Search found 353 matches

by MrMiyagi
Mon May 09, 2022 10:24 pm
Forum: Personal Investments
Topic: 457(b) distributions - when to start, over how many years?
Replies: 14
Views: 1451

Re: 457(b) distributions - when to start, over how many years?

Thanks all - you've given me a lot to think about. Some of my thoughts on the last few questions: 1. Take over next few years before Trump tax cuts expire. - Actually I pay more taxes under the Trump plan as a CA resident with a high value property. Assuming the $10k SALT cap also expires, I'll be better off in 2025. 2. Consider state tax on this money and current vs retirement location. (ie Texas/Florida vs NY/Cal) - Currently live and plan to retire in CA so it wouldn't make a difference. 3. Will taking this at/after 65 affect IRMAA or Roth conversions. - not sure, good question 4. If retire early will this affect Obama Care cliff and ability to get subsidized health ins. - I doubt I'll be retiring early, but that's a consideration I wasn...
by MrMiyagi
Mon May 09, 2022 4:36 pm
Forum: Personal Investments
Topic: 457(b) distributions - when to start, over how many years?
Replies: 14
Views: 1451

Re: 457(b) distributions - when to start, over how many years?

Yes, it's a non-governmental 457(b). I previously worked for a university. Correct me if I'm wrong...if I take it out now, these are the problems I see:

(1) I lose out on potentially ~25 years of growth. If I understand correctly, the money that's in there will continue to be invested (it's in one of those Vanguard targeted date funds). So while I can't contribute to it, it will still continue to make (or lose, if I'm really unlucky?) money.
(2) I increase my taxable income during my highest earning years, when I could be receiving distributions while working part time or retired instead.
by MrMiyagi
Mon May 09, 2022 3:26 pm
Forum: Personal Investments
Topic: 457(b) distributions - when to start, over how many years?
Replies: 14
Views: 1451

Re: 457(b) distributions - when to start, over how many years?

Thanks all. Good to know about that last caveat. I do plan to max out my 401k contributions at the new job. I'll probably start taking distributions over 10 years starting at 65. The only problem I see with that strategy is if I'm still making a high income at 65. I would hope to be on the retirement track by then if not actually retired, though. On the other hand if I start too late, I may not live to see all the payments...
by MrMiyagi
Mon May 09, 2022 1:38 pm
Forum: Personal Investments
Topic: 457(b) distributions - when to start, over how many years?
Replies: 14
Views: 1451

457(b) distributions - when to start, over how many years?

Hi all, I have a question that may be a no-brainer but I want to make sure I do this right. I recently changed jobs and can no longer contribute to my 457(b). I have to decide in the next few months when to start my distributions. The choices are: -Roll it over - I can't do this because my new job isn't a nonprofit and doesn't have a 457(b) plan. -Immediate lump sum - seems like the worst idea as it will increase my taxable income by a lot right now, when I'm still working, and I don't need the money right now. -Choose a later date for a one-time lump sum - also seems like a bad idea since it will increase my taxable income by a lot more later, assuming it grows over time. -Periodic payments up to a maximum of 10 years - sounds like this is...
by MrMiyagi
Thu Apr 08, 2021 11:56 am
Forum: Personal Finance (Not Investing)
Topic: So when are taxes actually due?
Replies: 5
Views: 1098

Re: So when are taxes actually due?

Ok so for 2020 taxes though, since I already forgot to make estimated payments, I'm going to owe the same penalty whether I file in April 15, 2021 or May 2021?

Guess I'll just pay the penalty for 2021 first quarter as well sigh and just remember to deduct more for the rest of 2021.
by MrMiyagi
Thu Apr 08, 2021 11:43 am
Forum: Personal Finance (Not Investing)
Topic: So when are taxes actually due?
Replies: 5
Views: 1098

So when are taxes actually due?

I am wondering when my taxes are actually due - April 15, 2021 or May 17, 2021?

I have w2 income but ended up having 1099 income in 2020 as well from some side work. Unfortunately I forgot to withhold extra taxes from my w-2 last year and will probably owe taxes again this year. Does this mean I was supposed to have "estimated tax payments" in 2020...meaning my taxes are due April 15, 2021?

Or can I file in May 17, 2021 and pay the taxes owed and penalty? I just don't want to file by May and then owe another penalty on top of that, or worse find out I was supposed to file in April!

