Search found 9779 matches

by Alan S.
Fri Aug 07, 2020 12:53 pm
Forum: Personal Investments
Topic: CARES act for Roth conversion?
Replies: 11
Views: 1253

Re: CARES act for Roth conversion?

A direct rollover appears to be allowed by CARES, since these are also considered to be distributions. However, there is wording in CARES that does not require the plan to treat a CRD as an eligible rollover distribution and therefore to provide a direct rollover. There may be many plans that will n...
by Alan S.
Thu Aug 06, 2020 2:10 pm
Forum: Investing - Theory, News & General
Topic: COVID19 Wage Decline Boosts Social Security Payouts For Most Employed Workers
Replies: 6
Views: 1604

Re: COVID19 Wage Decline Boosts Social Security Payouts For Most Employed Workers

https://www.cnbc.com/2020/08/05/some-retirees-social-security-benefits-could-dip-unless-congress-acts.html “This is not just something hitting people who are turning 60,” said Larry Kotlikoff, a Social Security expert and president of Economic Security Planning, a provider of financial planning too...
by Alan S.
Thu Aug 06, 2020 12:37 pm
Forum: Personal Investments
Topic: Coverdell (Ed IRA) and taking out too much $
Replies: 4
Views: 178

Re: Coverdell (Ed IRA) and taking out too much $

As is the case for IRA accounts, a CESA distribution can be rolled over within 60 days, and you are only allowed one such rollover within a 12 month period. Therefore, if you can roll this one back, you need to be careful for the next year how much you distribute since you will have to wait 12 month...
by Alan S.
Thu Aug 06, 2020 11:36 am
Forum: Personal Investments
Topic: CARES act for Roth conversion?
Replies: 11
Views: 1253

Re: CARES act for Roth conversion?

Yes, decide first how large a CRD you want to withdraw, and if you have a small balance but are adding to it every paycheck, you might wait until November, then withdraw the total amount you want as a single distribution to cut down on transactions. Or if you have enough in your 403b now to cover th...
by Alan S.
Thu Aug 06, 2020 9:40 am
Forum: Personal Investments
Topic: RMD and Roth Conversion
Replies: 2
Views: 356

Re: RMD and Roth Conversion

In reviewing my significant other’s finances recently I realized that because she does not have to take her RMD this year, she will drop down into a lower tax bracket. This will allow her to take advantage of her reduced bracket and make Roth IRA conversions at reduced rates. I guess this is pretty...
by Alan S.
Wed Aug 05, 2020 9:36 pm
Forum: Personal Investments
Topic: CARES Act 401(a) distribution this year repaid to Roth IRA next year?
Replies: 2
Views: 232

Re: CARES Act 401(a) distribution this year repaid to Roth IRA next year?

I have unfortunately been unemployed for over a year, but have managed not to touch my retirement accounts. I just accepted an amazing six figure job offer this week so am going to be back on track financially soon :D! Right now, however, I could really use some cash to get me through the next mont...
by Alan S.
Wed Aug 05, 2020 8:03 pm
Forum: Personal Finance (Not Investing)
Topic: Not "held harmless" in 2021?
Replies: 2
Views: 924

Re: Not "held harmless" in 2021?

Tough to analyze. Tougher to predict. But CPI W itself, which was never very accurate or adequate for SS beneficiaries, is being thrown further out of whack by the pandemic. Substitution decisions are much more often made not a a matter of choice, but due to limitation of options. Food in the stores...
by Alan S.
Wed Aug 05, 2020 1:51 pm
Forum: Personal Investments
Topic: CARES act for Roth conversion?
Replies: 11
Views: 1253

Re: CARES act for Roth conversion?

