Search found 4055 matches

by MP123
Mon Mar 18, 2024 1:10 pm
Forum: Personal Finance (Not Investing)
Topic: Late 5500 EZ
Replies: 2
Views: 355

Re: Late 5500 EZ

I tend to agree with the second IRS agent that you should have rounded down the $.33 and filed 2020 as final. I'm not sure why they suggest you don't file another amended 5500 to do this, that seems like the easiest resolution to this situation.

I'm not sure why you received a 5498 from the SoloK. That doesn't make sense.

If a second amended 5500 is out then I'm not sure what to suggest. It's a shame that a rounding error would put you at risk of hundreds of thousands in late penalties. If you do decide to file 2021 under the penalty relief program I would do it sooner rather than later, I don't think you need to wait for anything to happen with your 2020 5500.
by MP123
Mon Mar 18, 2024 12:58 pm
Forum: Personal Finance (Not Investing)
Topic: Medical Insurance Deduction
Replies: 9
Views: 518

Re: Medical Insurance Deduction

Welcome to Bogleheads!

Yes, your Sch C income does qualify you for the self employed health insurance deduction (SEHID), but only to the extent of your income from the business, and not including any other deductions associated with it such as the deductible 1/2 of self-employment tax and any SEP or SoloK contributions.

And, yes, Medicare premiums are eligible for this.

So, depending on the amounts you could probably deduct most if not all of your Medicare premiums.

I think whether your Partnership income qualifies is more complex, does your Partnership K1 show self-employment income in box 14? It sounds like probably not, if it's a passive rental activity.
by MP123
Sun Mar 17, 2024 10:48 am
Forum: Personal Finance (Not Investing)
Topic: Getting Your Money Back from an S-Corp
Replies: 3
Views: 664

Re: Getting Your Money Back from an S-Corp

eskimoquin wrote: Sun Mar 17, 2024 2:41 am Within one tax year, if you put in $1000 capital and pull it back out, you're not going to have any tax consequences, correct?

However, if you put in $1000 capital in one year and lose basis at the end of the year, you're not getting that back out without tax consequence, correct?
I think what you're getting at is that basis is reduced by distributions before it's reduced by losses and deductions.
by MP123
Wed Mar 13, 2024 10:25 pm
Forum: Personal Finance (Not Investing)
Topic: Part-Year Resident in KS & NYC - State Tax Credits?
Replies: 6
Views: 719

Re: Part-Year Resident in KS & NYC - State Tax Credits?

Usually the credit allowed is limited to the lesser of the tax on the income in the first state or the tax on that income in the second state. So if there are different tax rates between the states then one ends up paying the higher amount (but only once) if there is an overlap.
by MP123
Wed Mar 13, 2024 2:26 pm
Forum: Personal Finance (Not Investing)
Topic: solo 401K contributions calculation
Replies: 17
Views: 1067

Re: solo 401K contributions calculation

A written election by the employee for employee solo401k deferrals had to have been made by 12/31. Was this done? If not then you only need to think about employer contributions. This is no longer true - the Secure 2.0 Act allows for you to make retroactive elections of employee deferrals for sole proprietors. Sorry, but I have seen this posted opinion many times but there is no agreement on this. If you have a clear reference on the topic of written election requirements I'm all ears. But the multiple threads on this same topic has not came to a conclusion. It was section 317 in the final bill that was included in the 2023 Omnibus. Here is how it is described in the Congressional summary (https://www.congress.gov/bill/117th-congress/house...
by MP123
Wed Mar 13, 2024 2:08 pm
Forum: Personal Finance (Not Investing)
Topic: solo 401K contributions calculation
Replies: 17
Views: 1067

Re: solo 401K contributions calculation

It's the employer contribution that you have to subtract to calculate the employer contribution limit. The employee contribution doesn't factor in to that calculation. The employee contribution does factor into determining the compensation limit for total plan contribution. You can see this clearly if you use the worksheet in IRS Pub 560 (https://www.irs.gov/publications/p560#e ... nk10009065 - see Steps 9-12). Both are correct. The reduction from 25% to 20% is due to the interplay of the employER contribution (which can never be compensation) and the net income of the business (which is the compensation that the ER contribution is based on). They're both in the same pot for the self-employed. It's also true that the employEE deferral does...
by MP123
Wed Mar 13, 2024 1:54 pm
Forum: Personal Finance (Not Investing)
Topic: HSA contributions following FSA
Replies: 2
Views: 263

Re: HSA contributions following FSA

physics911 wrote: Wed Mar 13, 2024 12:55 pm Can he still contribute his yearly max to the HSA
Maybe.

