Search found 123 matches

by little_star
Fri Feb 26, 2021 6:54 pm
Forum: Personal Investments
Topic: Traditional IRA post-tax contribution options
Replies: 2
Views: 191

Re: Traditional IRA post-tax contribution options

Further, if this contribution was for the 2020 tax year and you are under the Roth contribution income limits, you can recharacterize your $500 to a Roth IRA anytime prior to April 15, 2021. This is *better* than converting, as you do not need to worry about pro rata rules and you do not have to pay...
by little_star
Fri Feb 26, 2021 9:57 am
Forum: Personal Finance (Not Investing)
Topic: After-Tax Money in IRA
Replies: 4
Views: 384

Re: After-Tax Money in IRA

Is this an "excess" contribution (i.e., you had already contributed the maximum allowable amount at a different institution), or just a mistake insofar as you did not want to make an IRA contribution for the 2020 tax year?
by little_star
Mon Feb 22, 2021 11:29 pm
Forum: Personal Finance (Not Investing)
Topic: Recharacterization and conversion same year-still confused
Replies: 2
Views: 164

Re: Recharacterization and conversion same year-still confused

If you have been doing backdoor Roths for a while, this year is not that much different. Your non-deductible contribution is still $6k. When you work through IRS Form 8606, you will discover that you will owe taxes on the growth of the contribution between the time you contributed and when you conve...
by little_star
Mon Feb 22, 2021 11:20 pm
Forum: Personal Finance (Not Investing)
Topic: Excess Roth IRA contributions - withdrawal
Replies: 24
Views: 872

Re: Roth IRA to Traditional IRA conversion Tax question

Duckie has given you good advice in your other thread. https://www.bogleheads.org/forum/viewtopic.php?f=2&t=340855 To re-phrase: given that you have recharacterized your Roth contributions to a non-deductible traditional IRA, you have completed the first step of the backdoor Roth process. For th...
by little_star
Fri Feb 19, 2021 9:49 pm
Forum: Personal Finance (Not Investing)
Topic: Fixing Backdoor Roth Conversion not performed in the same year
Replies: 12
Views: 777

Re: Fixing Backdoor Roth Conversion not performed in the same year

Recharacterize is the correct terminology for your first transaction. You should have documented this on your 2019 taxes using IRS Form 8606 to document the non-deductible contribution and made a statement regarding the re-characterization. Your word choice for the second transaction is problematic....
by little_star
Thu Feb 18, 2021 10:59 pm
Forum: Personal Investments
Topic: Question about Roth Conversion
Replies: 8
Views: 893

Re: Question about Roth Conversion

So I have an account over on Ameritrade I want to transfer over to Fidelity (just to consolidate my accounts, have three different brokerages now). This account is a Traditional IRA which I also wanted to convert to a Roth. This is a smaller account one I had from a while back, that being said it h...
by little_star
Thu Feb 18, 2021 5:27 pm
Forum: Personal Investments
Topic: Quick backdoor roth question
Replies: 23
Views: 1408

Re: Quick backdoor roth question

Just to be clear, the ideal backdoor Roth process is completed when there are no pre-tax dollars in any form of traditional IRA (to avoid the pro rata rule). If you have traditional IRAs of any form (rollover, SEP, SIMPLE, etc), you can either roll them into a 401k (if your plan allows for such roll...
by little_star
Thu Feb 18, 2021 4:50 pm
Forum: Personal Investments
Topic: Quick backdoor roth question
Replies: 23
Views: 1408

Re: Quick backdoor roth question

Is this the same traditional IRA that you reference as a SEP IRA in your other thread? https://www.bogleheads.org/forum/viewtopic.php?f=1&t=340428 If not, you will also need to clear the SEP IRA before you are ready to complete the backdoor Roth process, as the pro rata rule applies to all tradi...
by little_star
Thu Feb 18, 2021 10:36 am
Forum: Personal Investments
Topic: Quick backdoor roth question
Replies: 23
Views: 1408

Re: Quick backdoor roth question

You are only required to file IRS Form 8606 for the year in which you make the non-deductible contributions (or do a Roth conversion). From what you have written, it sounds like you might be missing the one for 2014. In terms of the older records, you should look for them, but you can probably use ...
by little_star
Thu Feb 18, 2021 8:48 am
Forum: Personal Investments
Topic: Can I convert my SEP-IRA to a Roth IRA?
Replies: 12
Views: 850

Re: Can I convert my SEP-IRA to a Roth IRA?

