Search found 7059 matches

by Alan S.
Tue Jan 16, 2018 10:33 pm
Forum: Investing - Help with Personal Investments
Topic: Taxes 1099-R
Replies: 3
Views: 342

Re: Taxes 1099-R

I transferred a SIMPLE IRA to Vanguard Traditional IRA (and thenconverted to my Roth IRA). It was a small amount and I was in a lower bracket in 2017 than I probably will ever be again so I felt I’d take the hit now Just want to make sure I didn’t do anything wrong ... it appears to be shown as a “...
by Alan S.
Tue Jan 16, 2018 9:55 pm
Forum: Personal Finance (Not Investing)
Topic: 1099-R Question
Replies: 1
Views: 292

Re: 1099-R Question

Your tax return should not show the conversion on Form 8606 because it was recharacterized (that is the official term to use) back to TIRA. The IRS can generally figure this out by comparing the two 1099R forms, however they still want you to include an explanatory statement with your return indicat...
by Alan S.
Tue Jan 16, 2018 2:50 pm
Forum: Investing - Theory, News & General
Topic: Roth 401k into Roth IRA
Replies: 5
Views: 303

Re: Roth 401k into Roth IRA

Even if your Roth IRA has not yet been held 5 years at the time of the Roth 401k rollover, the amount of your Roth 401k deferrals (24,500) will be treated as Roth IRA regular contributions, available anytime without tax or penalty from your Roth IRA. In fact, even if there is a loss before you do th...
by Alan S.
Tue Jan 16, 2018 2:14 pm
Forum: Investing - Help with Personal Investments
Topic: Questions re: Backdoor Roth specifics
Replies: 1
Views: 95

Re: Questions re: Backdoor Roth specifics

You are fine. The Roth IRA balance does NOT trigger any pro rating and can be ignored for purposes of your back door Roth. Also, because the final step is the conversion and you can no longer recharacterize conversions, there is no reason to convert to a new Roth IRA. Just convert into the existing ...
by Alan S.
Tue Jan 16, 2018 1:28 pm
Forum: Personal Finance (Not Investing)
Topic: RMD Withdrawal Plans
Replies: 5
Views: 439

Re: RMD Withdrawal Plans

You also need to determine if you want federal (or state) withholding on the RMD distributions, or if you are paying taxes through quarterly estimates or withholding from another source. And if you are planning QCDs, you will probably have to complete them all before setting up automatic distributio...
by Alan S.
Tue Jan 16, 2018 1:05 pm
Forum: Investing - Help with Personal Investments
Topic: In-Service Roth 401(k) Rollovers
Replies: 3
Views: 250

Re: In-Service Roth 401(k) Rollovers

Assuming this is Roth 401k money at this time, the amount you may be able to roll out to your Roth IRA depends on the plan provisions. Roth 401k money can be a mixture of "Distributable" and "non distributable" amounts. Regular Roth 401k contributions are elective deferrals and therefore cannot be d...
by Alan S.
Mon Jan 15, 2018 10:26 pm
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth IRA tax question.
Replies: 1
Views: 167

Re: Backdoor Roth IRA tax question.

The taxable amount depends on how much reconstruction work you are able to do to document your basis of non deductible contributions over the years. If you retroactively file an 8606 for each of those years, the IRS will accept them and your 2017 conversion will have a higher non taxable portion. Th...
by Alan S.
Mon Jan 15, 2018 7:22 pm
Forum: Investing - Theory, News & General
Topic: Invested in ROTH IRA but I appear to have crossed $186K mark
Replies: 15
Views: 2095

Re: Invested in ROTH IRA but I appear to have crossed $186K mark

If your 2017 Modified AGI ends up in the Roth contribution phaseout range (186-196k) and you have gains on your investment, you would generally be better off to do a partial recharacterization to TIRA, leaving the amount you are allowed to contribute to Roth in the Roth IRA. Otherwise, if you rechar...
by Alan S.
Mon Jan 15, 2018 6:51 pm
Forum: Personal Finance (Not Investing)
Topic: Insurance: Who do you use? (Auto/Home)
Replies: 32
Views: 1687

Re: Insurance: Who do you use? (Auto/Home)

Travelers direct for HO and Auto.

