4
Views: 572

Re: Mailing tax returns

FWIW, I mail returns first class. I typically owe less than $1000 and am willing to risk paying penalties plus interest if something is lost. So I walk two blocks from my workplace to the postoffice, ask for first class postage, and file away the receipt. Whether I owe or have a refund due, my "...
by House Blend
Thu Apr 09, 2015 3:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: Mailing tax returns
Replies: 56
Views: 3683

Re: Why is VDIGX Dividend Payout Always Small in 1st quarter

The March distribution is not a real dividend, it is an "Oops, we got more income in 2014 than we previously had thought, so we are dumping out that extra income now." Here's an article about it: https://personal.vanguard.com/us/insights/article/supplemental-fund-distributions-032015 This ...
by House Blend
Thu Apr 09, 2015 10:17 am
 
Forum: Investing - Theory, News & General
Topic: Why is VDIGX Dividend Payout Always Small in 1st quarter?
Replies: 4
Views: 803

Re: Required minimum distribution and year end fund distribu

Is the RMD in the same index fund within the IRA as you plan to use in the taxable account? Assuming we're referring to a stock index fund and stocks usually increase in value more than they lose value it might be beneficial to take the RMD early. Waiting until year end means any gains will be taxe...
by House Blend
Wed Apr 08, 2015 3:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: Required minimum distribution and year end fund distribution
Replies: 29
Views: 1984

Re: Required minimum distribution and year end fund distribu

Is the RMD in the same index fund within the IRA as you plan to use in the taxable account? Assuming we're referring to a stock index fund and stocks usually increase in value more than they lose value it might be beneficial to take the RMD early. Waiting until year end means any gains will be taxe...
by House Blend
Wed Apr 08, 2015 1:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Required minimum distribution and year end fund distribution
Replies: 29
Views: 1984

Re: Average Cost Basis Questions

BTW, you may want to read the Vanguard FAQ on cost basis tracking. https://personal.vanguard.com/us/help/FAQCostBasisContent.jsp If I'm currently using average cost, how will changing my method affect unrealized shares? If you're using average cost prior to electing a method, and you sell or transfe...
by House Blend
Wed Apr 08, 2015 12:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Average Cost Basis Questions
Replies: 7
Views: 820

Re: Transfer portfolio to Vanguard & Betterment

Betterment uses Vanguard ETFs in their portfolio. In my Vanguard taxable account, I will use funds...so no overlap. By "funds" in your Vanguard taxable account, did you mean Vanguard mutual funds? If so, it's not quite that easy to stay in the clear. I think there is wide agreement that d...
by House Blend
Wed Apr 08, 2015 12:16 pm
 
Forum: Investing - Help with Personal Investments
Topic: Transfer portfolio to Vanguard & Betterment
Replies: 28
Views: 1334

Re: Transfer portfolio to Vanguard & Betterment

Why are you moving some of the money to Betterment and some of it to Vanguard? I'm interested in their TLH. I think they do it more often. Do you think that's worth 0.15% in fees? Maybe I should considering move all to Vanguard and doing the TLH myself. If they are more efficient at tax managing th...
by House Blend
Wed Apr 08, 2015 12:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Transfer portfolio to Vanguard & Betterment
Replies: 28
Views: 1334

Re: Tax paid to wrong state: What recourse?

Thank you to the responders here and to sscritic via PM. The old State-A is Maryland. If you are not a resident but had Maryland tax withheld or had income from sources in Maryland, you must use Form 505 or 515, Nonresident Tax return. Does this mean that my tax withholding reflects that the Agency...
by House Blend
Wed Apr 08, 2015 9:10 am
 
Forum: Personal Finance (Not Investing)
Topic: Tax paid to wrong state: What recourse?
Replies: 13
Views: 838

Re: Average Cost Basis Questions

Yes, when you use average basis and sell shares, the oldest shares are sold first and all shares have the same cost basis. So you will never realize short term gains or losses until after all of the oldest shares have been sold. It is possible to tax loss harvest that way, but not as much or as ofte...
by House Blend
Tue Apr 07, 2015 9:51 am
 
Forum: Investing - Help with Personal Investments
Topic: Average Cost Basis Questions
Replies: 7
Views: 820

Re: Charity-RMD or appreciated stock

If one is solidly in the 28% tax bracket, and 85% of SS already taxable, is it better to donate a portion of RMD, or donate highly appreciated stock? Assume you want your total spending, including charity but not including taxes, to remain the same. For numbers, assume a total donation of $10,000, ...
by House Blend
Mon Apr 06, 2015 3:32 pm
 
Forum: Investing - Theory, News & General
Topic: Charity-RMD or appreciated stock
Replies: 7
Views: 503

Re: Small Value is not tax inefficient!

