Search found 7631 matches

by Alan S.
Tue Aug 14, 2018 6:31 pm
Forum: Personal Finance (Not Investing)
Topic: Taxes on first RMD withdrawal
Replies: 2
Views: 452

Re: Taxes on first RMD withdrawal

My husband, 74, just retired from his job of 41 years. We just completed the forms to take his first RMD from his profit sharing plan and we are planning on rolling over the remaining amount into an IRA with Fidelity. The company he worked for just informed us that if we want the taxes taken from t...
by Alan S.
Sat Aug 11, 2018 8:24 pm
Forum: Investing - Help with Personal Investments
Topic: ESOP payout
Replies: 6
Views: 391

Re: ESOP payout

Have you investigated the potential of NUA? You would need to determine the cost basis of the shares and you would have to take a lump sum distribution of all similar plans with that employer. You would then pay current taxes only on the cost basis of the shares (what they were worth when credited t...
by Alan S.
Tue Aug 07, 2018 8:13 pm
Forum: Personal Finance (Not Investing)
Topic: IRA Withdrawal for House Down Payment
Replies: 7
Views: 523

Re: IRA Withdrawal for House Down Payment

To clarify, there is no first home 10,000 penalty waiver for 401k distributions. The penalty exception only applies to IRA distributions.

https://www.irs.gov/retirement-plans/pl ... tributions
by Alan S.
Tue Aug 07, 2018 7:08 pm
Forum: Investing - Help with Personal Investments
Topic: Confusing IRA situation; Help requested
Replies: 17
Views: 1309

Re: Confusing IRA situation; Help requested

This is a messy situation due to the lack of clear IRS guidance, and there are several inter related issues. First, the date of the distribution from the IRA determines the pre tax and basis available in the IRA. This is not like the usual IRA distribution situation where any transaction up to year ...
by Alan S.
Tue Aug 07, 2018 11:03 am
Forum: Investing - Help with Personal Investments
Topic: TSP and RMD options
Replies: 2
Views: 376

Re: TSP and RMD options

I turned 70 this year and thus have to start thinking about RMD's from my retirement accounts. I've been taking 4% annually from my Fidelity IRA's and that has worked out well for me for the six years I have been retired. I have a spouse that is more than ten years younger than me so it will be a w...
by Alan S.
Mon Aug 06, 2018 9:47 pm
Forum: Personal Finance (Not Investing)
Topic: 1099-R for In-Plan ROTH Conversion of Pre-Tax 401k Contributions
Replies: 4
Views: 457

Re: 1099-R for In-Plan ROTH Conversion of Pre-Tax 401k Contributions

With respect to conversions, Form 8606 only applies if the distributing account is a TIRA, SEP or SIMPLE IRA. Form 8606 does not apply for IRRs or for direct rollovers from a qualified plan to a Roth IRA.
by Alan S.
Sun Aug 05, 2018 7:01 pm
Forum: Personal Finance (Not Investing)
Topic: 1099-R for In-Plan ROTH Conversion of Pre-Tax 401k Contributions
Replies: 4
Views: 457

Re: 1099-R for In-Plan ROTH Conversion of After-Tax 401k Contributions

What you are describing as "employee contributions" are probably pre tax elective deferrals that have never been taxed. However, you might also have made after tax "employee contributions" to these plans that were not elective deferrals. You need to differentiate between the two before in order to k...
by Alan S.
Fri Aug 03, 2018 2:04 pm
Forum: Investing - Help with Personal Investments
Topic: Edward Jones........again...
Replies: 8
Views: 1682

Re: Edward Jones........again...

EJ, Ameriprise and the like probably do pretty well selling to naïve investors even considering maybe 20% of those investors figure things out and move on. They keep the still naïve ones and comfort themselves that they are making much more money on those that stay than Vanguard will ever make on th...
by Alan S.
Fri Aug 03, 2018 1:51 pm
Forum: Investing - Theory, News & General
Topic: Is schwab TSM index fund serving 2 masters?
Replies: 29
Views: 3109

Re: Is schwab TSM index fund serving 2 masters?

Naw, they just take a bite out of your lunch when you do things like park cash in a money market fund. The MM funds are not the problem. Where investors lose out is when the sweep fund is held as bank deposits in a bank owned by the firm, and that sweep fund yields little more than 0. Investors the...
by Alan S.
Thu Aug 02, 2018 10:23 am
Forum: Investing - Help with Personal Investments
Topic: half of mega backdoor roth
Replies: 3
Views: 464

Re: half of mega backdoor roth

Hi all, It appears that my partners 403b servicer allow after tax contributions to the 403b but does not allow in service withdrawals to roll into a roth account. Does it still make sense to maximize the 403 b to 55K a year? Does this money get taxed on growth or how does it work? We already max to...
by Alan S.
Wed Aug 01, 2018 4:42 pm
Forum: Investing - Help with Personal Investments
Topic: 403b Rollover Question
Replies: 13
Views: 692

Re: 403b Rollover Question

For the average plan, a 401k is much more likely to offer better investment options and lower expenses than a 403b. As such an IRA rollover is more likely to be preferable for an old 403b plan than it is for an old 401k plan. Of course, this assumes that some diligence is expended in choosing an IRA...
by Alan S.
Wed Aug 01, 2018 4:36 pm
Forum: Investing - Help with Personal Investments
Topic: 60 day indirect rollover - does deadline end on trade date or settlement?
Replies: 9
Views: 615

Re: 60 day indirect rollover - does deadline end on trade date or settlement?

