Search found 6816 matches

by Alan S.
Wed Sep 20, 2017 11:00 am
Forum: Investing - Help with Personal Investments
Topic: Tax implications for converting rollover IRA to Roth
Replies: 5
Views: 339

Re: Tax implications for converting rollover IRA to Roth

If you are paying your federal taxes by withholding, there will be no underpayment penalty if your total withholding at least equals 100% of your 2016 tax liability (110% if your 2016 AGI was over 150k), or 90% of this year's tax liability. If you are paying by estimates, the payments should be equa...
by Alan S.
Tue Sep 19, 2017 11:26 am
Forum: Personal Finance (Not Investing)
Topic: Equifax Credit Freeze 100% online
Replies: 27
Views: 3676

Re: Equifax Credit Freeze 100% online

A key decision is whether to press forward with the freeze and associated requests while all 3 firms are dysfunctional and understaffed due to the sheer magnitude of this issue or wait until they have their act together. Public and political pressure will probably result in constant changes being de...
by Alan S.
Tue Sep 19, 2017 11:11 am
Forum: Investing - Help with Personal Investments
Topic: 59 1/2 Distribution Age Question
Replies: 4
Views: 402

Re: 59 1/2 Distribution Age Question

I don't ever recall a case where anyone reported mis coding of the 1099R due to incorrect age. If you are over 59.5 and Code 1 is incorrectly shown in Box 7, you can self correct it by filing a Form 5329 exception code 12. Obviously, errors made in your favor are much less likely to be reported to v...
by Alan S.
Sun Sep 17, 2017 8:08 pm
Forum: Personal Finance (Not Investing)
Topic: Mega Backdoor Roth: Withdrawal consequences for in-plan vs out-of-plan conversion
Replies: 10
Views: 536

Re: Mega Backdoor Roth: Withdrawal consequences for in-plan vs out-of-plan conversion

My employer allows after-tax 401k contributions, and has an option for automatic quarterly after-tax 401k -> Roth 401k in-plan conversions. The other option for executing the mega backdoor Roth is to do an out-of-plan conversion, in which I can convert the after-tax 401k contribution to a Roth IRA,...
by Alan S.
Fri Sep 15, 2017 10:37 pm
Forum: Personal Finance (Not Investing)
Topic: 2018 Tax Threshold Estimates
Replies: 12
Views: 1350

Re: 2018 Tax Threshold Estimates

Yup. I edited my post to add a comment about the IRMAA tiers. They are also catching more people every year, but inflation adjustments on the MAGI for IRMAA purposes should return in 2020 without any more legislation.
by Alan S.
Fri Sep 15, 2017 10:24 pm
Forum: Personal Finance (Not Investing)
Topic: 2018 Tax Threshold Estimates
Replies: 12
Views: 1350

Re: 2018 Tax Threshold Estimates

Where are the inflation adjustments on SS income? One of the worst tax hits on the books with no inflation adjustment. We should march on Washington for that one! Taxes get me excited if you couldn't tell. Dan The 2018 SS COLA should be announced on 10/16 (Mon) since the Sept CPI-W will be released...
by Alan S.
Fri Sep 15, 2017 12:26 pm
Forum: Personal Finance (Not Investing)
Topic: 2018 Tax Threshold Estimates
Replies: 12
Views: 1350

2018 Tax Threshold Estimates

These estimates are typically confirmed by the IRS in a few weeks.

http://news.cchgroup.com/2017/09/15/wol ... unts-2018/
by Alan S.
Thu Sep 14, 2017 1:28 pm
Forum: Investing - Help with Personal Investments
Topic: Inherited 401K - required minimum distributions or lump sum?
Replies: 9
Views: 845

Re: Inherited 401K - required minimum distributions or lump sum?

