Search found 198 matches

by AdamP
Thu Mar 21, 2019 12:21 pm
Forum: Personal Finance (Not Investing)
Topic: Verifying basis in Roth, and 5-yr rule
Replies: 18
Views: 1119

Re: Verifying basis in Roth, and 5-yr rule

Assuming you mean 5-year rule "conversions". Form 8606 only figures the taxable amount of withdrawal. All withdrawals attributed to conversions are tax free so form 8606 treats all conversions the same. The 10% penalty splits off at line 23 and continues to Form 5329 and instructions, which figure ...
by AdamP
Wed Mar 20, 2019 3:30 pm
Forum: Personal Finance (Not Investing)
Topic: Verifying basis in Roth, and 5-yr rule
Replies: 18
Views: 1119

Re: Verifying basis in Roth, and 5-yr rule

I'll take a pause here to let some time pass so all posts can be reviewed. Yeah, I realized with your penultimate post that something I wrote earlier looks like a source of confusion. Here's the post: Alan, to make sure I understand you correctly, let me repeat back what I understood. (This doesn't...
by AdamP
Wed Mar 20, 2019 2:28 pm
Forum: Personal Finance (Not Investing)
Topic: Verifying basis in Roth, and 5-yr rule
Replies: 18
Views: 1119

Re: Verifying basis in Roth, and 5-yr rule

Line 22 are amounts that are to be treated as if they were regular Roth IRA contributions in the first place. They are first out of the Roth IRA under the ordering rules. I'm on the same page with you there, as I understand the ordering rules. Which, yes, also apply to the 8606 amounts, but I don't...
by AdamP
Wed Mar 20, 2019 2:10 pm
Forum: Personal Finance (Not Investing)
Topic: Verifying basis in Roth, and 5-yr rule
Replies: 18
Views: 1119

Re: Verifying basis in Roth, and 5-yr rule

A qualified rollover contribution from the pre tax portion of a 401k to a Roth IRA including the so called mega back door conversion should be reported on line 24 of Form 8606. All of these line 24 amounts come out of the Roth IRA under the ordering rules and to further complicate things, Roth conv...
by AdamP
Wed Mar 20, 2019 1:37 pm
Forum: Personal Finance (Not Investing)
Topic: Verifying basis in Roth, and 5-yr rule
Replies: 18
Views: 1119

Re: Verifying basis in Roth, and 5-yr rule

I'd suggest that if the goal is to adjust the basis in your IRA for the IRS, there must be an easier way. Since a withdrawal from my Roth in 2019 will finally exceed the basis of regular contributions, I need to figure out the line 22/24 nuances, and I feel like I need to amend the 8606s (since eac...
by AdamP
Wed Mar 20, 2019 1:09 pm
Forum: Personal Finance (Not Investing)
Topic: Verifying basis in Roth, and 5-yr rule
Replies: 18
Views: 1119

Re: Verifying basis in Roth, and 5-yr rule

Note that amended returns must be filed within 3 years from the date you file the original return, or within two years of the date you paid the tax, whichever is later. When I read the amended return directions, it seemed to indicate that there was no point in filing them if you were hoping for add...
by AdamP
Wed Mar 20, 2019 1:01 pm
Forum: Personal Finance (Not Investing)
Topic: Verifying basis in Roth, and 5-yr rule
Replies: 18
Views: 1119

Re: Verifying basis in Roth, and 5-yr rule

The instructions are very clear that conversions from a tIRA to a Roth IRA do not belong on line 22, but go on line 24 instead. AFAICT most other conversions also go on line 24. This may or may not explain the discrepancies the OP has perceived. After I posted, I spent more time pouring over the in...
by AdamP
Fri Mar 15, 2019 10:44 pm
Forum: Personal Finance (Not Investing)
Topic: Verifying basis in Roth, and 5-yr rule
Replies: 18
Views: 1119