Roth conversions are reported in the calendar year they are made. So if you were to convert today, you would report it on your 2021 taxes.
by little_star
Wed Feb 17, 2021 11:53 am
Forum: Personal Investments
Topic: Quick backdoor roth question
Replies: 23
Views: 1408

Re: Quick backdoor roth question

You are only required to file IRS Form 8606 for the year in which you make the non-deductible contributions (or do a Roth conversion). From what you have written, it sounds like you might be missing the one for 2014. In terms of the older records, you should look for them, but you can probably use t...
by little_star
Wed Feb 17, 2021 9:08 am
Forum: Personal Investments
Topic: Quick backdoor roth question
Replies: 23
Views: 1408

Re: Quick backdoor roth question

You may as well start looking for those records as you will need this information when you start making withdrawals in any case. If you did not file form 8606 on any of the years that you made non-deductible contributions, you will need to fix that by filing those forms now. Since this will not chan...
by little_star
Tue Feb 16, 2021 9:13 pm
Forum: Personal Investments
Topic: Messed Up the Roth IRA Recharterization: What's the next step?
Replies: 3
Views: 294

Re: Messed Up the Roth IRA Recharterization: What's the next step?

Thanks lakpr for the detailed reply. When filing form 8606, Do I file one form for both IRA (Wife's and Mine) or separate forms as we intend to do the same recharterization for my wife's Roth IRA as well. You each file form 8606, since these are individual accounts. You will also need to include a ...
by little_star
Tue Feb 16, 2021 9:05 pm
Forum: Personal Investments
Topic: IRA to 401k: Backdoor Roth and pro-rata
Replies: 39
Views: 1467

Re: IRA to 401k: Backdoor Roth and pro-rata

Presumably you documented the $5k non-deductible IRA contribution (your basis) on an IRS Form 8606 in the year in which you made the contribution. Because of this, you must leave at least the $5k basis behind. It is important to keep your basis out of the rollover to the 401k; if you do not leave at...
by little_star
Tue Feb 16, 2021 8:51 pm
Forum: Personal Investments
Topic: Advice on Roth Conversion or Rollover
Replies: 6
Views: 497

Re: Advice on Roth Conversion or Rollover

If you expect to remain in the 12% bracket for 2021, I would convert the traditional to Roth. That will allow her access to a backdoor Roth should your combined income increase beyond the Roth IRA income limits in the future. Better to do this now at the 12% bracket than in the future when, if you n...
by little_star
Tue Feb 16, 2021 2:16 pm
Forum: Personal Finance (Not Investing)
Topic: Partial Backdoor Roth with SEP?
Replies: 5
Views: 246

Re: Partial Backdoor Roth with SEP?

If you are willing to pay the tax upfront (which might be actually financially prudent with a 0.35% management fee in your 401k plan), then you can just convert your SEP $$ to your Roth IRA this year to clear the way for further backdoor contributions. When you fill out IRS Form 8606 for 2020, you w...
by little_star
Sun Feb 14, 2021 2:19 pm
Forum: Personal Finance (Not Investing)
Topic: Novice Advice: Accidental non-deductible tIRA contributions in 2020 mixed in rollover IRA
Replies: 4
Views: 303

Re: Novice Advice: Accidental non-deductible tIRA contributions in 2020 mixed in rollover IRA

If you are under the Roth IRA phase-out limits (not clear from your post), then you can re-characterize your traditional contribution to a Roth contribution. Your IRA custodian will calculate the gains/losses associated with your contribution. For most situations, this is much better than a conversi...
by little_star
Sun Feb 14, 2021 1:58 pm
Forum: Personal Investments
Topic: What % of your TOTAL portfolio is in TIAA Trad?
Replies: 45
Views: 3219

Re: What % of your TOTAL portfolio is in TIAA Trad?

