Search found 891 matches

by nolesrule
Fri Jan 04, 2019 1:39 pm
Forum: Investing - Help with Personal Investments
Topic: In Roth MAGI phaseout, want to do partial Backdoor. Good to keep separate accounts?
Replies: 17
Views: 470

Re: In Roth MAGI phaseout, want to do partial Backdoor. Good to keep separate accounts?

Well, you can read about the topic here: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=186298 I among many others even had our 2016 Roth conversions reviewed by the IRS last year due to what appeared to be a software glitch. There were no objections. This is our 5th year doing backdoor Roths...
by nolesrule
Fri Jan 04, 2019 12:36 pm
Forum: Investing - Help with Personal Investments
Topic: In Roth MAGI phaseout, want to do partial Backdoor. Good to keep separate accounts?
Replies: 17
Views: 470

Re: In Roth MAGI phaseout, want to do partial Backdoor. Good to keep separate accounts?

The Withdrawal order for Roth IRAs 1. All Contributions 2. Year by year oldest year to most recent: money taxed on conversion, then money not taxed on conversion 3. Roth Earnings It's not until you withdraw all your direct contributions that would be looking at Step 2. And then you go year by year ...
by nolesrule
Fri Jan 04, 2019 12:14 pm
Forum: Personal Finance (Not Investing)
Topic: Botched 401(k) Contributions
Replies: 23
Views: 1675

Re: Botched 401(k) Contributions

There was no 5th pay period.

As far as 401k deferrals are concerned, it's the pay date they put on the check/payslip. If the 5th pay period was paid today, it's a 2019 deferral.
by nolesrule
Fri Jan 04, 2019 12:02 pm
Forum: Investing - Help with Personal Investments
Topic: In Roth MAGI phaseout, want to do partial Backdoor. Good to keep separate accounts?
Replies: 17
Views: 470

Re: In Roth MAGI phaseout, want to do partial Backdoor. Good to keep separate accounts?

The Withdrawal order for Roth IRAs 1. All Contributions 2. Year by year oldest year to most recent: money taxed on conversion, then money not taxed on conversion 3. Roth Earnings It's not until you withdraw all your direct contributions that would be looking at Step 2. And then you go year by year w...
by nolesrule
Fri Jan 04, 2019 11:23 am
Forum: Investing - Help with Personal Investments
Topic: In Roth MAGI phaseout, want to do partial Backdoor. Good to keep separate accounts?
Replies: 17
Views: 470

Re: In Roth MAGI phaseout, want to do partial Backdoor. Good to keep separate accounts?

Okay. Well it's still not going to make much of a practical difference. The earnings on the settlement fund for 2 days in the TIRA will be less than a dollar, so the taxes will round to zero, and any possible Roth withdrawal penalty in the next 5 years on that would round to zero as well.
by nolesrule
Fri Jan 04, 2019 11:16 am
Forum: Investing - Help with Personal Investments
Topic: In Roth MAGI phaseout, want to do partial Backdoor. Good to keep separate accounts?
Replies: 17
Views: 470

Re: In Roth MAGI phaseout, want to do partial Backdoor. Good to keep separate accounts?

No need for separate accounts. You need to keep track of how the money got in regardless if you are anticipating the possibility of withdrawals before age 59.5, and it's easier to just keep it in a spreadsheet. Contribution Conversion of pre-tax money Conversion of after-tax money Leave the $800 as ...
by nolesrule
Fri Jan 04, 2019 10:56 am
Forum: Investing - Help with Personal Investments
Topic: In Roth MAGI phaseout, want to do partial Backdoor. Good to keep separate accounts?
Replies: 17
Views: 470

Re: In Roth MAGI phaseout, want to do partial Backdoor. Good to keep separate accounts?

