Search found 1797 matches

by PaddyMac
Mon Mar 11, 2024 10:58 pm
Forum: Personal Finance (Not Investing)
Topic: What Retirement Planning/Budgeting Software Are You Using
Replies: 132
Views: 23937

Re: What Retirement Planning/Budgeting Software Are You Using

I am not sure if this has been mentioned but I recently started Projectionlab.com and like it very much. There is a cost to it however. They do have a very good video on youtube explaining the major features. I just saw that Kyle was starting to produce videos, including one on how to do Roth conversions. After trying most of the calculators, I'm pretty much settled on Projection Lab as it does everything I want for now, and new features are being added too. I also like having access to a support forum where other users can answer questions too - feels very Bogleheads-ish. I may even drop MaxiFi next year. I did learn that if you start a new plan with a Fixed Date start and work in Calendar years (which I like), you need to start it on 12/...
by PaddyMac
Mon Mar 11, 2024 4:40 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Excess Contributions - how to enter earnings on taxes
Replies: 13
Views: 856

Re: Roth IRA Excess Contributions - how to enter earnings on taxes

Success! I found a clue in TaxAct when I tried to use code "P" for the Vanguard form. At the end there was an alert to let me know that I should remove any 2022 distributions (so I did), but it threw up an Alert dialog that gave me the chance to check a box if P meant 2024! (So P can mean Prior or FUTURE year!). Alert said: Retirement Plan Income - 2024 Form 1099-R with Code P Check the appropriate box below ONLY if these entries are from a 2024 Form 1099-R you received (or expect to receive). Check only one box: [ ] 2024 form with code P in box 7 - corrective distribution from a pension [X] 2024 form with code P in box 7 - corrective excess contributions to a Roth IRA [ ] 2024 form with code P in box 7 - corrective excess contrib...
by PaddyMac
Mon Mar 11, 2024 3:43 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Excess Contributions - how to enter earnings on taxes
Replies: 13
Views: 856

Re: Roth IRA Excess Contributions - how to enter earnings on taxes

Alan S. wrote: Mon Mar 11, 2024 3:02 pm
As you indicated, because the excess deferrals were Roth, the distribution is non taxable, and there is no need to amend your 2022 return to report the distribution coded BP. However, the gains are coded B8 (current year) and the gains are taxable on your 2023 return on line 5b.
Thanks Alan S., that makes sense considering Vanguard separated the two items.
by PaddyMac
Mon Mar 11, 2024 2:04 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Excess Contributions - how to enter earnings on taxes
Replies: 13
Views: 856

Re: Roth IRA Excess Contributions - how to enter earnings on taxes

To make matters more interesting:
I have Vanguard "2023 Form 1099-R" for excess contributions for 2022 tax year from our Roth 401k

It has 2 individual lines:

Entry 1 = $10,000 = Excess Contribution Returned $ amount = Code BP
Entry 2 = $200 ( the "gains" on that amount+ = Code B8

TaxAct insists that I put the BP line on an Amended 2022 Tax Return. That shouldn't affect taxes as it's a Roth withdrawal.

Question:
Can I put the $200 (the gains) on the 2023 tax return?
Or do I put that on the Amended 2022 return, which ripples through everything (ACA subsidy etc).
by PaddyMac
Mon Mar 11, 2024 1:43 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Excess Contributions - how to enter earnings on taxes
Replies: 13
Views: 856

Re: Roth IRA Excess Contributions - how to enter earnings on taxes

I spoke to Wells Fargo, but even on my account, while the excess removal transaction happened on 12/28, it didn't settle until Jan 2nd, so I will not get a 1099-R until next year.

Lesson learned: Don't decide to retire right after max'ing out your IRA. And if you do, take out excess well before the end of the year...


The problem is that Wells Fargo will file 2023 FORM 5498 with the IRS, which right now shows a contribution of $7500. And if I enter that in TaxAct, it adds 6% tax ($450) as I had no earned income.
by PaddyMac
Mon Mar 11, 2024 1:17 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Excess Contributions - how to enter earnings on taxes
Replies: 13
Views: 856

