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Re: Performed backdoor Roth and accountant did not file 8606

Really, it (Backdoor) kind of is skirting the rules to some extent. The intent was that people that make too much money can't contribute to a Roth IRA. That wasn't a problem before 2010, because if you made too much money to contribute to a Roth, you also made too much money to convert money to a R...
by JW Nearly Retired
Fri Dec 19, 2014 11:10 am
 
Forum: Personal Finance (Not Investing)
Topic: Performed backdoor Roth and accountant did not file 8606
Replies: 46
Views: 2910

Re: Federal Taxes - Sticker Shock (And how to reduce)

Morning! I received my last pay stub of the year and was immediately floored by the total amount of Federal taxes paid. Income this year was approximately $150k with Federal taxes of about $17k. Using TaxCaster, I should receive a small refund, probably around $500 or so given what I can itemize on...
by JW Nearly Retired
Fri Dec 19, 2014 10:29 am
 
Forum: Personal Finance (Not Investing)
Topic: Federal Taxes - Sticker Shock (And how to reduce)
Replies: 47
Views: 3273

Re: Am I in two many investments.

I transferred $760,000 to Vanguard around December 3rd, 2014. I am using the CFP service because I am not comfortable enough to pick the investments. I am in about 12-13 funds with a 65% stock to 35% bond mix. BigDawg, I know nothing about the Vanguard CFP service and I don't see much of a descript...
by JW Nearly Retired
Thu Dec 18, 2014 1:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: Am I in two many investments.
Replies: 16
Views: 1392

Re: Performed backdoor Roth and accountant did not file 8606

The accountant says the form was not filed and that it is not required. He says the contribution was characterized as a rollover on my return and that should be fine. The amount that was "backdoored" was listed on line 16a. What do I need to do to fix this? What are the consequences here?...
by JW Nearly Retired
Thu Dec 18, 2014 12:11 pm
 
Forum: Personal Finance (Not Investing)
Topic: Performed backdoor Roth and accountant did not file 8606
Replies: 46
Views: 2910

Re: Am I in two many investments.

This fund shows down 11.27% for yesterday. Not sure why. Or am I not reading this right. Google finance actually shows it gaining. I guess I still have a lot to learn. I'm glad I'm using the CFP. VEXRX Vanguard Explorer Fund Admiral Shares 0.35% 187.424 $84.40 – $10.72 – 11.27% Mutual funds are req...
by JW Nearly Retired
Thu Dec 18, 2014 10:43 am
 
Forum: Investing - Help with Personal Investments
Topic: Am I in two many investments.
Replies: 16
Views: 1392

Re: Looking to move inheritance from high-fee advisor

Investments 1M with a large financial firm (1.25%) fee Chances are this is at least a 2+% drain on your portfolio's oxygen when the excessively costly fund selections are added in. You can use this fund fee effect tool to estimate what it will mean in terms of a smaller retirement age nest egg. htt...
by JW Nearly Retired
Wed Dec 17, 2014 8:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: Looking to move inheritance from high-fee advisor
Replies: 27
Views: 2140

Re: SS Delay Question

My initial advise was to view her SS as a part of the whole portfolio. It is a guaranteed, inflation protected, investment that will grow at 7% real per year from age 62 to 70. Thought of this way, they should not take SS. Is there general agreement here that this is the right advise? Which way to ...
by JW Nearly Retired
Wed Dec 17, 2014 9:33 am
 
Forum: Personal Finance (Not Investing)
Topic: SS Delay Question
Replies: 14
Views: 1578

Re: Stronger protection against personal lawsuits

I am planning to roll my Company 401K After-Tax account into a Vanguard Roth IRA. I'm doing this so I don't get taxed on the future returns. Does anybody have any feedback about protecting the IRA's from possible lawsuits? http://www.forbes.com/sites/financialfinesse/2013/01/24/7-reasons-not-to-rol...
by JW Nearly Retired
Mon Dec 15, 2014 8:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Stronger protection against personal lawsuits
Replies: 12
Views: 1791

Re: Social Security maximum earnings limit question.