Do the whole thing backdoor. In the worst case scenario you might have to pay the penalty on the part of the conversion that is taxable if you have to make a withdrawal of some of the conversion. That shouldn't be very much, if anything. For a summary of taxation and penalties on Roth withdrawals, s...
by nolesrule
Thu Jan 03, 2019 10:52 pm
Forum: Investing - Help with Personal Investments
Topic: Trad IRA to ROTH IRA Backdoor - "should I" and mechanics
Replies: 8
Views: 537

Re: Trad IRA to ROTH IRA Backdoor - "should I" and mechanics

Roll over all earnings and pre-tax contributions from your IRAs to your respective 401k accounts and convert only non-deductible basis to Roth. I'm not sure I can move to existing 401Ks, but can definitely check. Is there a benefit to putting into existing 401K vs. creating ROTH with existing ETrad...
by nolesrule
Thu Jan 03, 2019 10:50 pm
Forum: Investing - Help with Personal Investments
Topic: Trad IRA to ROTH IRA Backdoor - "should I" and mechanics
Replies: 8
Views: 537

Re: Trad IRA to ROTH IRA Backdoor - "should I" and mechanics

Roll over all earnings and pre-tax contributions from your IRAs to your respective 401k accounts and convert only non-deductible basis to Roth. This is dependent on the plan correct? Not all plans accept incoming IRA rollovers, and even if they do there might be restrictions on funds that have a no...
by nolesrule
Thu Jan 03, 2019 7:02 pm
Forum: Investing - Help with Personal Investments
Topic: Trad IRA to ROTH IRA Backdoor - "should I" and mechanics
Replies: 8
Views: 537

Re: Trad IRA to ROTH IRA Backdoor - "should I" and mechanics

Roll over all earnings and pre-tax contributions from your IRAs to your respective 401k accounts and convert only non-deductible basis to Roth.
by nolesrule
Thu Jan 03, 2019 3:44 pm
Forum: Investing - Theory, News & General
Topic: Traditional 401K vs Roth 401k
Replies: 60
Views: 3527

Re: Traditional 401K vs Roth 401k

The argument I've heard the most is that Roth is better if your tax rate while contributing is lower than when you withdraw. The opposite is true for pre-tax 401K (pre-tax sounds better than traditional). I'll be retiring soon and my federal marginal rate isn't going to be much lower (yeah it's low...
by nolesrule
Thu Jan 03, 2019 10:25 am
Forum: Personal Finance (Not Investing)
Topic: Income increase and Roth IRA eligibility?
Replies: 19
Views: 1317

Re: Income increase and Roth IRA eligibility?

Are you sure you are eligible to contribute to the HSA if she contributes to the FSA?
by nolesrule
Wed Jan 02, 2019 12:15 pm
Forum: Investing - Help with Personal Investments
Topic: Best way to backdoor Roth IRA
Replies: 16
Views: 775

Re: Best way to backdoor Roth IRA

However, I would wait until I have received enough earned income to make the contribution. The conversion step cannot be reversed. Correct. And if you do the Roth conversion step and end up not having enough earned income, you are really screwed. This scenario is not really a problem and should not...
by nolesrule
Wed Jan 02, 2019 11:53 am
Forum: Investing - Help with Personal Investments
Topic: Best way to backdoor Roth IRA
Replies: 16
Views: 775

Re: Best way to backdoor Roth IRA

However, I would wait until I have received enough earned income to make the contribution. The conversion step cannot be reversed. Correct. And if you do the Roth conversion step and end up not having enough earned income, you are really screwed. This scenario is not really a problem and should not...
by nolesrule
Wed Jan 02, 2019 11:41 am
Forum: Investing - Help with Personal Investments
Topic: Best way to backdoor Roth IRA
Replies: 16
Views: 775

Re: Best way to backdoor Roth IRA

Silk McCue and nolesrule, thank you both for the reply and technical information. But in my case, I will have enough earned income ($6000+) to qualify for the max IRA contribution. So will my wife and I, assuming we stay employed through mid-January, or one of us remains employed through the end of...
by nolesrule
Wed Jan 02, 2019 11:36 am
Forum: Investing - Help with Personal Investments
Topic: Timing of Backdoor Roth Contribution and Avoiding the Pro Rata Rule
Replies: 9
Views: 571

Re: Timing of Backdoor Roth Contribution and Avoiding the Pro Rata Rule

They are free at most of the standard providers. You would need self-employment income in order to be able to open a solo 401k. You would also need a provider that allows incoming rollovers from IRAs. Any recommendations on providers? I think i read somewhere (whitecoatinvestor maybe) that vanguard...
by nolesrule
Wed Jan 02, 2019 11:12 am
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth contribution limit for folks 50 and above?
Replies: 6
Views: 381

Re: Backdoor Roth contribution limit for folks 50 and above?