The date the receiving firm receives the rollover contribution may not be obvious. The date the rollover contribution is posted to your account is clear enough, but that could come on the 61st to 65th day after receiving the distribution. Thanks everyone. So, to summarize, if I'm reading the respon...
by Alan S.
Tue Jul 31, 2018 3:14 pm
Forum: Investing - Help with Personal Investments
Topic: 60 day indirect rollover - does deadline end on trade date or settlement?
Replies: 9
Views: 615

Re: 60 day indirect rollover - does deadline end on trade date or settlement?

The date the receiving firm receives the rollover contribution may not be obvious. The date the rollover contribution is posted to your account is clear enough, but that could come on the 61st to 65th day after receiving the distribution. The Slott report article seems to infer that if the 60 days e...
by Alan S.
Tue Jul 31, 2018 2:20 pm
Forum: Investing - Help with Personal Investments
Topic: Self-Directed IRA regulations
Replies: 4
Views: 340

Re: Self-Directed IRA regulations

I am looking for guidance if this would constitute self-dealing and thereby run into issues with IRS. The case in question pertains to a friend who have been in this country for 10+ years and along with spouse have size-able 401K/IRA money that is available to roll over. However he had low savings ...
by Alan S.
Sat Jul 28, 2018 1:43 pm
Forum: Personal Finance (Not Investing)
Topic: Leaving Roth IRA as an inheritance
Replies: 10
Views: 1434

Re: Leaving ROTH IRA as an inheritance

If you make a qualified trust the Roth beneficiary, a major decision is who will be the trustee or the trust and whether that trustee will be given discretion to make distribution decisions or even to terminate the trust. It is also particularly critical that the trust be qualified for look through ...
by Alan S.
Fri Jul 27, 2018 7:37 pm
Forum: Investing - Help with Personal Investments
Topic: Benefits of rolling Roth401k to Roth IRA
Replies: 13
Views: 974

Re: Benefits of rolling Roth401k to Roth IRA

Assuming no concern about creditor protection, a large benefit of the Roth IRA relates to tapping the account. If you take a distribution from the Roth 401k, you will be receiving a pro rated amount of earnings and such earnings will be subject to tax and penalty if under 59.5. All tracking of the R...
by Alan S.
Thu Jul 26, 2018 8:08 pm
Forum: Personal Finance (Not Investing)
Topic: Excess 401k Contribution
Replies: 7
Views: 995

Re: Excess 401k Contribution

You would owe just the 39.97 one time, which is a logical amount of tax due on $150 of additional taxable income for 2016. However, for excess elective deferrals most tax programs will see that Box 12d of your W-2 forms indicates more than you can defer, and will automatically add the excess to your...
by Alan S.
Thu Jul 26, 2018 7:54 pm
Forum: Personal Finance (Not Investing)
Topic: Preliminary Version of Revised Form 1040 Released by IRS
Replies: 10
Views: 1066

Re: Preliminary Version of Revised Form 1040 Released by IRS

Don't be fooled by the shorter 1040. Most people will have to attach various schedules to this form, many of them requiring the information that WOULD HAVE gone on the old 1040 itself. This explains 6 schedules that might need to be filed: https://www.journalofaccountancy.com/news/2018/jun/2018-irs-...
by Alan S.
Thu Jul 26, 2018 7:44 pm
Forum: Personal Finance (Not Investing)
Topic: Confusion on first RMD withdrawal
Replies: 9
Views: 857

Re: Confusion on first RMD withdrawal

Once he retires 2018 becomes an RMD distribution year for the 401k plan. The plan administrator should know that as basic RMD requirements, so when he indicates that the RMD for 2018 can be taken from the IRA, he is flat out wrong. These are IRS rules and cannot be overridden by the plan. If the IRA...
by Alan S.
Thu Jul 26, 2018 12:43 pm
Forum: Investing - Help with Personal Investments
Topic: Roth ProRata and inherited IRA
Replies: 3
Views: 278

Re: Roth ProRata and inherited IRA

That's correct. When you report the conversion of the ND TIRA contribution, the value of all your non Roth IRAs goes on line 6 of Form 8606. This does NOT include inherited IRAs. If your inherited IRA happens to include basis inherited from the decedent, the RMDs would also have to be reported on Fo...
by Alan S.
Wed Jul 25, 2018 6:04 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth IRA and Aggregation Rule
Replies: 22
Views: 1209