Currently: 10%. However, this is determined not by the percentage, but by the absolute amount. I project that my TIAA Traditional, combined with social security, will be sufficient to cover the bare minimum of my expenses at retirement. This provides a secure floor for my retirement; other funds (w...
by little_star
Sat Feb 13, 2021 11:57 pm
Forum: Personal Investments
Topic: What % of your TOTAL portfolio is in TIAA Trad?
Replies: 45
Views: 3219

Re: What % of your TOTAL portfolio is in TIAA Trad?

Currently: 10%. However, this is determined not by the percentage, but by the absolute amount. I project that my TIAA Traditional, combined with social security, will be sufficient to cover the bare minimum of my expenses at retirement. This provides a secure floor for my retirement; other funds (wi...
by little_star
Sat Feb 13, 2021 12:30 pm
Forum: Personal Investments
Topic: Will be close to Roth IRA contribution limit - better to just make contribution?
Replies: 7
Views: 432

Re: Will be close to Roth IRA contribution limit - better to just make contribution?

If you do not have a current pre-tax IRA (rollover, SEP, SIMPLE, etc), then it is straightforward to use the backdoor Roth process. First, open and contribute to a traditional IRA (you can leave this open after you make the conversion, so that it is available to you next year). Then, convert the fun...
by little_star
Fri Feb 12, 2021 9:51 am
Forum: Personal Investments
Topic: Unwinding a Northwestern Mutual account
Replies: 48
Views: 2771

Re: Unwinding a Northwestern Mutual account

Remember that you can still contribute to your IRAs for the 2020 tax year until April 15, 2021. So that should be $24k for your Roth IRAs this year. Is this true even for accounts that did not exist in 2020? I was familiar with the April 15th rule, but I thought it might only apply to existing acco...
by little_star
Fri Feb 12, 2021 9:25 am
Forum: Personal Investments
Topic: Unwinding a Northwestern Mutual account
Replies: 48
Views: 2771

Re: Unwinding a Northwestern Mutual account

While paying off your mortgage can have significant psychological benefits (debt free!!!), is it the best financial decision at this time? For example, if you had not liquidated your investments in order to move away from NWML, would you have done so to pay down your mortgage right now? Do you expe...
by little_star
Fri Feb 12, 2021 8:26 am
Forum: Personal Investments
Topic: Unwinding a Northwestern Mutual account
Replies: 48
Views: 2771

Re: Unwinding a Northwestern Mutual account

Smokey Abe, I think that you’re in the middle of the process of withdrawing from NWML. Please let us know how it all turns out when you complete your process. And post back with any questions that you have. That I am! NWM just closed my brokerage account to the tune of $54k. Bogleheads, since my mo...
by little_star
Tue Feb 09, 2021 5:52 pm
Forum: Personal Investments
Topic: Is Backdoor Roth IRA still possible?
Replies: 6
Views: 319

Re: Is Backdoor Roth IRA still possible?

A backdoor Roth is always possible, it is just a question as to whether or not it is prudent. You may contribute to a traditional IRA regardless of income level, but at some point it is no longer deductible (post-tax $). If you have no pre-tax dollars in traditional IRAs (including rollover, SEP, SI...
by little_star
Mon Feb 08, 2021 8:41 am
Forum: Personal Investments
Topic: Need advice on taxable portfolio expansion
Replies: 9
Views: 919

Re: Need advice on taxable portfolio expansion

Since she does not have a traditional IRA, you might consider opening a Roth for her and funding it through the backdoor process (contribute non-deductible to a traditional IRA and convert to Roth shortly thereafter). Since a Roth IRA has a 5 year "aging" requirement, it may be useful to h...
by little_star
Mon Feb 08, 2021 8:05 am
Forum: Personal Finance (Not Investing)
Topic: mistake on rollover ira to roth ira
Replies: 35
Views: 1822

