Search found 952 matches

by ThePrune
Thu Apr 09, 2020 9:55 am
Forum: Personal Investments
Topic: RMD and CARES Act
Replies: 12
Views: 3188

Re: RMD and CARES Act

Alan S ., your response to me was very kind, especially since I had completely missed in my reading of CARES that the RMD waiver under sec. 2203 actually treats IRAs somewhat differently than QRPs. I only grasped this detail as I read your response and then more carefully followed through the chain...
by ThePrune
Wed Apr 08, 2020 4:10 pm
Forum: Personal Investments
Topic: RMD and CARES Act
Replies: 12
Views: 3188

Re: RMD and CARES Act

Alan S . I have the greatest respect for your tax-related knowledge, but I don't believe that your advice in Item (3) below is correct. I'll explain my reasoning in order for you to see if you agree, or if I'm overlooking some detail. You also must not have done another IRA rollover in the last 12 ...
by ThePrune
Wed Apr 08, 2020 5:44 am
Forum: Personal Investments
Topic: Penalty free early annuity withdrawals
Replies: 2
Views: 203

Re: Penalty free early annuity withdrawals

There are several types of "penalties" that might result from a pre-age 59 1/2 withdrawal from a Variable Annuity contract. (1) Surrender charges that are a part of the annuity contract itself. CARES will not eliminate these. (2) Internal Revenue Code Section 72(q) 10% penalty tax for with...
by ThePrune
Sat Mar 07, 2020 8:55 pm
Forum: Personal Finance (Not Investing)
Topic: Using daily balance for calculation of SEPP?
Replies: 4
Views: 323

Re: Using daily balance for calculation of SEPP?

Based on the way you are wording your question, I'm not entirely sure you understand how to correctly perform the SEPP calculation. But maybe you do understand after all! Anyway, I'll emphasize the need to carefully study IRS Revenue Ruling 2002-62 (contained on pages 710-713 of IRS Bulletin 2002-42...
by ThePrune
Mon Mar 02, 2020 4:17 am
Forum: Personal Investments
Topic: SIL, 401K Beneficiary
Replies: 7
Views: 633

Re: SIL, 401K Beneficiary

If I read your posting correctly, the 401(k) is approximately $500K. This should definitely be moved into an Inherited IRA, potentially at Vanguard or Fidelity. But please advise SIL that this MUST be accomplished via a direct transfer, where the custodian of the inherited IRA (for example Vanguard ...
by ThePrune
Fri Feb 21, 2020 12:19 pm
Forum: Personal Finance (Not Investing)
Topic: deductible health insurance premiums for self-employment?
Replies: 53
Views: 3048

Re: deductible health insurance premiums for self-employment?

Based on CCA 201228037, it would not be a stretch to say that COBRA, like Medicare, "is insurance that constitutes medical care under Sec. 162(l), it is similar to other health insurance and its premiums can similarly be deducted." And like Medicare, a COBRA policy can be in the name of t...
by ThePrune
Fri Feb 21, 2020 4:56 am
Forum: Personal Finance (Not Investing)
Topic: deductible health insurance premiums for self-employment?
Replies: 53
Views: 3048

Re: deductible health insurance premiums for self-employment?

More important than the exact wording of the law is how the IRS chooses to interpret the law. And this interpretation varies over time even though the law has not changed at all. Thanks so very much for this enlightening post. This information has also helped to "wash away the rigidity" i...
by ThePrune
Thu Feb 20, 2020 9:27 am
Forum: Personal Finance (Not Investing)
Topic: deductible health insurance premiums for self-employment?
Replies: 53
Views: 3048

Re: deductible health insurance premiums for self-employment?

As I have already mentioned. The Medicare premium exception, especially for the spouse, dependent and child of the individual, are clearly contrary to the description in Publication 535 . Medicare is most certainly not established, or considered to be established under the business. Medicare enroll...
by ThePrune
Thu Feb 20, 2020 6:02 am
Forum: Personal Finance (Not Investing)
Topic: deductible health insurance premiums for self-employment?
Replies: 53
Views: 3048

Re: deductible health insurance premiums for self-employment?