Before that State Farm - left due to rate increases
Before that AARP Hartford - left due to rate increases
by Alan S.
Mon Jan 15, 2018 1:53 pm
Forum: Investing - Help with Personal Investments
Topic: traditional -> roth conversion and trustee transfer in the same year?
Replies: 3
Views: 101

Re: traditional -> roth conversion and trustee transfer in the same year?

Neither a Roth conversion or a trustee to trustee transfer counts toward the one rollover you are allowed. You can do a conversion by direct transfer OR by indirect 60 day rollover - neither one of those counts. What does count is when you do a 60 day rollover between IRAs of the same type within a ...
by Alan S.
Mon Jan 15, 2018 1:47 pm
Forum: Investing - Help with Personal Investments
Topic: Pension Rollover Before 59 and 1/2
Replies: 5
Views: 347

Re: Pension Rollover Before 59 and 1/2

Everything IS a distribution when it comes out of the plan and will be reported on a 1099R. For a direct rollover the code will be "G". It is either a taxable distribution if you don't roll it over, or non taxable if you do (except when you roll it to a Roth IRA). Your statement is true, no penalty,...
by Alan S.
Mon Jan 15, 2018 12:34 pm
Forum: Personal Finance (Not Investing)
Topic: Social Security “Hump” and the new tax rates???
Replies: 10
Views: 2367

Re: Social Security “Hump” and the new tax rates???

In 2017 the last dollar of QDI will be taxed at the same point where ordinary income goes from the 15% to 25% brackets. But in 2018 all of QDI will have been taxed just before ordinary income moves from the 12% to 22% brackets. This makes the marginal rate drop from 49.95% to 22.20% before jumping ...
by Alan S.
Mon Jan 15, 2018 11:56 am
Forum: Investing - Help with Personal Investments
Topic: Pension Rollover Before 59 and 1/2
Replies: 5
Views: 347

Re: Pension Rollover Before 59 and 1/2

There is never a penalty if a distribution is rolled over, regardless of age. There is also never a penalty if the age 55 separation from service exception applies for any part of a distribution NOT rolled over. However, many DB pensions may not allow a distribution prior to 55, even if separated fr...
by Alan S.
Sat Jan 13, 2018 10:49 pm
Forum: Personal Finance (Not Investing)
Topic: Pub 590B [Uniform Lifetime Table update?]
Replies: 5
Views: 333

Re: Pub 590B

We are now 16 years into the current RMD tables, and the 1987 tables lasted 15 years, so if the rate of mortality improvement has been consistent we would be due for new tables now. However, there has been no news of even preliminary tables being released and I know of no way to tell if there is any...
by Alan S.
Sat Jan 13, 2018 7:58 pm
Forum: Personal Finance (Not Investing)
Topic: IRA recharacterization
Replies: 9
Views: 839

Re: IRA recharacterization

Yes, recharacterizations of regular contributions were not affected by the new tax law. You can recharacterize the TIRA contribution made in Jan, 2017 as a Roth contribution as long as that contribution was a 2017 contribution and not a prior year contribution. The phase out range for 2017 started a...
by Alan S.
Sat Jan 13, 2018 7:33 pm
Forum: Personal Finance (Not Investing)
Topic: Roth conversion confusion
Replies: 28
Views: 1150

Re: Roth conversion confusion

The IRS cite for determination of age 70.5 is Reg 1.401(a)(9) -2 Q 3: Q-3. When does an employee attain age 70 1/2? A-3. An employee attains age 70 1/2 as of the date six calendar months after the 70th anniversary of the employee's birth. For example, if an employee's date of birth was June 30, 1933...
by Alan S.
Sat Jan 13, 2018 2:53 pm
Forum: Personal Finance (Not Investing)
Topic: Standard Deduction in 2018
Replies: 10
Views: 1605

Re: Standard Deduction in 2018

That figure is likely to have been 26,500 which includes the basic standard deduction of 24,000 plus 1, 250 additional standard deduction for each spouse who has reached age 65. 24000 plus 2500 = 26,500 With all the talk about the basic standard deduction increase, press releases throughout this pro...
by Alan S.
Sat Jan 13, 2018 2:11 pm
Forum: Personal Finance (Not Investing)
Topic: Mega Backdoor Roth: Conversion or Rollover?
Replies: 15
Views: 864

Re: Mega Backdoor Roth: Conversion or Rollover?

