Search found 8325 matches

by Alan S.
Sun Apr 21, 2019 3:44 pm
Forum: Personal Finance (Not Investing)
Topic: Mega Backdoor Roth Contributions Exceeded for 2019
Replies: 3
Views: 371

Re: Mega Backdoor Roth Contributions Exceeded for 2019

Hi All, I am under 50 and have access to the mega backdoor Roth option which I've been contributing to. All contributions have been made only with one employer, but my Fidelity 401k did not cease putting in after tax contributions even though I have exceeded the $56k maximum contribution amount for...
by Alan S.
Sun Apr 21, 2019 10:42 am
Forum: Personal Finance (Not Investing)
Topic: Cost basis date to use for inherited stock
Replies: 16
Views: 1296

Re: Cost basis date to use for inherited stock

The cost basis for inherited stocks is not the closing value on the DOD (when DOD applies), but this: Calculating Total Value The value of the stocks is measured by the average of the high and low value on the valuation date. For example, on the valuation date the stock traded between $50 and $54. Y...
by Alan S.
Sat Apr 20, 2019 2:34 pm
Forum: Personal Finance (Not Investing)
Topic: Taking more than required RMD tax free?
Replies: 13
Views: 1510

Re: Taking more than required RMD tax free?

Are you receiving social security? If so, is any of it taxed? Do you have any income from taxable accounts? If you really have no significant income except for IRA and 403b RMDs, then you have several choices. I think I would prefer converting some tIRA to Roth IRA rather than moving tIRA to taxabl...
by Alan S.
Fri Apr 19, 2019 8:59 pm
Forum: Personal Finance (Not Investing)
Topic: Taking more than required RMD tax free?
Replies: 13
Views: 1510

Re: Taking more than required RMD tax free?

Conversion is a good idea, but the entire annual RMD must be completed before doing a conversion of additional distributions.
by Alan S.
Fri Apr 19, 2019 8:27 pm
Forum: Personal Investments
Topic: New to Investing! Large qualified ESOP distributions, CASH to taxable. Complicated!!
Replies: 18
Views: 999

Re: New to Investing! Large qualified ESOP distributions, CASH to taxable. Complicated!!

Why are these ESOP shares being distributed? You did not indicate any separation from service. Private Equity group knocked on our door and we sold for a good multiplier of our current 2018 valuation. Thus our qualified shares cashed out into the share value times that nice multiplier. Distribution...
by Alan S.
Fri Apr 19, 2019 3:30 pm
Forum: Personal Investments
Topic: New to Investing! Large qualified ESOP distributions, CASH to taxable. Complicated!!
Replies: 18
Views: 999

Re: New to Investing! Large qualified ESOP distributions, CASH to taxable. Complicated!!

Why are these ESOP shares being distributed? You did not indicate any separation from service. Behind this question is the potential tax benefit of using NUA if the shares have a very low cost basis. However, NUA requires a triggering event such as separation from service, so it's not possible for a...
by Alan S.
Fri Apr 19, 2019 3:05 pm
Forum: Personal Investments
Topic: Help with Roth distribution on taxes
Replies: 7
Views: 437

Re: Help with Roth distribution on taxes

I know that distributions normally come from contributions first, but if the Qualified first time homebuyer expense. $10,000 is used, shouldn't that not be used in reducing the basis in the ROTH? Could the $10K be treated as coming from earnings, leaving a ROTH basis of 12,550 which could be used l...
by Alan S.
Fri Apr 19, 2019 12:07 pm
Forum: Personal Investments
Topic: Help with Roth distribution on taxes
Replies: 7
Views: 437

Re: Help with Roth distribution on taxes

Hi All, I was looking for some guidance on if I filled out my tax form correctly last year (2017). I took out $20k from my Roth IRA for a down payment on my house. The $20k was all contributions. Since I only took out contributions, did I fill my tax for out correctly? Form 8606 Line 19. Enter tota...
by Alan S.
Fri Apr 19, 2019 11:10 am
Forum: Personal Investments
Topic: Combining Old Pre-Tax 401Ks Into 1 Rollover IRA
Replies: 4
Views: 269

Re: Combining Old Pre-Tax 401Ks Into 1 Rollover IRA

Back in the day when rollover IRAs were referred to as "conduit IRAs", there was some concern that each employer plan should be rolled into it's own conduit IRA, ie. one employer plan per IRA account. Those concerns have been put to rest, but some old timers may still hesitate to combine rollover IR...
by Alan S.
Fri Apr 19, 2019 11:02 am
Forum: Personal Investments
Topic: Limit on Roth Conversions per year with a Backdoor?
Replies: 15
Views: 663

Re: Limit on Roth Conversions per year with a Backdoor?