As long as he isn't covered by the FSA (even with a zero balance) then he would be HSA eligible for the remaining months of the year and could make a prorated HSA contribution at least. If he was HSA eligible on Dec 1 and remained so for the entire next year then he could make a full contribution (see The Last Month Rule).

There is no need to subtract the FSA contributions, but it can be difficult to ensure that he's no longer covered by an FSA mid-year. A company going out of business might be one way, but he should still be certain that he isn't "covered" by the FSA any longer at that point.
by MP123
Wed Mar 13, 2024 1:34 pm
Forum: Personal Investments
Topic: HSA Single owner no employee S-Corp
Replies: 1
Views: 239

Re: HSA Single owner no employee S-Corp

I don't think an S-Corp can make er contributions towards a >2% owner's HSA. All of these contributions need to be treated as ee compensation, included on 1120S officer's comp, and shown on W2 box 1 (but not 3 or 5).

So, I think everything you're doing is correct at this point.
by MP123
Wed Mar 13, 2024 11:27 am
Forum: Personal Investments
Topic: Employer Sponsored 401(k) and IRA tax deferred contribution limits
Replies: 3
Views: 433

Re: Employer Sponsored 401(k) and IRA tax deferred contribution limits

Now the bonus question, what if I also had a side hustle that generated say 20K in profit after expenses as a sole proprietor, could all of that $20K be directed to a Self-Employed IRA in addition to the above and still remain within IRS thresholds? If the $20k was net of all expenses and net 1/2 of self-employment tax then you could contribute $4k (20% of $20k) to the SEP-IRA as an employer contribution, there is no employee deferral available in a SEP. You're already making a maximum employee deferral at your W2 job, so there's really no advantage in a solo 401k here. Also, note that the IRA deduction starts to phaseout at $123k for the spouse covered by the retirement plan. If the other spouse is not covered by a retirement plan at thei...
by MP123
Tue Mar 12, 2024 1:39 pm
Forum: Personal Finance (Not Investing)
Topic: Tax return not required?
Replies: 3
Views: 458

Re: Tax return not required?

ssn wrote: Tue Mar 12, 2024 12:30 pm
MP123 wrote: Tue Mar 12, 2024 12:27 pm It's going to depend on the nature of the internship. Was it through a school?

He most likely will need to pay self-employment tax on the earnings as an independent contractor, even though he won't owe income tax. But whether he should have been classified as such is a different question.
With a university.
If it was paid on 1099-NEC then the IRS will be expecting to see it on a Schedule C with self-employment taxes paid on Schedule SE, half of which are deductible.

You might be able to take the position that it was not self-employment income, but rather "other income" not subject to self-employment tax.

But given the amount in question it might be best to just pay it.
by MP123
Tue Mar 12, 2024 12:27 pm
Forum: Personal Finance (Not Investing)
Topic: Tax return not required?
Replies: 3
Views: 458

Re: Tax return not required?

It's going to depend on the nature of the internship. Was it through a school?

He most likely will need to pay self-employment tax on the earnings as an independent contractor, even though he won't owe income tax. But whether he should have been classified as such is a different question.
by MP123
Tue Mar 12, 2024 10:28 am
Forum: Personal Investments
Topic: Retirement account options for my spouse under my PLLC
Replies: 1
Views: 251

Re: Retirement account options for my spouse under my PLLC

Your spouse can be covered under your S-Corp's solo401k plan, she would have her own account, with her contributions determined by her compensation from the S-Corp (just like you).
by MP123
Mon Mar 11, 2024 4:44 pm
Forum: Personal Finance (Not Investing)
Topic: EIN for solo 401k with two self-employed businesses
Replies: 6
Views: 536

Re: EIN for solo 401k with two self-employed businesses

Well, I just talked to a support agent at Vanguard about their solo 401k option and they said that if I have two sole proprietorships that I report on separate schedule C's, I would need a separate EIN for each and a separate i401k associated with each sole proprietorship, which seems extremely clunky and annoying, especially given that my income from both is relatively low. Is this possibly just a Vanguard policy, or would this be the case with any i401k administrator? Tha Vanguard rep must have misunderstood or been misinformed. You most definitely do not want to open two solo 401ks for your sole proprietorship, even if you conduct two different activities. Doing so will create a mess that will be difficult to untangle. I know that Schwa...
by MP123
Mon Mar 11, 2024 11:31 am
Forum: Personal Finance (Not Investing)
Topic: Part-Year Resident in KS & NYC - State Tax Credits?
Replies: 6
Views: 719

Re: Part-Year Resident in KS & NYC - State Tax Credits?