Re: Roth IRA Excess Contributions - how to enter earnings on taxes

You are correct that your 1099-R will come next year, but you need to report the earnings this year. You likely just need to enter a fake 1099-R. Thank you. That's what I did, choosing "8 - Excess contributions & earnings taxable in 2023" for the Code. I was surprised that the profit showed up on the 1040 under 1(h) "Other Earned Income", instead of 4b taxable distributions from IRAs. The code should be 8J. Using just 8, your tax program will treat this distribution as coming from a qualified plan, not an IRA. That's why the earnings showed up incorrectly on 1(h) as excess elective deferrals rather than on lines 4a and 4b (the earnings) where it belongs. These codes are driving me crazy! TaxAct doesn't allow me to c...
by PaddyMac
Mon Mar 11, 2024 12:12 am
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Excess Contributions - how to enter earnings on taxes
Replies: 13
Views: 856

Re: Roth IRA Excess Contributions - how to enter earnings on taxes

toddthebod wrote: Sun Mar 10, 2024 7:38 pm You are correct that your 1099-R will come next year, but you need to report the earnings this year. You likely just need to enter a fake 1099-R.
Thank you. That's what I did, choosing "8 - Excess contributions & earnings taxable in 2023" for the Code.

I was surprised that the profit showed up on the 1040 under 1(h) "Other Earned Income", instead of 4b taxable distributions from IRAs.
by PaddyMac
Sun Mar 10, 2024 7:44 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Excess Contributions - how to enter earnings on taxes
Replies: 13
Views: 856

Re: Roth IRA Excess Contributions - how to enter earnings on taxes

Update: I found a clue in the IRS instructions for Form 5329:

You withdraw any earnings on the withdrawn contributions and include the earnings in gross income (see the Instructions for Form 8606 for details).

So I will hunt down Form 8606...
by PaddyMac
Sun Mar 10, 2024 7:30 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Excess Contributions - how to enter earnings on taxes
Replies: 13
Views: 856

Roth IRA Excess Contributions - how to enter earnings on taxes

I'm using TaxAct to file our taxes and am hung up on one item: We made Roth IRA contributions in 2023 that were in excess. I removed the excess + earnings on my account on 12/28/23. DH removed his excess + earnings on 1/2/24. We are both over 60 so withdrawals are penalty-free. According to TaxAct's page here (https://www.taxact.com/support/1280/2023/ira-or-roth-ira-excess-contributions), I do NOT enter the contributions as having been made (since they were removed in a timely manner), but I DO enter the EARNINGS as income in 2023. But where and how?! It looks like this should go on our 1040 on line 4b, IRA Distributions "Taxable Amount". But I can't figure out how to get it to appear there without a 1099. We have not gotten a 109...
by PaddyMac
Sun Mar 10, 2024 7:18 pm
Forum: Personal Finance (Not Investing)
Topic: Clarifying Tax Reporting of Sole Proprietor Solo 401(k) Contributions
Replies: 10
Views: 1224

Re: Clarifying Tax Reporting of Sole Proprietor Solo 401(k) Contributions

We haven't had a CPA for quite a few years now. There are lots of ways to figure out your contributions, but it means keeping track of your income and tax liability throughout the year if you want to know whether to contribute tax deferred vs. roth space. What I did in the end is create our tax return in a large Numbers spreadsheet, and then each quarter, do an update and see where we were at. At the very least, you have your business accounting software kicking out a P&L statement easily, and then there are worksheets that you can put in a spreadsheet so they are easy to play with. I modeled the Fidelity worksheet - here as a PDF : https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/customer-service/401k-self-employed-ow...
by PaddyMac
Fri Mar 01, 2024 10:27 pm
Forum: Personal Finance (Not Investing)
Topic: Clarifying Tax Reporting of Sole Proprietor Solo 401(k) Contributions
Replies: 10
Views: 1224

Re: Clarifying Tax Reporting of Sole Proprietor Solo 401(k) Contributions

What we used to do with the Solo 401k is make all the EmployEE contributions during the year, assuming we had matching income, as the max is a flat rate. We would make some EmployER contributions at the end of the year.

Then early the next year, once we could nail down our final income & expenses, we would nail down the EmployER contributions to max them out. I did notice that our CPA used to max out at about 97% or 98% of the max, and not 100%, if that helps. Likewise, I had a tendency to "round down" a little too once I did our own taxes.
by PaddyMac
Fri Mar 01, 2024 10:19 pm
Forum: Personal Finance (Not Investing)
Topic: Is ACA Excess Advance Premium Tax Credit Repayment Added to Self-Employed Health Insurance Deduction?
Replies: 25
Views: 1466

Re: Is ACA Excess Advance Premium Tax Credit Repayment Added to Self-Employed Health Insurance Deduction?