Which specific paragraphs from pub 535 make you say that this deduction would in no way be approved by the IRS? Is it because the plan is a COBRA plan, or because the plan is in my spouse's name instead of mine? This is a reasonable question to ask. I apologize for being so slow to respond. Since n...
by ThePrune
Wed Feb 19, 2020 6:59 pm
Forum: Personal Finance (Not Investing)
Topic: deductible health insurance premiums for self-employment?
Replies: 53
Views: 3048

Re: deductible health insurance premiums for self-employment?

It is well established that IRS Publications are not "substantial authority" . This means they provide no exemption from interest & penalties even if follow them faithfully. The reverse is also true. Just because an IRS publication doesn't explicitly allow something doesn't mean it is...
by ThePrune
Wed Feb 19, 2020 7:01 am
Forum: Personal Finance (Not Investing)
Topic: deductible health insurance premiums for self-employment?
Replies: 53
Views: 3048

Re: deductible health insurance premiums for self-employment?

What I find disappointing in this posting stream is the lack of an effort to locate, quote and apply Internal Revenue Code (Title 26 USC), Code of Federal Regulations and IRS Publication statements that cover the OP's situation. :oops: IRC Section 162(l) Special rules for health insurance costs of s...
by ThePrune
Sun Feb 09, 2020 8:32 pm
Forum: Personal Finance (Not Investing)
Topic: Fun Side Income in Retirement?
Replies: 50
Views: 4400

Re: Fun Side Income in Retirement?

I was asked to work as an “Instructional Assistant”, getting paid to answer questions from financial advisors about the retirement-related course material they are working through.

Imagine if you could get paid to post answers here on the Forum :moneybag
by ThePrune
Sun Feb 09, 2020 8:23 am
Forum: Personal Investments
Topic: Retirement Planning
Replies: 24
Views: 3203

Re: Retirement Planning

hile a SPIA might be very effective for the life of the individual it could be a horrific investment for those the investor might like to help out with their passing. Additionally, while I can't point out the link at the moment or quote the source it has been authoritatively put forward that SPIA's...
by ThePrune
Sat Feb 08, 2020 9:35 pm
Forum: Investing - Theory, News & General
Topic: Do any FAs charge a percent of earnings?
Replies: 6
Views: 835

Re: Do any FAs charge a percent of earnings?

Paying for investment advice as a percentage of earnings is prohibited by the Investment Advisers Act of 1940.
by ThePrune
Thu Feb 06, 2020 8:30 pm
Forum: Personal Investments
Topic: Overall defined contribution plan limit 2020 - confusion
Replies: 9
Views: 735

Re: Overall defined contribution plan limit 2020 - confusion

ao1philly,

lakpr gave you an excellent and reliable answer. I only felt the need to state this because sometimes you’ll see responses on this Forum that aren’t entirely correct (to put it politely).
by ThePrune
Thu Feb 06, 2020 4:14 pm
Forum: Personal Finance (Not Investing)
Topic: Trust amendment question/concern
Replies: 4
Views: 622

Re: Trust amendment question/concern

RudyS wrote: Wed Feb 05, 2020 9:55 pm Ask the current trustee why he recommends this. What are the comparative costs? is there any chance of a conflict of interest?
+1
by ThePrune
Thu Feb 06, 2020 4:06 pm
Forum: Personal Finance (Not Investing)
Topic: Surrender Flexible Premium Variable Life Policy?
Replies: 10
Views: 479

Re: Surrender Flexible Premium Variable Life Policy?