Generally states allow a credit on mutually taxed income. But if you're a part-year resident of both (rather than a non-resident of one) I'm not sure that you would have any income that was taxed by both states.

I'm not sure about the details of KS and NY though.
by MP123
Mon Mar 11, 2024 11:26 am
Forum: Personal Finance (Not Investing)
Topic: EIN for solo 401k with two self-employed businesses
Replies: 6
Views: 536

Re: EIN for solo 401k with two self-employed businesses

Your two businesses are a "controlled group" because you are the common owner of both. This means you can only open one 401k for both. If you get an EIN for one business the other will likely be automatically included as an affiliated employer, but you should verify this by reading the plan document and consulting with the custodian. It's possible that you may need to explicitly include the other business on the adoption agreement.

I believe you would aggregate the income from both businesses when calculating the contribution. They are, in effect, one business for 401k purposes.
by MP123
Mon Mar 11, 2024 11:09 am
Forum: Personal Finance (Not Investing)
Topic: HSA Contribution Limits Confusion for 55+
Replies: 10
Views: 1775

Re: HSA Contribution Limits Confusion for 55+

We were only in a family plan for 11 of 12 mos this year (the first mo of Jan I was in a single plan). So the limits are $8,300 but I can contribute 11/12ths of that amount. That much seems clear to me. As I'm 55+ I'm allowed to add a $1,000 catch up contribution. However, it is unclear if the catch up contribution also has to be 11/12ths or the full amount. I assume the full amount as it is (was) available to me even if I were single for the whole year. Can someone confirm? The catchup contribution is prorated for months of eligibility, just like the regular contribution, so 11/12 in your case. But it's not prorated for months before you turn 55 in the year you turn 55, you get the full amount for the year you turn 55, prorated for eligib...
by MP123
Sun Mar 10, 2024 12:56 pm
Forum: Personal Finance (Not Investing)
Topic: Late 5500EZ question
Replies: 1
Views: 252

Re: Late 5500EZ question

HarryH wrote: Fri Mar 08, 2024 1:16 pm My Solo 401k exceeded $250k in 2021 and I'm ashamed to say that I did not realize I had to file a 5500EZ. I am going to apply for the IRS Penalty Relief Program for 2021 and 2022. My question is, if I do this and it is accepted, am I still separately liable to the DOL? I read that 5500EZ filers are not eligible for the DOL DVFC and i am confused as to whether I need to reckon with both the IRS and the DOL or just the IRS since this is a one-person soloK plan?
My understanding is that single-participant plans (solo 401ks) are not eligible for the DOL's DFVCP or liable for DOL penalties, just the IRS penalties/correction program, because they are not covered under ERISA Title I. Given the stakes you might want to get professional advice.
by MP123
Sat Mar 09, 2024 7:03 pm
Forum: Personal Investments
Topic: How Do Various Factors Affect Maximum IRA & Solo 401(k) Contribution Limits at Low End of Sole Proprietor Income?
Replies: 10
Views: 473

Re: How Do Various Factors Affect Maximum IRA & Solo 401(k) Contribution Limits at Low End of Sole Proprietor Income?

On point 4, I said SEHID would reduce AGI, therefore reduce MAGI, therefore reduce the amount allowed to contribute to IRAs. However, in testing this in TurboTax, it doesn't seem to factor in SEHID at all in determining earned income you're allowed to contribute to IRAs. Am I wrong and SEHID is irrelevant in determining earned income that qualifies for IRA contributions? Right, SEHI reduces MAGI, but not "compensation" which is what's relevant for an IRA contribution. Although MAGI may phaseout the deductibility of the IRA contribution. So is MAGI not used to determine IRA contribution? My understanding is that there are different MAGI versions and there is a version of MAGI for IRA purposes. So would it be accurate to say that S...
by MP123
Sat Mar 09, 2024 6:23 pm
Forum: Personal Investments
Topic: How Do Various Factors Affect Maximum IRA & Solo 401(k) Contribution Limits at Low End of Sole Proprietor Income?
Replies: 10
Views: 473

Re: How Do Various Factors Affect Maximum IRA & Solo 401(k) Contribution Limits at Low End of Sole Proprietor Income?