I have had this issue (having to repay some of the subsidy) and also the opposite (finding I got more of a subsidy) as it is next to impossible to predict income in November the year before you actually work when you are self-employed. As mentioned, this is not a calculation that you can really do yourself accurately. However, just know that if you end up paying MORE of your premiums out of pocket (without as generous a subsidy as you were hoping), then that portion is tax deductible because you are self-employed. However, the deduction is not as generous as the subsidy in my experience. In TaxAct, if I recall, I just enter all the numbers from the SA Form and also what I paid in premiums etc., and then eventually, during the Alerts, TaxAct...
by PaddyMac
Thu Feb 22, 2024 3:25 pm
Forum: Personal Finance (Not Investing)
Topic: Best way to keep money in a main checking account safe?
Replies: 57
Views: 3475

Re: Best way to keep money in a main checking account safe?

For our online account, we memorize the password (not even written down anywhere) and have enabled 2FA. We do not install the app on our phone (too easy to lose a phone and we don't do banking on a phone anyway). If you feel like your password isn't long enough, just double it up so it's longer. After that, we don't worry too much.

We have alerts set to email us when there is any account activity, same with all our credit cards. Set the alert to $0.01, not the $1.00 default, as many a time we've found small payments for 99 cents get charged to "test" the credit card.
by PaddyMac
Tue Feb 06, 2024 10:19 pm
Forum: Personal Investments
Topic: Help me to calculate my Solo401k
Replies: 6
Views: 797

Re: Help me to calculate my Solo401k

The Finance Buff has an online calculator you might find useful

https://sheet.zohopublic.com/sheet/publ ... &range=B11
by PaddyMac
Thu Feb 01, 2024 1:04 am
Forum: Personal Finance (Not Investing)
Topic: SEP IRA question
Replies: 18
Views: 1194

Re: SEP IRA question

I'm not following this closely, but I don't think anyone has mentioned that when you have a SEP and then open a solo 401k, you must stop contributing to your SEP. You can keep it open, but no further contributions are allowed. That's what I was told when we opened our 401k. So no contributions means no rollovers I would think.
by PaddyMac
Tue Jan 30, 2024 11:49 pm
Forum: Personal Consumer Issues
Topic: 2FA seems out of control; any way to make it better?
Replies: 39
Views: 3692

Re: 2FA seems out of control; any way to make it better?

I'm surprised it's so complicated. On Mac, in Safari, the code from Messages just pops up inside the field so I don't even have to think about it. If I use another browser, I have to look at Messages and type in the code.
by PaddyMac
Tue Jan 30, 2024 11:41 pm
Forum: Personal Finance (Not Investing)
Topic: 1099-MISC for business credit card referral bonus - Schedule C or interest?
Replies: 20
Views: 1981

Re: 1099-MISC for business credit card referral bonus - Schedule C or interest?

bismarck23 wrote: Tue Jan 30, 2024 10:35 pm The income was not cash back on purchases, but rather a referral bonus for referring two business credit cards to my wife's business. Her business is a client of mine (it's all above-board - we have a written agreement, the biz sends me a 1099, I declare the income, I have a license, etc.), and arguably referring credit cards to her was within the scope of my consulting.
I'm curious if your wife also got the sign-up bonus as well?
by PaddyMac
Fri Jan 26, 2024 12:21 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Liability Planning in Early Retirement
Replies: 4
Views: 521

Re: Tax Liability Planning in Early Retirement

If you're taking from taxable accounts, then you could start by looking at what you're invested in and seeing how much cap gains you have on each fund. If you can manage to keep your adjusted gross income low enough, that cap gains might be tax free.

This is a good reference to bookmark:
https://engaging-data.com/tax-brackets/ ... 0&cg=10000

and this
https://www.kitces.com/blog/understandi ... -in-basis/
by PaddyMac
Thu Jan 25, 2024 4:54 pm
Forum: Personal Consumer Issues
Topic: Planes, trains, automobiles, boats- $$$ for hobbies
Replies: 51
Views: 5469

Re: Planes, trains, automobiles, boats- $$$ for hobbies

We're about to spend $200K to build a new music studio – granted music is a bit more than a hobby (some income will come from it) but realistically it will not pay for itself. Because it's an addition to the house, it will only increase our utilities a bit. We don't have kids to leave our savings to and taking that chunk out of our retirement funds means we are still able to afford a comfortable retirement to age 100. We've worked hard all our lives and are lucky to have some years to enjoy ourselves now with our hobbies and passions. If you are trying to justify your spending, then that is a very personal thing imho. IF you can afford it, and it's not bothering anyone, then it's your money and you shouldn't feel bad about spending it on ho...
by PaddyMac
Sat Jan 20, 2024 11:14 am
Forum: Personal Finance (Not Investing)
Topic: Turning Your Net Worth into Income Production
Replies: 24
Views: 4702

