Search found 7601 matches

by Alan S.
Fri Jul 20, 2018 3:02 pm
Forum: Investing - Help with Personal Investments
Topic: Mega Backdoor Roth IRA Withdrawal Pro-Rata?
Replies: 14
Views: 733

Re: Mega Backdoor Roth IRA Withdrawal Pro-Rata?

Many plans cease treating the after tax sub account as a separate account post separation, although there is no IRS rules that suggests this. Plans that do this apparently feel that distributions are simpler when the entire plan balance is eligible for distribution as is the case after separation fr...
by Alan S.
Wed Jul 18, 2018 6:32 pm
Forum: Investing - Help with Personal Investments
Topic: Received a ESOP payout...what to do with it?
Replies: 8
Views: 928

Re: Received a ESOP payout...what to do with it?

It's water over the dam now, but did you look into possible use of NUA with the final payment? Many ESOP shares have a very low cost basis.
by Alan S.
Tue Jul 17, 2018 10:59 am
Forum: Investing - Help with Personal Investments
Topic: flowchart from Kitces.com for backdoor roths
Replies: 4
Views: 987

Re: flowchart from Kitces.com for backdoor roths

Several options arise due to the MAGI phaseout range and which end of the range the taxpayer might end up in. There are too many variables to include them in a flow chart. Additional variables include: 1) When the contribution is made - if done after MAGI is finalized as a PY contribution there will...
by Alan S.
Sun Jul 15, 2018 4:36 pm
Forum: Investing - Help with Personal Investments
Topic: Roth IRA basis
Replies: 33
Views: 13333

Re: Roth IRA basis

A fee should reduce Box 1, but not Box 5 as it would not reduce or change the amount you contributed.


If the plan did reduce Box 5 as well as 1 which cannot be proven without a distribution statement, that would explain the higher amount on the W-2, Box 12.
by Alan S.
Sun Jul 15, 2018 11:34 am
Forum: Investing - Help with Personal Investments
Topic: Roth IRA basis
Replies: 33
Views: 13333

Re: Roth IRA basis

Yes, these two boxes should be the same. I assume that neither of these forms was corrected later, for example due to an excess contribution. Check Box 1 of the 1099R. If that figure is the same as Box 5, then the likely error is that the 1099R issuer did not know that Box 5 will exceed Box 1 if the...
by Alan S.
Sat Jul 14, 2018 7:09 pm
Forum: Investing - Help with Personal Investments
Topic: transferring funds from individual 401k to T Ira?
Replies: 6
Views: 304

Re: transferring funds from individual 401k to T Ira?

In the case of an active solo K, the amount she is allowed to roll out of the plan is limited by the plan document and IRS rules. For example, elective deferrals cannot be rolled out until 59.5 at the earliest if the plan is active, and employer contributions can only be distributed per the plan doc...
by Alan S.
Sat Jul 14, 2018 4:05 pm
Forum: Investing - Help with Personal Investments
Topic: IRA Rollover
Replies: 6
Views: 342

Re: IRA Rollover

Remember, the 2 year waiting period applies whether you are still working for the employer offering the SIMPLE IRA or not. During that period you can only transfer to another SIMPLE IRA, not to any other type of plan.
by Alan S.
Sat Jul 14, 2018 3:08 pm
Forum: Investing - Help with Personal Investments
Topic: After-tax Roth conversion question
Replies: 18
Views: 934

Re: After-tax Roth conversion question

It appears that the plan administrator mishandled your request. Under Notice 2014-54, you are allowed to "split" your direct rollovers to different retirement accounts, the usual combination of which is to request that the pre tax balance of your plan be rolled to your TIRA and the after tax balance...
by Alan S.
Sat Jul 14, 2018 1:30 pm
Forum: Personal Finance (Not Investing)
Topic: Questioning insurance valuation for homeowners
Replies: 24
Views: 1223

Re: Questioning insurance valuation for homeowners

State Farm sent me my annual homeowner's policy notice and it appears that they have valued the house upward quite a bit. I have a 1% of value deductible and the valuation they have is 8% higher than last year. This is more than a general inflation increase (they listed as 246 inflation coverage in...
by Alan S.
Sat Jul 14, 2018 1:13 pm
Forum: Personal Finance (Not Investing)
Topic: Inherited retirement account
Replies: 12
Views: 1507

Re: Inherited retirement account

When considering a disclaimer for which the deadline is 9 months after the DOD, the first thing to check is the IRA beneficiary clause. Were contingent beneficiaries named? If not, what is the default provision if there are no living beneficiaries? Some agreements would specify the children, but mos...
by Alan S.
Fri Jul 13, 2018 6:30 pm
Forum: Investing - Help with Personal Investments
Topic: Avoiding IRA transfer/closing fees
Replies: 9
Views: 573

Re: Avoiding IRA transfer/closing fees

What you propose is a 60 day rollover. Yon can only do one of those over a 12 month period. If you haven't done one in the last 12 months, you could do this one but would then not be able to another for another 12 months. You would report the contribution as a rollover contribution to Schwab who wou...
by Alan S.
Fri Jul 13, 2018 2:53 pm
Forum: Investing - Help with Personal Investments
Topic: Roth 403b rmd question
Replies: 14
Views: 712

Re: Roth 403b rmd question

A traditional 403b to Roth IRA rollover must be completed by 12/31 for the taxable income to be reported in 2018. Amounts in such rollovers come out tax free right away, but are subject to the 10% penalty for the first 5 years counting the rollover year, or until 59.5 if sooner. Your Roth IRA will b...
by Alan S.
Thu Jul 12, 2018 12:11 pm
Forum: Investing - Help with Personal Investments
Topic: 70 yr old about to take 1st RMD
Replies: 9
Views: 1419

Re: 70 yr old about to take 1st RMD

That means you do NOT have to maintain much in FDRXX to complete your RMD, certainly not 150k. Since securities change value in real time, and if you do not want to exceed your RMD amount, you would first transfer the number of shares you calculate would add up to around 97% of your RMD and transfe...
by Alan S.
Wed Jul 11, 2018 8:07 pm
Forum: Investing - Help with Personal Investments
Topic: 70 yr old about to take 1st RMD
Replies: 9
Views: 1419

Re: 70 yr old about to take 1st RMD

Generally, you should do your QCD as your first distribution, because if you take an RMD distribution prior to the QCD, the QCD cannot offset the taxes on the earlier distributions. Alan, My understanding is that you can make a QCD for any part of your RMD and get the tax benefits. For example, if ...
by Alan S.
Wed Jul 11, 2018 7:07 pm
Forum: Investing - Help with Personal Investments
Topic: 70 yr old about to take 1st RMD
Replies: 9
Views: 1419

Re: 70 yr old about to take 1st RMD

Will try to make question as simple as possible and not take much of someone's time. Turning 70 in Aug 2018 and 1st RMD withdrawal in yr 2019. IRA is with Fidelity Private Client Group, I have managed my portfolio since the beginning and plan to continue. I have various ETF's Stocks, and Bonds, in ...
by Alan S.
Wed Jul 11, 2018 6:44 pm
Forum: Investing - Help with Personal Investments
Topic: Inherited IRA with RMD strategy
Replies: 11
Views: 1309

Re: Inherited IRA with RMD strategy

we are on target to max the tax-advantaged space within 3-ish years, this will simply speed that up. We will probably use the money to live for the next few years in order to increase contributions to tax-free accounts. The second part makes sense, but I'm not understanding why you need to wait unt...
by Alan S.
Wed Jul 11, 2018 6:33 pm
Forum: Investing - Help with Personal Investments
Topic: Roth 403b rmd question
Replies: 14
Views: 712

Re: Roth 403b rmd question

Once you have withdrawn all your regular Roth contributions, you withdraw your conversions starting with the oldest conversions. Conversions more than 5 years old come out without tax or penalty, just like regular contributions. Under 5 years, conversions come out without tax but the 10% penalty ap...
by Alan S.
Wed Jul 11, 2018 5:13 pm
Forum: Investing - Help with Personal Investments
Topic: Roth 403b rmd question
Replies: 14
Views: 712

Re: Roth 403b rmd question

Does a Roth 403b have rmd at age 70.5? I know Roth IRA does not but Roth 401k does. Thanx for any help. Yes, a Roth 403b has RMDs at 70.5 unless you are still working for the plan sponsor. If you want to avoid those RMDs you must roll the Roth 403b to a Roth IRA before the year you reach 70.5 if yo...
by Alan S.
Wed Jul 11, 2018 4:58 pm
Forum: Investing - Help with Personal Investments
Topic: Roth 403b rmd question
Replies: 14
Views: 712

Re: Roth 403b rmd question

I have a question about the Roth's as well. I'm 45 currently and opened a roth in 1998. I have about 13k regular contributions in it but everything else is either a conversion or a 'backdoor' contribution. Am I right that until I'm 59 1/2 I can only withdraw the 13k without penalty? A backdoor cont...
by Alan S.
Wed Jul 11, 2018 3:50 pm
Forum: Investing - Help with Personal Investments
Topic: RMD from Inherited IRA
Replies: 12
Views: 1243

Re: RMD from Inherited IRA

14.6 is the correct divisor for 2018. ..Therefore, there has been a small shortfall in the RMD for 2015-2017 which needs to be made up. Then a 5329 should be filed for those years requesting the penalty waiver. The 5329 can be filed by itself and no 1040 X is needed. Alan, The OP has indicated an a...
by Alan S.
Tue Jul 10, 2018 12:53 pm
Forum: Personal Finance (Not Investing)
Topic: Estate Planning and Charity
Replies: 18
Views: 1326

Re: Estate Planning and Charity

In addition to beneficiaries, do not forget the importance of who will be your successor trustee. That job may not be easy and often the selection is not easy either. As in the case of selecting an executor or alternate executor, the trade off in selecting your successor trustee often comes down to ...
by Alan S.
Tue Jul 10, 2018 11:17 am
Forum: Investing - Help with Personal Investments
Topic: What's up with Wells Fargo
Replies: 27
Views: 2876

Re: What's up with Wells Fargo

I'd get right on this verification request and get written acknowledgement of same. There have been cases where accounts flagged for escheatment to the state are sent there sooner than expected or the letters indicate, and then you will encounter a hassle in some states to reclaim it. Fees might app...
by Alan S.
Mon Jul 09, 2018 7:07 pm
Forum: Investing - Help with Personal Investments
Topic: RMD from Inherited IRA
Replies: 12
Views: 1243

Re: RMD from Inherited IRA

14.6 is the correct divisor for 2018. After the first beneficiary RMD in 2014 using the 18.6 divisor, Table I is never consulted again. Instead, the initial divisor is to be reduced by 1.0 for each successive year. That would result in 14.6 being the correct divisor for 2018. Therefore, there has be...
by Alan S.
Sun Jul 08, 2018 5:51 pm
Forum: Personal Finance (Not Investing)
Topic: Best way to obtain older ROTH contribution #'s
Replies: 20
Views: 2541

Re: Best way to obtain older ROTH contribution #'s

There is considerable anecdotal evidence that the IRS does not maintain current status of your accumulated Roth contribution basis. I can't recall anyone reporting an IRA inquiry to provide documentation for the amount of basis reported on Form 8606 for a non qualified distribution. Therefore, it al...
by Alan S.
Sat Jul 07, 2018 8:48 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Isn't Taking in as Much Money; Neither Is Anyone Else
Replies: 8
Views: 2716

Re: Vanguard Isn't Taking in as Much Money; Neither Is Anyone Else

If true, it is probably a net positive for Vanguard. Firms that grow at the rate that Vanguard has in recent years typically malfunction to some degree. Some feel that they want to expand their business into other areas in which they lack experience. While Vanguard has not done this, their customer ...
by Alan S.
Sat Jul 07, 2018 8:33 pm
Forum: Personal Finance (Not Investing)
Topic: Is Social Security income included in MAGI for determination of medicare high income adjustment fee?
Replies: 9
Views: 1275

Re: Is Social Security income included in MAGI for determination of medicare high income adjustment fee?

Thank you for your responses. I had no idea that it would be 85% instead of 100%. The 15% that is tax exempt is analagous to your "basis" in IRA terms. It represents the approximate average % that a taxpayer made in after tax FICA contributions of the total expected benefits received in their lifet...
by Alan S.
Fri Jul 06, 2018 12:35 pm
Forum: Investing - Theory, News & General
Topic: Can I rollover from an old 401k to another old 401k?
Replies: 4
Views: 321

Re: Can I rollover from an old 401k to another old 401k?

You might be able to roll the old 401k administered by Fidelity into your present plan. Just because Fidelity administers both plans does not mean that current plan could not be preferable to the oldest plan. The costs may not be as low as the plan administered by Vanguard, but might be better than ...
by Alan S.
Thu Jul 05, 2018 8:15 pm
Forum: Personal Finance (Not Investing)
Topic: Excess Roth IRA conversion resulting MAGI over 170K
Replies: 27
Views: 2180

Re: Excess Roth IRA conversion resulting MAGI over 170K

The above example assumes that the taxes on the conversion are paid from the TIRA distribution. Results from the conversion are more positive if the taxes are paid from outside funds, and that is how most conversions are handled. Here is an interesting demo from Bob Keebler showing how results of a ...
by Alan S.
Thu Jul 05, 2018 1:17 pm
Forum: Investing - Help with Personal Investments
Topic: Fund IRA w/ESOP Distribution?
Replies: 5
Views: 214

Re: Fund IRA w/ESOP Distribution?

Hi everyone, Quick question for you. Wife is a SAHM with no earned income. She recently received an ESOP distribution from former employer from which fed and state taxes were deducted. Does this count as "earned income" which can be used to fund a backdoor IRA? Thanks. This is not earned income for...
by Alan S.
Thu Jul 05, 2018 11:16 am
Forum: Personal Finance (Not Investing)
Topic: Custodian to custodian Roth IRA rollover question
Replies: 3
Views: 245

Re: Custodian to custodian Roth IRA rollover question

IRA funds are either moved to another IRA by 60 day rollover or by direct trustee to trustee transfer. 60 day rollovers are reported on Form 1099R and by the receiving custodian on Form 5498. You are ONLY allowed one such rollover (IRA to same type of IRA) in a 12 month period. Therefore, you genera...
by Alan S.
Wed Jul 04, 2018 10:17 pm
Forum: Personal Finance (Not Investing)
Topic: Excess Roth IRA conversion resulting MAGI over 170K
Replies: 27
Views: 2180

Re: Excess Roth IRA conversion resulting MAGI over 170K

The IRMAA surcharge would generally be analyzed by incorporating the premium into the marginal tax rate. The IRMAA premiums only vary by tiers while the conversion amount could vary considerably. In an extreme case where a modest conversion amount also triggers an IRMAA tier change, the effective ma...
by Alan S.
Wed Jul 04, 2018 5:28 pm
Forum: Investing - Help with Personal Investments
Topic: Annuities in IRA retirement portfolio?
Replies: 11
Views: 712

Re: Annuities in IRA retirement portfolio?

Another thing to consider is the annuity impact on your RMDs. For a non annuitized contract, the RMD is still calculated using the prior year end balance. However, for annuities with higher fringe benefits the IRS has ruled that the year end value must be recalculated by the insurance company accord...
by Alan S.
Wed Jul 04, 2018 5:14 pm
Forum: Personal Consumer Issues
Topic: How to tip
Replies: 87
Views: 5321

Re: How to tip

I notice that most restaurants that print the suggested tip amounts on your tab (18% of your tab is $X, 20% of your tab is $Y, etc.) generally do so based on the pre-tax amount. That seems reasonable, as tax is not part of the product/service rendered by the restaurant/wait staff, and you wouldn't ...
by Alan S.
Wed Jul 04, 2018 4:45 pm
Forum: Personal Finance (Not Investing)
Topic: Adding a trust to your homeowner's policy
Replies: 56
Views: 3618

Re: Adding a trust to your homeowner's policy

For companies that still use ISO forms, the following form would provide coverage for the trust.

http://www.hpiainfo.com/wp-content/uplo ... emises.pdf

However, many companies will have their own forms to address this need.
by Alan S.
Mon Jul 02, 2018 6:31 pm
Forum: Personal Finance (Not Investing)
Topic: IRS inquiry regarding backdoor Roth
Replies: 13
Views: 2000

Re: IRS inquiry regarding backdoor Roth

Yes, all your owned non Roth IRA accounts are added together for purposes of completing Form 8606. It does not matter which of those accounts received non deductible contributions or which one funds the conversion, but the amount rolled over to the your employer plan should be your entire balance le...
by Alan S.
Mon Jul 02, 2018 1:56 pm
Forum: Personal Finance (Not Investing)
Topic: Lost Beneficiaries - T. Rowe Price
Replies: 26
Views: 2111

Re: Lost Beneficiaries - T. Rowe Price

Another note: when we upgraded our mutual fund accounts at VG to the new brokerage accounts, all the beneficiaries were wiped out and we had to reset all. Glad was able to catch that before being forgotten. Changes to clearing firms or major account upgrades are prone to lost beneficiary data. T Ro...
by Alan S.
Mon Jul 02, 2018 12:48 pm
Forum: Investing - Help with Personal Investments
Topic: Residual TIRA Basis
Replies: 7
Views: 370

Re: Residual TIRA Basis

Does it disappear immediately, or would I be able to apply it to a conversion later this year, at least? I agree trying to assiduously carry it year-to-year seems like overkill. Any basis is applied in equal %s to all distributions made in a single year. A conversion is a distribution. As to whethe...
by Alan S.
Mon Jul 02, 2018 11:30 am
Forum: Personal Finance (Not Investing)
Topic: What are your property taxes?
Replies: 212
Views: 12865

Re: What are your property taxes?

Northern AZ

Property tax about .5% of owner occupied home FMV.
Sales tax 9.1%
by Alan S.
Mon Jul 02, 2018 11:24 am
Forum: Personal Finance (Not Investing)
Topic: Excess Roth IRA conversion resulting MAGI over 170K
Replies: 27
Views: 2180

Re: Excess Roth IRA conversion resulting MAGI over 170K

Is there any RMD income included in your 2018 MAGI projection? Have these been distributed? Am thinking either QCDs or deferral of the first RMD if applicable. You cannot recharacterize the conversion, but the IRMAA MAGI threshold in 2020 may get a slight bump due to resumption of inflation adjustme...
by Alan S.
Sat Jun 30, 2018 8:33 pm
Forum: Personal Finance (Not Investing)
Topic: Mega Backdoor Roth Reporting on Form 5498
Replies: 6
Views: 719

Re: Mega Backdoor Roth Reporting on Form 5498

The 5498 report in the year following the rollover will probably not cause a problem, but if you do get an IRS inquiry about your reported rollover, it should be easy to respond and provide a copy of your IRA statement in January showing the rollover contribution in the same amount as the prior year...
by Alan S.
Fri Jun 29, 2018 9:58 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Ira: File Amended Return - Excess Withdrawn Today !
Replies: 7
Views: 458

Re: Roth Ira: File Amended Return - Excess Withdrawn Today !

Just wondering. Would the 10% penalty have applied if he had caught and removed the money before December 2017 (or April 15 2018)? In that case, would the earnings have just been taxed as ordinary income? Also, what would happen in same situation with a loss instead of earnings? Yes, the 10% penalt...
by Alan S.
Fri Jun 29, 2018 9:51 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Ira: File Amended Return - Excess Withdrawn Today !
Replies: 7
Views: 458

Re: Roth Ira: File Amended Return - Excess Withdrawn Today !

We are both under 59.5 yrs age, and no other exception applies. So, I Have to file an amended return for 2017, there is no way around it. It has to be filed Before October 15, 2018, and I can file any time from today until October.. -- Can you confirm if Is this correct ? Also, the 1099-R I will re...
by Alan S.
Fri Jun 29, 2018 9:38 pm
Forum: Personal Finance (Not Investing)
Topic: Mega Backdoor Roth Reporting on Form 5498
Replies: 6
Views: 719

Re: Mega Backdoor Roth Reporting on Form 5498

I had my 401k company split out any earnings from the after-tax contribution and rolled them into a traditional IRA. The rollover into the Roth IRA is all basis (just my pre-tax contribution and no earnings). - It sounds like maybe this should be reported as a conversion on Form 5498 of the Roth IR...
by Alan S.
Fri Jun 29, 2018 2:33 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Ira: File Amended Return - Excess Withdrawn Today !
Replies: 7
Views: 458

Re: Roth Ira: File Amended Return - Excess Withdrawn Today !

Hello Friends, Great forum, long time / 1st time. I have a situation and really need advise and help:-- My wife and I contributed full 5500 each in 2017 towards 2017 Roth Ira. We filed the 2017 taxes in April 2018. Now, last month I realized that our income was too high ti have contributed full 550...
by Alan S.
Thu Jun 28, 2018 11:29 am
Forum: Investing - Help with Personal Investments
Topic: SIMPLE IRA Transfers to Schwab from AF 5305
Replies: 6
Views: 376

Re: SIMPLE IRA Transfers to Schwab from AF 5305

My prior post may not have been clear. Schwab should open a TIRA to receive the transfers, not a transfer SIMPLE IRA since the 2 year period has passed. The problem is with p 7 of the AF form which infers that the transfers can only be made to a SIMPLE IRA account. That limitation fails to recognize...
by Alan S.
Wed Jun 27, 2018 8:06 pm
Forum: Investing - Help with Personal Investments
Topic: SIMPLE IRA Transfers to Schwab from AF 5305
Replies: 6
Views: 376

Re: SIMPLE IRA Transfers to Schwab from AF 5305

Starting a new post, my last one is disorganized. Okay, I have a 5305 SIMPLE IRA with my employer for 6 years now that invests us at American Funds class A shares with a front load. I want to move my SIMPLE IRA to Charles Schwab instead. I know in a 5305 I can transfer those contributions monthly f...
by Alan S.
Wed Jun 27, 2018 3:44 pm
Forum: Personal Finance (Not Investing)
Topic: IRS publishes draft 2018 1040 - Huge changes made
Replies: 156
Views: 16495

Re: IRS publishes draft 2018 1040 - Huge changes made

I will be filing later next year, hopefully after most of the bugs have been worked out between the tax software vendors, the IRS, and the still antiquated IRS computer system.
by Alan S.
Sun Jun 24, 2018 7:17 pm
Forum: Personal Finance (Not Investing)
Topic: Are you smarter than my CPA? (IRA issue)
Replies: 17
Views: 1899

Re: Are you smarter than my CPA? (IRA issue)

While there may be valid reasons to approve or disapprove of the term "back door Roth", it is time that tax preparers and particularly CPAs who prepare returns for individuals become familiar with the term and what it entails. We constantly read that tax preparers do not understand what the term mea...
by Alan S.
Sun Jun 24, 2018 6:34 pm
Forum: Investing - Help with Personal Investments
Topic: Rollover IRA and the Pro-Rata Rule
Replies: 5
Views: 377

Re: Rollover IRA and the Pro-Rata Rule

Yes, the conversion you already did will be pro rated because of the 403b rollover. Around 1,941 of your 5500 conversion will be taxable. You cannot recharacterize the conversion like you could have last year and you cannot stop the rollover. However, since you still will be in a lower bracket this ...
by Alan S.
Sun Jun 24, 2018 12:02 pm
Forum: Personal Finance (Not Investing)
Topic: Advice on an Inherited IRA / Beneficiaries Explanation
Replies: 7
Views: 637

Re: Advice on an Inherited IRA / Beneficiaries Explanation

If the Roth beneficiary designation includes your parent "per stirpes" and you are A1 but there is also an A2 sibling of yours, your share must be split and the form. Obviously, the custodian does not want to overfund your inherited IRA without knowing how many other siblings exist that would dilute...