Thanks, sorry if this was the wrong forum. I believe I understand better how it works. More specifically I was wondering if I had a few partial years where I earned less than maximum in the early 90s if working an extra year in the 2020s will greatly effect the calculations. Or if it's so minor in ...
by JW Nearly Retired
Mon Dec 15, 2014 9:50 am
 
Forum: Investing - Theory, News & General
Topic: Social Security maximum earnings limit question.
Replies: 11
Views: 724

Re: How to convert from TIRA to Roth IRA

I still wonder what the point of this is if you have zero basis? If there is zero basis the entire conversion is taxable. It needs to find it's way to 1040 line 15b. The IRS could add an exception to an exception to the line 15 instructions, but, as written, they punt all Roth conversions to form 8...
by JW Nearly Retired
Sun Dec 14, 2014 3:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: How to convert from TIRA to Roth IRA
Replies: 11
Views: 870

Re: friend has $70K; wants income from it

Depending on her age she could get significantly more than $250/month from a $70k priced SPIA.
JW
by JW Nearly Retired
Sun Dec 14, 2014 11:34 am
 
Forum: Personal Finance (Not Investing)
Topic: friend has $70K; wants income from it
Replies: 11
Views: 2126

Re: How to convert from TIRA to Roth IRA

You don't need to fill out an 8606 for a conversion unless there was non-deductible contribution money basis in the tIRA . The 8606 "Non-deductible IRAs" is the form that keeps track of tIRA basis. If there were no non-deductible contributions then there is no basis and no 8606 is needed....
by JW Nearly Retired
Sat Dec 13, 2014 5:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: How to convert from TIRA to Roth IRA
Replies: 11
Views: 870

Re: How to convert from TIRA to Roth IRA

I need guidance to convert my TIRA to Roth IRA using backdoor method. The reason I’m thinking to convert my TIRA into Roth IRA is that going forward (2015) we may not qualify to contribute in Roth IRA based on income limits. My plan for 2015 tax year would be to use the backdoor method to contribut...
by JW Nearly Retired
Sat Dec 13, 2014 2:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: How to convert from TIRA to Roth IRA
Replies: 11
Views: 870

Re: Social security spousal benefit recalculation?

Her benefit is based on 50% of your PIA, adjusted for her early claim of her benefit. As your PIA increases so will her benefit. Your early or late claiming doesn't enter into her numbers.

How could it be as small as $150 a month.... was that a typo?
JW
by JW Nearly Retired
Fri Dec 12, 2014 9:35 pm
 
Forum: Personal Finance (Not Investing)
Topic: Social security spousal benefit recalculation?
Replies: 1
Views: 583

Re: Robinhood has Zero-Commissions - are you buying stock?

was I mistaken? are people opposed to actively traded mutual funds because of the fees and commissions? but opposed to stock purchasing because of a lack of diversification and not necessarily fees? Yes, IMO that is definitely true. Unless you trade frequently the $7 commission per trade amounts to...
by JW Nearly Retired
Fri Dec 12, 2014 10:31 am
 
Forum: Investing - Theory, News & General
Topic: Robinhood has Zero-Commissions - are you buying stock?
Replies: 29
Views: 6384

Re: Left job, rolled over 401k, returning to old position

Can you confirm this was a Roth 401k? If you rolled a traditional 401k to a Roth IRA that would be taxed the same as a distribution.
JW
by JW Nearly Retired
Thu Dec 11, 2014 2:51 pm
 
Forum: Personal Finance (Not Investing)
Topic: Left job, rolled over 401k, returning to old position
Replies: 5
Views: 663

Re: Ira to 401k

Wait and do it all in 2015. You need to do the conversion of the basis money to the Roth in the same year as you do the 401k rollover. The best way is to convert exactly the basis amount to a Roth and then rollover the remaining pretax IRA money amount to your 401k. If you do all this in the same ye...
by JW Nearly Retired
Wed Dec 10, 2014 9:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: Ira to 401k
Replies: 12
Views: 810

Re: Looking to add to Roth...

Our company rep comes by in February to re-assess/review our portfolio's so i will mention this to him about the American Funds, thank you. Best way to go about this is to look at the holdings in each and make a decision based on that? Your best course is to invest in something that broadly represe...
by JW Nearly Retired
Wed Dec 10, 2014 12:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Looking to add to Roth...
Replies: 9
Views: 1333

Re: Help with SS for Mother-in-law

Your understanding is absolutely correct. The best long term idea is to take the spousal benefit at age 66 in lieu of her own (approximately equal) benefit, and delay hers until 70 when it will be a third larger. It's a total no-brainer, unless they just have insufficient money to live on for the 16...
by JW Nearly Retired
Tue Dec 09, 2014 11:17 am
 
Forum: Personal Finance (Not Investing)
Topic: Help with SS for Mother-in-law
Replies: 2
Views: 486