Re: Turning Your Net Worth into Income Production

When we started the transition from working/accumulating to retirement/spending, the first thing we did was turn off reinvesting dividends. We let the cash accumulate in the retirement accounts. The cash kicked off by dividends in all accounts throughout the year is about what we spend on expenses, so rarely do we have to make a decision to sell a stock or fund. When you get your statement, it should tell you how much annual income your account produces. By the way, make sure you have a Money Market fund paying a decent interest, not just the default cash collection account - for our SEP-IRAs we have to manually move the cash into the MM each month because we can't set dividends to automatically go into the MM account. We could set that up ...
by PaddyMac
Thu Jan 18, 2024 12:51 pm
Forum: Personal Finance (Not Investing)
Topic: Dealing with "one time" or "temporary" expenses when calculating X in 25X
Replies: 33
Views: 2825

Re: Dealing with "one time" or "temporary" expenses when calculating X in 25X

We plan lumpy expenses like a new car, bathroom remodel, and so on. These are somewhat discretionary - or at least can slide from one year to the next if something happens (like Covid when we didn't want workers in the house unless necessary). Sealing the driveway happens every couple or three years, so easy to predict. But then there are "emergency" repairs that have to be done. For these I allocate $5K a year for house repairs that we could not foresee. We had to replace the boiler one year - not only did we have that expense, but we wasted another grand trying to fix the old boiler before we decided to replace it. Just yesterday we paid $4K to repair a water leak under the driveway (our water district only recently offered insu...
by PaddyMac
Mon Jan 15, 2024 6:39 pm
Forum: Personal Investments
Topic: Solo401K..Contributions Employer/Employee first?
Replies: 21
Views: 1346

Re: Solo401K..Contributions Employer/Employee first?

I always started with EmployEE first, as it has a flat maximum amount for contributions. With EmployER contributions, it's based on a percentage of profit. Especially since you said you won't be maxing it out, start with EmployEE making sure that you have enough earned income to match of course.

When you file your tax return I believe they ask if it's Employer or Employee contributions on the worksheet so they can raise any flags, so I would just keep that straight when you do the saving.
by PaddyMac
Mon Jan 15, 2024 6:32 pm
Forum: Personal Investments
Topic: Keeping income below IRMAA Cut Offs
Replies: 14
Views: 2081

Re: Keeping income below IRMAA Cut Offs

I've been using Projection Lab the past year and it alerted me to IRMAA when I wanted to take too much from a SEP-IRA for a big remodel this year (we're 63 so two years from now IRMAA will be an issue). I juggled the cost between Roth and SEP until IRMAA went away and it's now on my radar for withdrawals this year.
Forgot to mention that there is a free trial but if you want to save your data, there is an annual fee. It does a lot though between RMD and IRMAA planning etc. It's also manages to be pretty to look at (if you're averse to Excel like me).
by PaddyMac
Sun Jan 14, 2024 10:51 am
Forum: Investing - Theory, News & General
Topic: Anyone have Fidelity or Vanguard hacked?
Replies: 34
Views: 5362

Re: Anyone have Fidelity or Vanguard hacked?

I haven't heard about that, but fwiw I have 2FA turned on for every time I log in (never saved) and I don't save my password in any place except on a piece of paper in my office (and I have it memorized). Same with our banking and savings accounts. I don't care who hacks my credit cards or Amazon account etc. but I don't want to save a password for banking, savings or investments on the computer, even in a password manager.
by PaddyMac
Sun Jan 14, 2024 10:45 am
Forum: Personal Finance (Not Investing)
Topic: Favorite way to generate 1099 forms for contractors?
Replies: 2
Views: 606

Re: Favorite way to generate 1099 forms for contractors?

I also use and like Tax1099 dot com (after trying another one in previous years that was very clunky to use called 1099online dot com).
by PaddyMac
Sat Jan 13, 2024 10:42 am
Forum: Personal Finance (Not Investing)
Topic: Contributing to both Solo 401K & Solo 401K Roth
Replies: 22
Views: 1660

Re: Contributing to both Solo 401K & Solo 401K Roth

HomeStretch wrote: Sat Jan 13, 2024 8:59 am Correct.