I am planning to do a backdoor Roth contribution this year as our income will be near the contribution limit. To prepare, I will need to move (hide) my current Rollover (Traditional IRA) by transferring to my current employer’s 401k plan - or as I understand - I can also convert this account to a R...
by Alan S.
Thu Apr 18, 2019 10:47 pm
Forum: Personal Investments
Topic: Inherited 401k Options: Non-Spouse, Beneficiary Age < 59.5, Deceased > 59.5 and < 70.5
Replies: 8
Views: 429

Re: Inherited 401k Options: Non-Spouse, Beneficiary Age < 59.5, Deceased > 59.5 and < 70.5

An inherited 401k still has ERISA protection, and only a handful of states provide creditor protection for inherited IRAs. Therefore, in cases of creditor exposures, maintaining the inherited 401k provides better creditor protection in other than a few states.
by Alan S.
Thu Apr 18, 2019 10:20 pm
Forum: Personal Investments
Topic: Inherited 401k Options: Non-Spouse, Beneficiary Age < 59.5, Deceased > 59.5 and < 70.5
Replies: 8
Views: 429

Re: Inherited 401k Options: Non-Spouse, Beneficiary Age < 59.5, Deceased > 59.5 and < 70.5

Please help me understand the possible ways to absorb an inherited 401k. The Facts 1) The beneficiary is not a spouse of the deceased 2) Beneficiary is < 59.5 3) The deceased is > 59.5 and < 70.5 4) Beneficiary has a 401k and IRA; let's assume the 401k accepts in-coming rollovers Which of the follo...
by Alan S.
Thu Apr 18, 2019 5:13 pm
Forum: Personal Finance (Not Investing)
Topic: QLAC
Replies: 6
Views: 745

Re: QLAC

A QLAC provides a greater net benefit for those expected to need LTC and are uninsured for that exposure. You might refer to the QLAC as a partial surrogate to replace LTC insurance in a currently dysfunctional market. The taxable income will be deferred to a period most likely to include the LTC ex...
by Alan S.
Thu Apr 18, 2019 4:50 pm
Forum: Personal Investments
Topic: Inherited Keogh / Stock Basis
Replies: 8
Views: 394

Re: Inherited Keogh / Stock Basis

Your holding period also starts on the day after the date of distribution from the IRA. If you held the stock in a taxable brokerage for up to 1 year when sold, any gain will be short term. Time held in the IRA does not count. The taxes paid on the IRA distribution are a function of the IRA basis, n...
by Alan S.
Thu Apr 18, 2019 2:45 pm
Forum: Personal Finance (Not Investing)
Topic: Marketwatch Article on Back Door Roths
Replies: 12
Views: 1567

Marketwatch Article on Back Door Roths

The following paragraph is copied from a Marketwatch article warning of pitfalls on back door Roth IRAs. It describes how a taxpayer uses rollovers to avoid taxes on the conversion: Is there a way around the existing IRA dilemma? Yes, Taxpayer A above could make the same $5,000 nondeductible contrib...
by Alan S.
Thu Apr 18, 2019 1:16 pm
Forum: Personal Investments
Topic: Roth IRA Withdrawal - Penalized or Not??
Replies: 7
Views: 512

Re: Roth IRA Withdrawal - Penalized or Not??