There may be good reasons not to tilt, but I don't believe tax efficiency is a valid one. Vanguard's SV Index Fund has not had a capital gains distribution since the advent of the ETF share class ten years ago. Agreed, but that's a feature of the Vanguard fund, not something intrinsic to the asset ...
by House Blend
Sun Apr 05, 2015 9:20 pm
 
Forum: Investing - Theory, News & General
Topic: Small Value is not tax inefficient!
Replies: 13
Views: 1575

Re: Small Value is not tax inefficient!

There may be good reasons not to tilt, but I don't believe tax efficiency is a valid one. Vanguard's SV Index Fund has not had a capital gains distribution since the advent of the ETF share class ten years ago. Agreed, but that's a feature of the Vanguard fund, not something intrinsic to the asset ...
by House Blend
Sun Apr 05, 2015 3:26 pm
 
Forum: Investing - Theory, News & General
Topic: Small Value is not tax inefficient!
Replies: 13
Views: 1575

Re: Long Term Tax Efficient Investing - Is it Better to Shel

^Yes, this is one of the factors that makes tax-adjusting difficult. Even if tax laws never change (and brackets continue to adjust with inflation), there is potential for stocks-in-tax-deferred, bonds-in-taxable to push you (or your beneficiaries) into a higher tax bracket than you would have the o...
by House Blend
Sun Apr 05, 2015 8:32 am
 
Forum: Investing - Theory, News & General
Topic: Long Term Tax Efficient Investing - Is it Better to Shelter
Replies: 16
Views: 2373

Re: IRA income: Take distributions or sell assets?

Question: Is it better (more tax efficient) to take the distributions if that's all that's required to meet spending needs, or, should one keep reinvesting and sell assets, or doesn't it make any difference? If the decision is spending RMDs or distributions first, it doesn't really matter either wa...
by House Blend
Sun Apr 05, 2015 8:14 am
 
Forum: Investing - Theory, News & General
Topic: IRA income: Take distributions or sell assets?
Replies: 3
Views: 286

Re: Vanguard Tax-Exempt Bond Index Fund vs Savings Account

Welcome to the forum. What do you mean by a "conceptual" bank account? Using short term bonds (muni or otherwise) as a store of cash reserves for an existing bank account does make sense to me. Short term CDs do too. Or a "high"-yield savings account. Yes you can get checkwriting...
by House Blend
Fri Apr 03, 2015 2:05 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard Tax-Exempt Bond Index Fund vs Savings Account
Replies: 7
Views: 1782

Re: Unwanted distribution from Roth

I just experienced a similar situation at Vanguard. They don't really use a "Sweep Account" like other Custodians do. Vanguard tells me, that because I didn't have any position (money) in their Money Market account and their minimum purchase for the MM is $3000, any distributions that wer...
by House Blend
Fri Apr 03, 2015 1:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: Unwanted distribution from Roth
Replies: 23
Views: 2015

Re: Which brokers do hassle-free Roth cnvrsn recharacterizat

What's the link to do this online at Vanguard? All I can find is a paper form to mail in. I didn't keep any notes. Just call Fidelity, and the rep should be able to tell you how to find it, unless something has changed since about a year ago. It was not intuitive to me how to get to the online form...
by House Blend
Fri Apr 03, 2015 12:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Which brokers do hassle-free Roth cnvrsn recharacterizations
Replies: 25
Views: 1626

Re: $1000 Investment

Wow, lots of leaping to unjustified conclusions here when we know only that the son is a 20 yo college student. He cannot put it in an IRA (trad or Roth) unless he has earned income, such as a W-2 job or self-employment income. If he had at least $1000 in Box 1 of his 2014 Form W-2, he can open a Va...
by House Blend
Fri Apr 03, 2015 10:09 am
 
Forum: Investing - Help with Personal Investments
Topic: $1000 Investment
Replies: 11
Views: 1475

Re: Vanguard Prospectus

I'm signed up for the dead-tree versions of the Semi+Annual reports and Prospectuses. They go to the bathroom reading shelf, and from there to the recycling bin. The prospectuses do not change much from year to year, and at some point in the past 5 years, VG switched to mailing the "Summary Pro...
by House Blend
Thu Apr 02, 2015 10:55 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard Prospectus
Replies: 14
Views: 1042

Yield anomaly for Investor and Admiral shares

Fund expenses are (as far as I know) accrued daily and deducted from dividends. So when you compare two share classes of the same fund, the difference in yield (annualized) should be the difference in Expense Ratios. This should hold whether you look at SEC yield or distribution yield. You can expec...
by House Blend
Wed Apr 01, 2015 12:38 pm
 
Forum: Investing - Theory, News & General
Topic: Yield anomaly for Investor and Admiral shares
Replies: 0
Views: 241

Re: Fees/cost question.