Re: Verifying basis in Roth, and 5-yr rule

Yes, that is what goes on line 22, adjusted for any excess contributions returned or contributions recharacterized. Thank you. Fortunately, no excess contributions or recharacterizations. With respect to the discrepancy on the 8606 forms actually filed in the past, if you think you might have to ta...
by AdamP
Fri Mar 15, 2019 10:24 pm
Forum: Personal Finance (Not Investing)
Topic: Verifying basis in Roth, and 5-yr rule
Replies: 18
Views: 1119

Verifying basis in Roth, and 5-yr rule

Two, hopefully, simple questions: First, I want to verify the number that goes on 8606 line 22. Is this just simply the sum of all contributions/conversions/rollovers minus withdrawals before the current tax year? Second, the Roth has been open for > 10yrs, and there are rollovers that happened star...
by AdamP
Wed Nov 14, 2018 10:28 pm
Forum: Personal Finance (Not Investing)
Topic: Medicare considerations for person with employer insurance
Replies: 15
Views: 939

Re: Medicare considerations for person with employer insurance

Ahh.. page 12 of EN-05-10043 clearly says: COBRA and retiree health coverage don’t count as current employer coverage. So, the retiree health coverage they currently have doesn't allow them to not enroll in (or delay enrollment of) Part B. Although my parent does have vision insurance through their ...
by AdamP
Wed Nov 14, 2018 4:19 pm
Forum: Personal Finance (Not Investing)
Topic: Medicare considerations for person with employer insurance
Replies: 15
Views: 939

Medicare considerations for person with employer insurance

My parent is turning 65 next year, so will be eligible for Medicare. However, there are two additional considerations: They have been receiving retiree benefits (medical, dental, vision) from a previous employer for many years, and they also receive some benefits (vision) from a current part-time em...
by AdamP
Thu Aug 23, 2018 4:59 pm
Forum: Personal Investments
Topic: Vanguard doesn't understand Mega-Backdoor
Replies: 55
Views: 8704

Re: Vanguard doesn't understand Mega-Backdoor

Bacchus01 wrote:
Thu Aug 23, 2018 12:50 pm
Done this with Vanguard many times. They ALWAYS know exactly what I'm talking about.
There was a time when it was more hit or miss, especially with the correct categorization for tax purposes.
by AdamP
Thu Mar 15, 2018 9:27 am
Forum: Personal Finance (Not Investing)
Topic: Planned Roth conversions might not make sense with state taxes
Replies: 4
Views: 556

Re: Planned Roth conversions might not make sense with state taxes

I wonder if its possible to keep my current state as my residence. If so, I wonder what happens then? I'm obviously taxed on the income earned inside the new state. But what about the Roth conversions - which aren't earned anywhere? I will explicitly clarify here that currently, at least 5 years fro...
by AdamP
Thu Mar 15, 2018 9:18 am
Forum: Personal Finance (Not Investing)
Topic: Planned Roth conversions might not make sense with state taxes
Replies: 4
Views: 556

Re: Planned Roth conversions might not make sense with state taxes

Olemiss540 wrote:
Thu Mar 15, 2018 6:45 am
My state has a highish tax rate but does NOT tax conversions (IL). Worth looking into if one of these rules applies.
That's pretty nice. Sadly, it seems Illinois is the only such state - and not the one I'm moving to.
by AdamP
Wed Mar 14, 2018 9:42 pm
Forum: Personal Finance (Not Investing)
Topic: Planned Roth conversions might not make sense with state taxes
Replies: 4
Views: 556

Planned Roth conversions might not make sense with state taxes

After years of prodigious saving in my company sponsored 401ks, I've built up quite an imbalance in pre/post tax retirement savings. I'll be going to graduate school this fall, and I had already planned on doing as much converting as possible while I would be in the 12% tax bracket (much lower than ...
by AdamP
Mon Jul 17, 2017 2:11 pm
Forum: Personal Finance (Not Investing)
Topic: SS combined income for first year
Replies: 4
Views: 931