I found the following statement on the internet while researching IRA and tax liabilities" "If you are under 59½, you may withdraw the exact amount of your Roth IRA contributions with no penalties." I have the following questions: 1) Is the statement above accurate? 2) If the answer to question #1 ...
by Alan S.
Wed Apr 17, 2019 10:13 pm
Forum: Personal Finance (Not Investing)
Topic: QLAC
Replies: 6
Views: 745

Re: QLAC

While RMD deferral is just one possibly overrated feature of QLACs, this article by Kitces includes lots of insights on the product itself:

https://www.kitces.com/blog/why-a-qlac- ... bligation/
by Alan S.
Wed Apr 17, 2019 8:13 pm
Forum: Personal Investments
Topic: Retirement Advice - Annuity or Not? RMD?
Replies: 27
Views: 1377

Re: Retirement Advice - Annuity or Not? RMD?

This annuity is already an IRA, and subject to all the IRA related rules including tax reporting and RMDs. Only NQ annuities can be exchanged under Sec 1035. What are the rules for switching Annuity providers? Is it allowed as long as I keep the same type of annuity account? It would be to minimize...
by Alan S.
Wed Apr 17, 2019 5:43 pm
Forum: Personal Investments
Topic: Retirement Advice - Annuity or Not? RMD?
Replies: 27
Views: 1377

Re: Retirement Advice - Annuity or Not? RMD?

This annuity is already an IRA, and subject to all the IRA related rules including tax reporting and RMDs. Only NQ annuities can be exchanged under Sec 1035. When OP refers to rolling this over to an IRA, he probably means to a non annuity IRA account. Unless the TIRA has basis, all distributions fr...
by Alan S.
Wed Apr 17, 2019 4:32 pm
Forum: Personal Investments
Topic: confused opening ira and withdrawal at retirement
Replies: 14
Views: 811

Re: confused opening ira and withdrawal at retirement

Did you say you are assuming receiving NO SS benefits? That is not going to happen, or anything close to that. That said, assuming a 10% annual return is overly optimistic, so that partially offsets the SS assumption. More realistic modeling would be receiving 80% of your SS benefit under current ru...
by Alan S.
Wed Apr 17, 2019 2:31 pm
Forum: Personal Investments
Topic: Roth Early Withdrawals - Do I Have this Right?
Replies: 2
Views: 352

Re: Roth Early Withdrawals - Do I Have this Right?

I don't plan on making any withdrawals from my Roth monies before 59.5 and/or the five-year mark, but I want to be sure I understand how it would work if I did. I only opened my first Roth last year, but already have a fun mix of contributions (both Roth IRA and Roth 401k), conversions, after-tax I...
by Alan S.
Wed Apr 17, 2019 12:55 pm
Forum: Personal Investments
Topic: Can i file extension although i filed taxes already?
Replies: 7
Views: 611

Re: Can i file extension although i filed taxes already?

I believe, even if you file an extension, the IRA needs to be funded by April 15. If you need to alter your taxes because you missed he contribution deadline, you file an amended return. Most IRA custodians use the IRS "postmark rules", which allows an IRA contribution postmarked by the due date (4...
by Alan S.
Wed Apr 17, 2019 12:39 pm
Forum: Personal Investments
Topic: After Tax 401k
Replies: 26
Views: 1944

Re: After Tax 401k

The advantage to Option 1 is easier control to make sure your taxable income is exactly at the top of the bracket. You are keeping your options open and optimizing your taxable income late in the year. Possible disadvantages are: 1) Contributions to the Roth 401k via IRR are probably done later in t...
by Alan S.
Wed Apr 17, 2019 12:16 pm
Forum: Personal Finance (Not Investing)
Topic: [2018 tax return - How does it compare to previous years?]
Replies: 363
Views: 28534

Re: [2018 tax return - How does it compare to previous years?]

MFJ - federal figures only

2018 AGI up 12.1% from 2017.
2018 taxable income up 11.6%
2018 tax liability down .6%.
by Alan S.
Wed Apr 17, 2019 12:02 pm
Forum: Personal Finance (Not Investing)
Topic: Switch auto insurance?
Replies: 18
Views: 1684

Re: Switch auto insurance?

The bigger question is how company underwriting/pricing is affected by constantly changing your carrier, even when you have no losses. You hear of many cases where someone has a 5 year loss free credit, but still the bottom line premium has increased so much that it is not difficult to move the insu...
by Alan S.
Wed Apr 17, 2019 11:45 am
Forum: Personal Investments
Topic: Why buy a CD with a brokerage firm?
Replies: 17
Views: 1173

Re: Why buy a CD with a brokerage firm?