I live in California if that makes a difference. Thanks!
by MrMiyagi
Sun May 28, 2017 1:40 pm
Forum: Personal Finance (Not Investing)
Topic: Question regarding ROTH IRA conversion and taxes owed
Replies: 12
Views: 1310

Re: Question regarding ROTH IRA conversion and taxes owed

Hey guys sorry to bring this up again but I read through the link livesoft read and it created more questions than answers.

You mentioned there was already a posted solution...which was it? Is it what Oicuryy says:
viewtopic.php?t=219445#p3379758

This is going to be a nightmare because I think I didn't even include the 8606 for 2016...so I'll have to proactively call the IRS to amend that one before I get the same letter next year. :oops: What's the fallout for that one?
by MrMiyagi
Sat May 27, 2017 12:52 pm
Forum: Personal Finance (Not Investing)
Topic: Question regarding ROTH IRA conversion and taxes owed
Replies: 12
Views: 1310

Re: Question regarding ROTH IRA conversion and taxes owed

livesoft wrote:
MrMiyagi wrote:Thanks livesoft. Looking through the thread though...has anyone actually posted a solution or sample way to fill it out?
Why yes they did.

Which would you suggest I use? Looking through it...there's links to how to do it via TurboTax 2015 (which I assume is too late to do since this is a year ago...), then some paper fill ins...

Now the other thing is, should I contact the IRS regarding my wife's 1040 proactively (same issue) or wait till they come for me...
by MrMiyagi
Sat May 27, 2017 12:47 pm
Forum: Personal Finance (Not Investing)
Topic: Question regarding ROTH IRA conversion and taxes owed
Replies: 12
Views: 1310

Re: Question regarding ROTH IRA conversion and taxes owed

Hi, I got a bill from the IRS for 2015 regarding a ROTH IRA conversion. Specifically what I did last year was put 5000 into the traditional IRA at Vanguard, then a few days later before any interest accrued, I converted it into a Roth IRA. The IRS must have gotten the 1099-R form from Vanguard for the 5500 in the initial traditional IRA deposit and am now sending me a tax bill for 1540 for it. To clarify, I am above the income limit for a Roth IRA, but I thought conversions were still available to everyone. Do I owe the IRS this 1540 or do I send them a letter telling them I converted to a Roth IRA? Was I not supposed to have been able to do that conversion? I thought I will get taxed on that 5500 when I withdraw, not when I deposit? Thank...
by MrMiyagi
Sat May 27, 2017 12:45 pm
Forum: Personal Finance (Not Investing)
Topic: Question regarding ROTH IRA conversion and taxes owed
Replies: 12
Views: 1310

Re: Question regarding ROTH IRA conversion and taxes owed

Form 1040 line 32 has nothing

Form 8606 lines
1 : 5500
2: 0
3: 5500
14: 5500
15: 0

It seems they also adjusted my schedule A to decrease deductible income by 165, probably because of the 5500 increased taxable ?

Thanks a ton for your help livesoft.
by MrMiyagi
Sat May 27, 2017 12:40 pm
Forum: Personal Finance (Not Investing)
Topic: Question regarding ROTH IRA conversion and taxes owed
Replies: 12
Views: 1310

Re: Question regarding ROTH IRA conversion and taxes owed

Thanks livesoft. Looking through the thread though...has anyone actually posted a solution or sample way to fill it out?

It sounds like it should be the same for everyone putting in 5500.

Are we still allowed to convert Roth IRA this way? I suppose my wife is going to get a letter for 2015 as well, and then both of us for 2016...
by MrMiyagi
Sat May 27, 2017 12:30 pm
Forum: Personal Finance (Not Investing)
Topic: Question regarding ROTH IRA conversion and taxes owed
Replies: 12
Views: 1310

Question regarding ROTH IRA conversion and taxes owed

Hi, I got a bill from the IRS for 2015 regarding a ROTH IRA conversion. Specifically what I did last year was put 5000 into the traditional IRA at Vanguard, then a few days later before any interest accrued, I converted it into a Roth IRA. The IRS must have gotten the 1099-R form from Vanguard for the 5500 in the initial traditional IRA deposit and am now sending me a tax bill for 1540 for it. To clarify, I am above the income limit for a Roth IRA, but I thought conversions were still available to everyone. Do I owe the IRS this 1540 or do I send them a letter telling them I converted to a Roth IRA? Was I not supposed to have been able to do that conversion? I thought I will get taxed on that 5500 when I withdraw, not when I deposit? Thanks!
by MrMiyagi
Sun Apr 16, 2017 4:59 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Question - California Joint Tenant question
Replies: 1
Views: 343

Tax Question - California Joint Tenant question

If I bought a house with someone and we are "joint tenants" but the mortgage is over 1.1 million...can we split the 2 million mortgage in half and claim that our share of the mortgage is 1 million each and take half of the interest deduction accordingly?