I also do not need the money, but I am financially conservative and believe in backups to my backups . The question is what to do with the policy. Since you already own the policy, one potential usage of the cash value is as a "volatility buffer" for use when your stock investments hit th...
by ThePrune
Thu Feb 06, 2020 2:35 pm
Forum: Personal Finance (Not Investing)
Topic: long term care insurance versus self-insuring
Replies: 110
Views: 7289

Re: long term care insurance versus self-insuring

Rather than a "Yes / No" answer, you'll benefit more from a description of how to think through the decision. The starting point for the self-funding (don't call this self-insuring!) decision: how many years of the most expensive care (e.g. Nursing Home) do you want to set aside funds to c...
by ThePrune
Thu Feb 06, 2020 12:55 pm
Forum: Personal Finance (Not Investing)
Topic: Rule 72T: Just how does this work? Anyone do this?
Replies: 18
Views: 3400

Re: Rule 72T: Just how does this work? Anyone do this?

If OP or anyone else is interested: I created a document that goes through all the details of IRS Revenue Ruling 2002-62 and the various allowed approaches to SEPPs. It adds in all the details required to understand the examples that the IRS has posted on the FAQ website. This document was created ...
by ThePrune
Thu Feb 06, 2020 10:40 am
Forum: Personal Investments
Topic: ? about requirement - inherited roth IRA
Replies: 3
Views: 467

Re: ? about requirement - inherited roth IRA

Your question is interesting because of the combination of a Trust and inherited Roth IRAs. I'll leave the potential complications resulting from the Trust until the end. It's a common practice for a brokerage to create multiple inherited IRAs for the beneficiaries and to divide the original IRA fun...
by ThePrune
Wed Feb 05, 2020 9:39 pm
Forum: Personal Investments
Topic: Retirement Planning
Replies: 24
Views: 3203

Re: Retirement Planning

Hooked, What you are proposing might work, but could well be very inefficient. Or it might fail miserably! Frankly, you haven't supplied enough information for a knowledgeable planner to give a valid evaluation. My perspective as someone who is working on a Masters degree in financial planning for r...
by ThePrune
Tue Jan 28, 2020 7:40 am
Forum: Personal Investments
Topic: Deferred Annuity
Replies: 3
Views: 337

Re: Deferred Annuity

Supplying a little more information might enable others to give sound advice. Here's what I think you should post: (1) You stated that one of the deferred annuities was nonqualified. That means it is not owned within an IRA (or similar tax-deferred plan). But what about the other 2 annuities? Are th...
by ThePrune
Sat Jan 25, 2020 10:12 pm
Forum: Personal Finance (Not Investing)
Topic: Is it possible to contest beneficiary of a life insurance and brokerage account of a deceased?
Replies: 51
Views: 4904

Re: Is it possible to contest beneficiary of a life insurance and brokerage account of a deceased?

GuyInFL wrote: Sat Jan 25, 2020 10:05 pm Looks like you can't disinherit your spouse in Massachusetts.
The spouse's Right of Election applies to property that passes through Probate. Life Insurance proceeds and IRAs do not pass through probate.
by ThePrune
Sat Jan 25, 2020 10:07 pm
Forum: Personal Finance (Not Investing)
Topic: Is it possible to contest beneficiary of a life insurance and brokerage account of a deceased?
Replies: 51
Views: 4904

Re: Is it possible to contest beneficiary of a life insurance and brokerage account of a deceased?

She should see a lawyer just in case MA has some court precedents that might help her. But generally in common law states, there would be no basis to challenge either the life insurance or the IRA beneficiary designations. Life insurance policies with an ex-spouse listed as the beneficiary can often...
by ThePrune
Sat Jan 25, 2020 9:55 pm
Forum: Personal Investments
Topic: Mega Back Door ROTH conversion
Replies: 13
Views: 1509

Re: Mega Back Door ROTH conversion

a) If i keep the earning in tiRA and since i've maxed out rIRA through backdoor conversion, wouldn't this violate IRS rule that your total contributions to all of your traditional and Roth IRAs cannot be more than $6000.00 Silk McCue gave you the correct answer earlier. I just wanted to add a comme...
by ThePrune
Sat Jan 25, 2020 8:46 pm
Forum: Personal Finance (Not Investing)
Topic: Pension beneficiary
Replies: 14
Views: 1439

