Search found 15 matches

by Jewel
Wed May 19, 2021 11:17 am
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion / Private Letter Ruling
Replies: 55
Views: 7839

Re: Roth Conversion / Private Letter Ruling

Correction: I’ll be taking out an additional $106,000 from my tIRA over the next five years, not three years.

Also, another good thing that I forgot to mention is that I did not have to raid my Roth to pay the tax. Since most of the tax did not have to be paid in 2020, I waited until this year to sell $30,000 in bonds from my brokerage account and then I paid the rest from cash. I made a small gain of $1,408 which I will not have to pay tax on since my taxable income will fall below the long-term capital gains amount.

Jewel
by Jewel
Tue May 18, 2021 5:11 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion / Private Letter Ruling
Replies: 55
Views: 7839

Re: Roth Conversion / Private Letter Ruling

Hello everyone, I am just now logging in after a long absence and reading these posts. I appreciate all your comments. I want to let you know that I am doing ok and that some good things have come out of what I initially thought was a disaster. Here they are: Most of my life-long tax liability has been eliminated. My financial life got even simpler. I do not have to do anymore Roth conversions so no more having to weigh different scenarios on how much to convert each year. Additionally, I will no longer have to calculate and pay estimated taxes each year since my tax burden going forward will be so low. I received all of the federal stimulus checks, $3,200, and I will use that money to pay for the one-time Medicare IRMAA adjustment that I w...
by Jewel
Sun Jul 05, 2020 7:37 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion / Private Letter Ruling
Replies: 55
Views: 7839

Re: Roth Conversion / Private Letter Ruling

Thank you. I appreciate your responses. Yes, my MAGI in 2019 is under $150k. I agree, I will pay more just in case. Probably $5,000 by July 15.
Cheers,
Jewel
by Jewel
Sun Jul 05, 2020 12:45 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion / Private Letter Ruling
Replies: 55
Views: 7839

Re: Roth Conversion / Estimated Taxes

Hello again, The day I’ve been dreading is here. It’s time to pay estimated taxes on this Roth conversion. This is my first time paying estimated taxes and I want to make sure I don’t make a mistake. If my understanding is correct from reading the IRS guidelines and completing the 1040ES estimated tax worksheet, I have three options. I can pay 100% of taxes due or $43,426, 90% of what is due or $39,083, or, I was shocked to read that I can pay 100% of the total tax from my 2019 return or $3,357. However, I took a TIRA $12,000 withdrawal in January before I did this Roth conversion and I had $1,200 in taxes taken out at that time. So the required annual payment to avoid a penalty would be $3,357-$1,200=$2,257? If this is correct, I am absolu...
by Jewel
Thu Apr 16, 2020 5:57 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion / Private Letter Ruling
Replies: 55
Views: 7839

Re: Roth Conversion / Private Letter Ruling

Thank you all for your responses. I am retired and single so no current income. I will not file for SS this year because I do no want to incur any additional tax liability. I will take from my existing Roth and some cash to live on and pay taxes. I'm thankful 1st and 2nd Qtr estimated tax payments have been extended to July 15. However, I have not given up looking for a relief valve out of this situation. Contacting Senators/Reps is a good idea. According to my new SS statement, my SS estimate at FRA, which is later this year, is $30,180. At 70 it is $39,840. I need to do a thorough analysis of my situation to see how I am going to move forward. I did learn from Vanguard that since I already have a Roth, I started it in 1998, that my new Ro...
by Jewel
Sun Apr 12, 2020 6:29 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion / Private Letter Ruling
Replies: 55
Views: 7839

Re: Roth Conversion / Private Letter Ruling

I received a response to my letter from someone on Tim Buckley’s Executive Response Team. This person, who I’ll call Joe, said he was very sorry to learn about what happened and that he checked every avenue he could to see if it was possible to override the transaction. He said if there was anyone that he wanted to make an exception for it was me and he regretted to have to tell me that there was nothing that Vanguard could do. He also said that this wasn’t something he was going to forget anytime soon and that he would bring it up for a committee review to see if Vanguard could add anymore safeguards to the website. I thanked him for his effort. So now it’s time to move forward and try to make some lemonade. I’ll need a lot of sugar... Jewel
by Jewel
Mon Mar 23, 2020 2:12 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion / Private Letter Ruling
Replies: 55
Views: 7839

Re: Roth Conversion / Private Letter Ruling

I just got off the phone with Vanguard. The client consultant who I spoke with before contacted me to see if I would like assistance from their financial planning group to see if they can offer any help regarding the changes with my financial situation as a result of this trade. I declined the offer but said if I changed my mind that I would contact them. Then I told this person that I was planning on writing a letter to Vanguard to document what happened with this trade and I asked her who was the best person to send it to. She said to send it to her and to Tim Buckley, CEO. I explained that the purpose of my letter was to provide a written account of what happened, to formally ask Vanguard in writing to reverse the trade, to notify Vangua...
by Jewel
Fri Mar 20, 2020 6:43 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion / Private Letter Ruling
Replies: 55
Views: 7839