If you do a combo of both, only the employEE elective deferrals can be either Roth or Traditional. The employEE catch-up contributions and employER contributions can only be Traditional.

I am hoping one of the free prototype providers will amend their plan soon to allow employER and catch-up Roth contributions.
Yes, you can mix and match.
Re above: Check the new laws for 2024 though. EmployER contribution can only be tax-deferred was the law, but I believe you can now save EmployER contributions and catch-up on the Roth side.
by PaddyMac
Sat Jan 06, 2024 10:14 pm
Forum: Personal Finance (Not Investing)
Topic: Do my own taxes?
Replies: 27
Views: 3021

Re: Do my own taxes?

For many years we had a CPA doing our business and personal taxes, and we were busy so we didn't have time to really learn the ins and outs. We had a SEP-IRA but because we didn't understand which line on the tax form was used for the Roth IRA contributions, we missed out on many years of contributions thinking our gross income made us ineligible. And when we did hit some good years, we were slow to open a solo 401k and paid gobs of taxes that we didn't need to. I don't regret much in life, but being slow to understand the tax return and where to save on taxes is one. When we slowed down at age 50, I took over the job of understanding the taxes. Then I just decided I knew enough to do them myself and haven't looked back. I have a big spread...
by PaddyMac
Sat Jan 06, 2024 9:57 pm
Forum: Personal Finance (Not Investing)
Topic: 10 year old wants to sit with me when I do taxes . Should I let him?
Replies: 98
Views: 16139

Re: 10 year old wants to sit with me when I do taxes . Should I let him?

I also think 10 years old is a bit young. If they want to run a business, have them create a fake business (lemonade stand) and do a Profit & Loss Statement for a year's worth of income and expenses.

This brings to mind something I read somewhere that went something like this:
Son says "Dad, are we rich?"
Dad: "No, I'm rich - and you get to live with me until you're 18."
by PaddyMac
Sat Jan 06, 2024 11:33 am
Forum: Personal Consumer Issues
Topic: Monthly Housing Costs in Retirement - 50% of expenses?
Replies: 27
Views: 3897

Re: Monthly Housing Costs in Retirement - 50% of expenses?

From our point of view, we spend a lot of time at home (vacations a couple time a year, maybe 3 weeks away). We have lots of hobbies and need space. And we hate dealing with house maintenance as it takes time away from things we enjoy doing. So for us, living in a house that is comfortable and doesn't need a lot of upkeep would be our choice. If your wife hates your current house, that is a big deal. If you can find a way to move and not be skint, do it. Make sure she understands the financial aspects as well as you do, so that if there are trade-offs later on, she understands and was in on the reasons why. Around here (semi-rural area), there are lots of houses on wells and septic tanks and digging deeper for water is super expensive, as i...
by PaddyMac
Fri Jan 05, 2024 12:02 am
Forum: Personal Consumer Issues
Topic: First time flying to Europe (2024)
Replies: 37
Views: 5442

Re: First time flying to Europe (2024)

Last time I went to Italy the plane stopped at Charles de Gaulle airport in France. Just know that when you get off the plane, you end up leaving a secure area when you get on a shuttle bus and have to go through security again at the next terminal. I made the mistake of stopping at the cafe at the corner where my gate was, not realizing there was a security checkpoint down that corridor too. I was last on the plane. So, get to your gate first and then look around for snacks etc. In fact, going through security multiple times seems more the norm these days. I flew Berlin - Heathrow - Dallas - ABQ last year and went through security at every stop. The one in Dallas was in the evening and the fast track checkins were closed (I think they clos...
by PaddyMac
Tue Jan 02, 2024 11:15 pm
Forum: Personal Finance (Not Investing)
Topic: Optimize AGI for ACA [Adjusted Gross Income for ACA health insurance]
Replies: 28
Views: 4090

Re: Optimize AGI for ACA

About the 425% target: Since we have a 401k and Roth accounts to withdraw from, I entered a couple of variations and found that there wasn't much of a difference around that income level. Our premium in 2024 for Bronze plan is only $111 per month in NM, and that worked for us.