Re: Pension beneficiary

so with my spouse's blessing I have named our daughter (not a huge pension amount, obviously). How common is this? When my husband retired, I don't recall any option that allowed a non-spouse pension beneficiary. Just wanted to make sure about one point. Did you have your spouse sign a Waiver of Sp...
by ThePrune
Sat Jan 25, 2020 8:32 pm
Forum: Personal Investments
Topic: What to do with a variable annuity
Replies: 11
Views: 869

Re: What to do with a variable annuity

Cait , one option that many people overlook when it comes to Variable Annuities (VAs) is the "Fixed interest" investment option. Although different VA sellers use different names, there will be an investment option available within your VA that supplies a fixed rate of interest. This isn'...
by ThePrune
Fri Jan 24, 2020 8:41 pm
Forum: Personal Investments
Topic: SEP IRA - Advice on Providers & Investing?
Replies: 10
Views: 548

Re: SEP IRA - Advice on Providers & Investing?

Hi all! I'm the sole proprietor of a business, planning to open a SEP IRA and contribute the max (which for me should be ~35k) and have a couple questions about how to proceed: Just to be clear, you're expecting to have $175,000 of net self-employment income, correct? A self-employed individual is ...
by ThePrune
Wed Jan 22, 2020 1:24 pm
Forum: Personal Investments
Topic: Cap gain calculation selling O/O home now a rental
Replies: 1
Views: 169

Re: Cap gain calculation selling O/O home now a rental

Please !!!!! always refer to IRS publications and posted materials when seeking to understand tax implications of your economic actions. Here is a link to IRS Tax Topic No. 701 on Sale of Your Home. It supplies the general rules for capital gains exclusion for residence property. Included within th...
by ThePrune
Mon Jan 20, 2020 8:05 pm
Forum: Personal Finance (Not Investing)
Topic: solo 401k eligibility?
Replies: 8
Views: 566

Re: solo 401k eligibility?

Kelly, A Solo 401(k) is legally classified as a "Qualified Retirement Plan". This type of plan is governed by the Internal Revenue Code section 401(a) and all associated regulations. One of the legal requirements for all "qualified" plans is PERMANENCE. Here is how my master's de...
by ThePrune
Sun Jan 19, 2020 9:19 pm
Forum: Personal Finance (Not Investing)
Topic: Deduct independent contractor mileage?
Replies: 36
Views: 1974

Re: Deduct independent contractor mileage?

Question 2) I know the mileage to my w2 job isn’t deductible but when my w2 job ends and I go directly to my independent contractor job, is that mileage deductible? No. Your W2 job is not one of your business locations, so driving from your regular job to your first business location is commuting, ...
by ThePrune
Sun Jan 19, 2020 9:03 pm
Forum: Personal Finance (Not Investing)
Topic: HSA Reimbursement for Expenses Deducted only on State Return?
Replies: 5
Views: 484

Re: HSA Reimbursement for Expenses Deducted only on State Return?

FrugalInvestor, I'd rather rephrase your question: Are you allowed to claim a state medical expense deduction for expenses that you previously covered through an H.S.A. distribution? After all, federal law alone controls whether an H.S.A. distribution is qualified or nonqualified when used to cover ...
by ThePrune
Sat Jan 18, 2020 9:36 pm
Forum: Personal Investments
Topic: Opinions on Brighthouse Shield Annuity?
Replies: 11
Views: 1807

Re: Opinions on Brighthouse Shield Annuity?

A financial advisor is trying to sell us a product called " Brighthouse Shield Level Select 6-Year Annuity " as a medium-term place to park our money -- so, lower risk, some chance of returns based on the stock market. In general annuities stand the best chance of being a reasonable alter...
by ThePrune
Thu Jan 09, 2020 6:09 am
Forum: Personal Finance (Not Investing)
Topic: 457(b) wiki. I believe some correction is needed.
Replies: 16
Views: 1696

Re: 457(b) wiki. I believe some correction is needed.

