Search found 8055 matches

by Alan S.
Wed Feb 13, 2019 7:30 pm
Forum: Personal Investments
Topic: Excess Roth Contribution
Replies: 6
Views: 359

Re: Excess Roth Contribution

You should see this in your consolidated 1099 from Vanguard when the dust clears. We had excess contributions last year because our income put us into the phase out area. Our CPA told us how much to pull out of each Roth and we called Fidelity and Schwab and filled out "return of excess contributio...
by Alan S.
Wed Feb 13, 2019 7:26 pm
Forum: Personal Investments
Topic: Excess Roth Contribution
Replies: 6
Views: 359

Re: Excess Roth Contribution

The contribution for 2018 was $6449, since I showed $51 earned income. I did a solo401K and that took care of most of my earned income. It would make sense that the tax implications on the profit would show up in 2019, since that is when I made the withdrawal. Thanks for the feedback. Not correct. ...
by Alan S.
Wed Feb 13, 2019 5:34 pm
Forum: Personal Investments
Topic: Excess IRA contribution with no earnings
Replies: 2
Views: 191

Re: Excess IRA contribution with no earnings

Over-contributed to my Vanguard IRA but has no earnings. Do I really have to mail this excess contribution to direct Vanguard to withdraw the excess or can I just withdraw it myself? Do I have to file anything with my taxes? If VG does not issue a properly coded corrective distribution 1099R, the I...
by Alan S.
Wed Feb 13, 2019 5:17 pm
Forum: Personal Finance (Not Investing)
Topic: W-2 incorrectly shows excess Roth retirement contributions, any action needed?
Replies: 8
Views: 382

Re: W-2 incorrectly shows excess Roth retirement contributions, any action needed?

The TSP should be automatically distributing the excess $100 by 4/15. If they do not, the plan is subject to possible sanctions. The excess would not affect the 2018 return because these were ROTH deferrals. Any income returned along with the $100 will be taxable in 2019, not 2018, and there is no 1...
by Alan S.
Wed Feb 13, 2019 3:25 pm
Forum: Personal Investments
Topic: Excess Roth Contribution
Replies: 6
Views: 359

Re: Excess Roth Contribution

Turbotax found that I made an excess contribution of $6449 for 2018. Since it is before April 15, 2019, I can withdraw this amount to avoid a penalty. When I called Vanguard to remove the $6449, they said I had earned $315.27 on my investment. Turbotax has a spot to enter 'Contribution Withdrawn Be...
by Alan S.
Wed Feb 13, 2019 1:41 pm
Forum: Personal Finance (Not Investing)
Topic: How To Fix Excess Roth Removal With Amended Return
Replies: 9
Views: 564

Re: How To Fix Excess Roth Removal With Amended Return

Since I withdrew contributions+interest back in March 2018 before the tax filing deadline, I read the above "treated as an amount not contributed" as indicating there wouldn't be a penalty on it. No? There wouldn't be a 6% excise tax on most of the excess, since you removed MOST OF the excess contr...
by Alan S.
Mon Feb 11, 2019 9:26 pm
Forum: Personal Investments
Topic: Roth withdraw, less than 5 years, less than 59 years old
Replies: 15
Views: 1016

Re: Roth withdraw, less than 5 years, less than 59 years old

Your 1099R would have been for the year you did the mega back door, which was apparently a couple years ago. So your tax filing was done then. From there you just need some method of keeping track of the composition of your Roth IRA (amount of regular or conversion basis, applicable years for conver...
by Alan S.
Mon Feb 11, 2019 6:57 pm
Forum: Personal Investments
Topic: Roth withdraw, less than 5 years, less than 59 years old
Replies: 15
Views: 1016

Re: Roth withdraw, less than 5 years, less than 59 years old

.............................................. OK, so you did a Notice 2014-54 split direct rollover to TIRA and Roth IRA. ...................................................... Trying to understand how the qualified plans to Roth IRA works. In this case only the after-tax funds went to Roth so thi...
by Alan S.
Mon Feb 11, 2019 4:23 pm
Forum: Personal Investments
Topic: Roth withdraw, less than 5 years, less than 59 years old
Replies: 15
Views: 1016