I wouldn't say you screwed up. Just that your conversion amount will probably be farther from your contribution amount compared to if you had left the funds in the settlement account when you do the conversion. You won't be able to do the conversion till your transactions have settled. If it's more ...
by nolesrule
Wed Jan 02, 2019 10:31 am
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth contribution limit for folks 50 and above?
Replies: 6
Views: 381

Re: Backdoor Roth contribution limit for folks 50 and above?

The 2019 contribution limit for IRAs is $6000 and there is a $1000 catch-up for a total of $7000. The limit showing for the Roth is incorrect.

However, that doesn't matter since your contributions will go into the Traditional IRA. There are no limits on conversions.
by nolesrule
Wed Jan 02, 2019 10:29 am
Forum: Investing - Help with Personal Investments
Topic: Best way to backdoor Roth IRA
Replies: 16
Views: 775

Re: Best way to backdoor Roth IRA

You have to have earned income to do any kind of IRA contribution. Is this for 2018 or 2019? This is for 2019. My 2019 income is projected to be on the borderline of the maximum income limit for a Roth contribution. So in order to invest now, I believe I can go ahead and proceed with the backdoor r...
by nolesrule
Wed Jan 02, 2019 10:20 am
Forum: Investing - Help with Personal Investments
Topic: Timing of Backdoor Roth Contribution and Avoiding the Pro Rata Rule
Replies: 9
Views: 571

Re: Timing of Backdoor Roth Contribution and Avoiding the Pro Rata Rule

They are free at most of the standard providers. You would need self-employment income in order to be able to open a solo 401k.

You would also need a provider that allows incoming rollovers from IRAs.
by nolesrule
Wed Jan 02, 2019 9:45 am
Forum: Investing - Help with Personal Investments
Topic: Best way to backdoor Roth IRA
Replies: 16
Views: 775

Re: Best way to backdoor Roth IRA

Option 1. However, I would wait until I have received enough earned income to make the contribution. The conversion step cannot be reversed. Correct me if I'm wrong, but I believe anyone (even those who are under the income limit) can do backdoor roth? I'm on the borderline, so I rather do a backdo...
by nolesrule
Wed Jan 02, 2019 9:27 am
Forum: Investing - Help with Personal Investments
Topic: Best way to backdoor Roth IRA
Replies: 16
Views: 775

Re: Best way to backdoor Roth IRA

Option 1.

However, I would wait until I have received enough earned income to make the contribution. The conversion step cannot be reversed.
by nolesrule
Wed Jan 02, 2019 9:17 am
Forum: Personal Finance (Not Investing)
Topic: High interest online savings with sub-accounts (like Capital One)?
Replies: 11
Views: 862

Re: High interest online savings with sub-accounts (like Capital One)?

You are only allowed one Money Market account at Capital One. If you want to divide up the money into separate accounts and get a higher rate than the CO savings account rate you will need to look elsewhere.

That said, you could just use a spreadsheet to divide up the money in a single account.
by nolesrule
Wed Jan 02, 2019 8:41 am
Forum: Investing - Help with Personal Investments
Topic: Timing of Backdoor Roth Contribution and Avoiding the Pro Rata Rule
Replies: 9
Views: 571

Re: Timing of Backdoor Roth Contribution and Avoiding the Pro Rata Rule

If you are trying to avoid pro-rata taxation, you should wait until the pre-tax TIRA balances have completed their moves into employer 401k accounts. This will save you from having to undo things in the case that the rollovers are not accepted. And one should consider that the conversion step of the...
by nolesrule
Tue Jan 01, 2019 7:37 pm
Forum: Investing - Help with Personal Investments
Topic: back door roth question - small amount left in traditional ira
Replies: 7
Views: 336

Re: back door roth question - small amount left in traditional ira

Just convert it or wait until you add the next TIRA contribution and convert then.