When you're on the exchange, you can actually enter a variety of income levels and play "what if" and see what result you get. I think it also said we could enter what subsidy we wanted! At the end of the day, you pay it back if you get too much of a subsidy and I wanted to avoid that.
by PaddyMac
Tue Jan 02, 2024 7:50 pm
Forum: Investing - Theory, News & General
Topic: Favorite features on your spreadsheets
Replies: 82
Views: 10285

Re: Favorite features on your spreadsheets

Not a favorite feature. But I built our entire tax return with all the schedules on one big Numbers spreadsheet. This includes our 1065 Partnership return, Schedule SE, Schedule C for another LLC, Business Use of Home form, Extra Tables to monitor all investment withdrawals (cap gains and dividends etc), and more. There is an ACA table that tracks the % of the poverty level so I can keep our taxable income hitting our target (425%). When I think we're close, I switch to making Roth or HSA withdrawals. At the bottom is a Tax Table that updates whenever anything above changes, and that updates the taxable income so I can make estimated payments. And to the side is another table for our State Return for estimated taxes. Whenever possible, numb...
by PaddyMac
Tue Jan 02, 2024 7:33 pm
Forum: Personal Finance (Not Investing)
Topic: Optimize AGI for ACA [Adjusted Gross Income for ACA health insurance]
Replies: 28
Views: 4090

Re: Optimize AGI for ACA

We are self-employed and planning an expensive remodel this year. I carefully withdrew as much as I could in 2023 to arrive at 425% of the poverty level so our ACA will kick in over a grand every month as a subsidy. I estimated when applying for 2024 that our income would also be at 425%. If our remodel goes over budget, I also plan to do exactly what you are planning and apply for credit cards that (a) have a $900 bonus (thank you Chase Ink) for business expenses and/or (b) get a credit card with no interest for a few months so we can pay them off with taxable withdrawals in January 2025. However, do note that with a Chase Ink Business card at least, they will flag any expenses that do not look like business expenses. I got a notice once, ...
by PaddyMac
Mon Jan 01, 2024 5:52 pm
Forum: Personal Finance (Not Investing)
Topic: Solo401k Spousal Contribution Clarification
Replies: 50
Views: 3403

Re: Solo401k Spousal Contribution Clarification

This may be a good time to consult with a CPA. FWIW, when we were on Schedule C income (in California), our CPA put all the income on ONE Schedule C as he said we could file "as husband & wife" rather than split the income and expenses over two Schedule Cs. Then the income was split 50/50 to the Schedule Es, as we both worked in the business equally. Later on, when we wanted to have a different split, he advised forming a General Partnership so we could split the income in any way we wanted. We are not an LLC, technically we are a General Partnership and we file Form 1065 and issue Schedule Ks. It's more paperwork, but there is one advantage: a GP can have a loss and still take the full Business Use of Home deduction (half our...
by PaddyMac
Sat Dec 30, 2023 7:04 pm
Forum: Personal Investments
Topic: Income Limits when investing in a Solo K Roth IRA
Replies: 4
Views: 487

Re: Income Limits when investing in a Solo K Roth IRA

We have Vanguard Solo/Individual 401k plan. Just to be clear, the "Roth" you are referring to is a "Roth 401k", not a Roth IRA. It basically has the same contribution limits as your regular 401k contributions except that I'm pretty sure with our Vanguard Individual 401k, the "Roth" contributions must be made as either an EmployEE contribution or a Catch-up contribution (you are old enough for that). But what's nice is if you have a high income, these are flat maximum numbers that you don't have to calculate. You are used to the SEP's calculation as the EmployER. This will be the exact same as the EmployER contributions to your 401k and will be tax deferred. So, no Roth contributions as an EmployER. Note also th...
by PaddyMac
Sat Dec 30, 2023 12:10 am
Forum: Personal Investments
Topic: Help with FIL finances
Replies: 17
Views: 1927

Re: Help with FIL finances

DreamsOfRetiring wrote: Fri Dec 29, 2023 11:42 pm As far as i know , he is doing the 7k a year IRA. But I imagine he should be able to go the full extent of the 22.5k for deductions from 401k
Is 20% of net profit more than $7K? If so, he could do a SEP for 2023 only, if he needs to reduce taxes, then roll it over to the IRA in the future. A SEP is easy to open, very little paperwork compared to a 401k. But once he has a 401k, he needs to stop contributing to the SEP.