Probably a good move to request a direct rollover to an inherited Roth IRA. Your 2017 beneficiary RMD must be distributed first and cannot be included in the direct rollover. You will then have an inherited Roth IRA from which your beneficiary RMDs must continue starting in 2018. Because of the Roth...
by Alan S.
Wed Sep 13, 2017 5:04 pm
Forum: Investing - Help with Personal Investments
Topic: Rollover IRA / Non Deductable IRA
Replies: 31
Views: 1015

Re: Rollover IRA / Non Deductable IRA

If you really want to eliminate the "8606 forever" prospects, you still have time to request a removal of your 2016 (now TIRA contribution after the recharacterization) from your former rollover IRA. After 10/16 this is no longer possible. Doing this would result in the following: 1) 2016 8606 sent ...
by Alan S.
Wed Sep 13, 2017 1:41 pm
Forum: Investing - Help with Personal Investments
Topic: Rollover IRA / Non Deductable IRA
Replies: 31
Views: 1015

Re: Rollover IRS / Non Deductable IRA

A "rollover IRA" is an IRA funded exclusively from qualified retirement plan contributions. Whether the funds rolled into the rollover IRA were pre tax or after tax is immaterial. It is a rollover IRA regardless. You CAN make a regular contribution to a rollover IRA, but the IRA is no longer a rollo...
by Alan S.
Tue Sep 12, 2017 2:08 pm
Forum: Personal Finance (Not Investing)
Topic: The 10 year car ownership "rule"
Replies: 95
Views: 9978

Re: The 10 year car ownership "rule"

How long you keep your vehicle is subject to enough variables that a "rule of thumb" is not meaningful or of value.
by Alan S.
Sun Sep 10, 2017 9:54 pm
Forum: Investing - Help with Personal Investments
Topic: Breaking IRA CD
Replies: 4
Views: 431

Re: Breaking IRA CD

This is a CU custodian specific offering, but the benefit of the EWP waiver is partially lost if the custodian will not change the CD IRA via same trustee non reportable transfer. I assume this offer only applies when the same CU provides the new CD. Due to the IRS one rollover rule some CD owners m...
by Alan S.
Sat Sep 09, 2017 3:28 pm
Forum: Investing - Help with Personal Investments
Topic: Roth 401K
Replies: 6
Views: 834

Re: ROTH 401K

That is the $64 question. If I want to transfer the 401K ROTH I would have to transfer everything from 401K to Vanguard which is ok. But I live in CA and I understand in a lawsuit the funds in 401K is protected against a lien but in IRA it can be taken. I guess that is my only hesitance. So I am de...
by Alan S.
Fri Sep 08, 2017 6:53 pm
Forum: Investing - Help with Personal Investments
Topic: Roth 401K
Replies: 6
Views: 834

Re: ROTH 401K

In order to avoid Roth 401k RMDs, you will have to directly roll the plan to your Roth IRA before 1/1/2019. But if you first contributed to the Roth 401k before 2015, your Roth 401k will be qualified and tax free in 2019 if you do not complete the rollover and become subject to RMDs. If your Roth IR...
by Alan S.
Tue Sep 05, 2017 11:34 pm
Forum: Personal Finance (Not Investing)
Topic: Homeowners Insurance - value to insure?
Replies: 13
Views: 1607

Re: Homeowners Insurance - value to insure?

The sweet spot is to first come up with the replacement cost. If you live where total catastrophe losses are very possible, increase your estimate by 15%-20%. Determine what % guaranteed replacement will provide. If 20%, then reduce the amount of insurance target to 100/120 of your figure. That will...
by Alan S.
Sun Sep 03, 2017 9:31 pm
Forum: Investing - Help with Personal Investments
Topic: Roth IRA or Backdoor Roth?
Replies: 22
Views: 1606

Re: Roth IRA or Backdoor Roth?

Is there a downside to doing ved's #2? That's what I was going to suggest to my son, who has a Roth but no pre-tax IRAs (of any flavor). It seems to be a no-harm-no-foul situation that works whether you're over income limits or not. You get an extra year or so in the market, as opposed to waiting u...
by Alan S.
Sat Sep 02, 2017 11:18 pm
Forum: Investing - Help with Personal Investments
Topic: 401k over contribution and 1099R
Replies: 15
Views: 1131