Re: How to properly allocate assets across multiple investme

I would get rid of your massive single stock risk as soon as possible. Today would be good. Or spread it out over a short time like a couple of weeks if you want.
JW
by JW Nearly Retired
Tue Dec 09, 2014 10:00 am
 
Forum: Investing - Help with Personal Investments
Topic: How to properly allocate assets across multiple investments?
Replies: 7
Views: 588

Re: Reporting estimated taxes at tax time

Tax software will ask about estimated taxes and put any on the right 1040 line.
JW
by JW Nearly Retired
Tue Dec 09, 2014 9:04 am
 
Forum: Personal Finance (Not Investing)
Topic: Reporting estimated taxes at tax time
Replies: 6
Views: 457

Re: If you don't need the Soc Sec, when to start taking it?

Drawing SS as soon as possible will boost your taxes big time. If you don't need the income now and you don't like high taxes, then it's best to delay taking SS. If you have only SS you pay no tax at all. If you have other income like pension & tIRA withdrawels along with SS, then the SS balloon...
by JW Nearly Retired
Mon Dec 08, 2014 8:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: If you don't need the Soc Sec, when to start taking it?
Replies: 39
Views: 4250

Re: Account Security Question

To answer your first question - of course not. But maybe a different password for phone and internet. It just seemed to me that my online password should be used only for that purpose. You have the option of changing your online password after such a phone call. I've been doing that on the very rar...
by JW Nearly Retired
Mon Dec 08, 2014 6:41 pm
 
Forum: Personal Consumer Issues
Topic: Account Security Question
Replies: 5
Views: 616

Re: After tax money to be left to Grandchildren

Thanks to all for your thoughts. I'm getting quite a few different views, which I was hoping for. I was leaning towards Total Stock Market and Total International Stock Market for growth; however, whichever way I go, the age old problem pops up as to method of investing, all in, dollar cost average...
by JW Nearly Retired
Mon Dec 08, 2014 1:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: After tax money to be left to Grandchildren
Replies: 15
Views: 1967

Re: Investing Magazines

I too would recommend AAII (American Association of Individual Investors) as mentioned by gwrvmd above. They are small cap oriented and do provide various techniques for stock picking – all of which I ignore. The real value is all the other articles they print like tax strategies, portfolio trackin...
by JW Nearly Retired
Sun Dec 07, 2014 11:01 am
 
Forum: Investing - Theory, News & General
Topic: Investing Magazines
Replies: 29
Views: 2247

Re: Bogle Advises Investing No More Than 20% Outside U.S.

I see the problem with international investing as one where the lack of transparency and rule of law interfere with the ability to participate in many of the markets outside the US with any degree of comfort. China for example is the largest economy in the world now, yet investing in China is a ver...
by JW Nearly Retired
Sun Dec 07, 2014 10:14 am
 
Forum: Investing - Theory, News & General
Topic: Bogle Advises Investing No More Than 20% Outside U.S.
Replies: 106
Views: 11338

Re: Helping my dad with his portfolio

Can you clarify "retirement account"? Is this EJ account an IRA or is it just a taxable account your dad plans to use in retirement? JW It's a traditional IRA I believe. If all the assets are indeed in the IRA, that means no cap gains tax problems at all with your Dad rolling it over to a...
by JW Nearly Retired
Sat Dec 06, 2014 1:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: Helping my dad with his portfolio
Replies: 52
Views: 2512

Re: Helping my dad with his portfolio

malibuboats91 wrote: I was just talking with my dad and he said his Edward Jones financial advisor wants to meet to go over one of his retirement accounts.

Can you clarify "retirement account"? Is this EJ account an IRA or is it just a taxable account your dad plans to use in retirement?
JW
by JW Nearly Retired
Sat Dec 06, 2014 11:00 am
 
Forum: Investing - Help with Personal Investments
Topic: Helping my dad with his portfolio
Replies: 52
Views: 2512

Re: Helping my dad with his portfolio

malibuboats91, Your Dad's looks like a fairly typical EJ portfolio that we see here. A uselessly huge number (like 30-50) of random high expense funds with sales loads for most of them. I have no proof of it to point to, but IMO the huge number is designed to (1) make the portfolio so complicated to...
by JW Nearly Retired
Sat Dec 06, 2014 10:11 am
 
Forum: Investing - Help with Personal Investments
Topic: Helping my dad with his portfolio
Replies: 52
Views: 2512