Spouse now works for hospital owned by the city - not for profit. I believe it is set up as governmental but I need to confirm. (its a weird setup). The conflicting info was in the first batch of glossy marketing info given to her by the Voya Rep ( :| ) that had info talking about ability to make w...
by ThePrune
Thu Jan 09, 2020 6:03 am
Forum: Personal Finance (Not Investing)
Topic: 457(b) wiki. I believe some correction is needed.
Replies: 16
Views: 1696

Re: 457(b) wiki. I believe some correction is needed.

I was asked to take a look at the discussion (so far) in this posting stream about the 457(b) Wiki. The first question that comes to mind is, Exactly how much detail do we really want to delve into in a mere Wiki article? Fundamentally, if anyone reall y wants to understand these things, they need t...
by ThePrune
Thu Jan 02, 2020 2:18 pm
Forum: Personal Finance (Not Investing)
Topic: Trust taxation question
Replies: 15
Views: 1683

Re: Trust taxation question

Since this posting stream is dealing with trust taxation, I thought I'd add another comment. My previous post (above) supplied information from my MSFS course textbook dealing with taxation of distributions from the general type of complex trust. But as I work my way through the textbook (which is a...
by ThePrune
Sun Dec 29, 2019 9:50 pm
Forum: Personal Finance (Not Investing)
Topic: Trust taxation question
Replies: 15
Views: 1683

Re: Trust taxation question

I guess the heart of the question is, does the income come out of the trust in the way I am hoping (ordinary income, then qualified dividends, then capital gains) or is it pro-rated in some weird way. The estate planning textbook I'm using for my current MSFS class (Kathryn Henkel's Estate Planning...
by ThePrune
Mon Dec 02, 2019 12:30 pm
Forum: Personal Finance (Not Investing)
Topic: taxes related to annuity account
Replies: 7
Views: 719

Re: taxes related to annuity account

However, does my annuity account have any impact on the Roth IRA conversion due to the pro-rata rule? For example, I have $70,000 in the annuity account. In 2019, I made $20,000 after-tax contribution and earned $1500 before converting to Roth IRA. How much money is taxable if I convert all $21,500...
by ThePrune
Wed Nov 06, 2019 8:46 pm
Forum: Personal Investments
Topic: In-Plan 401k After-Tax to Roth conversion with backdoor Roth
Replies: 11
Views: 738

Re: In-Plan 401k After-Tax to Roth conversion with backdoor Roth

Some 401k plans don’t allow partial distributions so I wondered if this precluded a former participant from being able to only rollover the after-tax portion. What you are alluding to is correct. The 401(k) plan is not obligated to offer every type of distribution that is allowed by statute, Treasu...
by ThePrune
Wed Nov 06, 2019 8:12 pm
Forum: Personal Investments
Topic: In-Plan 401k After-Tax to Roth conversion with backdoor Roth
Replies: 11
Views: 738

Re: In-Plan 401k After-Tax to Roth conversion with backdoor Roth

The IRS has provided official guidance in Notice 2014-54 on how to divide a roll-over distributions containing both pre-tax and after-tax amounts among several receiving accounts: If the pretax amount with respect to the aggregated disbursements that are treated as a single distribution is less than...
by ThePrune
Tue Nov 05, 2019 3:22 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Projections in Retirement?
Replies: 12
Views: 1652

Re: Tax Projections in Retirement?

If you want more reliable tax projection numbers, I suggest trying the free I-orp program and the modestly priced MaxiFi Planner program. Don't know about MaxiFi, but i-orp makes incorrect assumptions for lower incomes (e.g., assuming 85% of any SS benefit is taxed) and higher incomes (e.g., ignori...
by ThePrune
Tue Nov 05, 2019 9:44 am
Forum: Personal Finance (Not Investing)
Topic: Tax Projections in Retirement?
Replies: 12
Views: 1652

Re: Tax Projections in Retirement?