Re: 401k over contribution and 1099R

Ok is option B a 1099R 2017 coded P? Yes, that is the correction they should make. It appears the using either the 8 or P code with the corresponding 1099R edition is intended to treat the distribution as having been made to you by 4/15 even if it was distributed later than that. That would provide...
by Alan S.
Sat Sep 02, 2017 10:25 pm
Forum: Investing - Help with Personal Investments
Topic: 401k over contribution and 1099R
Replies: 15
Views: 1131

Re: 401k over contribution and 1099R

The W2 Box 12 D total across my W2s is 19600. The 1099 R is 2016. No 1099 R coded 8. What next? Was the 1099 R 2016 dated the wrong year? The code should not be P as P indicates a prior year. A P code on a 2016 1099R would indicate that the taxable wages would be increased for 2015, which is obviou...
by Alan S.
Sat Sep 02, 2017 6:52 pm
Forum: Investing - Help with Personal Investments
Topic: 401k over contribution and 1099R
Replies: 15
Views: 1131

Re: 401k over contribution and 1099R

icedtea, There are two issues here. First, what happened to your money and second your 2016 tax return. Right now, only addressing the second issue which is filing your return using the W-2 and 1099R forms that were issued. Can you confirm what your 2016 W-2 forms total for Box 12 Code D? Was it 19,...
by Alan S.
Sat Sep 02, 2017 2:23 pm
Forum: Personal Finance (Not Investing)
Topic: Disclaiming Multiple IRAs
Replies: 14
Views: 1096

Re: Disclaiming Multiple IRAs

Given multiple combinations of accounts, beneficiaries, generation skipping, and potential disclaimers, the obvious question is whether VG is the best place for these IRAs. VG has by far more obscure beneficiary restrictions historically than other major IRA custodians. Disclaimers have a strict 9 m...
by Alan S.
Fri Sep 01, 2017 2:33 pm
Forum: Investing - Help with Personal Investments
Topic: mega backdoor Roth 401k practical issues
Replies: 12
Views: 899

Re: mega backdoor Roth 401k practical issues

Be sure that the IRR is requested very clearly. Although an IRR can include the pre tax dollars in the 401k account as well as the after tax sub account, you will NOT normally want the IRR to include any of the pre tax portion of the account. Therefore, the request should be clearly limited to the r...
by Alan S.
Fri Sep 01, 2017 2:01 pm
Forum: Investing - Help with Personal Investments
Topic: What happens if I over-contribute on a mega-backdoor Roth?
Replies: 2
Views: 303

Re: What happens if I over-contribute on a mega-backdoor Roth?

Hopefully, the plan will have controls in place to avoid after tax contributions from breaching either the annual additions limit (54k) or discrimination testing. In many cases, the plan limits your after tax contributions up front to reduce these violations. However, if the annual additions limit i...
by Alan S.
Wed Aug 30, 2017 8:08 pm
Forum: Investing - Theory, News & General
Topic: The Age 55 Rule for 401K Accounts
Replies: 38
Views: 6413

Re: The Age 55 Rule for 401K Accounts

Your dilemma is that you need a certain amount distributed for living expenses before you hit 59.5. There are different ways to go, but a plan which limits you to a lump sum distribution hems you in somewhat. You could distribute as much as you think you will need and roll over the rest, but two yea...
by Alan S.
Wed Aug 30, 2017 7:09 pm
Forum: Personal Finance (Not Investing)
Topic: Net Unrealized Appreciation (NUA) of company stock in 401k
Replies: 5
Views: 244

Re: Net Unrealized Appreciation (NUA) of company stock in 401k

Ok I've numbered them. Thanks for answering. Regarding answer 1: So in theory if the NUA cost basis was the only income the person had during the tax year, would it be taxed progressively, just like ordinary income, or would the whole amount be taxed at the marginal rate? I agree with geologist. If...
by Alan S.
Wed Aug 30, 2017 7:06 pm
Forum: Personal Finance (Not Investing)
Topic: Net Unrealized Appreciation (NUA) of company stock in 401k
Replies: 5
Views: 244