First, your plan must offer CRDs or you will not be able to take these distributions while still working. The plan would also have to allow unlimited CRD distributions subject to the 100k limit. That may be less likely, and you might have to reduce the number of CRD distributions to one or two by ye...
by Alan S.
Tue Aug 04, 2020 5:04 pm
Forum: Personal Finance (Not Investing)
Topic: Compare the state tax across states - California, Florida
Replies: 39
Views: 3029

Re: Compare the state tax across states - California, Florida

Compare the state tax across states - California, Florida When we say one state is higher tax than another state, want to understand how that may impact us personally. What are the taxes we consider Income Tax. - Common across all states so we will leave this out inn the calculation State Tax City ...
by Alan S.
Tue Aug 04, 2020 4:51 pm
Forum: Personal Investments
Topic: Help Advice needed - CARES vs 72(t)/SEPP withdrawal
Replies: 4
Views: 211

Re: Help Advice needed - CARES vs 72(t)/SEPP withdrawal

Thanks for the info - unfortunately I just hit 55 this year so the "rule of 55" does not apply for me. -I think what I am leaning towards is this: I have 2 separate IRA's - 1 with about 1M and the other about 400K. I think I am going to use the CARES act and take a 100K CRD from the plan with the 4...
by Alan S.
Tue Aug 04, 2020 4:38 pm
Forum: Personal Investments
Topic: CARES act for Roth conversion?
Replies: 11
Views: 1253

Re: CARES act for Roth conversion?

There isn't an explicit reference to Roth conversions, and surprisingly enough there also has not been over the last 15 years of qualified disaster distributions forms and IRS Pubs (eg Pub 976). However, a Roth IRA is definitely listed as an "eligible plan", and CARES repayments can be made to any e...
by Alan S.
Tue Aug 04, 2020 1:37 pm
Forum: Personal Investments
Topic: Help Advice needed - CARES vs 72(t)/SEPP withdrawal
Replies: 4
Views: 211

Re: Help Advice needed - CARES vs 72(t)/SEPP withdrawal

Background: I am currently 55. I was let go last year around this time after working for a company for 28 years. I went into semi-retirement working part time as a substitute teacher. When covid hit and schools shut down I was out of work. I am at a point where my emergency fund is used up. My 2 op...
by Alan S.
Mon Aug 03, 2020 9:53 pm
Forum: Personal Finance (Not Investing)
Topic: 2021 Limits
Replies: 4
Views: 1227

Re: 2021 Limits

Financial consulting firms typically start to make projections in August. They have been very accurate in the past. In fact, here is a limited one for 2021 from Mercer last month: https://www.mercer.com/our-thinking/law-and-policy-group/mercer-projects-2021-retirement-plan-limits.html Note that they...
by Alan S.
Mon Aug 03, 2020 9:01 pm
Forum: Personal Investments
Topic: How to remove non deductible contribution from roll over IRA
Replies: 18
Views: 763

Re: How to remove non deductible contribution from roll over IRA

This fact pattern is very rare. As I see it, you overbought fund shares by .01, than ML apparently told you to make a new cash contribution to cover a mere .01, and you arrived at 60.00. They flagged it as a 2020 regular contribution that polluted your rollover IRA. Now you need to sell enough of th...
by Alan S.
Mon Aug 03, 2020 8:04 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA excess contributions
Replies: 2
Views: 251

Re: Roth IRA excess contributions

I just realized that I’ve been making excess Roth IRA contributions for the last 4 years. :oops: 2017 contributed $5500 (of which $5300 is excess) 2018 contributed $5500 (of which $4250 is excess) 2019 contributed $6000 (of which $6000 is excess) 2020 contributed $3312 (I think I’ll be ineligible t...
by Alan S.
Mon Aug 03, 2020 3:34 pm
Forum: Personal Finance (Not Investing)
Topic: CRD Federal Income Tax Question
Replies: 4
Views: 232

Re: CVD Federal Income Tax Question

I need some tax guidance on a CVD scenario: I made a CVD distribution of $30k from (t)IRA and then (re)contributed $5K to same (t)IRA in 2020. How will the taxable income be divided for 2020,2021, 2022? Would it be 2020:5K, 2021:10K, 2022:10K OR 2020:$8,333, 2021:$8,333, 2022:$8,333? Repayment of C...
by Alan S.
Mon Aug 03, 2020 3:24 pm
Forum: Personal Investments
Topic: What happens to SDIRA after retirement?
Replies: 6
Views: 608

Re: What happens to SDIRA after retirement?