It'll be a little inconvenient/annoying on your 2018 Form 8606 since you won't have zeros, but it's not a big deal. It may or may not result in a small taxable amount depending on rounding and your tax bracket.
by nolesrule
Tue Jan 01, 2019 7:34 pm
Forum: Investing - Help with Personal Investments
Topic: 2019 Backdoor Roth - Execute or Wait?
Replies: 2
Views: 394

Re: 2019 Backdoor Roth - Execute or Wait?

I wait until I have the earned income recorded. You can't undo the conversion step if for some reason you have to back it out because you didn't earn enough money.
by nolesrule
Tue Jan 01, 2019 4:32 pm
Forum: Investing - Help with Personal Investments
Topic: Optimize Use Of 401K and SE 401K: 1H 2019 W2 / 2H 2019 1099
Replies: 8
Views: 329

Re: Optimize Use Of 401K and SE 401K: 1H 2019 W2 / 2H 2019 1099

Your SE employer contribution is going to be 20% of your net business income as calculated on Schedule C less 1/2 your SE taxes as calculated on Schedule SE. Because you have a W-2 job but the SE income will put you past the SS wage base, you will need to calculate your SE taxes using the form. See ...
by nolesrule
Tue Jan 01, 2019 4:24 pm
Forum: Investing - Help with Personal Investments
Topic: Can I convert a Rollover IRA to a Roth IRA?
Replies: 5
Views: 472

Re: Can I convert a Rollover IRA to a Roth IRA?

Yes. In that order only. Deductible IRAs of all types must have zero balance before Backdoor. Cheers Not quite. The balance must be zero on December 31 in the year the conversion takes place to avoid pro-rata taxation. The caveat about sequence applies to moving pre-tax IRA balances to a 401k first...
by nolesrule
Tue Jan 01, 2019 3:15 pm
Forum: Investing - Theory, News & General
Topic: Will you contribute the max to your IRA and then invest it all in equities for the first market day of the new year?
Replies: 159
Views: 7686

Re: Is everyone maxing out their Roth IRA today? AA question too.

I don't have any qualifying earned income in 2019 to make IRA contributions yet. We wait till we get paid. You can still contribute if you anticipate earning eligible income this year. We have to do the backdoor Roth. I don't want the money earning interest in the settlement account waiting for us ...
by nolesrule
Tue Jan 01, 2019 1:06 pm
Forum: Investing - Theory, News & General
Topic: Will you contribute the max to your IRA and then invest it all in equities for the first market day of the new year?
Replies: 159
Views: 7686

Re: Is everyone maxing out their Roth IRA today? AA question too.

I don't have any qualifying earned income in 2019 to make IRA contributions yet. We wait till we get paid.
by nolesrule
Tue Jan 01, 2019 12:40 pm
Forum: Investing - Help with Personal Investments
Topic: Optimize Use Of 401K and SE 401K: 1H 2019 W2 / 2H 2019 1099
Replies: 8
Views: 329

Re: Optimize Use Of 401K and SE 401K: 1H 2019 W2 / 2H 2019 1099

This represents a total of $60,770 in contributions and the total limit is $56,000, so from here i believe I would reduce the percentage going towards the Mega Backdoor Roth as I want to fully utilize my tax deductible portions. Thanks for reading and for any help that can be provided. The $56k ann...
by nolesrule
Sun Dec 30, 2018 1:00 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Minimum Earnings Question (IRS Limit)
Replies: 4
Views: 395

Re: Roth IRA Minimum Earnings Question (IRS Limit)

Wait until you get your W-2 and see what appears in Box 1.

The Traditional 401k contributions will reduce your compensation for making a Roth IRA contribution, since it reduces your Box 1 compensation..
by nolesrule
Sat Dec 29, 2018 11:12 am
Forum: Investing - Help with Personal Investments
Topic: Sep IRA and Solo 401k
Replies: 26
Views: 1093

Re: Sep IRA and Solo 401k

No, the employee elective contribution election is not filed with Vanguard or the IRS. It is retained in your records unless/until requested by the IRS. Sorry, still confused. So what am I deciding on by 12/31 and who am I notifying of my decision? You have to decide how much you are going to contr...
by nolesrule
Thu Dec 27, 2018 3:51 pm
Forum: Investing - Help with Personal Investments
Topic: How much of VG Prime MM (VMMXX) Dividend is exempt from state tax?
Replies: 26
Views: 1786

Re: How much of VG Prime MM (VMMXX) Dividend is exempt from state tax?