Re: mistake on rollover ira to roth ira

4) Convert both Rollover IRAs to Roth and pay tax on the $20K. If you expect TSLA stock to grow, why not grow it in a Roth? Oh can I do that without selling them? Yes, but you need to be prepared to pay taxes on the amount you convert this year that is over your basis ($12,000). That is the simples...
by little_star
Mon Feb 08, 2021 7:40 am
Forum: Personal Investments
Topic: What money can be put into regular Roth
Replies: 12
Views: 836

Re: What money can be put into regular Roth

If you have earned income, you can put up to $6k ($7k, if over 50) into either a traditional or Roth IRA (or a mix of both). If you meet certain income limitations, your contributions to a traditional IRA can be deducted from your income for tax purposes (tax deferred, or deductible). If you meet ce...
by little_star
Sun Feb 07, 2021 10:27 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth Pro Rata Consequences
Replies: 4
Views: 351

Re: Backdoor Roth Pro Rata Consequences

You do have $6k in the Roth IRA. However, because you had significant funds in a traditional (pre-tax) IRA on Dec 31 of the year you did the conversion, your conversion was pro-rated between the non-deductible (post-tax) and pre-tax $$. You need to pay tax on the pre-tax dollars that were converted ...
by little_star
Sun Feb 07, 2021 7:45 pm
Forum: Personal Finance (Not Investing)
Topic: mistake on rollover ira to roth ira
Replies: 35
Views: 1822

Re: mistake on rollover ira to roth ira

You did not list option 4: convert part or all of your traditional IRA at Fidelty to a Roth IRA. There is no limit on number or amount of conversions. If that IRA holds options that are not available in your 401k, you can convert those holdings to a Roth IRA. You will have to pay taxes on the conver...
by little_star
Sun Feb 07, 2021 2:01 pm
Forum: Personal Finance (Not Investing)
Topic: Excess ROTH Conversions
Replies: 9
Views: 461

Re: Excess ROTH Contributions

Did you convert or contribute? Conversions from traditional to Roth can no longer be undone. However, there are no income limitations on conversions. Contributions (your thread title) have both minimum (earned income) and maximum income limitations. If you have contributed to an IRA of any type with...
by little_star
Fri Feb 05, 2021 4:24 pm
Forum: Personal Finance (Not Investing)
Topic: mistake on rollover ira to roth ira
Replies: 35
Views: 1822

Re: mistake on rollover ira to roth ira

I do have another roller over ira account with Fidelity (was a traditional 401k account for a former employer but as the balance was too low and I left the company, it automatically changed to a rollover ira. Does that matter? Yes. You will need to get rid of that pre-tax $20K IRA in 2021. You eith...
by little_star
Fri Feb 05, 2021 3:56 pm
Forum: Personal Finance (Not Investing)
Topic: mistake on rollover ira to roth ira
Replies: 35
Views: 1822

Re: mistake on rollover ira to roth ira

If you have pre-tax dollars in an IRA at Fidelity (or any other financial institution), you will be subject to the pro-rata rule unless you clear that account (roll into your 401k, or convert to Roth) by December 31 of the year in which you do a Roth conversion of your non-deductible contributions. ...
by little_star
Fri Feb 05, 2021 3:44 pm
Forum: Personal Investments
Topic: What to do if you can't max out your IRA?
Replies: 12
Views: 872

Re: What to do if you can't max out your IRA?

In general, if you are eligible, you should contribute to tax advantaged space to the maximum amount allowed/you can afford. In your particular case, you have the opportunity to contribute $3777 to a Roth IRA, where it will grow without further taxes imposed. Your alternative is to invest it in a ta...
by little_star
Fri Feb 05, 2021 2:17 pm
Forum: Personal Investments
Topic: How to handle PARTIAL traditional IRA deduction eligibility this year?
Replies: 10
Views: 473

Re: How to handle PARTIAL traditional IRA deduction eligibility this year?