So even after I retire, the assets would be permanently stuck inside the IRA unless I liquidate? You have choices: 1) Leave as is, and your beneficiary can eventually deal with the inherited Roth investments under the 10 year rule. 2) Have your Roth sell the real estate to a disinterested third par...
by Alan S.
Mon Aug 03, 2020 3:06 pm
Forum: Personal Investments
Topic: How to remove non deductible contribution from roll over IRA
Replies: 18
Views: 763

Re: How to remove non deductible contribution from roll over IRA

I suspect that he just overlooked that this was a 2020 contribution. OP indicated in another thread that he was married and MAGI is too high for a Roth contribution. That eliminates the recharacterization option for the $60, and also the deduction if EITHER spouse participates in a workplace retirem...
by Alan S.
Mon Aug 03, 2020 1:36 pm
Forum: Personal Investments
Topic: How to remove non deductible contribution from roll over IRA
Replies: 18
Views: 763

Re: How to remove non deductible contribution from roll over IRA

I contacted Merrill Edge and it looks like they just want to make distribution instead of undoing my contribution. I will Just try to roll over the money minus - $60. If the TSP will not accept any of the rollover because of that small IRA non deductible contribution, because the contribution was d...
by Alan S.
Sun Aug 02, 2020 4:20 pm
Forum: Personal Finance (Not Investing)
Topic: Naming sons as Roth primary beneficiaries
Replies: 24
Views: 1661

Re: Naming sons as Roth primary beneficiaries

Yes. one secondary factor to consider is the life of the Roth, since it will be generating tax free income. 1) If surviving spouse assumes ownership, the life of the Roth is the remaining life of the spouse plus 10 years. 2) If a disclaimer passes the Roths to the children, the life of the Roth is j...
by Alan S.
Sun Aug 02, 2020 3:58 pm
Forum: Personal Investments
Topic: Combine inherited spousal IRA or keep separate?
Replies: 20
Views: 1104

Re: Combine inherited spousal IRA or keep separate?

Given their ages, the surviving spouse's best option is to elect ownership of the inherited IRA. Her RMDs using the Uniform Table will be considerably lower than continuing as inherited IRA. While the surviving spouse has the option of the spousal rollover or continuing the IRA as inherited, if she ...
by Alan S.
Sat Aug 01, 2020 11:23 pm
Forum: Personal Investments
Topic: Over contribution 401k
Replies: 5
Views: 484

Re: Over contribution 401k

If an excess Roth deferral is not returned, it does not count as "investment in the contract", in other words does not become Roth 401k basis. IRS Reg. 1.402(g)(1)(e)(8): (iv) Distributions of excess deferrals from a designated Roth account. The rules of paragraph (e)(8)(iii) of this section general...
by Alan S.
Sat Aug 01, 2020 9:18 pm
Forum: Personal Investments
Topic: Combine inherited spousal IRA or keep separate?
Replies: 20
Views: 1104

Re: Combine inherited spousal IRA or keep separate?

There are various transactions possible, each with their own benefits. Two of those are: 1) Returning their "would be 2020 RMDs" to the distributing IRAs per Notice 2020-50. Once these RMDs have been returned, a conversion can be done with the returned amount, or because this is the last year they c...
by Alan S.
Sat Aug 01, 2020 8:46 pm
Forum: Personal Investments
Topic: Recharacterization of 2019 Traditional IRA Contribution to Roth IRA so I can fill out 12% bracket
Replies: 4
Views: 345

Re: Recharacterization of 2019 Traditional IRA Contribution to Roth IRA so I can fill out 12% bracket

Alright, the $935 recharacterization of my wife's 2019 Traditional IRA contribution to a Roth IRA is complete with Vanguard. Based on my reading of IRS rules, I am going to file an amended return for 2019 and write "Filed pursuant to section 301.9100-2" at the top of the 1040-X. Our income for 2019...
by Alan S.
Sat Aug 01, 2020 6:45 pm
Forum: Personal Investments
Topic: 401k+Backdoor Roth over contribution
Replies: 8
Views: 483

Re: 401k+Backdoor Roth over contribution

Are you sure that 3000 employer contribution was not allocated to 2019?
by Alan S.
Sat Aug 01, 2020 6:41 pm
Forum: Personal Investments
Topic: In-plan conversions of after-tax contributions; does pro-rata rule apply?
Replies: 4
Views: 255

Re: In-plan conversions of after-tax contributions; does pro-rata rule apply?