Re: SS combined income for first year

Thank you. That's what I assumed, so I'll keep my calculations the same.
by AdamP
Sun Jul 16, 2017 8:52 am
Forum: Personal Finance (Not Investing)
Topic: SS combined income for first year
Replies: 4
Views: 931

SS combined income for first year

I can't seem to find a straight answer on this anywhere, including the various SS packets. SS for my mom began in Feb of this year, so the first payment was in March. This means that there will be 10 checks received this year. However, since the payment is paid in arrears, there will have been 11 mo...
by AdamP
Sat Mar 11, 2017 11:03 am
Forum: Personal Investments
Topic: Vanguard doesn't understand Mega-Backdoor
Replies: 55
Views: 8704

Re: Vanguard doesn't understand Mega-Backdoor

Also, I would highly highly recommend that you invest any after-tax contributions while in your 401k in a money market or bond fund so you don't have to deal with the gains. I have never understood this recommendation. Since when is it a good idea to avoid gains because you might have to pay taxes ...
by AdamP
Thu Mar 09, 2017 11:53 am
Forum: Personal Investments
Topic: Vanguard doesn't understand Mega-Backdoor
Replies: 55
Views: 8704

Re: Vanguard doesn't understand Mega-Backdoor

I did nearly 30 "mega backdoor Roth" rollovers from my 401k's after-tax contributions to my Roth IRA at Vanguard - totaling nearly $50,000. They're just rollovers - nothing complicated, and I only had a few minor hiccups on Vanguard's end. I requested a withdrawal from my 401k every two weeks, got a...
by AdamP
Fri Feb 24, 2017 8:45 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA contribution recharacterization
Replies: 8
Views: 751

Re: Roth IRA contribution recharacterization

Not sure if this clarifies things. Thank you. I believe it does, but let me repeat what I understand. Her Roth contribution, which was made in January 2017 (for the 2016 tax year), could be partially or fully recharacterized to a TIRA contribution. Given that it's in a money market fund, there have...
by AdamP
Fri Feb 24, 2017 4:26 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA contribution recharacterization
Replies: 8
Views: 751

Re: Roth IRA contribution recharacterization

It's not clear to me what you have wrong, but it's non-deductible contributions, not gains, that create an issue. No non-deductible contributions -> no basis for the IRA -> no part I of form 8606. In particular, when you recharacterize a Roth contribution that has gains, the applicable gain is tran...
by AdamP
Fri Feb 24, 2017 2:25 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA contribution recharacterization
Replies: 8
Views: 751

Re: Roth IRA contribution recharacterization

Do you understand all the safe harbors? Withholding of 100% (110% for higher income people but that does not appear to be in play here) of last years taxes also avoids any penalty, as does owing less than $1,000. If a $4,500 deduction brings the withholding close to 100% of tax owed the $1,000 is d...
by AdamP
Fri Feb 24, 2017 12:33 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA contribution recharacterization
Replies: 8
Views: 751

Roth IRA contribution recharacterization

I've read several posts on this, checked the wiki, and a few other sites. However, I just want a quick sanity check on the Roth IRA contribution recharacterization. I made a fairly large mistake last fall in pre-calculating my mother's taxes for 2016 (funny paychecks and a misunderstanding on a Roth...
by AdamP
Thu Jan 26, 2017 9:57 pm
Forum: Personal Consumer Issues
Topic: New issues in trying to get out of timeshare
Replies: 8
Views: 2198

Re: New issues in trying to get out of timeshare

Mystery resolved, although it'll take some work to fix. The issue was relatively straightforward: my parents filled out the document incorrectly. When the specific issue was pointed out, it was quite clear. Sadly, I'm not surprised, as they did it without any legal counsel.
by AdamP
Wed Jan 25, 2017 11:13 pm
Forum: Personal Consumer Issues
Topic: New issues in trying to get out of timeshare
Replies: 8
Views: 2198