Re: Backdoor Roth IRA and Aggregation Rule

If returns prior to 2015 are not amended, you would use line 14 of the 2014 8606 for your basis. Yes, the prior conversion 8606 forms overstated the basis and probably used all of it improperly. Therefore, that line 14 would probably be 0 or close to it. Essentially, you overstated your basis and go...
by Alan S.
Wed Jul 25, 2018 3:06 pm
Forum: Investing - Help with Personal Investments
Topic: Conduit IRA Requirement
Replies: 28
Views: 1879

Re: Conduit IRA Requirement

You may want to re contact the plan and talk to a supervisor about this rollover. If the plan hesitates to accept the IRS publication and wants a cite from the tax code, Sec 408(H) applies to this rollover: (H)Application of section 72 (i)In general If— (I)a distribution is made from an individual r...
by Alan S.
Wed Jul 25, 2018 2:25 pm
Forum: Personal Finance (Not Investing)
Topic: Apply for Waiver of 10% Federal Penalty before 59 1/2
Replies: 4
Views: 656

Re: Apply for Waiver of 10% Federal Penalty before 59 1/2

I was separated from my employer in 2017 at age 55 yrs and 9 months, after 30+ years of service. My company profit sharing account is held at Vanguard. While reviewing the options the plan provides for, I came across something that says I can apply to have the 10% penalty waived. The VG site doesn'...
by Alan S.
Wed Jul 25, 2018 11:31 am
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth IRA and Aggregation Rule
Replies: 22
Views: 1209

Re: Backdoor Roth IRA and Aggregation Rule

This error represents a small portion of taxable income, so the IRS is not going to pursue back taxes for more than the last 3 tax years. Therefore, the only returns that need to be amended are 2015-2017. Further, the 2017 conversion can still be recharacterized to eliminate the taxation that would ...
by Alan S.
Tue Jul 24, 2018 1:43 pm
Forum: Investing - Theory, News & General
Topic: Mega-backdoor roth ira conversion with one check
Replies: 24
Views: 1296

Re: Mega-backdoor roth ira conversion with one check

In most cases, if the earnings are small it makes the most sense to have a single direct rollover check made payable to your Roth IRA. However, if you have enough earnings and you do not want to pay the current taxes, then Notice 2014-54 comes into play with the split rollover. This works fine if do...
by Alan S.
Tue Jul 24, 2018 1:20 pm
Forum: Investing - Theory, News & General
Topic: Income Limit for Roth IRA contributions
Replies: 13
Views: 1460

Re: Income Limit for Roth IRA contributions

I didn't see anyone say this, so: How much you can put in a Roth "phases out" between $189k and $199k (2018 married MAGI). If you're in the phase out, you can put "some" money into a Roth, but there's a limit based on MAGI. Yes, the phaseout range causes issues. If you make a full Roth contribution...
by Alan S.
Tue Jul 24, 2018 1:07 pm
Forum: Investing - Help with Personal Investments
Topic: Rolling over portion of tIRA to 401(k)
Replies: 10
Views: 632

Re: Rolling over portion of tIRA to 401(k)

Before doing the intended tax free conversion, be totally sure your 401k will accept an IRA rollover from a contributory IRA account. Your IRA is no longer a rollover IRA because you made regular IRA contributions to it. Were you to convert first, and for whatever reason your 401k declined to accept...
by Alan S.
Tue Jul 24, 2018 12:46 pm
Forum: Investing - Help with Personal Investments
Topic: Wife and her brother are recipients of a few inherited IRA's
Replies: 11
Views: 1543

Re: Wife and her brother are recipients of a few inherited IRA's

This sounds like a pretty complex combination of variables. Your future tax situation is also likely to get much more complex. Apparently, there are 3 different IRA accounts. Could you clarify that AND list the entities that are the beneficiaries on each of the 3? Do not use actual names. For exampl...
by Alan S.
Tue Jul 24, 2018 12:27 pm
Forum: Investing - Help with Personal Investments
Topic: Split 401k 50/50 roth/traditional [new job]?
Replies: 17
Views: 1100

Re: Split 401k 50/50 roth/traditional [new job]?

You can probably elect just about any % split, not just 50-50. You may also be able to change your election several times during the year, so you would not be locked into your initial choice in most plans. Finally, if you overweight the pre tax portion somewhat, many plans that offer designated Roth...
by Alan S.
Sat Jul 21, 2018 2:26 pm
Forum: Investing - Help with Personal Investments
Topic: How to make inherited Roth last longer?
Replies: 9
Views: 1306

Re: Inherited Roth - how to make it last?… (allocations /RMD w 4 funds)

How you invest the inherited Roth will not change the applicable distribution period, which determines how long it will last.

However, it will change the amount of your RMDs, which represent the amount of dollars that you will pull out of the inherited Roth tax free.
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: 19
Views: 1267

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: 971

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: 1024

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: 13433

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: 13433

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: 323

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: 361

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: 979

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: 1317

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: 1560

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: 614

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: 758

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: 1456

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: 1456

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: 1456

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: 1369

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: 758

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: 758

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: 758

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: 1292

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...