On point 4, I said SEHID would reduce AGI, therefore reduce MAGI, therefore reduce the amount allowed to contribute to IRAs. However, in testing this in TurboTax, it doesn't seem to factor in SEHID at all in determining earned income you're allowed to contribute to IRAs. Am I wrong and SEHID is irrelevant in determining earned income that qualifies for IRA contributions? Right, SEHI reduces MAGI, but not "compensation" which is what's relevant for an IRA contribution. Although MAGI may phaseout the deductibility of the IRA contribution. So is MAGI not used to determine IRA contribution? My understanding is that there are different MAGI versions and there is a version of MAGI for IRA purposes. So would it be accurate to say that S...
by MP123
Sat Mar 09, 2024 6:12 pm
Forum: Personal Investments
Topic: How Do Various Factors Affect Maximum IRA & Solo 401(k) Contribution Limits at Low End of Sole Proprietor Income?
Replies: 10
Views: 473

Re: How Do Various Factors Affect Maximum IRA & Solo 401(k) Contribution Limits at Low End of Sole Proprietor Income?

GoldenBear17 wrote: Sat Mar 09, 2024 5:47 pm On point 4, I said SEHID would reduce AGI, therefore reduce MAGI, therefore reduce the amount allowed to contribute to IRAs. However, in testing this in TurboTax, it doesn't seem to factor in SEHID at all in determining earned income you're allowed to contribute to IRAs. Am I wrong and SEHID is irrelevant in determining earned income that qualifies for IRA contributions?
Right, SEHI reduces MAGI, but not "compensation" which is what's relevant for an IRA contribution. Although MAGI may phaseout the deductibility of the IRA contribution.
by MP123
Sat Mar 09, 2024 5:55 pm
Forum: Personal Investments
Topic: Solo 401k contribution amount
Replies: 7
Views: 1000

Re: Solo 401k contribution amount

Do I have this right that the deduction of "contributions for yourself" is only part of calculating the EmployER max contribution but that the IRS language makes it sound like it's part of defining compensation as a whole and possibly relevant to both? Or am I still misunderstanding? I realize this could be a semantic thing regarding different terms like "compensation" vs. "net self-employment income". Yes, you're correct. This is dealing with the employER contribution which is the same for both Solo 401ks and SEP-IRAs. The employEE deferral can't exceed $23k or the net earnings from self-employment. And both combined can't exceed $69k or the net earnings from self-employment. Semantics are important here, Sec...
by MP123
Sat Mar 09, 2024 11:49 am
Forum: Personal Finance (Not Investing)
Topic: How best to make up for the failure to file a tax return
Replies: 38
Views: 2625

Re: How best to make up for the failure to file a tax return

Although he probably won't owe income tax, he will owe self-employment tax plus any late penalties. On the plus side, this might get him some credits for Social Security.
by MP123
Sat Mar 09, 2024 10:32 am
Forum: Personal Finance (Not Investing)
Topic: Multiple Solo 401(k)
Replies: 28
Views: 1992

Re: Multiple Solo 401(k)

Note that the Favorable Determination letter issued by the IRS for a pre-approved plan specifically says that their opinion does not apply if the employer maintains or has ever maintained another qualified plan, unless the prior plan is terminated and no additions were made once the new plan was active.

So an employer with two concurrent 401ks (at least the pre-approved ones from Vanguard, Fidelity, and other major providers) is no longer operating plans that are known to be qualified.

Look for this letter as part of your plan document.
by MP123
Fri Mar 08, 2024 6:58 pm
Forum: Personal Investments
Topic: Solo 401k contribution amount
Replies: 7
Views: 1000

Re: Solo 401k contribution amount

What exactly is meant by "and contributions for yourself"? It's the number you are trying to calculate. It just turns the 25% limit into 20%. It's quite straightforward: subtract out self-employment tax. Now take out 20%. What's left? 80%. What's 20%/80%? 25%. I'm trying to figure out this exact thing the OP asked about what "and contributions for yourself" means in this scenario of calculating the maximum Solo 401(k) contribution for a sole proprietor. I read over your (toddthebod's) answer here. But I'm still not sure I'm understanding. Could you, or someone, spell it out a little more fully? "Contributions for yourself" in this context refers to employer contributions made to a self-employed individual's SE...
by MP123
Thu Mar 07, 2024 10:24 pm
Forum: Personal Investments
Topic: SEP-IRA Contribution Year
Replies: 6
Views: 499