This is in California if it makes a difference. Thanks!
by MrMiyagi
Sun Nov 01, 2015 8:25 pm
Forum: Investing - Theory, News & General
Topic: "I" Bonds [Interest rate?]
Replies: 12
Views: 2722

Re: "I" Bonds [Interest rate?]

So if I buy an i-bond now, it will never earn any interest for the life of the i-bond (30 years)?!?

It says fixed rate 0%, inflation rate NEGATIVE 0.80%...so composite rate is -0.8% which becomes 0%?

What's the point of buying an i-bond if it's going to be 0% interest rate for the next 30 years? Or do the rates constantly reset?
by MrMiyagi
Tue Jun 09, 2015 2:46 pm
Forum: Personal Finance (Not Investing)
Topic: Buying in Bay Area (redux)
Replies: 72
Views: 13325

Re: Buying in Bay Area (redux)

If you can afford it, just buy a place and don't look back. I remember looking at this forum, redfin, and Patrick.net asking the same questions in 2012-2013. I saw multiple people saying "market is crazy, just save and wait for better opportunity." Well guess what? I followed that advice, and I increased my downpayment savings substantially. Too bad since then, the market has risen EXPONENTIALLY and I've been completely priced out of the market. I can't even afford a place in downtown San Jose now. :oops: Patrick.net was full of bears, redfin was full of bulls, bogleheads is full of people that 99% of the time give you sensible advice. Unfortunately, on bay area real estate, it was the 1% time it was wrong. Don't live with regret....
by MrMiyagi
Sat Apr 11, 2015 10:54 am
Forum: Personal Finance (Not Investing)
Topic: Did a stealth roth conversion last year - Taxes and AMT
Replies: 4
Views: 712

Re: Did a stealth roth conversion last year - Taxes and AMT

I put 5500 in traditional ira, then immediately converted it into roth ira the very next day. So the net gains for the traditional was 0...actually in 1 case it was 2 cents.
by MrMiyagi
Sat Apr 11, 2015 9:47 am
Forum: Personal Finance (Not Investing)
Topic: Did a stealth roth conversion last year - Taxes and AMT
Replies: 4
Views: 712

Did a stealth roth conversion last year - Taxes and AMT

My wife and I did a stealth roth conversion last year, but whenever I enter the 11,000 in Turbo Tax, our taxes owed jumps up quite a bit. I thought we didn't get taxed on roth contributions till after we withdrew? Is it becomes our income was over the roth limit? Is there a way to properly enter the stealth conversion so we don't get taxed (like we're supposed to not taxed?) Also...does this amount of tax seem right? Our gross was 358,000 last year, taxable income was 323,000...and our total tax is 89,000? We got hit with a 53 tax penalty? I thought if the taxes paid this year was higher than last year, we didn't have to pay a penalty (we owe ~11k in federal this year). I guess we got hit with a ~5300 AMT as well. Is AMT paid on top of regu...
by MrMiyagi
Fri Jan 02, 2015 12:54 am
Forum: Personal Finance (Not Investing)
Topic: Engaged - marriage penalty & other practical concerns
Replies: 50
Views: 7084

Re: Engaged - marriage penalty & other practical concerns

Wow great thread. Seems like the tax system still favors one breadwinner lifestyle.
by MrMiyagi
Wed Apr 30, 2014 6:51 pm
Forum: Personal Finance (Not Investing)
Topic: Car Insurance - Which company do you use?
Replies: 19
Views: 3157

Car Insurance - Which company do you use?

Specifically for California. I have used the same company for many years that provided great coverage at fair prices. However, they don't cover in California. I currently have 2 cars insured for the same price Geico would insure one in CA (~800 bucks).

What car insurance company do you use? Any pointers on things I should definitely make sure it covers. Thanks!