For 2024, open a 401k (it takes a few weeks) and save for TY 2024.
by PaddyMac
Fri Dec 29, 2023 10:53 pm
Forum: Personal Investments
Topic: Help with FIL finances
Replies: 17
Views: 1927

Re: Help with FIL finances

Bit confused. He's already 70. He has high income but you don't think he can save much even though he has no debt now. If so, is this the age-old problem of spending more than he makes? Whether or not he saves in a 401k depends on whether he can afford to set aside enough money to make the paperwork worth it. Fwiw, it's too late now to open a 401k for 2023 as the account must be set up by December 31 (even though he can save up until he files taxes). He can however open a SEP-IRA up to the tax filing deadline and he can save for 2023 up until October 15, 2024 if he files for an extension (useful to reduce 2023 tax bill if he needs time to get savings together due to cashflow). The SEP-IRA is "like" the EmployER side of a 401k (the...
by PaddyMac
Fri Dec 29, 2023 10:45 pm
Forum: Personal Finance (Not Investing)
Topic: Help: Social security application approved too quickly
Replies: 2
Views: 631

Re: Help: Social security application approved too quickly

As it happens, I had a similar conversation with the SS office as I didn't want any 2023 income. I signed up in November with an official start date of December 1. My first check arrives later in January. They assured me that the first check will be 2024 income because I received it in 2024.
by PaddyMac
Thu Dec 28, 2023 11:45 pm
Forum: Personal Finance (Not Investing)
Topic: Taxing of social security, should you pay per month or at years end?
Replies: 19
Views: 3048

Re: Taxing of social security, should you pay per month or at years end?

I just signed up for SS and opted not to do any withholding. We withdraw from our Vanguard i401k and they insist on withholding 20%. So I plan our withdrawals so that it covers our taxes from all other sources (interest, IRA withdrawals, etc) as our effective tax rate is nowhere close to 20%.

If anyone knows how to reduce the 20% withholding, I'm all ears.
by PaddyMac
Thu Dec 28, 2023 11:35 pm
Forum: Personal Investments
Topic: Leaving Vanguard
Replies: 40
Views: 5989

Re: Leaving Vanguard

I had to call Vanguard's small biz customer service today for something with an i401k. 100% couldn’t be done online. … and Lordy. It was awful. The reps were nice, but I was on the phone for just under 7 hours. Every small biz number listed (there were four)? Wrong, and all the reps all know it’s wrong, and that there wasn’t a direct route for me to find to even call. Most of my time spent was an hour long wait, to explain the situation, to be told who I was transferred to was incorrect, to be transferred again (to what they hoped was the right group) to wait another hour. The last leg of it was 2 hours and 43 minutes across two folks. To have something done that took the rep only four minutes. Again, she knew what I just went through was ...
by PaddyMac
Thu Dec 28, 2023 3:58 pm
Forum: Personal Finance (Not Investing)
Topic: Netflix: subscribe directly or via Apple?
Replies: 7
Views: 840

Re: Netflix: subscribe directly or via Apple?

If you mean AppleTV, you just add Netflix as an app, then sign in with the app. You purchase the sub via Netflix.
We get Netflix sub free with our TMobile iPhone plan (over 55 Magenta plan I think it's called).
by PaddyMac
Wed Dec 27, 2023 10:58 am
Forum: Personal Consumer Issues
Topic: Best Tips for a Macbook Air?
Replies: 16
Views: 1650

Re: Best Tips for a Macbook Air?

If that were me, I would take it to an Apple store for a check-up. I did that with an old laptop and they didn't charge me.
by PaddyMac
Tue Dec 26, 2023 5:01 pm
Forum: Personal Consumer Issues
Topic: Anything special to see in Denver?
Replies: 33
Views: 3820

Re: Anything special to see in Denver?

Another vote for Meow Wolf, although the original one in Santa Fe is better afaik. The kids are the perfect age for MW.

We were in Denver recently and visited the Forney Museum of Transportation - vintage trains, cars, motorbikes, etc. We really enjoyed it, but then we love old cars. Most of them had some history attached with an interesting story (and some were from famous movies etc.).
https://www.forneymuseum.org
by PaddyMac
Mon Dec 25, 2023 7:58 pm
Forum: Personal Finance (Not Investing)
Topic: Does a loss on one business offset income from 2nd business or W-2 wages first?
Replies: 2
Views: 550

Re: Does a loss on one business offset income from 2nd business or W-2 wages first?