Wondering what causes these tools to be so different? And I guess more importantly, how to get "Good" tax projection numbers? I taught an adult education class last winter where I ran a hypothetical family's retirement finances through a number of free, online programs. There were certain...
by ThePrune
Tue Nov 05, 2019 9:19 am
Forum: Personal Investments
Topic: Roth Conversion of an individual TIPS bond
Replies: 9
Views: 543

Re: Roth Conversion of an individual TIPS bond

vtMaps , Short answe r: If you are more concerned about possible future deflation rather than high future inflation, it's probably best to leave the TIPS in your traditional (non-ROTH) account. My reasoning : I've also had to wrestle with the question of where to locate my TIPS bond ladder. If infl...
by ThePrune
Mon Nov 04, 2019 4:49 pm
Forum: Investing - Theory, News & General
Topic: Preparing for Your Best Retirement course
Replies: 14
Views: 2756

Re: Preparing for Your Best Retirement course

More info please ... When and how much? I welcome more and new info and believe I can decide for myself. I recently purchased an SPIA and am considering getting more. Here is a link to the course information: Preparing for Your Best Retirement . The cost is $795. From my perspective one of the draw...
by ThePrune
Mon Nov 04, 2019 12:12 pm
Forum: Personal Investments
Topic: Social Security Windfall Elimination Provision (WEP) question
Replies: 17
Views: 2358

Re: Social Security Windfall Elimination Provision (WEP) question

Yes, the school district and state also contribute to the pension plan but those contributions beef up the plan itself and are not something I'm entitled to withdraw. So it seems pretty cut and dried, if I cash out now then I escape the WEP . It isn't considered a lump sum pension payout. It's simp...
by ThePrune
Mon Nov 04, 2019 11:38 am
Forum: Investing - Theory, News & General
Topic: Preparing for Your Best Retirement course
Replies: 14
Views: 2756

Re: Preparing for Your Best Retirement course

Wade Pfau has recently gotten into the business of hawking annuities, so I would steer clear of that organization. Given the antipathy towards annuities displayed by some here at the Bogleheads, I suppose that the mere fact that Wade Pfau recommends people consider annuities in some situations make...
by ThePrune
Mon Nov 04, 2019 10:25 am
Forum: Personal Investments
Topic: Social Security Windfall Elimination Provision (WEP) question
Replies: 17
Views: 2358

Re: Social Security Windfall Elimination Provision (WEP) question

texasdiver, Flobes pointed you in THE correct direction for resolving all your WEP questions: The Program Operations Manual System (POMS). Her link takes you to the detailed rules that the SSA personnel will use to resolve your situation. From what you've written, your Texas pension has both employe...
by ThePrune
Wed Oct 09, 2019 2:03 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Savings ideas - retired with large separation payment
Replies: 9
Views: 1122

Re: Tax Savings ideas - retired with large separation payment

The best way to "think this through" is to march through the lines of your latest Form 1040 and pay attention to every entry that might reduce your AGI and/or Taxable Income. One idea that comes to mind lies within your itemized deductions. Do you generally make charitable contributions ea...
by ThePrune
Tue Oct 08, 2019 12:06 pm
Forum: Personal Finance (Not Investing)
Topic: [Should I be taking RMDs from an Inherited 457?]
Replies: 11
Views: 759

Re: [Should I be taking RMDs from an Inherited 457?]

There have been several confusing (confused!) statements made in this posting stream about RMDs as they apply to inherited 457 accounts. I'd like to cite the relevant Treasury regulations on this topic, so that all readers will unambiguously know the facts. 457 plans are governed (not surprisingly) ...
by ThePrune
Sun Jun 23, 2019 6:46 pm
Forum: Personal Finance (Not Investing)
Topic: 457(b) and SIMPLE IRA
Replies: 11
Views: 983

Re: 457(b) and SIMPLE IRA

Side note, can someone explain to me why you would use a simple IRA over a Solo 401k in this situation? It's possible that the spouse has employees which precludes using a solo 401k. Or maybe the spouse wasn't aware of the solo 401k option at the time the SIMPLE IRA was created and doesn't want to ...