Edit: Any recommendations on minimum coverage for x,y,z in California? Are there tons of uninsured people driving for example? We are not in the military so can't get USAA.
by MrMiyagi
Mon Apr 21, 2014 8:59 am
Forum: Personal Finance (Not Investing)
Topic: Town home, good or bad idea?
Replies: 21
Views: 2570

Re: Town home, good or bad idea?

Unless you're willing to let your cousin live rent-free in the event he loses his job and can't cover his part of the mortgage, I'm going to err on saying "NO" to buying a townhouse together. Maybe if you want to buy it yourself and rent to your cousin, that might work. It would be hard to kick your cousin out since you're family if he loses his job and can't pay for his half. If you don't cover his half of the mortgage, then you risk losing the house. Townhouses also have monthly HOA fees. Financially it's impossible to know if renting or buying is "smarter" without knowing the numbers. Try this calculator: http://www.nytimes.com/interactive/business/buy-rent-calculator.Html Unless you're fairly certain that you won't b...
by MrMiyagi
Mon Apr 21, 2014 7:46 am
Forum: Personal Investments
Topic: Just started residency, need some portfolio advice
Replies: 10
Views: 2028

Re: Just started residency, need some portfolio advice

I'm a resident as well so I feel your pain with the education debt. If you aren't getting a match at your 403b, you probably wouldn't bother contributing to that at all. I would just max out my Roth IRA each year. Sorry to derail your plan, but if you have 300k in debt that is 6.8% and 7.9% interest, you should be putting any extra money you have into that, not investing it into retirement. That debt is not going away (unless you die) and the interest is most likely piling up faster than any investments you'll make. Also you want to max out that 2500 student interest loan deduction each year. Once you make too much money (I think it's 155k for married, 80k for single?) you get phased out of that and lose that too. Since I am married, I got ...
by MrMiyagi
Tue Apr 01, 2014 12:00 pm
Forum: Personal Consumer Issues
Topic: Will this affect your Tipping? [Suggested Tip Amounts]
Replies: 123
Views: 13587

Re: Will this affect your Tipping?

I once hit "no tip" in front of my girlfriend in this exact situation (and then left a dollar in the tip jar because that seemed reasonable as opposed to a percentage). She told me that "in this economy" I was a jerk for not spreading the wealth around. I made the same point about this not being a service establishment, there being no below-minimum-wage workers there, etc., and she just looked at me like I was the worst person in the world. I asked if the presence of the tip option in any store automatically meant that one had to tip. She said yes. I asked if this would apply to Walmart. She said yes. The point of the story is that we are no longer in a relationship. Ughhhh it's a pet peeve of mine when people comment o...
by MrMiyagi
Tue Apr 01, 2014 11:47 am
Forum: Personal Consumer Issues
Topic: Will this affect your Tipping? [Suggested Tip Amounts]
Replies: 123
Views: 13587

Re: Will this affect your Tipping? [Suggested Tip Amounts]

Can someone explain this table to me? http://www.dol.gov/whd/state/tipped.htm Take California for example, where the minimum is $8.00. Does this mean the employer is paying the waiter 8/hr + the waiter collects tips? In that case, the waiters in CA are making much more than their counterparts in NY! I waitered in my youth in NY (Basic Combined Cash & Tip Minimum Wage Rate) and my employer paid me the minimum (i.e. 2.13/hr now) and I collected tips. If tips+salary end up being less than 8/hr, the employer must make up the difference (which never happened...waiters make a lot more than you think). To the poster above who said the bus boys and dishwashers had it 100x worse, he is absolutely correct. The day I was moved up to waitstaff was ...
by MrMiyagi
Mon Mar 24, 2014 10:14 am
Forum: Personal Consumer Issues
Topic: Road trip advice?
Replies: 35
Views: 4424

Re: Road trip advice?

I don't want to thread hijack, but I am doing a similiar (but longer) drive soon. Is there anything else we should consider - such as what sort of car tune-ups should be done before such a long drive? Thanks!
by MrMiyagi
Sat Mar 22, 2014 10:34 am
Forum: Personal Consumer Issues
Topic: Frugality regret: What thing do you regret not spending on?
Replies: 208
Views: 51963

Re: Frugality regret: What thing do you regret not spending

I think one thing the YOLO crowd has right, is spending money on travel and any physically demanding activities when you are young and able to do these things. I'm only in my mid 30s, but my knees are shot. I really regret not participating in things in my youth that fall into those categories, but now I can't do due to health and work schedule constraints. I also regret not spending more money on better food. I grew up in poverty, so I got used to eating ramen and ordering off the dollar menu at McDonalds. Unfortunately, I kept up with this sort of diet till today due to frugality and a sense of comfort with this diet. Now my health is paying for it and I'm just starting to realize it. I regret not starting to eat better when my salary all...
by MrMiyagi
Sat Mar 22, 2014 9:56 am
Forum: Personal Finance (Not Investing)
Topic: You can lead a horse to water... [Giving financial advice]
Replies: 50
Views: 7731

Re: You can lead a horse to water...