Re: New issues in trying to get out of timeshare

There are few [worse] purchases than a bad timeshare. I learned more than I cared to about timeshares (and how impossible they are to get rid of) when she was first considering bankruptcy, but the level of financial intelligence necessary to buy one was all summed up in a quote that I put in the th...
by AdamP
Wed Jan 25, 2017 7:29 pm
Forum: Personal Consumer Issues
Topic: New issues in trying to get out of timeshare
Replies: 8
Views: 2198

Re: New issues in trying to get out of timeshare

It would indeed. We had planned on asking that as well.
by AdamP
Wed Jan 25, 2017 6:47 pm
Forum: Personal Consumer Issues
Topic: New issues in trying to get out of timeshare
Replies: 8
Views: 2198

New issues in trying to get out of timeshare

Semi-Quick background: My parents (now divorced) bought a timeshare together (both on the documents) while they were married. After the divorce my father filed quit claim deed to transfer full ownership to my mother (agreed upon beforehand, and both signed the document). My mother went through bankr...
by AdamP
Wed Jan 04, 2017 3:23 pm
Forum: Personal Finance (Not Investing)
Topic: How many of you did a Roth conversion the first day of 2017
Replies: 48
Views: 4699

Re: How many of you did a Roth conversion the first day of 2017

Roth conversion (not for backdoor purposes) done this week. I'm taking advantage of some lean year(s) coming up, and I have a 15% bracket I can fill trying to "even out" my Roth v. Traditional balances.
by AdamP
Fri Nov 11, 2016 11:32 am
Forum: Personal Finance (Not Investing)
Topic: SSA: "We cannot pay you because of your work."
Replies: 12
Views: 3730

Re: SSA: "We cannot pay you because of your work."

https://www.ssa.gov/pubs/EN-05-10069.pdf Review this pamphlet. The first example is similar to your mom. She will get paid in 2017 her regular monthly payment starting after 2 months of zero payment. When social security learns the actual 2017 income they will retroactively restore the partial 2nd ...
by AdamP
Fri Nov 11, 2016 9:59 am
Forum: Personal Finance (Not Investing)
Topic: SSA: "We cannot pay you because of your work."
Replies: 12
Views: 3730

Re: SSA: "We cannot pay you because of your work."

Thank you all for your replies. However, I think I wrote too much, and my main question is getting lost. I'm not at all concerned with the earnings limit; I fully understand the reduction in benefits and how it is calculated (thanks for the heads up on the increase for 2017). My main question is: wi...
by AdamP
Thu Nov 10, 2016 7:53 pm
Forum: Personal Finance (Not Investing)
Topic: SSA: "We cannot pay you because of your work."
Replies: 12
Views: 3730

Re: SSA: "We cannot pay you because of your work."

I think I got a letter from them back at the beginning that used the same language to simply say that my payments could not be paid this month because they actually start next month, or something like that. That's my main problem with the letter. It says "we cannot pay" and you won't receive anythi...
by AdamP
Thu Nov 10, 2016 7:50 pm
Forum: Personal Finance (Not Investing)
Topic: SSA: "We cannot pay you because of your work."
Replies: 12
Views: 3730

Re: SSA: "We cannot pay you because of your work."

Yeah. Send them the info on what you expect to earn and you will get back better info. I wouldn't be shocked to learn that the SS has a rule where they will not pay out partial months til the end of the year (i.e. they don't want to clawback money. The optics of doing that are much worse than not p...
by AdamP
Thu Nov 10, 2016 6:49 pm
Forum: Personal Finance (Not Investing)
Topic: SSA: "We cannot pay you because of your work."
Replies: 12
Views: 3730

SSA: "We cannot pay you because of your work."