Re: Net Unrealized Appreciation (NUA) of company stock in 401k

Hello, I just wanted to get some insight on this topic. Lets say someone had 160k of company stock in their 401k with a 100k cost basis , and was separated from service to the company prior to age 55. Lets also say that the person would prefer to take advantage of the NUA rule on company stock, eve...
by Alan S.
Wed Aug 30, 2017 6:31 pm
Forum: Investing - Help with Personal Investments
Topic: Mom's IRA
Replies: 16
Views: 1030

Re: Mom's IRA

Ask her if she has received anything she can recall indicating other accounts, and call WF and ask them if there are any current accounts open. If you do not have POA, she will have to call them. These accounts might have been opened up to 15 years ago. Both opening new cc accounts and closing them ...
by Alan S.
Wed Aug 30, 2017 6:12 pm
Forum: Investing - Help with Personal Investments
Topic: Mom's IRA
Replies: 16
Views: 1030

Re: Mom's IRA

Given that it was WF, might be a good idea to make sure that they did not open several other accounts that she may not even be aware of. That would have generated more bonus revenue for whoever was managing this IRA, and might have affected her credit score.
by Alan S.
Wed Aug 30, 2017 3:53 pm
Forum: Personal Finance (Not Investing)
Topic: QCDs from Vanguard
Replies: 38
Views: 2341

Re: QCDs from Vanguard

I found out the hard way that you need the funds in your IRA brokerage 'settlement account' when writing a check on your IRA. This is true whether it is a QCD distribution or otherwise. As to writing a Vanguard IRA check for a QCD I have yet to find a definitive statement from the IRS, Vanguard, or...
by Alan S.
Wed Aug 30, 2017 2:08 pm
Forum: Personal Finance (Not Investing)
Topic: QCDs from Vanguard
Replies: 38
Views: 2341

Re: QCDs from Vanguard

FYI--you can write your own QCD checks on your Vanguard or Fidelity IRA account. If you do it this way, VG or Fido won't withdraw the amount from your account until after the check has been cashed. I also find it a lot simpler to write my own checks, rather than calling VG to do it. YMMV While IRA ...
by Alan S.
Wed Aug 30, 2017 1:56 pm
Forum: Investing - Help with Personal Investments
Topic: Roth IRA Index Annuity
Replies: 23
Views: 1480

Re: Roth IRA Index Annuity

So it is now evident why the industry changed the name of these products from "equity indexed annuity" to "fixed index annuity". Equity indexed annuities quickly earned a bad reputation resulting in a name change.

It appears they are now aptly named. The fix is in. :annoyed
by Alan S.
Wed Aug 30, 2017 1:21 pm
Forum: Investing - Help with Personal Investments
Topic: 401k rollover with multiple sources
Replies: 7
Views: 315

Re: 401k rollover with multiple sources

I agree that the destination account selection is ideal, and this should be requested as a Notice 2014-54 split rollover. But it comes with some post transfer monitoring to be sure that the former plan accounting data was properly reflected on 1099R forms, particularly since this request is a fairly...
by Alan S.
Tue Aug 29, 2017 10:31 pm
Forum: Personal Finance (Not Investing)
Topic: QCDs from Vanguard
Replies: 38
Views: 2341

Re: QCDs from Vanguard

If there are any abuses regarding QCD reporting, the simple solution would be for the IRS to assign a unique Box 7 distribution code for QCDs. It is logical that there was no such code while QCDs expired every other year, but once they were made permanent it would have been logical to assign a code.
by Alan S.
Tue Aug 29, 2017 8:46 pm
Forum: Investing - Help with Personal Investments
Topic: Transferring money from Roth IRA to new Roth IRA
Replies: 3
Views: 413

Re: Transferring money from Roth IRA to new Roth IRA

Was the 50k you converted to each Roth IRA distributed on the same day? If so, you should verify with VG that they consider this two conversions of 50k (one to each Roth) rather than one single conversion, as the latter treatment would undermine your selected recharacterization plans. They should tr...
by Alan S.
Tue Aug 29, 2017 2:44 pm
Forum: Investing - Help with Personal Investments
Topic: Relative angry I will not co-sign
Replies: 90
Views: 7993