Something to keep in mind is that if your music business consistently has a loss and you want to continue it as a going concern, you could merge the two businesses. You are a creative person that also consults. We have a business making music and writing and consulting and doing lots of other things (the NY Times once described our type of business as "slashers"...!). Another way to stop from having a loss is to not deduct big expenses as S179, but write them off over a few years. We've built up a lot of Depreciation deductions that way that help deduce income during the good years. Another thing to keep in mind is the Business Use of the Home deduction. I believe with Schedule C income, you are limited by your profit. We are a ge...
by PaddyMac
Mon Dec 25, 2023 11:06 am
Forum: Investing - Theory, News & General
Topic: What is Your Biggest "Good Problem to Have"? [Financial]
Replies: 97
Views: 13686

Re: What is Your Biggest "Good Problem to Have"? [Financial]

Well, seeing as it's Christmas. When figuring out what we should get each other for Christmas, I realized that I have everything I want and need. If something comes up during the year on my wishlist, I can click a button and it's on my doorstep in a few days.

Next year I will try to NOT click that button and make a wish list instead, otherwise there's nothing under the tree! :oops:
by PaddyMac
Mon Dec 25, 2023 10:48 am
Forum: Personal Investments
Topic: Cash Basis 1065 reporting of SE 401k profit sharing liability
Replies: 2
Views: 345

Re: Cash Basis 1065 reporting of SE 401k profit sharing liability

I'm not sure how your entity is organized. We are a general partnership with a Vanguard Individual 401k. We file a 1065 and two Schedule Ks.

I don't put the 401k contributions on the 1065 at all. They go on the 1040 directly. That's how our CPA had us do it and I just continued with that when I took over our taxes in TaxAct. I merged the EmployER and EE contributions into one total sum.

The 401k contribution is not like a regular business deduction (like buying a computer), which would reduce your SE taxes. So I would not put it down as an expense.

+ You can deduct it in 2023 up until your tax filing deadline, April 15, or even October 15 if you file for an extension. I would do that sometimes depending on cashflow.
by PaddyMac
Sat Dec 23, 2023 10:56 pm
Forum: Personal Finance (Not Investing)
Topic: Spouse Over Contributed to HSA. Can I Under Contribute?
Replies: 4
Views: 645

Re: Spouse Over Contributed to HSA. Can I Under Contribute?

We used to have a family plan and we would put the max contribution on one plan, and the $1000 catchup on the second plan.
by PaddyMac
Sat Dec 23, 2023 11:46 am
Forum: Personal Finance (Not Investing)
Topic: Overcoming irrational financial conservatism
Replies: 58
Views: 5870

Re: Overcoming irrational financial conservatism

I find whenever I stress out about money, making a spreadsheet and really examining expenses will give me some peace of mind. I need to see how cashflow works. I would create a simple spreadsheet where you list the cash assets you have at the top, what you would spend if you were out of work with one monthly entry, adding in the second salary as a monthly entry, and then see how many months later if would be before you hit $0. You might be surprised that it is years out or even never (as you say, one salary will cover all expenses). Just seeing cashflow in a table is more useful than some vague round number. We recently contracted to add an addition to our home and with a few nights of sweating the details of how to withdraw a huge amount f...
by PaddyMac
Sat Dec 23, 2023 11:33 am
Forum: Personal Finance (Not Investing)
Topic: HSA reimbursements
Replies: 4
Views: 930

Re: HSA reimbursements

Another thing to watch is if your state is like New Mexico: On my State's return, I can enter our out-of-pocket unreimbursed medical expenses for the year and get a small deduction. But I can't include expenses that were "reimbursed" including from an HSA. (In my accounting program, I move HSA reimbursed expenses to a separate column so I can get a separate tally for the unreimbursed expenses.)

However, I'm not sure how that works if I ever pull up an old receipt and use it to withdraw funds from an HSA. I guess I will just subtract that amount from the current year's out-of-pocket expenses.
by PaddyMac
Thu Dec 21, 2023 11:44 pm
Forum: Personal Finance (Not Investing)
Topic: Help: Roth conversion and $300k income limit for $7500 EV credit
Replies: 12
Views: 1416

Re: Help: Roth conversion and $300k income limit for $7500 EV credit

FWIW, I officially "filed" my SS on December 1st, telling SS that my starting date is Dec. 1.
However, that means that my first payment will be on the 4th Wed in January! And that income will be 2024 income.

So the paymenet arrives a month after the Filing Date, and the week it's received will depend on your wife's day of the month.
Also, ONLY income actually received in your bank account in 2023 will appear on your 2023 tax return. So my guess is that if she filed on Nov 1, her first check will be sometime in December and only one payment will appear in 2023.