Re: Tax Loss Harvesting and Capital Gains

Including deductions my taxable income was $78K and tax due of $6,673 giving an effective tax rate of 8.5%. Trying to match your numbers......... Married filing jointly Social Security = $27K Interest = $2K Ordinary Dividends = $47K (non-qual = $14k) Qual. Dividends = $33K LT Capital Gains = $18K I...
by JW Nearly Retired
Fri Dec 05, 2014 10:30 am
 
Forum: Investing - Theory, News & General
Topic: Tax Loss Harvesting and Capital Gains
Replies: 20
Views: 1183

Re: Tax Loss Harvesting and Capital Gains

Ordinary Dividends = $47K Qual. Dividends = $33K I am wondering if the Ordinary Dividends are the total dividends with 33k of that being qualified. Unless you separated them out, that is often how they are reported. That would be paying ordinary taxes on only $14k instead of $47k. Actually, $14k wa...
by JW Nearly Retired
Fri Dec 05, 2014 10:02 am
 
Forum: Investing - Theory, News & General
Topic: Tax Loss Harvesting and Capital Gains
Replies: 20
Views: 1183

Re: Tax Loss Harvesting and Capital Gains

Married filing jointly Social Security = $27K Interest = $2K Ordinary Dividends = $47K Qual. Dividends = $33K LT Capital Gains = $18K No RMD's Not sure what you mean regarding the ROTH conversion. I meant the $30k you were converting from your tIRA to your Roth. OK. If I put your numbers into TaxCa...
by JW Nearly Retired
Thu Dec 04, 2014 10:40 pm
 
Forum: Investing - Theory, News & General
Topic: Tax Loss Harvesting and Capital Gains
Replies: 20
Views: 1183

Re: Convert to a Roth?

My wife and I are 34 years old. We are in the 33% federal tax bracket, and 5.92% state and at least 20 years from retirement. We have about $100k ($70k me, $30k her) in traditional IRAs, which is a combination of prior contributions and rollovers from old 401ks. Together my wife and I also have abo...
by JW Nearly Retired
Thu Dec 04, 2014 6:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: Convert to a Roth?
Replies: 14
Views: 1580

Re: Fidelity or Schwab Brokerage account

It comes to pass that I have to open a brokerage account to exercise some options which were given me back in 2006- and will expire in early 2016. I knew about them but was delaying any action until it got closer to the expiration date and I really hand't paid any attention to the details involving...
by JW Nearly Retired
Thu Dec 04, 2014 12:09 pm
 
Forum: Personal Finance (Not Investing)
Topic: Fidelity or Schwab Brokerage account
Replies: 28
Views: 2575

Re: Tax Loss Harvesting and Capital Gains

A few more facts for clarification: I'm retired and have no earned income. My income is entirely dividends, interest, capital gains and social security. My effective tax bracket last year was 6.3%. I have been rolling $30K per year from my TIRA to a ROTH. This puts my taxable income at $78K includi...
by JW Nearly Retired
Thu Dec 04, 2014 11:48 am
 
Forum: Investing - Theory, News & General
Topic: Tax Loss Harvesting and Capital Gains
Replies: 20
Views: 1183

Re: Close to retirement with this much money need thoughts!

If I am not able to obtain full time work then I will need to begin taking from my IRA at 59 1/2. $7000 from dividends, $7000 from paid work, $10,000 from savings. When I hit 62 I could take $7000 from dividends, $7000 from paid work and $10,000 from SS. Many say that when your nest egg is not real...
by JW Nearly Retired
Wed Dec 03, 2014 7:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: Close to retirement with this much money need thoughts!
Replies: 14
Views: 2754

Re: Early Retirement Roth Conversions

I have no knowledge from OP on heirs or charities so I'm ignoring that option. Just to produce more post age 70 income it seems pretty clear that converting some tIRA money to Roth up to the top of at least the 15% bracket is a good idea. OP, you can use TaxCaster with some guesstimated tIRA RMD inc...
by JW Nearly Retired
Wed Dec 03, 2014 4:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: Early Retirement Roth Conversions
Replies: 11
Views: 1397

Re:

A neighbor of mine, a successful attorney who went to Yale, used to give a significant amount of money to his alma mater. Then, he had an epiphany. He realized that if he hadn't gone to Yale, he would have gone to Harvard or someplace similar. He was going to do fine regardless. His father, on the ...
by JW Nearly Retired
Wed Dec 03, 2014 1:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: Giving money to your alma mater: Have to vent
Replies: 166
Views: 16556

Re: [Poll] What's Your Tax Prep Strategy?