I have a question on after-tax contributions made in a Company 401(k) plan and our ability to convert these to a Roth 401(k) within my wifes retirement plan. I have been reading the forum and reading the IRS publications and was hoping someone had come across a similar predicament.  My wife makes b...
by Alan S.
Sat Aug 01, 2020 6:27 pm
Forum: Personal Investments
Topic: QCD from non spousal IRA
Replies: 15
Views: 563

Re: QCD from non spousal IRA

If you wanted to make QCDs of 20K, you would want to do that before you took 20K of your RMD But wouldn't that 20k BE part of the RMD? So my thinking is wrong? I thought if I took 20k as a QCD then I would only have to take 5k more to hit the RMD and would only pay taxes on that 5k. That is correct...
by Alan S.
Sat Aug 01, 2020 5:24 pm
Forum: Personal Investments
Topic: 401k+Backdoor Roth over contribution
Replies: 8
Views: 483

Re: 401k+Backdoor Roth over contribution

If you exceeded the 415c limit and did an IRR to the designated Roth, the plan might use one of many corrective options based on the plan procedures, and based on the presence of any other violations (such as ACP) and plan forfeitures. To indicate just how many variables might be incorporated, see p...
by Alan S.
Sat Aug 01, 2020 2:58 pm
Forum: Personal Investments
Topic: Convert to Roth for lower taxes or keep it invested?
Replies: 14
Views: 1178

Re: Convert to Roth for lower taxes or keep it invested?

The income I mentioned was for 2019. My RMD for that year was $107K. I did a QCD of $67K to my church so only $40K went to taxable. It seemed like a good year this year to do a Roth since I believe we have no RMD this year. While your IRA probably grew plenty in 2019 to 5.3mm now, the 107k still se...
by Alan S.
Fri Jul 31, 2020 1:47 pm
Forum: Personal Finance (Not Investing)
Topic: Barclays Bank Online Savings Now 0.80% (July 30, 2020)
Replies: 8
Views: 983

Re: Barclays Bank Online Savings Now 0.80% (July 30, 2020)

I keep most of my emergency fund in Barclays Bank. I periodically check the interest rate, and July 30, 2020 found that it had fallen from 1.00 % to 0.80 % (a few days ago it was still 1.00 %). Oh well. All these accounts are reducing rates with minor differences in the dates and increments. What i...
by Alan S.
Fri Jul 31, 2020 11:34 am
Forum: Personal Finance (Not Investing)
Topic: Inherited 403b Tricky Question
Replies: 4
Views: 495

Re: Inherited 403b Tricky Question

Earlier this year I received a call out of the blue from an employee of one of my parents former employers (parent passed away 10 years ago). They had received a form letter addressed to my parent that referenced an account with Fidelity. A few phone calls later it was determined that my parent had...
by Alan S.
Thu Jul 30, 2020 11:07 pm
Forum: Personal Finance (Not Investing)
Topic: 401k Coronavirus Related Distribution to Rollover IRA - saving fees
Replies: 18
Views: 897

Re: 401k Coronavirus Related Distribution to Rollover IRA - saving fees

Wanted to provide an update on this situation...I took some action by adding my checking account info into the 401k plan @ Great West. Great West has a 15-day waiting period when new bank info is provided probably as a cooling off and anti-fraud measure. Next, I reached out to my Rollover IRA provi...
by Alan S.
Thu Jul 30, 2020 4:04 pm
Forum: Personal Investments
Topic: Re characterize roth contribution at a loss
Replies: 15
Views: 544

Re: Re characterize roth contribution at a loss

Confusion arises if in some year (e.g., 2021) you do not do a backdoor Roth but do take a distribution from a Roth IRA. In that case line 14 of Form 8606 will be blank, so if one follows the Form 8606 instructions in a subsequent year (e.g., 2022) the amount on line 14 of "the last Form 8606 you fi...
by Alan S.
Thu Jul 30, 2020 12:28 pm
Forum: Personal Finance (Not Investing)
Topic: Reporting a loss on excess Roth contribution
Replies: 4
Views: 301