If your CDs are held in an IRA account, with a bank you would be justifiably concerned about efficient direct transfers, and avoiding a rogue 1099R exposing you to the one rollover limitation per 12 months. This seems to happen frequently with banks, but rarely with brokerage firms. Banks have a ten...
by Alan S.
Tue Apr 16, 2019 2:03 pm
Forum: Personal Investments
Topic: Help understanding mom's Transamerica variable annuity
Replies: 17
Views: 599

Re: Help understanding mom's Transamerica variable annuity

Remember that she is only 3 years away from RMDs. An RMD for a non annuitized IRA annuity of this nature can sometimes be calculated from the cash value, but if certain fringe benefits are high enough, only the insurance company can calculate the RMD for the IRA annuity because the value of the frin...
by Alan S.
Tue Apr 16, 2019 12:50 pm
Forum: Personal Finance (Not Investing)
Topic: TurboTax error in handling excess Roth contribution?
Replies: 11
Views: 630

Re: TurboTax error in handling excess Roth contribution?

The IRS computer matching will be looking for that 1099R distribution of 100 to show up on line 4a of Form 1040 for 2018, but since there is no tax due because of no earnings, they might not send an inquiry. If you allow Ttax to assign the excess to 2018, will you still be able to enter the 1099R? ...
by Alan S.
Tue Apr 16, 2019 12:38 pm
Forum: Personal Investments
Topic: Cost basis during Roth conversion
Replies: 9
Views: 674

Re: Cost basis during Roth conversion

TIRA cost basis is the ratio of non deductible contributions made to the IRA to the total value of all TIRA, SEP and SIMPLE IRA account. Form 8606 is used to report conversions and determine the non taxable amount of the conversion. What you paid for a security when you bought it is irrelevant in a ...
by Alan S.
Tue Apr 16, 2019 12:26 pm
Forum: Personal Investments
Topic: Do IRA contributions reduce MAGI for IRMAA?
Replies: 9
Views: 949

Re: Do IRA contributions reduce MAGI for IRMAA?

To state the obvious - only deductible IRA contributions reduce MAGI. Non deductible TIRA contributions and Roth contributions do not. It is possible in some cases that one spouse qualifies for the deduction but the other spouse does not.
by Alan S.
Mon Apr 15, 2019 10:49 pm
Forum: Personal Finance (Not Investing)
Topic: TurboTax error in handling excess Roth contribution?
Replies: 11
Views: 630

Re: TurboTax error in handling excess Roth contribution?

The IRS computer matching will be looking for that 1099R distribution of 100 to show up on line 4a of Form 1040 for 2018, but since there is no tax due because of no earnings, they might not send an inquiry. If you allow Ttax to assign the excess to 2018, will you still be able to enter the 1099R?
by Alan S.
Mon Apr 15, 2019 7:48 pm
Forum: Personal Finance (Not Investing)
Topic: Recharacterizing TRAD Ira
Replies: 3
Views: 201

Re: Recharacterizing TRAD Ira

To be able to utilize the 10/15 (extended due date) deadline for recharacterization or return of contributions with earnings, you must either have: 1) Filed an extension for 2018 by midnight tonight or 2) Filed your actual return (even if it is later amended) by midnight tonight. Otherwise, your dea...
by Alan S.
Mon Apr 15, 2019 7:40 pm
Forum: Personal Investments
Topic: Roth IRA Early Withdraw Question - Rollover from Previous Employer
Replies: 3
Views: 233

Re: Roth IRA Early Withdraw Question - Rollover from Previous Employer

Hi Alan, Thanks for all of the help. So if my total Vanguard Roth IRA is $32,000 right now and I wanted to use all of it, I can take out the following without tax or penalty: $2800 - Original Roth IRA Contributions $2300 - Qualified Roth rollover $14,000 - Basis from the Roth 401k rollover Second t...
by Alan S.
Mon Apr 15, 2019 6:43 pm
Forum: Personal Investments
Topic: Confused about IRA RMD date
Replies: 18
Views: 971