Re: Roth withdraw, less than 5 years, less than 59 years old

I'm 53 and have a had a Roth for a couple years via: After Tax 401K --> Roth IRA ("mega back door" route) Suppose I bought $5000 in each of two funds, but today the values are $4800 and $5500. So 10K in, 10.3K today Can i withdraw the $4800 without penalty since that *holding* has no earnings? (dow...
by Alan S.
Sun Feb 10, 2019 11:37 pm
Forum: Personal Investments
Topic: Married filing separately IRA question
Replies: 1
Views: 194

Re: Married filing separately IRA question

My wife and I both make around 70k. We are also only able to do Married filing separately. Is there any point to doing traditional IRA investments because we can't take a deduction anyways? Maybe to just backdoor Roth the entire amount every year? I assume you both are active participants in a work...
by Alan S.
Sun Feb 10, 2019 9:57 pm
Forum: Personal Finance (Not Investing)
Topic: 1099-R and Mega Backdoor Issue using TurboTax
Replies: 3
Views: 385

Re: 1099-R and Mega Backdoor Issue using TurboTax

The root cause of this problem is that when there are two transactions that have different instructions for a 1099R box (Boxes 2a and 5 in this case), the 1099R Inst should state that a separate 1099R form is required for each. The instructions fail to do that. Since this is not stated, 1099R issuer...
by Alan S.
Sat Feb 09, 2019 6:50 pm
Forum: Personal Investments
Topic: question on an inherited IRA
Replies: 24
Views: 1432

Re: question on an inherited IRA

IRS letter rulings throughout the years have consistently found that an executor can assign inherited IRAs out of the estate to the beneficiaries of the estate. However, there are still some custodians that throw out roadblocks to this process. Pressure applied to the custodian will usually work, bu...
by Alan S.
Sat Feb 09, 2019 6:43 pm
Forum: Personal Investments
Topic: Is my 1099-R wrong year by bank?
Replies: 3
Views: 212

Re: Is my 1099-R wrong year by bank?

In February 2018 I recharacterized part of a 2017 bank Roth CD. I was sent a 1099-R dated 2018 for the amount. This is in error, right, and should be a 2017 1099-R even if it was mailed this last year? Not an error. The 2018 1099R will show code R in Box 7. That means the recharacterization was for...
by Alan S.
Sat Feb 09, 2019 6:13 pm
Forum: Personal Finance (Not Investing)
Topic: Help with Recharacterization of Roth to TIRA
Replies: 20
Views: 503

Re: Help with Recharacterization of Roth to TIRA

Please answer the following: 1) Was the original contribution made to an existing account? 2) Did you transfer that entire account to ME? 3) Was the ME account a new account with 0 balance when you transferred from VG? 4) Did you make any other transactions (contributions or distributions) from 7/2...
by Alan S.
Sat Feb 09, 2019 2:23 pm
Forum: Personal Finance (Not Investing)
Topic: Help with Recharacterization of Roth to TIRA
Replies: 20
Views: 503

Re: Help with Recharacterization of Roth to TIRA

Please answer the following: 1) Was the original contribution made to an existing account? 2) Did you transfer that entire account to ME? 3) Was the ME account a new account with 0 balance when you transferred from VG? 4) Did you make any other transactions (contributions or distributions) from 7/27...
by Alan S.
Sat Feb 09, 2019 1:24 pm
Forum: Personal Investments
Topic: question on an inherited IRA
Replies: 24
Views: 1432

Re: question on an inherited IRA

In addition to having your own records organized and current, it is also vital to verify that the custodian's records conform. Custodians may fail to record a beneficiary change, and often will record it but have it erased due to some system malfunction, merger or acquisition of the custodian, chang...
by Alan S.
Fri Feb 08, 2019 7:28 pm
Forum: Personal Investments
Topic: question on an inherited IRA
Replies: 24
Views: 1432