Re: SEP-IRA Contribution Year

1) I believe that my max contribution would be 1858.70. Is this correct? 2) What year would I be contributing against? 2023 or 2024? And would it even make a difference (I won't be approaching the max ~66k in either year). Yes, $1858.70 is correct assuming the $10k is net of any expenses. When did you receive the payment? I received the payment a few days ago, with an invoice of 1/24 So it would probably be best to see how the rest of the year goes. You can make the contribution for 2024 because that's when you received the income, but you may have additional income or expenses over the rest of the year that could change the amount you qualify to contribute. Did you have any business income received in 2023? That's what you'd normally be c...
by MP123
Thu Mar 07, 2024 7:16 pm
Forum: Personal Finance (Not Investing)
Topic: Reporting LLC/S-corp wages - Moved from one state to another
Replies: 3
Views: 311

Re: Reporting LLC/S-corp wages - Moved from one state to another

Alchem1st wrote: Thu Mar 07, 2024 6:54 pm Thanks for the detailed response!
The LLC was registered in OR for entire 2023 and I did a CA domestication of the LLC in Jan 2024. My confusion is - the source of income is not from CA, the LLC is not in CA but I'm considered doing business in CA?
If the S-Corp is registered in CA then it's considered to be doing business in CA and so it has a filing requirement. However, its possible that all of it's income is apportioned to states other than CA.

This doesn't really help you though, because the income from any source will pass onto your personal CA return because you are a CA resident.
by MP123
Thu Mar 07, 2024 6:00 pm
Forum: Personal Investments
Topic: SEP-IRA Contribution Year
Replies: 6
Views: 499

Re: SEP-IRA Contribution Year

dan7800 wrote: Thu Mar 07, 2024 3:37 pm 1) I believe that my max contribution would be 1858.70. Is this correct?
2) What year would I be contributing against? 2023 or 2024? And would it even make a difference (I won't be approaching the max ~66k in either year).
Yes, $1858.70 is correct assuming the $10k is net of any expenses.

When did you receive the payment?
by MP123
Thu Mar 07, 2024 5:31 pm
Forum: Personal Finance (Not Investing)
Topic: Reporting LLC/S-corp wages - Moved from one state to another
Replies: 3
Views: 311

Re: Reporting LLC/S-corp wages - Moved from one state to another

In addition to the Federal 1120S return you likely need to file S-Corp returns in both CA and OR, apportioning income between them. Then you need to take the state level K-1s from the above and use them in your state taxes for both CA and OR while using the Federal K-1 from the 1120S for your 1040. Be aware that CA also has a minimum $800 franchise fee for S-Corps. Unless you closed the LLC prior to moving you very likely need to register with CA and pay the $800 at a minimum. If you closed the LLC (you don't mention this in your post) then you might get away with just filing the Oregon 20-S and it's K-1 and then filing a personal OR return. But be sure you check with the California FTB to see what they consider a filing requirement. You wi...
by MP123
Thu Mar 07, 2024 1:21 pm
Forum: Personal Finance (Not Investing)
Topic: UBS Won't Issue a Corrected 1099
Replies: 14
Views: 1377

Re: UBS Won't Issue a Corrected 1099

Sandi_k wrote: Thu Mar 07, 2024 10:42 am This seems ridiculous to me - how can they blithely send out a tax document so blatantly wrong? Don't they have an obligation to correct it? Has anyone every had this situation, and DIDN'T get audited? I am distressed, but it's not my money, and not my mo
There's nothing wrong with the 1099, it's correct. You just haven't received the corresponding 5498 showing the rollover deposit yet, that should be coming sometime in May. In the meantime just treat it as a rollover on her 1040.
by MP123
Thu Mar 07, 2024 10:46 am
Forum: Personal Finance (Not Investing)
Topic: Calculating QBI (form 8995) for s-corp
Replies: 3
Views: 516

Re: Calculating QBI (form 8995) for s-corp

Am I interpreting this correctly? Is this a known double whammy for s-corp owners? Or does this rule, with its confusing language, apply only to partnerships, but not single owner s-corps? A >2% S-Corp owner must include their health ins premiums in their W2 wages. This decreases the income of the business for purposes of calculating QBI, although it really just transfers the premiums to the 1040 where they can possibly be deducted as SEHI. If deducted as SEHI then the QBID needs to be reduced on 8995. Here's what the IRS has to say: https://www.irs.gov/newsroom/tax-cuts-and-jobs-act-provision-11011-section-199a-qualified-business-income-deduction-faqs Q39. Health insurance premiums paid by an S-Corporation for greater than 2% shareholders...
by MP123
Wed Mar 06, 2024 10:42 pm
Forum: Personal Finance (Not Investing)
Topic: S corp loss deductions useless
Replies: 6
Views: 828