Re: Roth Conversion / Private Letter Ruling

I contacted a tax attorney. He said PLR’s are time-consuming and costly. He estimated a good deal more than $20K. He said he does not know of any favorable rulings for Roth conversions since the law changed but that doesn’t mean it hasn’t happened. He said redacted rulings are available for the public to view but there is about a one year lag time before they are posted. He also said that just because one person gets a favorable ruling doesn’t mean that the next person will. There is no precedent when it comes to PLR’s. Sobering phone call but it was what I needed to hear. I don’t think I will pursue a PLR. Thanks, Alan, for your suggestion. I will send a letter to VG documenting the steps I took to notify them to reverse the mistake immedi...
by Jewel
Wed Mar 18, 2020 6:00 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion / Private Letter Ruling
Replies: 55
Views: 7839

Roth Conversion / Private Letter Ruling

I could use some help! I did an on-line Roth conversion on 2/25 for what I thought was $2,500.00. When I checked my Vanguard account a few days later to look at the trade, I was shocked to see a transaction for almost $194,000. At first, I thought Vanguard put someone else’s money in my account. But when I saw that the portfolio value didn’t increase by that much I had a sinking feeling I did something wrong. I called Vanguard right away (the confirm says to contact them immediately if the information isn’t correct) and I was told that I traded 2500 shares, not dollars, and since the law changed in 2017 they could no longer do a re-characterization. I was told to seek advice from a CPA and to submit a Private Letter Ruling to the IRS. I did...
by Jewel
Wed Jun 28, 2017 2:45 pm
Forum: Personal Finance (Not Investing)
Topic: Annuity VS cash
Replies: 16
Views: 2374

Re: Annuity VS cash

I’m in a similar situation. I have a pension that will pay be $327 a month at 65. I am 63, and single. They offered a lump sum of $55k. It is not CPI-indexed. It will take 14 years of payments to reach the lump sum amount. Who knows, will I live that long? Also, when RMD’s kick in at 70, the extra $3,924/year will put me in the hump and I will have to pay more in SS taxes. I don’t think I can convert enough of my traditional IRA for that not to happen. I’m leaning toward rolling it into an IRA.
Jewel
by Jewel
Mon Jun 26, 2017 3:03 pm
Forum: Personal Finance (Not Investing)
Topic: Full comprehensive or liability only?
Replies: 30
Views: 4582

Re: Full comprehensive or liability only?

It is a time suck and you bring up a very good point, SpaethCo, about the logistics of handling the vehicle after a wreck without comprehensive coverage. One thing that helped in my case was that my employer has a very large parking structure and they let me park my totaled car there until the insurance company towed it away. Also, get this. I had the same insurance company as the person who caused the accident and I thought for sure that would make a difference and that they would at least give me some direction or educate me a little bit on how to handle everything. Wrong! “But I’m a customer of yours,” I said. “Sorry, ma’am, but we can’t help you because you didn’t pay the premium for representation (cc coverage).” I’m laughing now at ho...
by Jewel
Wed Jun 21, 2017 4:51 pm
Forum: Personal Finance (Not Investing)
Topic: Full comprehensive or liability only?
Replies: 30
Views: 4582

Re: Full comprehensive or liability only?

Thank you, Rupert. You explained it better than I did. That is what I had to do and it took about 5 months for them to pay.
Jewel
by Jewel
Wed Jun 21, 2017 1:22 pm
Forum: Personal Finance (Not Investing)
Topic: Full comprehensive or liability only?
Replies: 30
Views: 4582

Re: Full comprehensive or liability only?

Yes, that's correct. If there is a claim against me and I only have liability insurance, my insurance company will take care of it.
by Jewel
Wed Jun 21, 2017 11:02 am
Forum: Personal Finance (Not Investing)
Topic: Full comprehensive or liability only?
Replies: 30
Views: 4582

Re: Full comprehensive or liability only?

Thank you, LadyGeek. It feels good to be part of the forum. I appreciate all of your posts. You are right it is the job of the insurance company to defend you but only if you have comprehensive coverage, at least in California. Since I cancelled that coverage, I was no longer paying my insurance company to defend me in an accident and that’s why they didn’t assist me with any recovery. Essentially, if you don’t have comprehensive coverage, you are taking on your own defense if you are in an accident. Most people don’t know that, I didn’t, and that’s why I thought it was so important to contribute to this post. Eventually, after ASATW gave her statement 45 days later, her insurance company paid and it was paid out of the liability part of he...
by Jewel
Tue Jun 20, 2017 3:39 pm
Forum: Personal Finance (Not Investing)
Topic: Full comprehensive or liability only?
Replies: 30
Views: 4582

Re: Full comprehensive or liability only?

I pondered this same question several years ago when I lost my job. At the 12 month mark of unemployment, I decided to save some money and let go of my comprehensive coverage (cc) on my 10 year old Honda Accord. Before doing so, however, I contacted my insurance agent to get his opinion if it was a good idea. He didn’t see anything wrong with dropping the coverage so I did. A few months after I got a job, at the 20th month mark, reinstating my cc was on my list of things to do. Unfortunately, before I got around to it, I was involved in a multi-car accident. I was stopped at a red light on my way home from work when a person, who fell asleep at the wheel, (ASATW) rear-ended the person behind me, and that person hit me. It was quite an impac...