Tried searching for this but couldn't find. People frequently use the terminology of "rollover" and "conversion" interchangeably when it comes to Mega Backdoor Roth. However, is the move from 401K after tax to rIRA a rollover or conversion? It's a qualified rollover contribution. The IRS terminolog...
by Alan S.
Fri Jan 12, 2018 7:35 pm
Forum: Investing - Help with Personal Investments
Topic: Reasoning behind Backdoor Roth IRA
Replies: 11
Views: 665

Re: Reasoning behind Backdoor Roth IRA

Many of these provisions are affected by the 10 year budgeting process for tax related legislation. Since generated tax revenue over 10 years is used to "pay for" other provisions that reduce such revenue, budgeting often takes priority over sound tax policy. FYI - Today's Morningstar article by IRA...
by Alan S.
Fri Jan 12, 2018 7:24 pm
Forum: Investing - Help with Personal Investments
Topic: 401k (and Roth 401k) Rollover
Replies: 1
Views: 104

Re: 401k (and Roth 401k) Rollover

If you are confident about the rapid progression of your future income, I suggest that you roll over both portions to your Roth IRA. You will owe taxes on 2,000. Then be sure to keep track of the year and type of contributions made to your Roth IRA in case you ever need to take a distribution before...
by Alan S.
Fri Jan 12, 2018 6:18 pm
Forum: Personal Finance (Not Investing)
Topic: TurboTax Prices
Replies: 153
Views: 17226

Re: TurboTax Prices

Anyone know whether Deluxe or on line deluxe handles 1099MISC income Box 3 - for brokerage bonus?
by Alan S.
Thu Jan 11, 2018 11:57 pm
Forum: Investing - Help with Personal Investments
Topic: Question regarding investment options
Replies: 18
Views: 1113

Re: Question regarding investment options

The plan has a couple options in correcting an ACP failure. For example, they might make additional contributions to reduce the excess. However, it is more likely that they would distribute the excess from the plan back to the employee. Since these are employee (after tax) Contributions, only the ea...
by Alan S.
Thu Jan 11, 2018 12:39 pm
Forum: Investing - Help with Personal Investments
Topic: Mistake with After-Tax 401k to Roth?
Replies: 5
Views: 238

Re: Mistake with After-Tax 401k to Roth?

For these direct rollovers, the participant should not get a split rollover per Notice 2014-54 unless they request it. If a direct rollover to the Roth IRA is requested without such instructions, the sub account balance including the earnings in the sub account should all be transferred to the Roth ...
by Alan S.
Wed Jan 10, 2018 9:39 pm
Forum: Investing - Help with Personal Investments
Topic: 401K Roth direct rollover to Roth IRA 5-year rule
Replies: 2
Views: 221

Re: 401K Roth direct rollover to Roth IRA 5-year rule

Since your Roth IRA was qualified at the time of the Roth 401k rollover, the Roth 401k money is also immediately qualified upon rollover to the Roth IRA. You no longer have to track the composition of your Roth IRA. Any distributions you take are only reported on line 15a of Form 1040. In other word...
by Alan S.
Wed Jan 10, 2018 4:40 pm
Forum: Investing - Help with Personal Investments
Topic: Rollover IRA to 401k
Replies: 8
Views: 356

Re: Rollover IRA to 401k

The main pitfall would be if your 401k plan does not have good investment options or reasonably low expenses. If the expenses were high and your rollover amount as well, you could lose the net benefit of the back door.
by Alan S.
Wed Jan 10, 2018 3:47 pm
Forum: Personal Finance (Not Investing)
Topic: Excess Roth IRA Contribution
Replies: 7
Views: 448