Re: S corp loss deductions useless

vnatale wrote: Wed Mar 06, 2024 8:33 pm I'm not following if this is putting you into an overall 0% tax bracket? If so, that would be the ideal time to do Roth conversions.
I think OP might already be in a 0% bracket without the S-Corp loss, maybe below the standard deduction? You're right that this could be a good opportunity for Roth conversions.
by MP123
Wed Mar 06, 2024 4:46 pm
Forum: Personal Finance (Not Investing)
Topic: S corp loss deductions useless
Replies: 6
Views: 828

Re: S corp loss deductions useless

So it sounds like you're using the losses from the S-Corp against income that wouldn't be taxed anyway? It's sort of a waste, but there's no way to save the losses as long as they are nonpassive.

A similar situation can happen with capital losses in the 0% capital gains bracket.
by MP123
Wed Mar 06, 2024 4:29 pm
Forum: Investing - Theory, News & General
Topic: Record keeping for HSA when deferring reimbursement for many years
Replies: 26
Views: 2635

Re: Record keeping for HSA when deferring reimbursement for many years

I don't see how an EOB can be a requirement when there is no way to get an EOB if you don't have insurance. If you have an invoice that clearly shows the name and address of a medical establishment, and lists charges for things like "office visit", "xrays", and "lab work", I would think that should be sufficient to show that it was a medical expense. The EOB might help if the invoice is a bit lacking in describing what the charges are for (and therefore not clear that they are for medical expenses). It also can be used if you don't have the invoice but do have the payment receipt. I think the EOB would help show that the expenses on the invoice were not paid by insurance, or that they were paid in part and you...
by MP123
Wed Mar 06, 2024 2:04 pm
Forum: Personal Investments
Topic: Question about SEP-IRA transaction . . .
Replies: 2
Views: 258

Re: Question about SEP-IRA transaction . . .

Maisie wrote: Wed Mar 06, 2024 1:04 pm Since I’ll have to “sell” the $$$ figure from my VMFXX fund to the settlement fund, I’d like confirmation that making this transaction will not cost me anything—I mean, no investment losses (since I’m selling a MM and the $$$ is going into what is essentially another MM) and no fees or other charges attached to the sale.
When you sell VMFXX at Vanguard you won't be charged a commission. You also won't realize either a capital loss or gain on the sale because the fund price is pegged at $1.
by MP123
Wed Mar 06, 2024 11:19 am
Forum: Personal Finance (Not Investing)
Topic: Quick tax return question re: timing of TIRA contribution
Replies: 2
Views: 265

Re: Quick tax return question re: timing of TIRA contribution

I'm not sure how freetaxusa does it, but they may ask separately about contributions made during 2023 and contributions made in 2024 for 2023.
by MP123
Wed Mar 06, 2024 10:41 am
Forum: Investing - Theory, News & General
Topic: Record keeping for HSA when deferring reimbursement for many years
Replies: 26
Views: 2635

Re: Record keeping for HSA when deferring reimbursement for many years

So it seems my record keeping would only satisfy the first item in the list. What about the 2nd and 3rd? The only thing I can think of is saving every tax return as far back as the date of the earliest expense I'm getting reimbursed for. This will show I have had no previous 8889 distributions (that should satisfy the 2nd requirement) and will also show that in no year did I use a medical expense as an itemized deduction (3rd requirement). You should probably also retain any EOBs from your health insurance during the period, to show that the expense wasn't paid by your health insurance. If you scan everything it shouldn't take up much space, but yes it's kind of a hassle. There is no time limit for reimbursements from an HSA, but there's a...
by MP123
Mon Mar 04, 2024 5:53 pm
Forum: Personal Investments
Topic: Family HSA with a non-dependent child
Replies: 6
Views: 490

Re: Family HSA with a non-dependent child

HCopter wrote: Mon Mar 04, 2024 5:13 pm Please confirm:
Daughter can open her own HSA account and fund it as 7/12 x $8,300
I can contribute 7/12 x $9,300 + 5/12 x $5,150
Is this correct?
If so, when can we actually make the contributions?
When daughter starts her job and selects medical insurance, what happens if she selects an HSA eligible plan?
Your calculations look correct. You could fund the HSAs at any point during 2024 and up until your tax deadline in 2025. It might be worth waiting until she's actually on her own insurance to figure the amounts, sometimes plans change along the way.