Re: Reporting a loss on excess Roth contribution

Because the 1099R form provides no direct data indicating the amount of the excess that was removed, the taxpayer is required to include an explanatory statement with their return for the year of contribution. This is stated in the Inst for Form 8606 and in Pub 590 A. For example, using the OP numbe...
by Alan S.
Wed Jul 29, 2020 5:05 pm
Forum: Personal Finance (Not Investing)
Topic: Anyone get their 5498 for tax year 2019
Replies: 22
Views: 1996

Re: Anyone get their 5498 for tax year 2019

If all you did was a conversion, the 1099R is all you need to file your return, and if you file by the usual due date the 5498 would not yet be issued anyway. However, the 5498 still serves some secondary purposes and you should retain them after checking they accurately reflect what you already rep...
by Alan S.
Wed Jul 29, 2020 4:16 pm
Forum: Personal Investments
Topic: Poor service at Vanguard making me re-think my decision
Replies: 96
Views: 7998

Re: Poor service at Vanguard making me re-think my decision

I have accounts at Vanguard, Fidelity, and Schwab, with the most at Schwab. They are set up such that the VG account requires almost no service and I average about 1 transaction every two years there, making the VG account a classic buy and hold. The other accounts need much more service and they pr...
by Alan S.
Wed Jul 29, 2020 1:08 pm
Forum: Personal Finance (Not Investing)
Topic: Living Trust as beneficiary of tIRA vs. direct inheritance
Replies: 18
Views: 968

Re: Living Trust as beneficiary of tIRA vs. direct inheritance

Apparently, in some states a trust beneficiary can be named directly as the trustee by the trustor (check state trust laws). If so, then that beneficiary can certainly assign the IRA out of trust to the individual beneficiaries acting as trustee, or perhaps for certain beneficiaries only. Conduit tr...
by Alan S.
Tue Jul 28, 2020 8:03 pm
Forum: Personal Finance (Not Investing)
Topic: Living Trust as beneficiary of tIRA vs. direct inheritance
Replies: 18
Views: 968

Re: Living Trust as beneficiary of tIRA vs. direct inheritance

Hopefully, this post will be visited by Bruce Steiner. The only issue I see is whether a power of appointment to this extent is allowed. If so, the trustee should be able to assign the IRA out of trust to the trust beneficiaries, hopefully without blow back from the IRA custodian. Should be true for...
by Alan S.
Tue Jul 28, 2020 7:26 pm
Forum: Personal Investments
Topic: Is there a RMD with a designated Roth account?
Replies: 8
Views: 510

Re: Is there a RMD with a designated Roth account?

A designated Roth account is subject to RMDs. This is avoidable by rolling the 401k /403b/457 to IRA (traditional and Roth) before RMDs start. I converted a 401k to a Roth, I bit the tax bullet, so I wouldn't have to take any more RMDs. They were putting me in a 51% marginal tax bracket because of ...
by Alan S.
Tue Jul 28, 2020 6:49 pm
Forum: Personal Investments
Topic: CARES act lets you take out retirement without penalty, when does it expire?
Replies: 12
Views: 1212

Re: CARES act lets you take out retirement without penalty, when does it expire?

That question has already been answered twice.

CRD distributions can only be taken up to 12/30/2020.

If the pandemic does not ease up, some of the CARES provisions might be extended or modified down the road. Stay tuned.
by Alan S.
Tue Jul 28, 2020 6:43 pm
Forum: Personal Investments
Topic: Is there a RMD with a designated Roth account?
Replies: 8
Views: 510

Re: Is there a RMD with a designated Roth account?

What the IRS material rarely includes, is that RMDs from qualified plans sub accounts may be aggregated. In other words, your RMD can be taken in any combination between the pre tax 401k account, after tax contributions in the pre tax account and the Roth account. See the following IRS Reg. 1.401(a)...
by Alan S.
Tue Jul 28, 2020 6:18 pm
Forum: Personal Finance (Not Investing)
Topic: Converting to a ROTH via CARES Act?
Replies: 16
Views: 1626

Re: Converting to a ROTH via CARES Act?