Re: Relative angry I will not co-sign

Those who request co signing rarely think of the implications involved for the co signor. For an auto loan, those implications extend to liability in the event of an accident, so the co signor may need to increase his liability insurance limit since his control of the exposure is limited. Of course,...
by Alan S.
Tue Aug 29, 2017 2:35 pm
Forum: Investing - Help with Personal Investments
Topic: Transferring money from Roth IRA to new Roth IRA
Replies: 3
Views: 413

Re: Transferring money from Roth IRA to new Roth IRA

The transfer should be done by a non reportable direct transfer which will not count as a rollover. Direct transfers are unlimited in number. That's the easy part. The rest of this gets complex. You have two accounts now for conversion recharacterization purposes, mostly to isolate the investment ex...
by Alan S.
Thu Aug 24, 2017 9:45 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA over contribution in 2016, but haven't filed taxes yet
Replies: 2
Views: 236

Re: Roth IRA over contribution in 2016, but haven't filed taxes yet

Each of you would ask Fidelity for a return of a 2016 excess Roth contribution of $130. Fidelity will calculate the net income or loss on that amount and adjust the return amount accordingly. If you have gains, the amount of reportable gain is the amount your return exceeds $130 each. Any gain is ta...
by Alan S.
Wed Aug 23, 2017 7:02 pm
Forum: Investing - Help with Personal Investments
Topic: 401k roth in-plan conversions
Replies: 7
Views: 664

Re: 401k roth in-plan conversions

Roth earnings are taxed if your Roth is not yet qualified when you take distributions, but before your Roth is qualified the earnings come out last. For example, if your Roth is worth 100k and that is composed of 25k of earnings, the first 75k you withdraw are tax free regardless of what they are us...
by Alan S.
Wed Aug 23, 2017 1:54 pm
Forum: Personal Finance (Not Investing)
Topic: Question on 401(k) rollover/ Backdoor Roth
Replies: 3
Views: 235

Re: Question on 401(k) rollover/ Backdoor Roth

All of this is date and balance dependent, and I am not clear on the dates of each transaction. Apparently, there was no taxable transaction done in 2016, but you did have to report the direct rollover to the 401k on line 15 and should have included an explanatory statement with your return so the I...
by Alan S.
Wed Aug 23, 2017 11:58 am
Forum: Personal Finance (Not Investing)
Topic: Question on 401(k) rollover/ Backdoor Roth
Replies: 3
Views: 235

Re: Question on 401(k) rollover/ Backdoor Roth

For any year you have a TIRA pre tax balance at year end, back door Roth conversions done in that year will be pro rated resulting in the conversion being mostly taxable. If you do a direct rollover of the old 401k into the new employer plan your back door Roth will be unaffected and still non taxab...
by Alan S.
Wed Aug 23, 2017 11:28 am
Forum: Investing - Help with Personal Investments
Topic: Reduce future RMD before 70 1/2
Replies: 4
Views: 695

Re: Reduce future RMD before 70 1/2

Be careful to avoid having the cure being worse than the disease (RMD taxes). The amount you get to keep after taxes is what counts. Therefore, you should only convert if you can do so at a tax rate that is lower than or in some cases equal to the expected tax rate paid on the RMDs. For many, early ...
by Alan S.
Tue Aug 22, 2017 8:18 pm
Forum: Personal Finance (Not Investing)
Topic: Beneficiaries/TOD for Vanguard Joint Account
Replies: 27
Views: 2454

Re: Beneficiaries/TOD for Vanguard Joint Account

Most firms DO offer beneficiaries on joint taxable accounts. Not sure why VG will not. We personally have had these on 3 different accounts recently including Schwab, Oppenheimer, and T Rowe Price. Also on beneficiary deed on real estate allowed in our state. But these firms may refer to these forms...
by Alan S.
Tue Aug 22, 2017 7:32 pm
Forum: Investing - Help with Personal Investments
Topic: Pre and post tax tIRA
Replies: 8
Views: 511