Re: question on an inherited IRA

$200K is a lot of money to withdraw all at once from an inherited IRA. So NO do not just take it all out at once. You and your sister will get hit with a big tax bill. You need to go to Schwab or Fidelity or vanguard and get them to pull that IRA out of Ameriprise. Start now so you have many months...
by Alan S.
Fri Feb 08, 2019 6:58 pm
Forum: Personal Investments
Topic: question on an inherited IRA
Replies: 24
Views: 1432

Re: question on an inherited IRA

It is unfortunate that IRA owners seldom consider the distribution challenges that their IRA (or qualified plan) beneficiaries will face when the account is inherited, and choose their custodians accordingly. Many of these owners also compound the problem by leaving the account to their estate, eith...
by Alan S.
Fri Feb 08, 2019 3:35 pm
Forum: Personal Finance (Not Investing)
Topic: How To Fix Excess Roth Removal With Amended Return
Replies: 9
Views: 564

Re: How To Fix Excess Roth Removal With Amended Return

Scenario: - Jan 2017 I contributed $5500 to Roth IRA for each myself + spouse. - Unexpected income in late 2017 - Tax time 2018, find our 2017 AGI was ~$187K, so a little bit into the Roth IRA phase-out window for MFJ. - Mar 2018 I work with Vanguard. They calculate the excess plus earnings, and th...
by Alan S.
Fri Feb 08, 2019 11:46 am
Forum: Personal Finance (Not Investing)
Topic: Reporting Earnings from Roth Excess contribution
Replies: 13
Views: 650

Re: Reporting Earnings from Roth Excess contribution

The issue of withholding presents a major complication and does not apply to you unless your 1099R coded P includes withholding. Does it? Basically, you do need to file a 1040X for 2017 to add the Box 2a amount to your taxable income, and also to pay the 10% penalty on the Box 2a amount. You can als...
by Alan S.
Fri Feb 08, 2019 11:18 am
Forum: Personal Investments
Topic: Backdoor Roth (in a few years time)
Replies: 8
Views: 423

Re: Backdoor Roth (in a few years time)

Good Morning, I am currently filing my taxes single at 31 years of age and have contributed to a Roth IRA for a number of years. For instance, this year I will add $6,000 to my Fidelity 500 Fund (FXAIX). In the next year or so (likely in 2020) I will get married. Our combined incomes will likely re...
by Alan S.
Thu Feb 07, 2019 11:15 am
Forum: Personal Investments
Topic: Move two shares of stock from taxable acct to Roth IRA?
Replies: 6
Views: 467

Re: Move two shares of stock from taxable acct to Roth IRA?

Hi All, Back before I really started learning about tax efficiency, I set up a taxable brokerage account to get my feet wet with investing. Since then I have transferred the majority of those assets to my Roth IRA. My question is whether or not I should sell the stocks and transfer the money to the...
by Alan S.
Wed Feb 06, 2019 7:41 pm
Forum: Personal Investments
Topic: Megabackdoor 401K: How many 1099-R's should I get for two rollovers?
Replies: 3
Views: 329

Re: Megabackdoor 401K: How many 1099-R's should I get for two rollovers?

I have a 401K with the after-tax (megabackdoor) option. Last year I did two sets of rollovers: I contributed ~$20K which I then rolled over to the Roth 401K within the plan. There was a gain of ~$600. This zero'd out the after-tax bucket at that point in time. I contributed an additional $16K which...
by Alan S.
Wed Feb 06, 2019 7:20 pm
Forum: Personal Investments
Topic: Should we contribute to a non-deductible IRA if we can't do a backdoor Roth?
Replies: 9
Views: 658

Re: Should we contribute to a non-deductible IRA if we can't do a backdoor Roth?

You should consider:
1) What is her dollar and percentage TIRA basis now?
2) If she is not working now, will that always be the case, or if she does work what are the chances of her working for a company with a qualified retirement plan that will accept IRA rollovers?
by Alan S.
Wed Feb 06, 2019 5:20 pm
Forum: Personal Investments
Topic: Vanguard 401k to IRA in-kind success - When can we upgrade/consolidate to brokerage acct.?
Replies: 2
Views: 180

Re: Vanguard 401k to IRA in-kind success - When can we upgrade/consolidate to brokerage acct.?