There are many unintended consequences brought on by Covid. Invariably, emergency legislation ends up with several inequitable results. However, many of those were corrected by IRS action including the latest Notice 2020-51. None of this would have affected 2019 transactions however. As far as conve...
by Alan S.
Tue Jul 28, 2020 11:48 am
Forum: Personal Finance (Not Investing)
Topic: Inherited IRA/401K & Missed RMDs
Replies: 5
Views: 522

Re: Inherited IRA/401K & Missed RMDs

Congratulations, you have nailed all these complex issues. That's very impressive. Secure Act does not apply during DW's lifetime. The IRS will waive the 50% penalties as long as the 4 lines of the 5329 for each year are completed correctly. Make sure her brother knows that he must also apply DW's d...
by Alan S.
Mon Jul 27, 2020 11:57 am
Forum: Personal Finance (Not Investing)
Topic: Roth IRA question
Replies: 2
Views: 282

Re: Roth IRA question

I am wondering if my wife and I can fund our Roth IRAs this year. We make a combined W2 income of about $135,000.00. We max out 401ks. This year I will profit about $100k from the sale an investment property I have owned about 4 years. Will this long-term capital gain affect my MAGI as it relates t...
by Alan S.
Sun Jul 26, 2020 10:27 pm
Forum: Personal Investments
Topic: Tax Question on Excess Roth IRA Contribution and Commingled Rollover
Replies: 7
Views: 468

Re: Tax Question on Excess Roth IRA Contribution and Commingled Rollover

... Are you going to be keeping the traditional IRA or can you roll it into a plan with your new employer? Moving the traditional IRA into a 401k would open up the possibility of a back door Roth. In this case, you would recharacterize the contribution instead of withdrawing it. I expect to keep th...
by Alan S.
Sun Jul 26, 2020 12:48 pm
Forum: Personal Investments
Topic: How to zero out a traditional IRA account?
Replies: 31
Views: 3621

Re: How to zero out a traditional IRA account?

OP, We have thrown a lot at you. I want to help you with your next steps. The most important steps right now are: -Determine with the help of bogleheads or a tax preparer who really knows what they are doing, the correct amount of your traditional basis. -Ask for a corrective distribution from the ...
by Alan S.
Sun Jul 26, 2020 11:16 am
Forum: Personal Investments
Topic: Mega backdoor Roth IRA from 401(k) with multiple employers?
Replies: 9
Views: 522

Re: Mega backdoor Roth IRA from 401(k) with multiple employers?

Yes, terran is correct. The DC contribution limit (Sec 415c) of 57k is per employer, but a 403b participant is treated as the employer for purposes of this limit. And since the participant is also the employer for the solo K, there is only one employer here, and only one 57k limit. Often, this same ...
by Alan S.
Sun Jul 26, 2020 11:06 am
Forum: Personal Investments
Topic: Stock dividends in a Roth IRA
Replies: 4
Views: 561

Re: Stock dividends in a Roth IRA

No activity strictly within an IRA is taxable. Taxes are calculated only upon taking a distribution from the IRA account. Most people simply reinvest dividends to purchase more shares of the issuing stock or use the funds in the IRA from the dividends to purchase other investments. You should not be...
by Alan S.
Sat Jul 25, 2020 8:03 pm
Forum: Personal Investments
Topic: Roth IRA Distribution Questions
Replies: 5
Views: 597

Re: Roth IRA Distribution Questions

Assuming a 25k distribution for each spouse, you each have more than that for regular Roth contribution basis, therefore the 8606 for each spouse will show a regular Roth basis higher than 25k, and this makes the 25 k non taxable. You did not indicate the amount of your conversions in 2018, but it w...
by Alan S.
Sat Jul 25, 2020 6:08 pm
Forum: Personal Investments
Topic: Roth IRA Distribution Questions
Replies: 5
Views: 597

Re: Roth IRA Distribution Questions

My wife and I are currently considering taking distributions from our respective Roth IRAs to purchase a property in her country of birth--the Philippines. I am 55 and she is 42 so according to Fidelity in order to take distributions out penalty-free we are limited to our original contributions. Wh...