Re: Pre and post tax tIRA

Hello, If I have a traditional IRA with 5 years of pre tax and 8 years of post tax, what should I do? Going forward I don't think I'll ever qualify for a direct Roth under normal circumstance; should I open an additional post tax traditional IRA to do a backdoor Roth? If I do this, is there a point...
by Alan S.
Tue Aug 22, 2017 4:02 pm
Forum: Investing - Help with Personal Investments
Topic: 401k roth in-plan conversions
Replies: 7
Views: 664

Re: 401k roth in-plan conversions

Withdrawals for qualified higher education expenses from all types of retirement plans provide no benefit with respect to ordinary taxes due. The benefit comes via an exception to the 10% penalty whenever it would otherwise apply to the distribution. This penalty exception is NOT available for distr...
by Alan S.
Tue Aug 22, 2017 3:25 pm
Forum: Investing - Help with Personal Investments
Topic: 401k after-tax contributions and a Vanguard Roth IRA rollover
Replies: 6
Views: 573

Re: 401k after-tax contributions and a Vanguard Roth IRA rollover

Mark, you are correct. It is critical to make the best choices when you do rollovers of any type, but even more so when the plan balance is large following several years of employment. And YOUR plan here presents the most complex combination of options possible since you have both NUA potential AND ...
by Alan S.
Mon Aug 21, 2017 11:14 am
Forum: Personal Finance (Not Investing)
Topic: How to Undo Backdoor Roth Completely
Replies: 10
Views: 1193

Re: How to Undo Backdoor Roth Completely

I did backdoor Roth for this year (2017) by first contributing to a new Traditional IRA and then converting to Roth. But I recently realized that I would have to rollover my previous 401(k) to a Traditional IRA soon, so at the end of this year I would have a large pre-tax amount in a Traditional IR...
by Alan S.
Mon Aug 21, 2017 10:50 am
Forum: Investing - Help with Personal Investments
Topic: How do cap. gains affect Roth conversions?
Replies: 3
Views: 327

Re: How do cap. gains affect Roth conversions?

I want to stay in the 25% tax bracket and not exceed the $170,000 income limit that would increase my Medicare Part B premiums. I have some cap gains this year. How to they influence the Roth decision? I think they are included in the calculations for the income limit for Part B. But, I don't think...
by Alan S.
Sun Aug 20, 2017 5:07 pm
Forum: Investing - Help with Personal Investments
Topic: 401k after-tax contributions and a Vanguard Roth IRA rollover
Replies: 6
Views: 573

Re: 401k after-tax contributions and a Vanguard Roth IRA rollover

Hello Bogleheads – I have 401k with a previous employer that I am looking into rolling over to my existing Vanguard IRA portfolio. Portions of the balance of the of this 401k are as follows: After-tax contributions $47,891 Post-1986 contributions $6,349 I’ve done some searches on-line and there see...
by Alan S.
Sat Aug 19, 2017 9:41 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion 5yr Holding Period?
Replies: 20
Views: 1898

Re: Roth Conversion 5yr Holding Period?

Here's AlanS on a similar topic: https://www.bogleheads.org/forum/viewtopic.php?t=209496 . . Ouch! That thread gave me a headache. It mainly dissected Form 8606 which calculates how much of a conversion is taxable (among other things). In summary, if you did a partial conversion and have a basis (m...
by Alan S.
Sat Aug 19, 2017 1:57 pm
Forum: Investing - Help with Personal Investments
Topic: Best Book on Roth Conversions
Replies: 27
Views: 4049

Re: Best Book on Roth Conversions

Here is a technical article by Robert Keebler on conversions. Everything stated about 2010 conversions applies now except that paying the taxes over two years only applied to conversions actually done in 2010. There have also been some changes to the unified credit for estate taxes. https://www.atax...
by Alan S.
Sat Aug 19, 2017 1:32 pm
Forum: Investing - Help with Personal Investments
Topic: Recharacterizing invested Roth excess 2016 contribution questions
Replies: 2
Views: 207

Re: Recharacterizing invested Roth excess 2016 contribution questions

Like I normally do, tossed $5,500 into my Roth on Jan 1st (well, 4th) in 2016 and thought nothing of it (invested it immediately in a few index funds). Got married last year and filed married filing separately in April because my wife has a low paying job in the public sector and 100k in federal lo...