I thought VG wanted all new IRA accounts to be in the brokerage platform, so why would they open mutual fund IRAs instead of brokerage IRA accounts to receive these direct rollovers? Particularly since the VBO was already in a brokerage account. Of course, this can be fixed by doing non reportable d...
by Alan S.
Wed Feb 06, 2019 5:02 pm
Forum: Personal Investments
Topic: Inherited ROTH IRA, Taxes, & 5 year rule
Replies: 11
Views: 536

Re: Inherited ROTH IRA, Taxes, & 5 year rule

Put another way, for a Roth IRA owner, the account becomes qualified at 5 years and age 59.5. The death of the owner replaces the age 59.5 requirement, so now the only remaining requirement for the beneficiary to have a qualified Roth is that the owner made their first Roth contribution more than 5 ...
by Alan S.
Wed Feb 06, 2019 4:37 pm
Forum: Personal Finance (Not Investing)
Topic: Qualified Charitable Distributions from my IRA
Replies: 42
Views: 1839

Re: Qualified Charitable Distributions from my IRA

Copied from the IRS Publication 590-B (2018): "A qualified charitable distribution (QCD) generally is a nontaxable distribution made directly by the trustee of your IRA (other than a SEP or SIMPLE IRA) to an organization eligible to receive tax-deductible contributions. You must be at least age 70½...
by Alan S.
Wed Feb 06, 2019 4:07 pm
Forum: Personal Finance (Not Investing)
Topic: Taking an inherited IRA as a lump sum
Replies: 6
Views: 576

Re: Taking an inherited IRA as a lump sum

The reasons for this are accounting related. IRA custodians want to avoid the complexity of having more than one tax ID # per account. Therefore, they require each beneficiary interest to be transferred to a new inherited IRA under the beneficiary SSN. The original inherited IRA interest can then be...
by Alan S.
Wed Feb 06, 2019 3:55 pm
Forum: Personal Finance (Not Investing)
Topic: Large CD Question
Replies: 7
Views: 928

Re: Large CD Question

What is the best way to go about opening a cd(s) with 400K? If I put 400K into one cd at an institution (say Ally for instance) only 250K of that 400K is fdic insured correct. Can we open (2) cd's at the same institution and put 200K into each one? Maybe one in each spouses name? Would each $250K c...
by Alan S.
Wed Feb 06, 2019 3:42 pm
Forum: Personal Investments
Topic: quick double check that 85% of my SS will be subject to tax
Replies: 88
Views: 6579

Re: quick double check that my SS will be taxed at 85%

Reducing your taxable income by $100 will have the same effect regardless of whether your Social Security check drops by $100 or you withdraw $100 less from a Traditional IRA or you make $100 less in wages. If you are in the 50% phase in for SS taxation $100 less of wages decreases taxable income b...
by Alan S.
Wed Feb 06, 2019 2:48 pm
Forum: Personal Investments
Topic: Locating All tIRAs to prep for Backdoor Roth
Replies: 4
Views: 199

Re: Locating All tIRAs to prep for Backdoor Roth

Note that if your IRA escheated to your state, it is no longer an IRA. It was distributed and a 1099R issued reporting a taxable distribution under the usual rules. You might be able to recover the distributed cash, however. The IRS issued https://us.eversheds-sutherland.com/portalresource/rr-18-17....
by Alan S.
Tue Feb 05, 2019 2:09 pm
Forum: Personal Finance (Not Investing)
Topic: 1099-R code 8J for returning excess Roth IRA contribution
Replies: 4
Views: 275

Re: 1099-R code 8J for returning excess Roth IRA contribution

I entered the 1099-R exactly and I can confirm that the tax software (freetaxusa) does not see it as a taxable event. So that's fine. I'd like to confirm that the IRS knows the whole story and that i'm good here. I believe the "8J" describes that this is an excess contribution withdrawl per the Rot...
by Alan S.
Tue Feb 05, 2019 2:01 pm
Forum: Personal Investments
Topic: Vanguard 1099R, need help!
Replies: 2
Views: 269

Re: Vanguard 1099R, need help!