Re: Confused about IRA RMD date

Another consideration. If you delay the first RMD into 2021, your second RMD, which is for 2021, will be larger than if you took your first RMD in 2020. The reason for this is that your 2021 RMD will be calculated based on your account balance on 12/31/2020. So, if you delay the first RMD past 12/3...
by Alan S.
Mon Apr 15, 2019 1:57 pm
Forum: Personal Investments
Topic: Confused about IRA RMD date
Replies: 18
Views: 971

Re: Confused about IRA RMD date

The IRS web site says: Beginning date for your first required minimum distribution IRAs (including SEP and SIMPLE IRAs) April 1 of the year following the calendar year in which you reach age 70½. I am now 69 and turn 70 in Jan of 2020. I will turn 70.5 in July 2020. That means I am required to take...
by Alan S.
Mon Apr 15, 2019 12:10 pm
Forum: Personal Investments
Topic: Am I correct re: my Roth Conversion?
Replies: 2
Views: 364

Re: Am I correct re: my Roth Conversion?

If you are NOT eligible for the regular Roth contribution through recharacterization, then you can convert your IRA basis. However, since there is always a chance that your employer plan will not accept the IRA rollover, you should complete that rollover before converting. If you convert your basis ...
by Alan S.
Mon Apr 15, 2019 11:49 am
Forum: Personal Finance (Not Investing)
Topic: TurboTax error in handling excess Roth contribution?
Replies: 11
Views: 630

Re: TurboTax error in handling excess Roth contribution?

Ok, now it all makes sense. Except we are back to your original problem trying to figure out why Ttax apparently does not think that the contribution returned was for 2017. The 1099R codes are correct, because the 8 code correctly means that if there were any earnings (there isn't since .02 rounds t...
by Alan S.
Mon Apr 15, 2019 10:55 am
Forum: Personal Investments
Topic: Roth IRA Early Withdraw Question - Rollover from Previous Employer
Replies: 3
Views: 233

Re: Roth IRA Early Withdraw Question - Rollover from Previous Employer

Hi, I am looking for some help with a Roth IRA account that I was planning on using for a first time home purchase. I thought I would qualify for the first time home purchase exemption, however after reviewing the rules for a qualified withdraw I am confused by all of this. I am also now concerned ...
by Alan S.
Sun Apr 14, 2019 11:54 pm
Forum: Personal Finance (Not Investing)
Topic: 72t.net shutting down May 1st
Replies: 4
Views: 1660

Re: 72t.net shutting down May 1st

The owner of 72t.net has posted in a comment thread that the site is shutting down on May 1st. If there's any information over there that you want, make sure to get it before the end of the month. Excellent advice. Would be great if someone or some firm steps in and create another dedicated site fo...
by Alan S.
Sun Apr 14, 2019 11:46 pm
Forum: Personal Finance (Not Investing)
Topic: Old Annuity IRA: contains both pre-tax & post-tax 401k monies
Replies: 7
Views: 332

Re: Old Annuity IRA: contains both pre-tax & post-tax 401k monies

To clarify in case it makes a difference: 1.Annuity purchased in 2005 - could not remove funds for minimum 10 years or a substantial penalty. 2. Elected 10 year annuity payout - had choice of monthly, quarterly, or annual - so elected annual - basically 9 years + 1 day payout. 3. It was not an imme...
by Alan S.
Sun Apr 14, 2019 11:05 pm
Forum: Personal Finance (Not Investing)
Topic: TurboTax error in handling excess Roth contribution?
Replies: 11
Views: 630

Re: TurboTax error in handling excess Roth contribution?

Thanks, but there is a conflict between your first post and your most recent regarding WHEN contributions were made for each year. The 1099R coding indicates the return of a contribution made in 2018 but cannot specify whether it was FOR year 2017 or 2018. However, you indicated in your first post t...
by Alan S.
Sun Apr 14, 2019 7:52 pm
Forum: Personal Finance (Not Investing)
Topic: Old Annuity IRA: contains both pre-tax & post-tax 401k monies
Replies: 7
Views: 332