Re: Excess Roth IRA Contribution

Sec 408(d)(4) dealing with the return of excess contributions is the actual source of this rule: (4)Contributions returned before due date of return Paragraph (1) does not apply to the distribution of any contribution paid during a taxable year to an individual retirement account or for an individua...
by Alan S.
Wed Jan 10, 2018 12:22 pm
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth Mess
Replies: 7
Views: 806

Re: Backdoor Roth Mess

Agree, the qualify control on this entire issue is subjective and error prone. Therefore, the IRS issued Bulletin 2014-9 which was intended to allow plan administrators to accept IRA rollovers based on participant's certification that no IRA basis was included in the amount rolled over. And if the c...
by Alan S.
Tue Jan 09, 2018 11:35 pm
Forum: Personal Finance (Not Investing)
Topic: Trying to understand Roth five-year rule
Replies: 25
Views: 3163

Re: Trying to understand Roth five-year rule

For those wondering about the cite for the 5 year conversion period continuing from the year of the IRR if a Roth IRA rollover was done before 5 years were completed from the IRR year, it is the bolded sentence in Q 12 of IRS Notice 2010-84 copied below: Q-12. Are there any special rules relating to...
by Alan S.
Tue Jan 09, 2018 10:57 pm
Forum: Personal Finance (Not Investing)
Topic: Recharacterization.......one last chance?
Replies: 2
Views: 300

Re: Recharacterization.......one last chance?

Ascensus has also contacted the IRS and received a positive response for recharacterizing 2017 conversions. That should mean that the only headwind would be a Roth IRA custodian who is not up to date. The new rules are clear about conversions and retirement plan-to-Roth IRA rollovers that occur in 2...
by Alan S.
Tue Jan 09, 2018 10:06 pm
Forum: Personal Finance (Not Investing)
Topic: Excess Roth IRA Contribution
Replies: 7
Views: 448

Re: Excess Roth IRA Contribution

I'd say 1099-R should have code P instead of code 8. Any earnings should be taxable on the 2016 tax return, since it was a 2016 Roth IRA contribution that was withdrawn. In addition to the missing entry on line 15a there should be an attached statement describing the withdrawal. Consider writing th...
by Alan S.
Tue Jan 09, 2018 9:53 pm
Forum: Investing - Help with Personal Investments
Topic: Roth IRA over contribution
Replies: 2
Views: 206

Re: Roth IRA over contribution

The custodian would not know your earned income unless you told them. If you did tell them and they said that your total contributions can exceed your total earned income, they were wrong. Because the due date for 2016 excess contributions has passed, there is a different procedure for correcting th...
by Alan S.
Tue Jan 09, 2018 8:27 pm
Forum: Personal Finance (Not Investing)
Topic: Excess Roth IRA Contribution
Replies: 7
Views: 448

Re: Excess Roth IRA Contribution

You shouldn't have to file anything, since the excess Roth contribution was removed by the due date and there were no earnings returned with it that WOULD HAVE been taxable on your 2017 return because the contribution was made IN 2017 (for 2016). Since you do not report Roth contributions on your re...
by Alan S.
Mon Jan 08, 2018 12:41 pm
Forum: Investing - Help with Personal Investments
Topic: Roth 401k rollover to Roth IRA + backdoor Roth in same year?
Replies: 8
Views: 556

Re: Roth 401k rollover to Roth IRA + backdoor Roth in same year?