I voted H&R Block without thinking because I use their tax software (H&R Block at home). But probably you meant the H&R Block personal tax service! :oops:
I've never used anything but pencil & paper or tax software.
JW
by JW Nearly Retired
Tue Dec 02, 2014 3:43 pm
 
Forum: Personal Finance (Not Investing)
Topic: [Poll] What's Your Tax Prep Strategy?
Replies: 62
Views: 3292

Re: Backdoor Roth IRA

I seem to recall a warning about having money in a traditional IRA when you try the backdoor Roth conversion. Something to the effect that all the money somehow gets treated differently, not just the "new" money intended for the conversion. Perhaps some of the more knowledgeable Boglehead...
by JW Nearly Retired
Mon Dec 01, 2014 10:08 pm
 
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth IRA
Replies: 6
Views: 886

Re: How much to have Vanguard withhold on RMD

I don't file estimated quarterly taxes. We prefer to withhold the right amount of total tax over pension/SS/RMD withholding. The pension W4 allows small increment tweaks so I will be able to accurately hit my total federal and state tax. Maybe not a bulls eye this first full year of retirement.........
by JW Nearly Retired
Sun Nov 30, 2014 4:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: How much to have Vanguard withhold on RMD
Replies: 36
Views: 2654

Re: 401(k) rollover to...?

triguy, I'm still confused. The terms traditional IRA and Roth IRA are for personal individual accounts that are not connected to any employer. Is it the Federal government TSP that you are referring to? The Thrift Savings Plan (TSP) is a defined contribution retirement savings plan for Federal empl...
by JW Nearly Retired
Sun Nov 30, 2014 11:48 am
 
Forum: Investing - Help with Personal Investments
Topic: 401(k) rollover to...?
Replies: 5
Views: 1014

Re: backdoor roth balance question

...last week I made a $5500 contribution of after tax money to my new vanguard ira. You probably already know they would mess things up, but perhaps it's worth us verifying that you don't have any "old" IRA accounts of any kind (SEP,SIMPLE, tIRAs, rollover IRAs). JW RVD, You never answere...
by JW Nearly Retired
Sun Nov 30, 2014 11:15 am
 
Forum: Investing - Help with Personal Investments
Topic: backdoor roth balance question
Replies: 20
Views: 1922

Re: IRA 100% bonds inevitable??

If you are in a fairly high tax bracket you could hold muni bonds in the taxable account as your bond allocation. Personally, I prefer not to waste my limited Roth space on bonds.
JW
by JW Nearly Retired
Sun Nov 30, 2014 10:36 am
 
Forum: Investing - Help with Personal Investments
Topic: IRA 100% bonds inevitable??
Replies: 46
Views: 3803

Re: Strategy for paying for bridge years until Social Securi

The tax brackets are different. A single filer pays more. I understand that but should have been more clear with my question which is how would you use that information to decide on Roth conversion strategy? It's a bit of a double whammy as when you get to RMD and SS at 70, tax rate is also much hi...
by JW Nearly Retired
Sat Nov 29, 2014 2:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Strategy for paying for bridge years until Social Security
Replies: 20
Views: 3512

Re: After Tax 401k contribution rollover to Roth 401k?

ps: IRS says employer can't have been doing this so I don't know what this option that I must have misunderstood was? It was most likely an automatic switch to after-tax employee contributions in the 401k when the employee reached the $17,500 limit. From what I've read here, that is fairly common. ...
by JW Nearly Retired
Sat Nov 29, 2014 2:39 pm
 
Forum: Investing - Help with Personal Investments
Topic: After Tax 401k contribution rollover to Roth 401k?
Replies: 32
Views: 1967

Re: Do it yourself tax solutions? Should I just try turbotax

OK one more question: how do I know what forms I need to file? E.g., if I hadn't mentioned nondeductible IRA contributions (thus receiving advice that I need to file form 8606), how would I have found out? If you use a CPA I assume you need to tell him you made IRA contributions; perhaps you fill i...
by JW Nearly Retired
Sat Nov 29, 2014 1:59 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do it yourself tax solutions? Should I just try turbotax?
Replies: 53
Views: 3991

Re: Social Security Benefits

The is also our own BigFoot48's "Retiree Portfolio Model" spreadsheet. I'm a fan of it. Found I could model various scenarios for everything I wanted to study.
http://www.bogleheads.org/forum/viewtop ... =1&t=97352
JW
by JW Nearly Retired
Sat Nov 29, 2014 1:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: Social Security Benefits
Replies: 5
Views: 1169
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