Re: Old Annuity IRA: contains both pre-tax & post-tax 401k monies

Thank you for weighing in! The annuity provider took the easy way out and left the Taxable amount field blank and checked the Taxable amount not determined box. I have talked to 5 tax CPAs and there was not a consensus! One said deduct 100% of 'basis after tax contributions' (not earnings) the firs...
by Alan S.
Sun Apr 14, 2019 7:43 pm
Forum: Personal Finance (Not Investing)
Topic: Old Annuity IRA: contains both pre-tax & post-tax 401k monies
Replies: 7
Views: 332

Re: Old Annuity IRA: contains both pre-tax & post-tax 401k monies

Long time lurker(10 years plus): first post ever! Long time ago (1995 -2004) contributed both 401k pretax and 401k after tax. Never heard of a Roth at that time! Left employer and rolled all monies into IRA annuity 2005. I would not have done that today. However now I have this 'mess'. Now that I a...
by Alan S.
Sun Apr 14, 2019 6:59 pm
Forum: Personal Finance (Not Investing)
Topic: Self Directed 401k & SEPP
Replies: 3
Views: 251

Re: Self Directed 401k & SEPP

Yes, you will probably need to have an appraisal done periodically with frequency depending on changes to the property and expected value changes. The plan would have to pay for the appraisal, and an appraisal would be needed shortly before starting the SEPP since you need to document the account va...
by Alan S.
Sat Apr 13, 2019 11:25 pm
Forum: Personal Investments
Topic: Confused regarding which year RMD is being taken, 2018 or 2019?
Replies: 5
Views: 558

Re: Confused regarding which year RMD is being taken, 2018 or 2019?

Let's start from the beginning. Since father passed late in 2016, he probably took his 2016 RMD, but if not Mom is responsible for that. There was a 2017 beneficiary RMD due for Mom, but if that RMD was not completed in 2017, then Mom defaulted to ownership status of the RMD even if the inherited IR...
by Alan S.
Sat Apr 13, 2019 7:00 pm
Forum: Personal Finance (Not Investing)
Topic: When can one access ROTH 401k contributions?
Replies: 3
Views: 571

Re: When can one access ROTH 401k contributions?

When you roll your Roth 401k to your Roth IRA, the elective deferrals you made to your Roth IRA are entered in Box 5 of the 1099R. This amount is integrated with your Roth IRA regular contributions and the total regular contributions can be withdrawn anytime from your Roth IRA without tax or penalty...
by Alan S.
Sat Apr 13, 2019 6:51 pm
Forum: Personal Finance (Not Investing)
Topic: Self Directed 401k & SEPP
Replies: 3
Views: 251

Re: Self Directed 401k & SEPP

Is it possible to use the assets of a Self Directed 401k (Real estate in this case) as the basis for SEPP payments? If this is a solo K, it's possible but it's not a good match for a SEPP because there are too many needles to thread: 1) The business must stay open or the solo K must be terminated; ...
by Alan S.
Fri Apr 12, 2019 8:35 pm
Forum: Personal Finance (Not Investing)
Topic: TurboTax error in handling excess Roth contribution?
Replies: 11
Views: 630

Re: TurboTax error in handling excess Roth contribution?

What was the year on that 1099R, the amounts in Box 1 and 2a, and code in Box 7?
by Alan S.
Thu Apr 11, 2019 9:35 pm
Forum: Personal Investments
Topic: Roth IRA Contribution Correction Issue (1099R code JP)
Replies: 2
Views: 199

Re: Roth IRA Contribution Correction Issue (1099R code JP)

I had to adjust my contribution amounts to a Roth IRA in 2017, I received a 1099-R with a code JP attached. Since I had taxable income on this 1099-R it forces me to amend 2017 taxes with this amount. However this causes my MAGI to increase, thus causing a loop or until enough is pulled out. I have...
by Alan S.
Wed Apr 10, 2019 10:43 pm
Forum: Personal Finance (Not Investing)
Topic: Taxation of NSF REU undergraduate research stipend
Replies: 47
Views: 11236

Re: Taxation of NSF REU undergraduate research stipend

After looking through previous threads and reading the instructions for Form 5329, it looks like this may actually be fairly easy to fix. I think I would just need to: File a 2012 Form 1040X with an attached 2012 Form 5329 with $0 reported on Line 18, $2,551 reported on Line 23 and Line 24, and $15...