Is this a governmental 457(b)? (Which means: as safe as other qualified retirement plans, and transferable to other QRPs after retirement/separation.) If not, I would stay away. If it is governmental (e.g., you are a state employee), then it comes down to how many years you plan to stay in this job-...
by House Blend
Wed Apr 01, 2015 11:37 am
 
Forum: Investing - Help with Personal Investments
Topic: Fees/cost question.
Replies: 3
Views: 432

Re: What would you do now if you were all cash?

I also have the responsibility of managing a 92 yo's money of 2M with an income of 150K/yr. Expenses are currently about 32K/yr. There I have opted for long term bonds/CDs (3 - 5%) with Survivor's Options and 20% equities. Preferably the bonds/CDs would be purchased under par to leverage the SO cha...
by House Blend
Tue Mar 31, 2015 5:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: What would you do now if you were all cash?
Replies: 28
Views: 3383

Re: What would you do now if you were all cash?

I also have the responsibility of managing a 92 yo's money of 2M with an income of 150K/yr. Expenses are currently about 32K/yr. There I have opted for long term bonds/CDs (3 - 5%) with Survivor's Options and 20% equities. Preferably the bonds/CDs would be purchased under par to leverage the SO cha...
by House Blend
Tue Mar 31, 2015 2:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: What would you do now if you were all cash?
Replies: 28
Views: 3383

Re: IRA And 401k?

Oh, and another question concerning a higher income.. As I understand it, the Roth IRA contribution (2015) can be limited by income, starting to phase out after 183K (married filing jointly). Let's say I make 190K and then contribute 18K to a traditional pre-tax 401K. This brings my taxable income ...
by House Blend
Mon Mar 30, 2015 1:52 pm
 
Forum: Personal Finance (Not Investing)
Topic: IRA And 401k?
Replies: 14
Views: 774

Re: Paying Taxes on Vanguard MISTAKEN Refund

Why not just cancel the incorrect redemption fee and add the money to my money market account? Surely they already did refund you the money in some way. If they incorrectly imposed (say) a 0.25% redemption fee, and then corrected it, you must have been refunded that 0.25%....either a check, or a de...
by House Blend
Mon Mar 30, 2015 1:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: Paying Taxes on Vanguard MISTAKEN Refund
Replies: 8
Views: 833

Re: IRA And 401k?

Also, what about RMDs and dividend income? I know they don't show up on a W2, but could RMD or dividend income be used to raise the ceiling for an IRA contribution after earned income has been maxed out by 401k contributions? In think DSInvestor answered your other questions. On this one, the answe...
by House Blend
Mon Mar 30, 2015 12:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: IRA And 401k?
Replies: 14
Views: 774

Re: IRA And 401k?

If all of your earned income is from a W-2 job, then all that matters for IRA purposes is the number in Box 1 of the W-2. If it is over $6500 then you can max out an IRA (trad or Roth), or his and hers if over $6500+$5500. (Also, check whether you qualify for the Retirement Savers Credit.) Note that...
by House Blend
Mon Mar 30, 2015 8:30 am
 
Forum: Personal Finance (Not Investing)
Topic: IRA And 401k?
Replies: 14
Views: 774

Re: Vanguard's Week In Review

. Does anyone have any good suggestions for alternate source for the information normally found in Vanguard's Week in Review? In particular, a site that gives a summary of the week's reports along with the actual and expected values and the effect they had on interest rates and the stock market for...
by House Blend
Sat Mar 28, 2015 11:44 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard's Week In Review
Replies: 19
Views: 2109

Re: Recurring utility bills - How do you pay?

As mentioned already in this thread, there's more than one form of "autopay". One way is to autobill a credit card. (You can also set up autopay for the card; I don't do that.) Another is to autobill a bank account. No "online" involved. I use both. I've been doing the latter for...
by House Blend
Sat Mar 28, 2015 8:23 am
 
Forum: Personal Finance (Not Investing)
Topic: Recurring utility bills - How do you pay?
Replies: 43
Views: 3075

Re: Traditional IRA into Roth; when Income too High?

OP here, I don't think the individual can re-characterize to a Roth directly due to bumping up on income limitations for the Roth. The individual only has a few years left of employment, perhaps it's just best to file the Form 8606 and let it go? Last year was an off year in terms of expected incom...
by House Blend
Fri Mar 27, 2015 8:39 am
 
Forum: Personal Finance (Not Investing)
Topic: Traditional IRA into Roth; when Income too High?
Replies: 8
Views: 459

Re: Vanguard Expense Ratio Changes

FWIW, the posted ER for Admiral shares of Total Bond will be dropping 1 basis point when the prospectus comes out next month. (Investor shares unchanged.) Total AUM (all share classes) moved from 117B -> 108B -> 137B over the past two years, and dropped 2 basis points last year while AUM was falling...
by House Blend
Fri Mar 27, 2015 8:31 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard Expense Ratio Changes
Replies: 5
Views: 1497

Re: Traditional IRA into Roth; when Income too High?