Hello- Last Feb., based on Vanguard advice I moved an inherited spousal IRA into my brokerage IRA. I received a 1099R showing the move as a taxable event. Box 1 = 185K, Box 2A = 185K, Box 2B = X. TurboTax shows me with a 40K fed, and a 11K state tax due based on this 1099R My account clearly shows ...
by Alan S.
Tue Feb 05, 2019 1:39 pm
Forum: Personal Investments
Topic: Don't File Too Early
Replies: 47
Views: 6094

Re: Don't File Too Early

The question is really: “When is it too early?” Never too early. The inconvenience of possibly amending is better than risking someone filing under your name before you do. If someone files under my name does that mean they have to pay my bill? I might be OK with that :sharebeer If a fraudulent ret...
by Alan S.
Tue Feb 05, 2019 1:29 pm
Forum: Personal Investments
Topic: Roth to Trad recharacterization, did I make a mistake?
Replies: 6
Views: 339

Re: Roth to Trad recharacterization, did I make a mistake?

Alan, thanks for the response. I think I've got this cleared up. However, I spoke with a Vanguard representative today and was told that the 5498 they send to the IRS will have the $5135 number on it for Trad IRA contributions, not the $5500. He said that he cannot tell me which I should report on ...
by Alan S.
Tue Feb 05, 2019 1:14 pm
Forum: Personal Investments
Topic: Merrill Edge 5498 Forms
Replies: 1
Views: 107

Re: Merrill Edge 5498 Forms

Website shows these are still not completed ... don't we need this for filing taxes? I thought all tax forms had to be ready by 1/31/2019. No, you do not need them for filing taxes. They are usually issued in May for the prior year. When you receive them you need to verify that they are correct and...
by Alan S.
Tue Feb 05, 2019 1:01 pm
Forum: Personal Investments
Topic: Roth 401k roll over to Roth IRA. Two different scenarios.
Replies: 5
Views: 326

Re: Roth 401k roll over to Roth IRA. Two different scenarios.

The company I work for started offering Megaback door this year. The way it is offered is different than I am used to so I need a clarification on something. Basically my goal is to always be able to withdraw money from my Roth IRA before retirement even though I hope I never need to. I think I und...
by Alan S.
Tue Feb 05, 2019 12:38 pm
Forum: Personal Investments
Topic: Roth to Trad recharacterization, did I make a mistake?
Replies: 6
Views: 339

Re: Roth to Trad recharacterization, did I make a mistake?

You probably earn too much to take a deduction from an IRA. The limit depends on whether or not you are covered by a work retirement plan. See IRA Deduction Limits. I am well below that limit. Is that $5000 or $5500? I contributed $5500 to the traditional IRA. When I recharacterized the contributio...
by Alan S.
Tue Feb 05, 2019 12:21 pm
Forum: Personal Investments
Topic: RMDs and in-kind exchanges
Replies: 7
Views: 370

Re: RMDs and in-kind exchanges

Some custodians may capture the correct per share cost basis in the taxable brokerage, and some may not. Best to check to determine what figure was recorded, and if not correct then correct it with your broker. The holding period starts anew on the date of distribution from the retirement plan and t...
by Alan S.
Mon Feb 04, 2019 11:52 pm
Forum: Personal Finance (Not Investing)
Topic: Reporting Earnings from Roth Excess contribution
Replies: 13
Views: 650

Re: Reporting Earnings from ROTH Excess contribution

I'm not a 1099 expert that would be Alan S. The reason TurboTax told you to amend your 2017 return is because the 2018 1099-R Box 7 likely had a Code P indicating it was taxable in the prior year. I think you should enter all the entries from the 1099-R but change the Box 7 Code P to an 8, indicati...
by Alan S.
Mon Feb 04, 2019 11:46 pm
Forum: Personal Finance (Not Investing)
Topic: Is roth conversion worth it in all cases?
Replies: 55
Views: 3996

Re: Is roth conversion worth it in all cases?