If you are in the income phase-out range for the deductible traditional IRA, then any further contributions are post-tax. You can (1) split your contribution (max of deductible limit to the traditional; remainder to a Roth IRA); (2) contribute all to the Roth IRA; or (3) contribute max of deductible...
by little_star
Fri Feb 05, 2021 12:02 pm
Forum: Personal Investments
Topic: Shift from Roth IRA to Roth 401k - any issues?
Replies: 5
Views: 350

Re: Shift from Roth IRA to Roth 401k - any issues?

There's a chance that we will cross over the income limit for Roth IRA contributions in 2021. I've been maxing out my 401k and Roth IRA, but my employer offers a Roth 401k as well. I'm considering putting $6,000 into the Roth 401k, and then maxing out the rest of my traditional 401k and IRA space. ...
by little_star
Fri Feb 05, 2021 9:06 am
Forum: Personal Finance (Not Investing)
Topic: ROTH IRA - HELP!
Replies: 10
Views: 757

Re: ROTH IRA - HELP!

As a clarification, you will owe taxes on the gains present at the time of conversion, not the time of recharacterization. You will need to provide comments regarding the recharacterization as part of the tax documents associated with the year of the contribution and you will need to file IRS form 8...
by little_star
Fri Jan 29, 2021 8:21 pm
Forum: Personal Investments
Topic: Remove or Recharacterize Roth IRA?
Replies: 2
Views: 228

Re: Remove or Recharacterize Roth IRA?

For Roth contribution in the year 2020, do I: A) call Vanguard and have them withdraw the excess contributions ($500) and the earnings received on them; OR B) do a recharacterization (of the entire $6000 contribution and earnings) with Vanguard? 1. The deadline to do A or B is 4/15/2021 for the 202...
by little_star
Wed Jan 27, 2021 12:25 am
Forum: Investing - Theory, News & General
Topic: Vanguard Brokerage Account Misinformation Correction Thread
Replies: 60
Views: 4616

Re: Vanguard Brokerage Account Misinformation Correction Thread

My reading of that thread is that the 1099-DIV's for those on the mutual fund side were missing for a few specific funds, whereas those on the brokerage side had incorrect entries for at least some of those same funds (i.e., that is what I was confused by, and my post was merged into that thread). S...
by little_star
Tue Jan 26, 2021 8:23 pm
Forum: Personal Finance (Not Investing)
Topic: Vanguard 1099-DIV Missing a Fund
Replies: 260
Views: 16038

Confused about 1099-DIV for VFWAX

[merged into existing topic - moderator prudent] I received my 1099-DIV statements for my Vanguard mutual funds. For the most part the Box 1a values (ordinary dividends) track my records. However, for my VTIAX holdings, I need to add the dividends distributed plus the foreign tax paid to arrive at ...
by little_star
Mon Jan 25, 2021 11:33 am
Forum: Personal Investments
Topic: Portfolio Review - how to exit Advisor and be as tax efficient as possible
Replies: 12
Views: 1007

Re: Portfolio Review - how to exit Advisor and be as tax efficient as possible

3. Also, someone one mentioned turning off reinvest of dividends immediately, and I wasn't sure why that was? 4. I've been contributing to IRA then converting it to Roth though I wonder if that's the right move if I may have lower income 7-10 years from now. Congratulations on your success! In rega...
by little_star
Sat Jan 23, 2021 5:58 pm
Forum: Personal Investments
Topic: Back Door Roth Conversion 2020 & Tax Filing
Replies: 20
Views: 1428

Re: Back Door Roth Conversion 2020 & Tax Filing

BogleTaxPro wrote: Sat Jan 23, 2021 5:43 pm You don't need an 8606.
This is incorrect. You will need to file Form 8606 to document both the non-deductible contribution to the traditional IRA and the conversion to the Roth IRA.
by little_star
Sat Jan 23, 2021 12:45 pm
Forum: Personal Investments
Topic: Backdoor ROTH with recharacterization
Replies: 4
Views: 355