It appears the New Jersey mutual fund language is based on this NJ Tax Court decision: https://scholar.google.com/scholar_case?case=8341055502437862772&q=colonial+trust+iii&hl=en&as_sdt=4,31 I don't know the proper way to cite these things, but the last section states the following: X. Holding For t...
by nolesrule
Thu Dec 27, 2018 11:01 am
Forum: Investing - Help with Personal Investments
Topic: How much of VG Prime MM (VMMXX) Dividend is exempt from state tax?
Replies: 26
Views: 1786

Re: How much of VG Prime MM (VMMXX) Dividend is exempt from state tax?

I thought it was VMFXX that was more tax efficient It is but that does not mean there is no federal obligations in Prime. Btw, as a NJ resident I know to read the footnotes, neither fund is eligible for NJ taxpayers. One of the ways NJ has probably the most onerous tax laws in the USA by not extend...
by nolesrule
Wed Dec 26, 2018 8:34 am
Forum: Investing - Help with Personal Investments
Topic: Have you moved to ETF's? Why or why not?
Replies: 84
Views: 9831

Re: Have you moved to ETF's? Why or why not?

I TLHed VTSAX lots with losses to VLCAX in November. On Monday, I TLHed some more VTSAX lots with losses and all the VLCAX from the previous TLH to VFIAX. Now I have more losses in VTSAX lots and the losses in VFIAX are even bigger. But I can't move them to VLCAX. Maybe 50/50 VVIAX & VIGAX ? VTSAX ...
by nolesrule
Mon Dec 24, 2018 12:02 pm
Forum: Investing - Help with Personal Investments
Topic: 401k and Roth IRA. Am I doing it wrong?
Replies: 3
Views: 463

Re: 401k and Roth IRA. Am I doing it wrong?

Stay the course. Markets go up, markets go down. Right now they are going down. But you have a long time till you need the money, so worrying about a drop now is self-defeating. So either stop looking at your accounts and continue to add money regularly, or consider whether your asset allocation is ...
by nolesrule
Mon Dec 24, 2018 9:57 am
Forum: Investing - Help with Personal Investments
Topic: Have you moved to ETF's? Why or why not?
Replies: 84
Views: 9831

Re: Have you moved to ETF's? Why or why not?

I TLHed VTSAX lots with losses to VLCAX in November. On Monday, I TLHed some more VTSAX lots with losses and all the VLCAX from the previous TLH to VFIAX. Now I have more losses in VTSAX lots and the losses in VFIAX are even bigger. But I can't move them to VLCAX. Maybe 50/50 VVIAX & VIGAX ? And if...
by nolesrule
Sat Dec 22, 2018 4:25 pm
Forum: Investing - Help with Personal Investments
Topic: Can I open a SEP-IRA? Already did backdoor roth
Replies: 6
Views: 348

Re: Can I open a SEP-IRA? Already did backdoor roth

As for the solo-401k- if I'm reading this right, even if I opened a solo 401k before year end, since I've made no salary deferrals on any 2018 paychecks, I could not make an employer profit share contribution, correct? Employer profit sharing is not a match. It is a percentage contribution made by ...
by nolesrule
Sat Dec 22, 2018 4:16 pm
Forum: Investing - Help with Personal Investments
Topic: Have you moved to ETF's? Why or why not?
Replies: 84
Views: 9831

Re: Have you moved to ETF's? Why or why not?

I'm considering having Vanguard convert my mutual funds to ETFs in the taxable account just for ease of tax loss harvesting, because there are more options for TLH partners. When it was just buy and hold without the TLH opportunities, it didn't matter as much. There are ample tax loss harvesting pa...
by nolesrule
Sat Dec 22, 2018 2:55 pm
Forum: Investing - