Search found 7977 matches

by Alan S.
Sun Jan 20, 2019 5:05 pm
Forum: Investing - Theory, News & General
Topic: IRS Form 8606
Replies: 14
Views: 1232

Re: IRS Form 8606

Yes, you must file an 8606 to report any IRA conversion, with or without basis.

All conversions require Part II.
Some conversions also require Part I.
by Alan S.
Sun Jan 20, 2019 4:21 pm
Forum: Investing - Help with Personal Investments
Topic: IRA Rollover to 401k when there are Partial Non-Decutible Contributions
Replies: 5
Views: 186

Re: IRA Rollover to 401k when there are Partial Non-Decutible Contributions

My Rollover IRA account has a balance of 12k and I am planning to roll this amount over to my 401k plan so that I can do a back-door Roth contribution (non-deductible IRA with zero basis -> Roth) for tax year 2019. I was checking my IRA contributions and found out that I had made two contributions:...
by Alan S.
Sat Jan 19, 2019 10:52 pm
Forum: Investing - Help with Personal Investments
Topic: Is my 1099-r correct?
Replies: 12
Views: 1051

Re: Is my 1099-r correct?

Can I piggyback on this topic? Similar situation for my husband and me, except we (unknowingly) did make the October 15th deadline. Both of our 1099-Rs say J8. Mine says $0 in taxable, while my husband's says $48. Can anyone go over what we need form-wise? I know we owe a 10% penalty on the $48. Th...
by Alan S.
Sat Jan 19, 2019 3:44 pm
Forum: Personal Finance (Not Investing)
Topic: Retirement Savings Contributions Credit
Replies: 3
Views: 232

Re: Retirement Savings Contributions Credit

If I continued to contribute to 2017 roth ira contributions in calendar year 2018 am I allowed to count those contributions for 2018 Retirement Savings Contributions Credit tax filing or am I only allowed to count 2018 roth ira contributions made in in calendar year 2018? Ex) In February 2018 I con...
by Alan S.
Sat Jan 19, 2019 2:57 pm
Forum: Investing - Help with Personal Investments
Topic: Any downsides to repeatedly switching between varioud money market funds?
Replies: 7
Views: 598

Re: Any downsides to repeatedly switching between varioud money market funds?

The way many brokerages are set up now after MM reform, including VG, the clearing fund yields about 2% less than the prime MM fund. Therefore, leaving any more in the clearing fund than a bare minimum if you are not very close to settling a trade can be very costly over time. Non reinvested dividen...
by Alan S.
Sat Jan 19, 2019 1:17 pm
Forum: Personal Finance (Not Investing)
Topic: SS: How do Delayed Retirement Credits work?
Replies: 11
Views: 965

Re: SS: How do Delayed Retirement Credits work?

The following is an example showing how much in earned DRC money is forfeited i n the current year only depending on the effective claiming month. Hypothetical example: Assumptions - each additional month delay provides a $10 a month additional DRC benefit. Jan 10 X 12 months = $120 forfeited Feb 20...
by Alan S.
Fri Jan 18, 2019 11:55 pm
Forum: Investing - Help with Personal Investments
Topic: Is my 1099-r correct?
Replies: 12
Views: 1051

Re: Is my 1099-r correct?

You will need a 2017 5329 and will owe the 6% excise tax on 6500, despite your 12/31/2017 balance being 0. You can send this form in by itself. For 2018 you must file a 5329 to show the distribution of 6000 eliminating the excess amount, assuming that you did not make any other contributions or dist...
by Alan S.
Fri Jan 18, 2019 11:50 pm
Forum: Investing - Help with Personal Investments
Topic: Inherited IRA - RMD
Replies: 19
Views: 1354

Re: Inherited IRA - RMD

Hi all, I inherited an IRA, and need to begin taking RMDs this year. Is there a strong case to take this RMD early in the year or later in the year? I plan on simply re-investing this money in my traditional brokerage account. Thanks in advance! RJ Strong case? No. Any spreadsheet scenario will dep...
by Alan S.
Thu Jan 17, 2019 11:07 pm
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 87
Views: 2936

Re: Are mega back door Roth contributions considered contributions?

We agree that the $1,000 that was earnings in the after-tax account gets taxed as it goes into Roth 401k. You think that money then joins up with earnings in the Roth 401k. I suppose it would have to be passed on as earnings into the Roth IRA. I think that the $1000 in earnings in after-tax becomes...
by Alan S.
Thu Jan 17, 2019 7:27 pm
Forum: Personal Finance (Not Investing)
Topic: 2018 H&R Block problem: Pension + IRA with non-taxed money
Replies: 8
Views: 625

Re: 2018 H&R Block problem: Pension + IRA with non-taxed money

To confirm, are you saying that Block includes the pension, but NOT the IRA distribution on 4a? That reverses what the instructions indicate which is no pension on 4a because it is 100% taxable, but the IRA distribution should show because of the QCD. Block reversed that?
by Alan S.
Wed Jan 16, 2019 5:49 pm
Forum: Investing - Help with Personal Investments
Topic: Unusual Check from Fidelity
Replies: 8
Views: 815

Re: Unusual Check from Fidelity

My daughter worked for a company less than a year, in that time she had an 401k through the employer with Fidelity. She left that job last summer and today she got a check for $700. I assume the employer closed her account. What can she do with the money? Not sure how this is handled tax wise, can ...
by Alan S.
Wed Jan 16, 2019 5:22 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth and Pro-Rata Rule
Replies: 7
Views: 484

Re: Backdoor Roth and Pro-Rata Rule

Hello, My husband and I both have money in Vanguard Traditional IRAs (22K and 18.5K respectively). We would like to move them to Roth accounts. We are aware of the Pro-Rata rule and that the amount in our Traditional IRA accounts need to be $0 by the end of the year in order to avoid the Pro-Rata r...
by Alan S.
Wed Jan 16, 2019 5:02 pm
Forum: Personal Finance (Not Investing)
Topic: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?
Replies: 31
Views: 1194

Re: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?

Yes, it works best if there is no pre tax accounts to begin with. But if you have a pre tax balance that cannot be rolled into a employer qualified plan, the taxable amount of your conversion will be pro rated in the same manner if you convert the pre tax amount or just let it remain until year end....
by Alan S.
Wed Jan 16, 2019 4:27 pm
Forum: Personal Finance (Not Investing)
Topic: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?
Replies: 31
Views: 1194

Re: Mega Roth Conversion and Backdoor Roth IRA in the same year possible?

Converting a large amount in a high tax bracket just to get a bit of extra Roth doesn't make any sense to me. I wouldn't use Roth 401(k) either. The minimum I would do is try to roll the TIRA into the 401(k) and take care of the backdoor Roth. It would be a good idea to stop using the term "Mega Ro...
by Alan S.
Wed Jan 16, 2019 3:50 pm
Forum: Personal Finance (Not Investing)
Topic: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?
Replies: 31
Views: 1194

Re: Mega Roth Conversion and Backdoor Roth IRA in the same year possible?

Yes, I think you can do both. The only date that matters for the pro rata rule is the last day of the year, 12/31/19 in your case. So long as your tIRA balance is zero on that date, you should be fine. Now, having never done this myself, I have no idea how complicated the tax reporting will be. Hop...
by Alan S.
Wed Jan 16, 2019 2:02 pm
Forum: Personal Finance (Not Investing)
Topic: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?
Replies: 31
Views: 1194

Re: Mega Roth Conversion and Backdoor Roth IRA in the same year possible?

What you hear about having a 0 balance in your non Roth IRAs at year end is designed to prevent a mostly taxable back door Roth conversion. However, if you were to go ahead and convert your TIRA to prevent having a year end balance, you are producing a tax disaster that is much worse. Let's compare ...
by Alan S.
Wed Jan 16, 2019 1:43 pm
Forum: Investing - Help with Personal Investments
Topic: Roth contribution with the HEART act
Replies: 8
Views: 784

Re: Roth contribution with the HEART act

I am looking to make a Roth contribution with the HEART act. I do not want to invest in the stock market. I prefer to invest in CDs. Should I do it through a brick and mortar bank, online bank or brokerage house? I do not need to use the money but I want as little risk as possible. I just do not wa...
by Alan S.
Wed Jan 16, 2019 1:28 pm
Forum: Investing - Help with Personal Investments
Topic: Overcontributed to 401k, now what?
Replies: 8
Views: 847

Re: Overcontributed to 401k, now what?

Great now another curve ball. Vanguard is now telling me *their* system is showing $54,900+ contributed in 2018 on their backend system, but my interface on the Vanguard website is showing $55,100+ contributed in 2018. So the question is... did I overcontribute in 2018? Which begs the question, how...
by Alan S.
Wed Jan 16, 2019 1:07 pm
Forum: Investing - Help with Personal Investments
Topic: Rolling over tIRA to a 401k with mixed pre/after tax contributions
Replies: 2
Views: 244

Re: Rolling over tIRA to a 401k with mixed pre/after tax contributions

First, be sure you do not succumb to the temptation to convert your IRA basis before the rollover to simplify the rollover. This is too risky because if your IRA to 401k rollover is not accepted, then you are stuck with your conversion being mostly taxable. The risk of non acceptance of that rollove...
by Alan S.
Tue Jan 15, 2019 9:17 pm
Forum: Personal Finance (Not Investing)
Topic: Can 401k rollover be split into multiple institutions?
Replies: 2
Views: 233

Re: Can 401k rollover be split into multiple institutions?

This is perfectly OK under IRS rules, but the plan probably has some limit for the number of destination accounts. Certainly two should not be a problem since in most cases these amounts would be rolled into two different accounts anyway. Just be sure any forms are completed correctly.
by Alan S.
Tue Jan 15, 2019 3:33 pm
Forum: Investing - Help with Personal Investments
Topic: Mega Backdoor Mechanics Clarification - Check Payable to Me
Replies: 16
Views: 1261

Re: Mega Backdoor Mechanics Clarification - Check Payable to Me

You might be able to endorse the check and send it to the custodian. Even though the withholding is minimal, it would simplify things is you replaced that. For the future, make sure you get a direct rollover distribution. If the Roth custodian accepts an endorsed check for a rollover contribution t...
by Alan S.
Mon Jan 14, 2019 9:39 pm
Forum: Investing - Help with Personal Investments
Topic: Mega-backdoor Roth has a loss
Replies: 13
Views: 1266

Re: Mega-backdoor Roth has a loss

As retiredjg indicated, the fact that Box 5 of the 1099R was limited to the amount of the distribution suggests that the excess basis has been retained in the after tax sub account for future use. You may or may not get to take advantage of future small gains being offset by such carryover basis. In...
by Alan S.
Mon Jan 14, 2019 3:18 pm
Forum: Investing - Help with Personal Investments
Topic: TLH is called "Murky"
Replies: 17
Views: 2085

Re: TLH is called "Murky"

When attempting to identify a similar replacement holding, many people overlook the fact that the holding being sold is not the perfect holding for them going forward, and probably was not the perfect holding for them when they bought it. Therefore, they may well be better off with something that ha...
by Alan S.
Sun Jan 13, 2019 10:21 pm
Forum: Investing - Theory, News & General
Topic: charles schwab, fidelity and seven other banks and brokerages are planning to launch a new exchange
Replies: 6
Views: 1388

Re: charles schwab, fidelity and seven other banks and brokerages are planning to launch a new exchange

ERs cannot go much lower, so the fixed costs of trading may be the next frontier in reducing overall costs of investing. The shares of the NYSE and Nasdaq dropping around 4% at the announcement suggests that the new exchange will be successful and the old guard will have to wring out some savings to...
by Alan S.
Sun Jan 13, 2019 9:38 pm
Forum: Investing - Help with Personal Investments
Topic: Mega-backdoor Roth has a loss
Replies: 13
Views: 1266

Re: Mega-backdoor Roth has a loss

Exactly how is a loss handled when a Mega-backdoor Roth conversion/distribution shows less money made it into the Roth than was put into the 401k after-tax account? This tax year (2018) could see a lot of people experience this. I understand why gains are taxed. The 1099-R form shows the employee c...
by Alan S.
Sat Jan 12, 2019 7:26 pm
Forum: Investing - Help with Personal Investments
Topic: Roth 401k - directing payments to a different custodian
Replies: 4
Views: 214

Re: Roth 401k - directing payments to a different custodian

Hi all, I am trying to convert funds from a previous employer in a roth 401k to a self directed account; however the catch is I would be interested in taking those interest payments and stick them in a index fund. Is it possible/legal to take these original funds and split them between two custodia...
by Alan S.
Sat Jan 12, 2019 6:45 pm
Forum: Investing - Help with Personal Investments
Topic: 4 cents left in traditional IRA after Backdoor Roth
Replies: 13
Views: 1227

Re: 4 cents left in traditional IRA after Backdoor Roth

I did a backdoor Roth with Chase, but since they took long to convert from traditional to Roth, my $6,000 has already earned 4 cents. The $6,000 will be moved into the Roth by monday, and the 4 cents will be sitting in traditional. Now what? I would wait until next year and just convert the extra 4...
by Alan S.
Sat Jan 12, 2019 6:28 pm
Forum: Investing - Help with Personal Investments
Topic: IRA Contributions AFTER 70 1/2 years of age??
Replies: 18
Views: 2844

Re: IRA Contributions AFTER 70 1/2 years of age??

Maybe a dumb question....or rather a dumb person asking a question :wink: : If you are retired and took lets say 100,000 out of your 401k or IRA, and at the end of the year you ended up with leftover money, can you take said money and reinvest it in a Roth IRA? Is your retirement considered "earned...
by Alan S.
Sat Jan 12, 2019 5:59 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA ineligible LOSS
Replies: 9
Views: 487

Re: Roth IRA ineligible LOSS

Sorry for the confusion and thank you for your patience. I didn’t mean add $200 to the Roth, rather the MM settlement fund. $5500 went in, the value when I discovered my error was $5300. $5300 got moved to MM settlement. There is a discrepancy with the in/out. How can I withdrawal $5500 to make It ...
by Alan S.
Sat Jan 12, 2019 5:36 pm
Forum: Personal Finance (Not Investing)
Topic: missed RMD for several years
Replies: 5
Views: 1180

Re: missed RMD for several years

The IRS will grant almost every waiver request they get once the late RMDs are made up. But if the late RMDs are not distributed, there is no waiver granted. The IRS has been vowing to increase RMD oversight for years, and is getting some help from IRA custodians in notifying people of their RMDs, e...
by Alan S.
Sat Jan 12, 2019 5:15 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA ineligible LOSS
Replies: 9
Views: 487

Re: Roth IRA ineligible LOSS

The remedy from vanguard rep was to take $200 from my 2018 Roth to make the withdrawal equal the contribution for 2017. Essentially saying “what goes in must come out”, but I don’t see the logic. I thought I should just take the loss. I asked what would happen if it was the only investment account ...
by Alan S.
Sat Jan 12, 2019 4:39 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA ineligible LOSS
Replies: 9
Views: 487

Re: Roth IRA ineligible LOSS

Start with a 2017 5329. You would owe the 6% excise tax on 5500, or on your 12/31/2017 balance if less. For 2018, you used up your IRA space with a ND TIRA contribution, so the 2018 5329 cannot assign your 2017 Roth excess to 2018, so you are correct that you owe another 6% excise tax on a 2018 5329...
by Alan S.
Sat Jan 12, 2019 1:43 pm
Forum: Investing - Help with Personal Investments
Topic: I inherited individual stock. Should I sell it now or wait?
Replies: 28
Views: 2306

Re: I inherited individual stock. Should I sell it now or wait?

Your basis on the inherited shares are their value on the date of death. But what is that value? Death on day the markets are open - the DOD value is the average of the lowest selling price that date and the highest. It is NOT the closing value. Death on weekend or holiday - average of most recent t...
by Alan S.
Sat Jan 12, 2019 11:28 am
Forum: Personal Finance (Not Investing)
Topic: TurboTax forms should all be available as of 1/25/19
Replies: 2
Views: 457

Re: TurboTax forms should all be available as of 1/25/19

I wouldn't count on all these "expected" availability dates to be met by the IRS, given the shutdown and TCJA required changes, as last year there were a few forms that were late (8606 as I recall was one of them) without a shutdown and prior to the major changes due to the TCJA. Tax program vendors...
by Alan S.
Fri Jan 11, 2019 4:10 pm
Forum: Personal Finance (Not Investing)
Topic: 2018 Roth Contribution Rechar'ed to Traditional on 1/7/19. Now want to perform Backdoor Roth Conversion. Need help!
Replies: 9
Views: 562

Re: 2018 Roth Contribution Rechar'ed to Traditional on 1/7/19. Now want to perform Backdoor Roth Conversion. Need help

You could, but it really makes very little difference. For example, let's assume 73 shows up for some reason in the TIRA. That would change the taxable amount of your conversion from 1227 to 1298 depending on the number of decimal places you round to for Form 8606. If you converted the 73 before yea...
by Alan S.
Fri Jan 11, 2019 3:19 pm
Forum: Investing - Help with Personal Investments
Topic: Mega Backdoor ROTH Clarification
Replies: 7
Views: 702

Re: Mega Backdoor ROTH Clarification

Not a problem. This is the standard direct rollover process. You will get a 1099R showing the taxable amount (a few bucks of earnings) in Box 2a. What your W-2 shows is another issue. I think the plan must record 18.7 of elective deferrals and treat the excess as distributed to you and recontributed...
by Alan S.
Fri Jan 11, 2019 2:22 pm
Forum: Personal Finance (Not Investing)
Topic: How did you solve the pre-medicare healthcare riddle?
Replies: 81
Views: 5627

Re: How did you solve the pre-medicare healthcare riddle?

Eventually, when the Cobra interchange between the employer and the Cobra provider broke down, such that they did not pay claims but still sent me monthly bills, I stopped paying the premiums and went uninsured for about a year until age 65. Lucked out, no medical bills and saved a ton of premium. H...
by Alan S.
Fri Jan 11, 2019 1:57 pm
Forum: Investing - Help with Personal Investments
Topic: 401k Rollover Timing
Replies: 7
Views: 307

Re: 401k Rollover Timing

It depends on how driven and optimistic you are about finding a new job with an employer with a decent 401k plan that also accepts rollovers from other plans. Of course, there are several other considerations than just their 401k that you must consider before terminating. Most plans that accept roll...
by Alan S.
Thu Jan 10, 2019 11:30 pm
Forum: Personal Finance (Not Investing)
Topic: RMD and IRA Transfer Timing
Replies: 16
Views: 853

Re: RMD and IRA Transfer Timing

I did this in 2018, just before turning 70.5, without any issues. I transferred a tIRA from one custodian to another before taking any QCDs or RMDs. I had considered one other option, but chose not to pursue it: I could have taken an RMD from the fund I was planning to transfer and then converted t...
by Alan S.
Thu Jan 10, 2019 11:18 pm
Forum: Personal Finance (Not Investing)
Topic: RMD and IRA Transfer Timing
Replies: 16
Views: 853

Re: RMD and IRA Transfer Timing

SeaShelleys wrote:
Tue Jan 08, 2019 11:11 am
Thank you, Alan S. So if I understand correctly, I can do a direct transfer of the IRA from custodian to custodian? And I can do the transfer before doing the QCD & the RMD? Thanks again.
Yes, that is correct.
by Alan S.
Thu Jan 10, 2019 10:21 pm
Forum: Investing - Theory, News & General
Topic: Kitces - Retirement Tax Rate Equilibrium
Replies: 23
Views: 3418

Re: Kitces - Retirement Tax Rate Equilibrium

Also, it was not pointed out that married taxpayers will eventually be filing single, and some for many years. In those years the marginal rates would rise considerably because the single tax brackets would more than offset the reduction of income coming from elimination of the lower SS benefit, and...
by Alan S.
Thu Jan 10, 2019 8:57 pm
Forum: Personal Finance (Not Investing)
Topic: 2018 Roth Contribution Rechar'ed to Traditional on 1/7/19. Now want to perform Backdoor Roth Conversion. Need help!
Replies: 9
Views: 562