Leesbro63 wrote:
MrMiyagi wrote: How about:

3. The interest rates are near 0% now so there's really no point in saving. :beer
Excellent. Exactly! And when interest rates were 14% it was "inflation is 20%, so there's really no...."
I have to confess, I do fall into #3 myself. I still max my 401k and IRA, but since the rates are so low now, I don't bother saving anything over my $5000 emergency fund and have spent everything else. I guess the QE incentive to spend got me too. :mrgreen:
by MrMiyagi
Sat Mar 22, 2014 9:44 am
Forum: Personal Finance (Not Investing)
Topic: You can lead a horse to water... [Giving financial advice]
Replies: 50
Views: 7731

Re: You can lead a horse to water...

Leesbro63 wrote:My observation is that "spenders" rationalize like this, in two parts depending on age:

1. While young, they say "hey, you only live once, I'll worry about tomorrow if I'm still alive, so now I'll do <fill in the temporary-fix-feel-good-hedonism>"

2. When older they say "it's too late to save now, so I'll <fill in the temporary-fix-feel-good-hedonism> because saving it won't amount to much and I'll feel good now"
YOLO!

How about:

3. The interest rates are near 0% now so there's really no point in saving. :beer
by MrMiyagi
Sat Mar 22, 2014 9:38 am
Forum: Personal Finance (Not Investing)
Topic: You can lead a horse to water... [Giving financial advice]
Replies: 50
Views: 7731

Re: You can lead a horse to water...

My own experience is that your SUBJECT says it all....you can't get spenders to change. They may have to suffer through the punishment of bankruptcy and whatever else the world inflicts on them. I would be a supportive friend, but I would not bang my head against the wall trying to get them to change. There's even a chance that they'll resent YOU for it...looking to blame anyone and anything for not being able to continue the hedonism. This. I would just "be there for them" and not offer them any more money or advice. From my experience, it's pretty much guaranteed that when you stop giving them money, they will think "Why won't Zabar give me Y dollars this month for heating oil? Zabar can easily afford it. Doesn't Zabar kno...
by MrMiyagi
Sat Mar 22, 2014 7:33 am
Forum: Personal Finance (Not Investing)
Topic: Girlfriend pays rent - tax filing (Schedule E or elsewhere?)
Replies: 10
Views: 5360

Re: Girlfriend pays rent - tax filing (Schedule E or elsewhe

Somewhat naive question, but isn't rental income taxed as income? Can you even claim your condo as a rental unit if it's also your primary residence?

I'm just confused at how claiming extra income (rental income) can be advantageous to you in terms of taxes!
by MrMiyagi
Fri Feb 21, 2014 8:22 am
Forum: Personal Finance (Not Investing)
Topic: What's the Appropriate Net Worth by % for a 27 year old?
Replies: 78
Views: 20268

Re: What's the Appropriate Net Worth by % for a 27 year old?

Good god, what profession are you guys in...300k by age 30? WOW. Guessing finance... I'm actually a state police officer, so I don't make that much. Wife has a decent job, makes about as much as me. But I agree with tj I bought two homes that turned into rentals in 2009 and 2010 and a third home in 2012. Without that I wouldn't be close to where I am. I always compare myself to others on this forum and it will drive you nuts. It seems like everyone here are doctors and lawyers making four times what I make. If it makes you feel any better, I think most physicians are negative net worth (or not even close to 300k certainly) until probably their mid 40s. I'm in my 30s and still in residency, and I can tell you, very few of my colleagues have...
by MrMiyagi
Fri Feb 21, 2014 8:15 am
Forum: Personal Finance (Not Investing)
Topic: What's the Appropriate Net Worth by % for a 27 year old?
Replies: 78
Views: 20268

Re: What's the Appropriate Net Worth by % for a 27 year old?