No problem doing this, and no reason to maintain more than one Roth IRA account. Awesome, and yes, I want to consolidate everything into one account which is a Roth IRA I used as the destination of a backdoor Roth I did last year. You will have to keep close track of the composition of your Roth IR...
by Alan S.
Sun Jan 07, 2018 10:22 pm
Forum: Investing - Help with Personal Investments
Topic: Roth IRA transfer to Traditional IRA in error
Replies: 7
Views: 501

Re: Roth IRA transfer to Traditional IRA in error

If you don't mind, let us know what was done to fix it. And be sure to take note of any 1099R you receive this month or 5498 in May that reflects this issue.
by Alan S.
Sun Jan 07, 2018 9:14 pm
Forum: Personal Finance (Not Investing)
Topic: Please Post Tax Bill Questions Here [was Tax Bill Omnibus Thread]
Replies: 878
Views: 48505

Re: Please Post Tax Bill Questions Here [was Tax Bill Omnibus Thread]

Yes, somewhat. While your subjective assumption of what your marginal rate will be in retirement should not change, the current reduction from 25 to 22 means it is somewhat more likely that your conversion tax rate would be equal or lower to your rate in retirement than it was last year. As always, ...
by Alan S.
Sun Jan 07, 2018 7:05 pm
Forum: Investing - Help with Personal Investments
Topic: Roth IRA transfer to Traditional IRA in error
Replies: 7
Views: 501

Re: Roth IRA transfer to Traditional IRA in error

We have two banks, two advisors, and yourself involved in this error, and probably none of the first 4 parties will take responsibility for this error because other parties were also likely to be partly at fault. This is how an initial mistake compounds into an entire string of mistakes. Was 920 the...
by Alan S.
Sun Jan 07, 2018 6:23 pm
Forum: Investing - Help with Personal Investments
Topic: Roth 401k rollover to Roth IRA + backdoor Roth in same year?
Replies: 8
Views: 556

Re: Roth 401k rollover to Roth IRA + backdoor Roth in same year?

I have a Roth 401k with my employer. I may leave them in the coming year and would plan on performing a Roth 401k rollover to Roth IRA after I leave. In the same year, because of my income levels, I want to perform a backdoor Roth to the same Roth IRA. Are there any rules preventing me from doing s...
by Alan S.
Sun Jan 07, 2018 1:36 pm
Forum: Investing - Theory, News & General
Topic: Backdoor Roth: How Long To Wait For Conversion?
Replies: 58
Views: 11903

Re: Backdoor Roth: How Long To Wait For Conversion?

If Congress really wanted to end the back door, they wouldn't mess with unenforceable time limits for conversions. The prior administration promoted this solution: To shut down this perceived “abuse”, the Treasury Greenbook proposal would simply limit any/all Roth conversions to be only permissible ...
by Alan S.
Sun Jan 07, 2018 1:07 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth question Pro rate rule
Replies: 2
Views: 180

Re: Backdoor Roth question Pro rate rule

No. Your wife's rollover IRA will not affect the taxation of your conversion. Her IRAs are entirely separate from yours. You would make a non deductible TIRA contribution for 2017 and/or 2018. If for 2017 you would file Form 8606 with your 2017 return. Form 8606 is individual and only holds one SSN....
by Alan S.
Sat Jan 06, 2018 9:33 pm
Forum: Personal Finance (Not Investing)
Topic: Trying to understand Roth five-year rule
Replies: 25
Views: 3163

Re: Trying to understand Roth five-year rule

How about this if I may pop in with a slightly tangential question: For reasons not important to go into here, I can't say for sure exactly how much I've contributed ... Does the IRS know? How will they know when I've withdrawn them all and moved into earnings? You are asking here about a Roth IRA,...
by Alan S.
Sat Jan 06, 2018 9:21 pm
Forum: Personal Finance (Not Investing)
Topic: Trying to understand Roth five-year rule
Replies: 25
Views: 3163

Re: Trying to understand Roth five-year rule

again, I don't pretend to know this situation, but be careful and precise about your words......there are after tax contributions to 401K and there are Roth 401K contributions and they are not identical. In your last post, you use both terms....so wondering which one is the correct one? One part I ...
by Alan S.
Sat Jan 06, 2018 6:32 pm
Forum: Personal Finance (Not Investing)
Topic: Trying to understand Roth five-year rule
Replies: 25
Views: 3163