Re: 2018 Roth Contribution Rechar'ed to Traditional on 1/7/19. Now want to perform Backdoor Roth Conversion. Need help

All fairly routine and not a problem. You have the tax impact assessed correctly and should proceed with the conversion after reading the following. When you do the in kind transfer to a Roth IRA, the value of the account when the custodian processes the transfer (probably after hours) will be the g...
by Alan S.
Thu Jan 10, 2019 8:27 pm
Forum: Investing - Help with Personal Investments
Topic: I inherited individual stock. Should I sell it now or wait?
Replies: 28
Views: 2306

Re: I inherited individual stock. Should I sell it now or wait?

Am late to this thread. If the shares were for a company he worked for over a number of years or a spin off from such a company, there is a chance that they could be NUA shares. NUA shares just sit in a taxable brokerage account and are not flagged with any identification as such so many people incl...
by Alan S.
Thu Jan 10, 2019 6:03 pm
Forum: Personal Finance (Not Investing)
Topic: Same-year IRA recharacterization and conversion: Did I do this correctly?
Replies: 5
Views: 364

Re: Same-year IRA recharacterization and conversion: Did I do this correctly?

Yes, for the Schwab conversion from traditional IRA to Roth IRA, I knew there would be a tax hit and had planned for it. Maybe not pleasant for 2018 taxes, but it closes out a few-year saga with those funds and will hopefully come out for the better in the long term. My main concern is rather about...
by Alan S.
Thu Jan 10, 2019 5:19 pm
Forum: Personal Finance (Not Investing)
Topic: IRA to Roth IRA conversion
Replies: 9
Views: 924

Re: IRA to Roth IRA conversion

Hi, I am planning to open a regular after tax IRA for 2018 and 2019 and then roll over to ROTH IRA. Currently I do not have IRA account so my conversion should not generated taxes. But I am planning to move my 401K to IRA later this year and my question is will this effect my taxes. For example I w...
by Alan S.
Thu Jan 10, 2019 12:05 am
Forum: Personal Finance (Not Investing)
Topic: Same-year IRA recharacterization and conversion: Did I do this correctly?
Replies: 5
Views: 364

Re: Same-year IRA recharacterization and conversion: Did I do this correctly?

Hello everyone! I could use a friendly sanity-check on this. In 2018 I made a same-year IRA recharacterization and conversion (details below), and while it all seemed to make sense at the time, as tax season approaches and my memory grows fuzzy, I hope I have not gotten myself into hot water. Pleas...
by Alan S.
Wed Jan 09, 2019 11:42 pm
Forum: Investing - Help with Personal Investments
Topic: Transferring IRA funds as result of divorce
Replies: 6
Views: 526

Re: Transferring IRA funds as result of divorce

Yes, she should open an IRA. Personally, I would open it at the same institution that currently holds her ex-husband’s IRA. It is my understanding that IRA’s are split with a divorce decree not a QDRO. (The QDRO is used for workplace retirement plans.) If done correctly, there should be no current ...
by Alan S.
Wed Jan 09, 2019 1:46 pm
Forum: Investing - Help with Personal Investments
Topic: Move Inherited Trad IRA Money to Trad or Roth IRA?
Replies: 12
Views: 772

Re: Move Inherited Trad IRA Money to Trad or Roth IRA?

If you are not already maxing out your IRA and workplace retirement plan contributions, you might consider the following strategy. You can use your RMD to "subsidize" additional contributions to these other plans, and if you are still not maxed out you can take out more than your RMD to help you max...
by Alan S.
Tue Jan 08, 2019 11:04 pm
Forum: Personal Finance (Not Investing)
Topic: Mega-back-door Roth IRA tax question
Replies: 3
Views: 358

Re: Mega-back-door Roth IRA tax question

Here is a real head scratcher! Now that there are potential losses on a mega back door Roth rollover for 2018, what happens to the basis in excess of the actual distribution? This basis is to be reported on Box 5 of the 1099R per the 1099R Inst. Likewise, it is also to be reported in Box 5 for an IR...