Good god, what profession are you guys in...300k by age 30? WOW. Guessing finance... I'm in the US military... so nothing too incredible for pay. Out of college, I started at around $45k/yr. 6 years later, I'm at around $80k/yr. The biggest factors for me were just getting through college with no student loans, saving aggressively, and keeping my expenses well under control. I really started saving with a Roth IRA while I was a junior in college, and things have just been building from there. Plus, military pay ramps up pretty quickly in the first 4 years (levels off somewhat for a few years after that), so it was easy for me to stay at the same (low) level of spending while saving most of the rest. Non-taxable combat pay (during 2 deploym...
by MrMiyagi
Thu Feb 20, 2014 9:14 pm
Forum: Personal Finance (Not Investing)
Topic: What's the Appropriate Net Worth by % for a 27 year old?
Replies: 78
Views: 20268

Re: What's the Appropriate Net Worth by % for a 27 year old?

Good god, what profession are you guys in...300k by age 30? WOW. Guessing finance...
by MrMiyagi
Thu Feb 20, 2014 3:22 pm
Forum: Investing - Theory, News & General
Topic: $16 Billion for WhatsApp?!?!?!
Replies: 51
Views: 6419

Re: $16 Billion for WhatsApp?!?!?!

I have never even heard of WhatsApp, is this an international app? Then again, I was surprised that Facebook stock is as high as it is, and the company is profitable?

Maybe social media is the new wave to wealth after all.
by MrMiyagi
Thu Feb 20, 2014 2:06 pm
Forum: Personal Finance (Not Investing)
Topic: What's the Appropriate Net Worth by % for a 27 year old?
Replies: 78
Views: 20268

Re: What's the Appropriate Net Worth by % for a 27 year old?

Bogle101 wrote:I am 29.5, and my net worth is right around 300k (taxable + Roth IRA + 401(k) + cash). I think that's about average for someone with a college education, but on this saving / investing forum alot of people are doing much better. As far as %'s of net worth - that is totally dependent on your short term and long term goals. With a wife who will soon be doctor im sure you'll be just fine.
I'm pretty sure a net worth of 300k before age 30 puts you in the top 1%...if not the top 0.1% It certainly isn't "about average" for someone with a college education.
by MrMiyagi
Thu Feb 20, 2014 12:29 pm
Forum: Personal Finance (Not Investing)
Topic: Skip IRA for 1 year to buy engagement ring
Replies: 194
Views: 22877

Re: Skip IRA for 1 year to buy engagement ring

Is she making Roth contributions? If not, put it in her account! It would always be there for her until she needs it!!! This is actually quite a clever suggestion. It speaks to your values. And it is a sure sign of commitment. At least I would have no qualms about proposing this. She might surprise you and tell you it's the best engagement gift you could have given her. This forum... You guys are so out of touch. A deposit into your fiance's Roth IRA in lieu of engagement ring. Any normal woman, and that normal woman's friends, would be mortified. I am talking about normal society. This would be mocked mercilessly. Print out the debit from Vanguard.com? Put a bow on it and give it your fiance? I'm sure her post to Facebook will get many li...
by MrMiyagi
Tue Feb 18, 2014 12:12 pm
Forum: Personal Finance (Not Investing)
Topic: Skip IRA for 1 year to buy engagement ring
Replies: 194
Views: 22877

Re: Skip IRA for 1 year to buy engagement ring

I'm going to go against probably everyone else's advice here and say just buy the engagement ring that she will be happy with, within reason (i.e. if you're making 45k/yr and she asks you for a 20k ring, I'd personally run for the hills). Before you do that though, make sure she is "the one." Only you can answer that question. Divorce can be expensive. Second, ask her how important the ring is to her. This forum is essentially filled with the 1% of Americans that value retirement savings very highly over most "consumer goods", and is not representative of the public. Personally I agree that jewelry is a waste of money. However, if she thinks a large engagement ring is important to her, just suck it up and buy her the $50...
by MrMiyagi
Thu Nov 28, 2013 2:00 pm
Forum: Personal Finance (Not Investing)
Topic: Do 401k contributions reduce MAGI?
Replies: 14
Views: 16459

Re: Do 401k contributions reduce MAGI?

Thanks everyone!
by MrMiyagi
Mon Nov 25, 2013 8:07 pm
Forum: Personal Finance (Not Investing)
Topic: Do 401k contributions reduce MAGI?
Replies: 14
Views: 16459

Re: Do 401k contributions reduce MAGI?