I thought it would be better to start a new thread on this. My mom applied for SS retirement benefits, and received a very confusing response letter, which I'll put below (abbreviated, and numbers changed to protect the innocent): We have approved your application for retirement benefits. Your entit...
by AdamP
Wed Nov 09, 2016 11:59 pm
Forum: Personal Finance (Not Investing)
Topic: Large IRA withdrawal and SS
Replies: 27
Views: 3687

Re: Large IRA withdrawal and SS

So, after she applied online, the SSA sent a slightly confusing letter: We have approved your application for retirement benefits... We cannot pay you because of your work... Any future payments will be... [$1,850 - just to keep with the fictitious number below] Then it goes on to say: You estimated...
by AdamP
Wed Oct 12, 2016 2:13 pm
Forum: Personal Finance (Not Investing)
Topic: Large IRA withdrawal and SS
Replies: 27
Views: 3687

Re: Large IRA withdrawal and SS

It would be much better to avoid claiming SS until FRA, at which point this income limit goes away... You'll have to check the other posts above and the thread I link to at the top. But needless to say, that is impossible. Most of her tIRA will go to paying the IRS (and taxes on the distribution); ...
by AdamP
Wed Oct 12, 2016 1:24 pm
Forum: Personal Finance (Not Investing)
Topic: Large IRA withdrawal and SS
Replies: 27
Views: 3687

Re: Large IRA withdrawal and SS

Thank you, pshonore. This insight really changed up the calculations. Now she could take home an extra 16% (vs 4%) for that same doubling of hours. (this includes the delayed SS) Just so there's no misunderstanding: Assume Mom makes 20K and contributes 5K for a 401, Box 1 on her W2 will say 15K whe...
by AdamP
Wed Oct 12, 2016 12:47 pm
Forum: Personal Finance (Not Investing)
Topic: Large IRA withdrawal and SS
Replies: 27
Views: 3687

Re: Large IRA withdrawal and SS

Thank you, pshonore. This insight really changed up the calculations. Now she could take home an extra 16% (vs 4%) for that same doubling of hours. (this includes the delayed SS)
by AdamP
Wed Oct 12, 2016 11:09 am
Forum: Personal Finance (Not Investing)
Topic: Large IRA withdrawal and SS
Replies: 27
Views: 3687

Re: Large IRA withdrawal and SS

Okay, that's really great. Thanks. I should've looked at a 1040, since they are straight forward. Since I was wrong about that, I should ask: do 401k/tIRA contributions affect amount used to test against the $15,720 earned income limit?
by AdamP
Wed Oct 12, 2016 9:41 am
Forum: Personal Finance (Not Investing)
Topic: Large IRA withdrawal and SS
Replies: 27
Views: 3687

Re: Large IRA withdrawal and SS

pshonore wrote:401K contributions (on a W2) are not part of MAGI for SS taxability purposes.
I don't think this is correct. As far as I can find, the income used for SS tax trigger calculations is before all deductions.
by AdamP
Wed Oct 12, 2016 8:32 am
Forum: Personal Finance (Not Investing)
Topic: Large IRA withdrawal and SS
Replies: 27
Views: 3687

Re: Large IRA withdrawal and SS

Don't forget that if you start SS while still working before FRA, SS will be reduced even further (compared to not working at the same age). The reduction ends at FRA when it is returned in the form of slightly larger SS benefits. http://www.socialsecuritychoices.com/info/workclaim.php I knew about...
by AdamP
Tue Oct 11, 2016 12:50 pm
Forum: Personal Finance (Not Investing)
Topic: Large IRA withdrawal and SS
Replies: 27
Views: 3687

Re: Large IRA withdrawal and SS

Enkidue (too much to quote), since it's a foregone conclusion that both 1) she'll have to take a large chunk out of her IRA to pay the IRS and 2) she'll be in a higher marginal bracket the year she starts SS, I think it makes the most sense to convert most of the necessary money now. And the taxes w...
by AdamP
Tue Oct 11, 2016 11:22 am
Forum: Personal Finance (Not Investing)
Topic: Large IRA withdrawal and SS
Replies: 27
Views: 3687

Re: Large IRA withdrawal and SS

For those with SS experience: If one sets their start date say March 1st (so the first check comes on some Wednesday in April), for calculating the combined income, does that mean SS was received for 10 months (Mar-Dec), or 9 months (Apr-Dec)? I'm trying to calculate when she should quit 1 job and s...
by AdamP
Tue Oct 11, 2016 8:15 am
Forum: Personal Finance (Not Investing)
Topic: Large IRA withdrawal and SS
Replies: 27
Views: 3687