Re: Trying to understand Roth five-year rule

again, I don't pretend to know this situation, but be careful and precise about your words......there are after tax contributions to 401K and there are Roth 401K contributions and they are not identical. In your last post, you use both terms....so wondering which one is the correct one? One part I ...
by Alan S.
Sat Jan 06, 2018 5:46 pm
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth Year 1/2 Help
Replies: 6
Views: 310

Re: Backdoor Roth Year 1/2 Help

There is no limit on the number or amount of conversions you can do in a tax year. If you had the dollars available, you could make your 2018 5500 contribution now and convert it. You would have two conversions in 2018 that would be added together, but they would be non taxable except possibly for a...
by Alan S.
Sat Jan 06, 2018 5:29 pm
Forum: Investing - Help with Personal Investments
Topic: Roth Conversion
Replies: 4
Views: 571

Re: Roth Conversion

Sorry, for the ambiguity in my original posting. I am transferring an old IRA to my 401k, so that I can "back-door" into a Roth. I initiated the transfer, months ago, but am being yanked along by my IRA provider. I was just looking for clarification on the timing, which Duckie seems to have provide...
by Alan S.
Fri Jan 05, 2018 10:42 pm
Forum: Investing - Help with Personal Investments
Topic: Rolling Roth 401K into Roth IRA and 5 year Rule
Replies: 9
Views: 1602

Re: Rolling Roth 401K into Roth IRA and 5 year Rule

Moving from a pre-tax 401k to a Roth IRA, there are two paths: 1. Convert pre-tax 401k to Roth 401k, then rollover Roth 401k to Roth IRA 2. Rollover pre-tax 401k to IRA, then convert IRA to Roth IRA I'm beginning to see the two paths are not equivalent wrt the 5-year rule, which is absurd; but if m...
by Alan S.
Fri Jan 05, 2018 10:06 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth -- Separating Gains from Non-deductible basis
Replies: 4
Views: 393

Re: Backdoor Roth -- Separating Gains from Non-deductible basis

The considerations involved in determining if you will do the conversion first or the rollover of pre tax IRA assets to the qualified plan have changed due to the elimination of conversion recharacterizations. It used to be that if you converted first and then the rollover to the 401k failed for som...
by Alan S.
Fri Jan 05, 2018 3:01 pm
Forum: Investing - Help with Personal Investments
Topic: Taking over a Roth IRA
Replies: 5
Views: 372

Re: Taking over a Roth IRA

You should advise the firm managing the account that you are removing that authorization. That might trigger some fee deductions that they earned but have not yet deducted from the account. If they refuse, then you might call Fidelity and explain the situation and ask them how you should proceed. I ...
by Alan S.
Thu Jan 04, 2018 10:00 pm
Forum: Investing - Theory, News & General
Topic: How does the IRA Required Minimum Distribution work for those over 70.5?
Replies: 4
Views: 779

Re: How does the IRA Required Minimum Distribution work for those over 70.5?

I just looked at the Vanguard set up screen for the RMD service. For the account beneficiary, you are asked to select "Spouse" or "Non-spouse", and they ask for the spouse's DOB. That could result in an error when both a spouse > 10 years younger and a non spouse are beneficiaries. The screen should...
by Alan S.
Thu Jan 04, 2018 7:38 pm
Forum: Personal Finance (Not Investing)
Topic: State tax refund taxability after SALT cap
Replies: 7
Views: 594

Re: State tax refund taxability after SALT cap

The question is a good one. Prior to 2018, the Inst for Sch A includes this directive regarding deduction of SIT: Don't reduce your deduction by any: State or local income tax refund or credit you expect to receive for 2016 So you did not have the option of not deducting the amount you knew you were...
by Alan S.
Thu Jan 04, 2018 1:07 pm
Forum: Personal Finance (Not Investing)
Topic: Can one leave just part of an IRA to a Trust?
Replies: 27
Views: 1057

Re: Can one leave just part of an IRA to a Trust?

Note that detailed estate plans may be warranted for a large estate, but might be impractical and overly expensive and complex for smaller estates. Therefore, the number of beneficiaries and the amount earmarked to each beneficiary is a major factor in determining how to set this up.