Thanks for all your help regarding the Roth IRA conversion. Why do I not withhold taxes?

Also, will vanguard keep an empty traditional IRA account open for a year if I keep doing this every year? I assume it's advantageous for me to do a backdoor roth from now on, even when our combined income is very high (over 400k combined hopefully). Currently this year I'm still a medical resident so it's probably closer to 180k total.

Also, I will be changing jobs in a few months, but I can keep my 403b with my old employer as far as I know. I did contribute into it on a pre-tax and post-tax basis, so I guess that will be another huge mess when I do a rollover for that. Might be better to keep it with the old employer then?

Thanks again!
by MrMiyagi
Sun Nov 24, 2013 11:00 am
Forum: Personal Finance (Not Investing)
Topic: Do 401k contributions reduce MAGI?
Replies: 14
Views: 16459

Re: Do 401k contributions reduce MAGI?

Will Vanguard allow me to do a tIRA -> roth IRA pretty much the next day, after it's been funded? Seems like this is the way to go to do it this year, since I don't own any other IRAs as of now. I do own pre-tax 403b contributions (as does my spouse) but it sounds like this doesn't matter. Also, does this mean that every year I should be doing tIRA contributions then converting it into a Roth IRA the next day? Sounds like that's the way to go since we don't own any tIRA and every year the amount would be set back to 0...or does Vanguard not allow this? Yes, you will be allowed to do this as soon as the contribution transaction posts and the money is at vanguard. I suggest that the contribution be made to prime money market in tIRA. To conv...
by MrMiyagi
Sun Nov 24, 2013 2:12 am
Forum: Personal Finance (Not Investing)
Topic: Do 401k contributions reduce MAGI?
Replies: 14
Views: 16459

Re: Do 401k contributions reduce MAGI?

What do you mean "if I am a candidate?" I thought anyone can do the backdoor Roth IRA? I would just pay taxes on the earnings between the day of the initial IRA contribution and the roth IRA conversion? I have no other retirement funds except for Roth IRA and 403b with my employer. Same with my spouse. Thanks! With no other pretax IRA assets you're both excellent candidates for the backdoor into Roth IRA. The problem arises when there are pretax IRA assets because IRS requires that you aggregate all traditional type ira accounts per SSN and prorate the basis on partial conversions. For example if you had a 45k rollover IRA , contribute 5k non-deductible to a traditional IRA , then covert 5K to Roth , IRS treats that as a partial ...
by MrMiyagi
Thu Nov 21, 2013 8:45 pm
Forum: Personal Finance (Not Investing)
Topic: Do 401k contributions reduce MAGI?
Replies: 14
Views: 16459

Re: Do 401k contributions reduce MAGI?

What do you mean "if I am a candidate?" I thought anyone can do the backdoor Roth IRA? I would just pay taxes on the earnings between the day of the initial IRA contribution and the roth IRA conversion? I have no other retirement funds except for Roth IRA and 403b with my employer. Same with my spouse. Thanks!
by MrMiyagi
Thu Nov 21, 2013 7:51 pm
Forum: Personal Finance (Not Investing)
Topic: Do 401k contributions reduce MAGI?
Replies: 14
Views: 16459

Re: Do 401k contributions reduce MAGI?

Contributions to Traditional 401(k) reduce your AGI and MAGI for Roth IRA purposes. Contributions to Roth 401(k) do not reduce your AGI and MAGI. IRA contributions for 2013 must be made by tax filing deadline which I believe is April 15, 2014. Let's say you contribute to traditional IRA in Feb 1 2014 for 2013 and you convert to Roth IRA on feb 3, 2014. Your 2013 IRA contribution will be handled by the 2013 tax return. Your conversion happened in calendar 2014 so it must be handled by form 8606 in your 2014 tax return. Thanks for the prompt and helpful reply! How about regarding the partial contributions? I think our MAGI is going to be slightly over 178,000 (but under 188k). So should I do the partial contribution to Roth IRA, then the res...
by MrMiyagi
Thu Nov 21, 2013 7:32 pm
Forum: Personal Finance (Not Investing)
Topic: Do 401k contributions reduce MAGI?
Replies: 14
Views: 16459

Do 401k contributions reduce MAGI?