Re: Large IRA withdrawal and SS

BTW, does anyone know if Vanguard will do a distribution in-house from a tIRA (Vanguard) to a new taxable account (Vanguard)? Not only will they, but they can also withdraw "in-kind", meaning keeping the investment in the same asset before and after the withdrawal. Excellent. Thank you, celia. A bi...
by AdamP
Mon Oct 10, 2016 10:14 pm
Forum: Personal Finance (Not Investing)
Topic: Large IRA withdrawal and SS
Replies: 27
Views: 3687

Re: Large IRA withdrawal and SS

If by tax software, you mean Excel. :wink: I've never invested in a tax suite. The tIRA account itself is only a few years old. However, it was a direct transfer from an account that was opened over a decade ago. I hadn't thought of converting in-place, mainly because she doesn't have the funds to p...
by AdamP
Mon Oct 10, 2016 9:21 pm
Forum: Personal Finance (Not Investing)
Topic: Large IRA withdrawal and SS
Replies: 27
Views: 3687

Large IRA withdrawal and SS

(Very specific question about SS, related to this thread I started https://www.bogleheads.org/forum/viewtopic.php?f=2&t=139370 ) This question relates to taking an IRA distribution around the same time SS is started. I'll give some ballpark numbers and dates, as well as my current best plan. I'm loo...
by AdamP
Sat Sep 17, 2016 12:37 pm
Forum: Personal Finance (Not Investing)
Topic: Parent in financial mess. General and SS timing advice
Replies: 72
Views: 10127

Re: Parent in financial mess. General and SS timing advice

Adam, when will the past taxes be settled/paid off? Would it make sense to start SS at that time? If she could somehow pay it off early, could she start SS then? (An incentive for her) The date is pending an IRS decision (but shouldn't be more than 2 years out). I was actually thinking about using ...
by AdamP
Fri Sep 16, 2016 11:46 am
Forum: Personal Finance (Not Investing)
Topic: Parent in financial mess. General and SS timing advice
Replies: 72
Views: 10127

Re: Parent in financial mess. General and SS timing advice

ObliviousInvestor wrote:Darn. That rules out what would otherwise be a pretty advantageous claiming strategy.
Yeah, there were several changes in that bill that I was not happy about. Mainly, I was planning on her filing against her ex's SS at 66 and hers at 70.
by AdamP
Fri Sep 16, 2016 11:30 am
Forum: Personal Finance (Not Investing)
Topic: Parent in financial mess. General and SS timing advice
Replies: 72
Views: 10127

Re: Parent in financial mess. General and SS timing advice

Just checking on a relevant point: You said in the original post (May 2014) that she "just" turned 60. How "just" was it? Specifically, was she 62 as of 1/1/2016, or was she still 61? She was 61 on January 1st of this year. POA will give you the ability to act on her behalf, but it will not prevent...
by AdamP
Fri Sep 16, 2016 10:52 am
Forum: Personal Finance (Not Investing)
Topic: Parent in financial mess. General and SS timing advice
Replies: 72
Views: 10127

Re: Parent in financial mess. General and SS timing advice

But she needs to keep working if she wants a higher SS check at 66 (while taking <75% now). Her age 66 amount will still be less than if she waited to start at 66. Can you have her agree to start at 64 or 65 while working to 66? I've done the calculations on this, including estimates for the increa...
by AdamP
Fri Sep 16, 2016 8:09 am
Forum: Personal Finance (Not Investing)
Topic: Parent in financial mess. General and SS timing advice
Replies: 72
Views: 10127

Re: Parent in financial mess. General and SS timing advice

Before telling her the SS benefit, run her numbers through some tax software for this year to calculate her income taxes Too late, as I had shown her in the past how to get on the SSA website. With regard to the earnings test, it no longer applies after the person reaches FRA. (That is, they can ea...