If she's eligible for an HSA through her employer then she may end up with two HSAs but they can be consolidated if she wants.
by MP123
Sun Mar 03, 2024 3:29 pm
Forum: Personal Finance (Not Investing)
Topic: E*Trade solo 401(k) Form 5500-EZ filing
Replies: 17
Views: 1693

Re: E*Trade solo 401(k) Form 5500-EZ filing

nyclon wrote: Sun Mar 03, 2024 3:10 pm This year the IRS added a question at the end of the 5500-EZ which appears to be in relation to selecting code “3D”, which many in this thread select. Does anyone know the answer for E*Trade?

The new question:
“12. If the plan sponsor is an adopter of a pre-approved plan that received a favorable IRS Opinion Letter, enter the date of the Opinion Letter [MM/DD/YYYY] and the Opinion Letter serial number [ ]”

As a reminder, code “3D” is:
“Pre-approved pension plan – A pre-approved plan under sections 401, 403(a), and 4975(e)(7) that is subject to a favorable opinion letter from the IRS”
The Opinion Letter is generally included along with the plan document. If you don't have a copy (you should) you can probably download it from E*Trade.
by MP123
Sat Mar 02, 2024 5:18 pm
Forum: Personal Finance (Not Investing)
Topic: S-Corp Receipts from another business reporting ?
Replies: 4
Views: 425

Re: S-Corp Receipts from another business reporting ?

The Patient Protection and Affordable Care Act (PPACA, 2010) did introduce a 1099 reporting requirement for corporations, as a way to boost compliance and help fund the ACA program. But it was repealed shortly afterwards as being too burdensome to implement.
by MP123
Sat Mar 02, 2024 4:51 pm
Forum: Personal Finance (Not Investing)
Topic: S-Corp Receipts from another business reporting ?
Replies: 4
Views: 425

Re: S-Corp Receipts from another business reporting ?

Also see:

https://www.irs.gov/instructions/i1099m ... k100044513
Exceptions
Some payments do not have to be reported on Form 1099-NEC, although they may be taxable to the recipient. Payments for which a Form 1099-NEC is not required include all of the following.

Generally, payments to a corporation (including a limited liability company (LLC) that is treated as a C or S corporation). However, see Reportable payments to corporations , earlier.
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by MP123
Sat Mar 02, 2024 2:57 pm
Forum: Personal Finance (Not Investing)
Topic: S-Corp Receipts from another business reporting ?
Replies: 4
Views: 425

Re: S-Corp Receipts from another business reporting ?

There is no requirement to file a 1099-NEC or -MISC for payments to a corporation (or LLC taxed as such) in most cases, just for sole proprietors/disregarded entities. Some companies will 1099 all of their vendors including the corporations anyway, but it isn't required.

Short of an audit the IRS doesn't have anything to match against a corporation's reported receipts.
by MP123
Sat Mar 02, 2024 10:49 am
Forum: Personal Investments
Topic: Simple IRA rollover and Solo401k rollover.
Replies: 2
Views: 386

Re: Simple IRA rollover and Solo401k rollover.

1. After 2 years I don't think there are any issues with rolling a SIMPLE-IRA over into another type of IRA. Not sure what the Fidelity rep was referring to. Some 401k plans might restrict incoming rollovers from SIMPLE-IRAs, but I don't think that's an issue here.

2. That's pretty much it. You might also write a notice to yourself saying the plan is terminated as of X date.
by MP123
Fri Mar 01, 2024 9:51 pm
Forum: Personal Finance (Not Investing)
Topic: Sole prop now S corp, clarifying solo 401k contributions
Replies: 1
Views: 336

Re: Sole prop now S corp, clarifying solo 401k contributions

After he elected S-Corp taxation all of the solok contributions should have been taken through W2 (employee) or 1120S (employer). None of the contributions attributed to this period would be taken on his 1040. So it's just a question of taking the correct amount on 1040 Sch 1 line 16 for the period preceding the S-Corp (when he was a Sch C).

There is definitely a math problem to be solved here, just be sure you don't double dip on the contributions by taking them in more than one place.