Sorry for this basic question. I looked online and most articles seem to mention IRA contributions reducing MAGI but not mention 401k I am asking because we are right on the borderline for being able to contribute to a Roth IRA this year. If 401k contributions reduce MAGI, we can Roth. If not, I guess we should do a traditional IRA then convert it to an existing Roth IRA the very next day on our Vanguard account? Also, if we are eligible for partial contributions, do we contribution that portion directly into a Roth IRA, then the remaining portion into the IRA and roll that over? Or would it just be easier to contribute the entire 5500 into the traditional IRA and roll it all over? Lastly, can we contribute after December 2013 (but before A...
by MrMiyagi
Sun Nov 10, 2013 1:19 pm
Forum: Personal Consumer Issues
Topic: Donating a Used TV to Charity
Replies: 44
Views: 12190

Re: Donating a Used TV to Charity

The Wizard wrote:
WendyW wrote:Tube TVs are no longer worth anything. A charity probably wouldn't take it.
Correct, or CRT computer monitors for that matter...
Really? I still have a CRT computer monitor and a CRT TV. Does that mean my lifestyle is even worse than charity cases? :(
by MrMiyagi
Thu Oct 31, 2013 3:53 am
Forum: Personal Consumer Issues
Topic: Elope to Save Money?
Replies: 79
Views: 9239

Re: Elope to Save Money?

I would NOT elope if you had any inkling of wanting a traditional wedding. You only get to do this once (hopefully) and if you elope or just have a small wedding of less than 20 people, you may look back with regret. A wedding is stressful, but it will also be a fun gathering of your closest friends and family. You will look back with fond memories of this.

Life is too short to penny-pinch on important events. That's not saying you should be spending 20k+ on your wedding, but I don't think it's unreasonable to have a nice wedding for 10-20k for ~100 people. What's the point of sacrificing so much to save money if you can't enjoy some of it?
by MrMiyagi
Thu Oct 17, 2013 5:10 pm
Forum: Investing - Theory, News & General
Topic: How Often Do Gamblers Really Win?
Replies: 51
Views: 7330

Re: How Often Do Gamblers Really Win?

Nice article link, I have no idea why that site gave away its data. If I was an exec at another company I would be pretty displeased at that site. As to those who say gambling has other value like free drinks, etc. I don't agree with that at all. An awful thing to happen to me was watching the WSOP on ESPN in 2002. That introduced me to online poker and that bad habit still haunts me to this day. Lost a bunch of money in college and during my first few years working, not to mention all that lost productivity where I could have been doing anything more beneficial. You never realize all those poker pros on tv are salaried by the sites, have their entry fees paid for and are compensated in other ways to make up for the variance of gambling. A...
by MrMiyagi
Sat Aug 31, 2013 7:02 am
Forum: Personal Finance (Not Investing)
Topic: New job: Employer match didn't kick in for 3 paychecks...
Replies: 11
Views: 1657

Re: New job: Employer match didn't kick in for 3 paychecks..

No, she is qualified for the match, payroll somehow didn't apply it for 3 paychecks...
by MrMiyagi
Fri Aug 30, 2013 7:51 pm
Forum: Personal Finance (Not Investing)
Topic: New job: Employer match didn't kick in for 3 paychecks...
Replies: 11
Views: 1657

New job: Employer match didn't kick in for 3 paychecks...

My wife started a new job and they offer a 6% match. She set her pre-tax contribution, but after 3 paychecks, none of the deductions has gone through. As a result, she has lost out on all the matches (over a $1000 so far and counting). She called them and they said "It takes 1-2 paychecks to kick in..." but it's been 3 paychecks already.

Is there anything she can do to retroactively reclaim the lost match? The HR people say there's nothing they can do, but that doesn't sound right to me, especially since it's their mistake. Thanks!

Edit: Woops she did contacy payroll not HR.
by MrMiyagi
Mon Aug 19, 2013 8:14 pm
Forum: Personal Investments
Topic: Catching a falling knife in the bond market?
Replies: 15
Views: 2556

Re: Catching a falling knife in the bond market?

Thanks for the informative post nisprius!
by MrMiyagi
Mon Aug 19, 2013 9:34 am
Forum: Personal Finance (Not Investing)
Topic: Poll: Retirement savings by mid 30s?
Replies: 35
Views: 8098

Re: Poll: Retirement savings by mid 30s?

50-100k age 32

Maybe you should specify that the poll is for your individual (rather than combined with spouse)?