Nonetheless, the success of a Roth conversion more often depends on what happens to you rather than what happens with tax rates for the entire population. I am referring to life events, such as how early you retire, major health problems, inheritances, death of a spouse, or divorces. If everything g...
by Alan S.
Sun Feb 03, 2019 8:39 pm
Forum: Personal Finance (Not Investing)
Topic: Avoiding double taxation of IRA early distribution
Replies: 3
Views: 455

Re: Avoiding double taxation of IRA early distribution

Using Form 4852 was not the recommended way to report this on your 2017 return, but since your end result is the same the IRS may be able to figure out what you did, despite the Box 7 on the 1099R possibly being different than the code you showed on the 4852 as your distribution code because the yea...
by Alan S.
Sat Feb 02, 2019 4:17 pm
Forum: Personal Investments
Topic: Nondeductible IRA question
Replies: 7
Views: 449

Re: Nondeductible IRA question

If you make your SEP contribution for the prior year after your max SEP contribution is calculated, why not make that contribution in perhaps late March for 2018, then roll the SEP balance to the TSP. Make your 2018 (and 2019) ND contributions then if you can and convert them. You will not have a pr...
by Alan S.
Sat Feb 02, 2019 4:09 pm
Forum: Personal Investments
Topic: 401K 1099-R issue - in-plan Roth conversion of after-tax contribution
Replies: 5
Views: 353

Re: 401K 1099-R issue - in-plan Roth conversion of after-tax contribution

Hopefully, the IRR did not include amounts from other than the after tax sub account. The increased Box 2a amount suggests that this might be a possibility. Not a 1099R error, but rather some confusion at the time of the IRR as to what portion of the plan funded the IRR. If that happened, it might n...
by Alan S.
Wed Jan 30, 2019 3:38 pm
Forum: Personal Investments
Topic: Changing mistaken Roth-IRA contribution to SEP-IRA?
Replies: 31
Views: 1456

Re: Changing mistaken Roth-IRA contribution to SEP-IRA?

Yes, the IRS will assume it is timely because the custodian would not issue a P code unless the excess was returned by the extended due date of 10/15/2018 for a 2017 contribution. After the due date there would be no P code and you would have incurred a 6% excise tax for 2017, and possibly for 2018....
by Alan S.
Wed Jan 30, 2019 3:14 pm
Forum: Personal Investments
Topic: Strange withdrawals on my 401k... 'Elective Deferral'??
Replies: 4
Views: 528

Re: Strange withdrawals on my 401k... 'Elective Deferral'??

Ok, I contacted Fidelity... They said my employer did not properly shut of contributions and I went over the annual max for 2018 The money was automatically withdrawn and a check is being mailed to me from Fidelity There will probably be some sort of tax consequence for this too I have a call into ...
by Alan S.
Tue Jan 29, 2019 10:20 pm
Forum: Personal Finance (Not Investing)
Topic: Vanguard brokerage 1099-DIV and IRS Schedule B
Replies: 3
Views: 411

Re: Vanguard brokerage 1099-DIV and IRS Schedule B

Just show the total on Sch B for dividends and/or interest. You have only one account now since a brokerage account can hold an unlimited number and type of investments. Your tax program will calculate the reduced rate on the qualified dividends, otherwise you would still have to complete the qualif...
by Alan S.
Tue Jan 29, 2019 8:08 pm
Forum: Personal Finance (Not Investing)
Topic: 1099-R Roth conversion problem on tax return
Replies: 5
Views: 520

Re: 1099-R Roth conversion problem on tax return

Could be a software bug, The 1099R form is correct. Surprisingly, a 1099R for an IRR (what you did) and a direct rollover to your Roth IRA are identical. Therefore, the only way the IRS knows if the funds went to your Roth IRA is when the Roth IRA custodian issues a 5498 for a rollover contribution....
by Alan S.
Tue Jan 29, 2019 7:18 pm
Forum: Personal Finance (Not Investing)
Topic: IRS Form 8606 Free File Fillable Forms
Replies: 5
Views: 628

Re: IRS Form 8606 Free File Fillable Forms

We went through this last year as well. I can't recall exactly how long it took for the average vendor to support it after the IRS released it, but don't think it was more than 10 days. Unfortunately, FFFF was one of the last, and there was no shutdown at the time. The answer depends on your patienc...