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Re: Highly Compensated Employee ?

She will need to declare the income on her 2012 tax return even though she gets it in 2013. It will be added to line 7 on Form 1040 where her W2 income goes (His/Her Wages, is that line 7?). Sounds like with the 2008 changed rules it can all be handled on the 2013 return. Is that correct? Yes, thin...
by benpthompson
Sat Feb 02, 2013 8:37 am
 
Forum: Investing - Help with Personal Investments
Topic: 401(k) corrective distribution for HCE
Replies: 12
Views: 2390

Re: Highly Compensated Employee ?

First, there is no penalty. Her employer will send her a check for the amount that she should not have contributed. She will also get a 1099R for this. The rules have changed a little bit since the last time this happened to me. She will need to declare the income on her 2012 tax return even though...
by benpthompson
Fri Feb 01, 2013 6:40 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401(k) corrective distribution for HCE
Replies: 12
Views: 2390

401(k) corrective distribution for HCE

I have a dilemma that I am having trouble understanding. For the first year my wife contributed to her 401k. She maxed out the 401k at 17k. However, she is just learning that she is within the Highly Compensated Employee status and cannot contribute this much to her 401k. My question is what happens...
by benpthompson
Fri Feb 01, 2013 6:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401(k) corrective distribution for HCE
Replies: 12
Views: 2390

Re: Am I doing this right?

Anyone else have an opinion?
by benpthompson
Tue Jan 08, 2013 11:39 am
 
Forum: Investing - Help with Personal Investments
Topic: Am I doing this right?
Replies: 6
Views: 468

Re: Am I doing this right?

JW,

Thank you for the encouragement. My thinking was the same as yours. I just want to make sure I am doing everything correctly for my family.
by benpthompson
Tue Jan 08, 2013 12:38 am
 
Forum: Investing - Help with Personal Investments
Topic: Am I doing this right?
Replies: 6
Views: 468

Re: Am I doing this right?

MHC, The 401(k) is pretty good, however my motivation was primarily tax purposes. I do want to leave flexibility to continue to do the backdoor Roth conversions. Perhaps my options are either A. Leave the money in the 401(k) or B. Do the conversion as stated above. Your point of early retirement or ...
by benpthompson
Tue Jan 08, 2013 12:33 am
 
Forum: Investing - Help with Personal Investments
Topic: Am I doing this right?
Replies: 6
Views: 468

Am I doing this right?

I am 32 years old and wife is 29 years old. Combined income of 200k. Next years income will be similar. The following year our combined income should increase to 500k and remain stable moving forward. We currently have 35k invested in my Roth IRA and 7k invested in my 401(k). Her Roth is at 15k and ...
by benpthompson
Mon Jan 07, 2013 11:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: Am I doing this right?
Replies: 6
Views: 468

Re: Estate question? Bogleheads Expertise Needed

Thank you both for the quick responses. What does the term revocable mean in reference to the trust?
by benpthompson
Fri Jan 04, 2013 1:03 am
 
Forum: Investing - Help with Personal Investments
Topic: Estate question? Bogleheads Expertise Needed
Replies: 3
Views: 265

Estate question? Bogleheads Expertise Needed

My grandfather is 95 years old. He used his remaining retirement $150,000 in 2006-07 to purchase all Ford stock. He did so on a whim and all by himself. To his credit (and incredible luck) his retirement is now worth close to $1,000,000. The stock is in a standard non-tax advantage account with TD A...
by benpthompson
Fri Jan 04, 2013 12:23 am
 
Forum: Investing - Help with Personal Investments
Topic: Estate question? Bogleheads Expertise Needed
Replies: 3
Views: 265

Re: Add $5k to Roth IRA today, but income ends up > 125k?

[/quote] i thought the backdoor roth loophole is being closed by the current tax deal.[/quote]

Is this true??
by benpthompson
Wed Jan 02, 2013 2:14 am
 
Forum: Investing - Help with Personal Investments
Topic: Add $5k to Roth IRA today, but income ends up > 125k?
Replies: 9
Views: 1173

Re: Backdoor Roth IRA, Please help?

-Alan S. Fantastic breakdown. That's what I have been trying to understand. Thank you!
by benpthompson
Thu Dec 13, 2012 5:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth IRA, Please help?
Replies: 9
Views: 861

Re: Backdoor Roth IRA, Please help?

Thank you very much for the responses. I was planning on doing the same conversion for my wife. She also has only a ROTH and a 401k through work. Currently, she does not have a traditional IRA. We would open the Traditional and place 5k in for her and then convert it into her ROTH a week later. Our ...
by benpthompson
Thu Dec 13, 2012 3:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth IRA, Please help?
Replies: 9
Views: 861

Backdoor Roth IRA, Please help?

I have been trying to wrap my head around my situation for too long. I need some good ole Bogleheads help! I converted 17k from a 401k to a traditional IRA to a Roth IRA earlier in the year. I understand that I will need to pay taxes on the 17k as ordinary income. I have now funded a traditional IRA...
by benpthompson
Wed Dec 12, 2012 11:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth IRA, Please help?
Replies: 9
Views: 861

Re: Portfolio Help (Young Family) [Medical Residency]

Grt2bOutdoors - Thank you. It should now be edited appropriately.

-Ben
by benpthompson
Sun Nov 25, 2012 11:08 pm
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Help (Young Family) [Medical Residency]
Replies: 8
Views: 508

Portfolio Help (Young Family) [Medical Residency]

Hi, I have been reading this forum for a number of years, however I have never posted. I appreciate so much all of the information on this fantastic site! I have never had a reason to post, instead I have spent my time reading and learning. I am finally in a position in life where I am producing an ...
by benpthompson
Sun Nov 25, 2012 10:16 pm
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Help (Young Family) [Medical Residency]
Replies: 8
Views: 508

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