I'd see what he contributed after the S-Corp election and hopefully the rest of the amount fits into the Sch C space. You probably only need to tell TT about the Sch C part and not the S-Corp contributions.
by MP123
Fri Mar 01, 2024 6:46 pm
Forum: Personal Finance (Not Investing)
Topic: HSA earnings on excess - how to calculate?
Replies: 12
Views: 1072

Re: HSA earnings on excess - how to calculate?

The same method is used as for IRAs.

https://www.law.cornell.edu/cfr/text/26/1.408-11

Generally the custodian will do this calculation as a courtesy, so be sure it isn't done twice.
by MP123
Fri Mar 01, 2024 6:14 pm
Forum: Personal Finance (Not Investing)
Topic: Clarifying Tax Reporting of Sole Proprietor Solo 401(k) Contributions
Replies: 10
Views: 1222

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

You are correct that both parts of a soloK contribution for a sole proprietor go on line 16 of Schedule 1. There is no other place that they are reported other than Form 5500 (if the account is >$250k). The line on Sch C itself is for any contributions you make to your employee's 401k. I'm not sure why the site above is suggesting that you report the business income - employer contribution as a net operating loss (NOL) (Sch 1 line 8a). That is certainly incorrect. FreeTaxUSA seems to be handling this correctly. Thank you so much. And I'm correct that the Solo Roth 401(k) contributions just don't get reported at all on the tax form? So it's just the combined Employer + Employee Traditional contributions that go on Schedule 1, Line 16? I'm c...
by MP123
Fri Mar 01, 2024 5:58 pm
Forum: Personal Finance (Not Investing)
Topic: pay Part D from HSA. Not premium, it's LEP-late enroll
Replies: 1
Views: 431

Re: pay Part D from HSA. Not premium, it's LEP-late enroll

You can pay the Part D premiums using the HSA along with any out-of-pocket drug costs, direct or reimbursed doesn't make a difference, just keep receipts.

And note that you can pay Part C (Medicare Advantage) premiums with an HSA, it's the Medicare Supplement plans that aren't eligible.
by MP123
Fri Mar 01, 2024 5:39 pm
Forum: Personal Finance (Not Investing)
Topic: Clarifying Tax Reporting of Sole Proprietor Solo 401(k) Contributions
Replies: 10
Views: 1222

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

You are correct that both parts of a soloK contribution for a sole proprietor go on line 16 of Schedule 1. There is no other place that they are reported other than Form 5500 (if the account is >$250k). The line on Sch C itself is for any contributions you make to your employee's 401k.

I'm not sure why the site above is suggesting that you report the business income - employer contribution as a net operating loss (NOL) (Sch 1 line 8a). That is certainly incorrect. FreeTaxUSA seems to be handling this correctly.
by MP123
Fri Mar 01, 2024 5:25 pm
Forum: Personal Finance (Not Investing)
Topic: S-corp health insurance deduction, spouse works
Replies: 4
Views: 721

Re: S-corp health insurance deduction, spouse works

With the above facts I think the SEHI deduction would be allowed since the S-Corp owner is not eligible to participate in any subsidized employer health plan (Section 162(I)2B). Of course that's because they have their own health insurance, but I don't think there's any requirement that they drop it in order to become eligible for the spouse's plan.
by MP123
Thu Feb 29, 2024 10:43 pm
Forum: Personal Investments
Topic: HSA question
Replies: 11
Views: 1598

Re: HSA question

goblue100 wrote: Thu Feb 29, 2024 10:13 pm
sailaway wrote: Thu Feb 29, 2024 5:45 pm It sounds like your wife has and FSA, rather than HSA, based on the balance being on a debit card and the limited carryover.
I wonder if she has an HRA? The fact she can carry over $500 makes me think HRA.
https://www.metlife.com/stories/benefits/hra-vs-hsa/
Maybe, but an FSA can also allow a limited carry over. Either one would make our OP HSA ineligible unless they were vision/dental only or dependent care plans.
by MP123
Thu Feb 29, 2024 8:04 pm
Forum: Personal Investments
Topic: HSA question
Replies: 11
Views: 1598

Re: HSA question

Nate79 wrote: Thu Feb 29, 2024 7:37 pm Unfortunately any year that she had this account open including the year there are rollover funds you need to completely undo your HSA contributions.
Agreed.

If your spouse was covered by an FSA then you were covered, and that makes you ineligible to contribute to an HSA.