By far the best option is to recharacterize the 2014 IRA contribution as a Roth. You will have to contact the IRA custodian to make it happen, but once it is done there will be no extra taxes due. Read the instructions for Form 8606 to see what the reporting requirements are when you do a recharacte...
by House Blend
Fri Mar 27, 2015 8:20 am
 
Forum: Personal Finance (Not Investing)
Topic: Traditional IRA into Roth; when Income too High?
Replies: 8
Views: 459

Re: International stock dividend cut. Why?

Thank you for that information. Any insight (or even a guess) as to why this is? More companies in the index having irregular dividend payments or some other reason? Dunno. I do think there have been prior threads about this question (most likely exactly 2 years ago, when we saw the puny $0.066 div...
by House Blend
Thu Mar 26, 2015 3:51 pm
 
Forum: Investing - Theory, News & General
Topic: International stock "dividend variability" Why?
Replies: 37
Views: 3052

Re: Tax Loss Harvesting Wash Sale in Roth IRA

That loss is now permanently gone (since the replacement shares are in an IRA), so instead of claiming a loss of $5000 on your 2015 Schedule D, you will claim only $4987. 149600*(5000/150000) This is only an approximation to the calculation one must do for the IRS. It will be close only if the gap ...
by House Blend
Thu Mar 26, 2015 12:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tax Loss Harvesting Wash Sale in Roth IRA
Replies: 16
Views: 1252

Re: Tax Loss Harvesting Wash Sale in Roth IRA

^As I explained upthread, that's not how the calculation works. Let me try again, this time with slightly more realistic and specific numbers involving VEMAX (Emerging Markets Admiral). The price on the recent reinvest day was $33.99. If you had $400 in dividends from this fund, that means you bough...
by House Blend
Thu Mar 26, 2015 9:40 am
 
Forum: Investing - Help with Personal Investments
Topic: Tax Loss Harvesting Wash Sale in Roth IRA
Replies: 16
Views: 1252

Re: Where to hold international bond funds?

Hi bogleheads, I appreciate your comments on the following: Shall I hold the Vanguard Total International Bond Fund in a taxable account because of the foreign tax credit OR in a tax-sheltered account because of the tax-inefficiencies of bond funds? Thank you very much Another option to consider is...
by House Blend
Wed Mar 25, 2015 8:45 pm
 
Forum: Investing - Theory, News & General
Topic: Where to hold international bond funds?
Replies: 1
Views: 366

Re: Wash Sale (w/ a slight spin)

I share ogd's view on this subject. I TLH, and choose not to hold any substantially identical funds in taxable and tax-advantaged. If I did, I would at least set the dividend distributions in the "substantially identical" fund in tax-advantaged to not be automatically reinvested. (But my e...
by House Blend
Wed Mar 25, 2015 8:39 pm
 
Forum: Investing - Theory, News & General
Topic: Wash Sale (w/ a slight spin)
Replies: 23
Views: 1632

Re: Tax Loss Harvesting Wash Sale in Roth IRA

I'm pretty sure wash sales tax rules don't apply to Roths. We've already had citations to two authorities earlier in this thread who are sure that you're wrong. Here's a third; pay close attention to item #4: Wash Sales A wash sale occurs when you sell or trade stock or securities at a loss and wit...
by House Blend
Wed Mar 25, 2015 5:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tax Loss Harvesting Wash Sale in Roth IRA
Replies: 16
Views: 1252

Re: Tax Loss Harvesting Wash Sale in Roth IRA

The same thing happened to me. I sold about $150,000 worth of Vanguard's emerging markets and developed markets funds in my taxable account a couple weeks ago for a loss of $5000. Yesterday, the same funds in my Roth IRA reinvested a total of $400 in dividends. I would like to fix this if anything ...
by House Blend
Wed Mar 25, 2015 4:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tax Loss Harvesting Wash Sale in Roth IRA
Replies: 16
Views: 1252

Re: Location of Total International Bond Index

It depends. For tax-efficiency it has been better than Total Bond, because it has been yielding less. While you are free to compare SEC yields if you want to project future returns , what matters for current taxes is distribution yield. For Admiral shares last month, it was about 1.5% for VTABX vs. ...
by House Blend
Wed Mar 25, 2015 2:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Location of Total International Bond Index
Replies: 1
Views: 253
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