Re: Backdoor ROTH with recharacterization

I made my maximum ROTH IRA contribution 2 and a half weeks ago. I was just informed I am getting an unexpected raise. This will push my income above the limits to contribute anything to my ROTH IRA for 2021. What's the best course of action to recharacterize the contribution, and then perform a bac...
by little_star
Fri Jan 22, 2021 9:37 pm
Forum: Personal Investments
Topic: Backdoor ROTH with recharacterization
Replies: 4
Views: 355

Re: Backdoor ROTH with recharacterization

I made my maximum ROTH IRA contribution 2 and a half weeks ago. I was just informed I am getting an unexpected raise. This will push my income above the limits to contribute anything to my ROTH IRA for 2021. What's the best course of action to recharacterize the contribution, and then perform a bac...
by little_star
Thu Jan 21, 2021 8:54 pm
Forum: Personal Investments
Topic: Bonus Caused Roth Excess Contribution - Need Help with Recharacterization and Back Door Roth
Replies: 3
Views: 315

Re: Bonus Caused Roth Excess Contribution - Need Help with Recharacterization and Back Door Roth

There are some terminology problems with your summary and you do not need to separate step 1 and step 3 of Wife's path. I would also recommend only re-characterizing the funds that you need to re-characterize (not the full $6k unless that is what you need to do) as you will owe taxes for any gains y...
by little_star
Thu Jan 21, 2021 8:18 pm
Forum: Investing - Theory, News & General
Topic: take loan on traditional 401k to fund Roth
Replies: 10
Views: 534

Re: take loan on traditional 401k to fund Roth

I think that this is even worse than people have stated above. Not only are you still putting after-tax money into a Roth (so no benefit there), but you are now putting after-tax money into your tax-deferred 401k when you pay the interest on your 401k loan! I think you are essentially voluntarily ch...
by little_star
Mon Jan 18, 2021 10:59 am
Forum: Personal Investments
Topic: Stupid question about starting an investment account
Replies: 24
Views: 1643

Re: Stupid question about starting an investment account

Thanks for that link, I pretty much have no excuse to not have read it before. Last year, about 80% of my income was through self-employment, so I'm opening a SEP Ira before doing any investing first (as advised by this forum) But I will definitely re-assess and make sure I'm maxing out my 401k thi...
by little_star
Sun Jan 17, 2021 6:55 pm
Forum: Personal Investments
Topic: Inexperienced with Investments, 350K HHI, help!
Replies: 18
Views: 1199

Re: Inexperienced with Investments, 350K HHI, help!

1. See if I can roll my traditional IRAs into my 401Ks. Still not clear to me what I should do here. Basically, I contributed $6K to each one in 2020. Vast majority of the money in there is from those contributions. There is a very bare minimum amount of money that was from "growth". Negl...
by little_star
Sun Jan 17, 2021 2:31 pm
Forum: Personal Investments
Topic: Inexperienced with Investments, 350K HHI, help!
Replies: 18
Views: 1199

Re: Inexperienced with Investments, 350K HHI, help!

Only on Bogleheads is $350k HHI “mid-range” Do you have any actual advice? Sure. 1. Roll your traditional IRA back into your 401k in order to do Backdoor Roths 2. Diversify into international 3. Get out of your bubble to understand what “mid-range” Americans actually make Be careful about #1. If th...
by little_star
Sun Jan 17, 2021 2:19 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor ROTH IRA tax question
Replies: 3
Views: 325

Re: Backdoor ROTH IRA tax question

There is nothing to be done. Indeed, you cannot do anything differently now since the conversion step cannot be undone. However, there are no worries. You have successfully moved your funds into a Roth IRA. The main difference is that you will have to do a little more paperwork (IRS Form 8606) since...
by little_star
Sun Jan 17, 2021 12:58 pm
Forum: Personal Finance (Not Investing)
Topic: Academic transitioning to new career?
Replies: 30
Views: 2287

Re: Academic transitioning to new career?

There are some hedge funds that hire academics. For example, at one point, Renaissance Technologies was targeting people in my field. Now, of course, those who want out all go to work for Google.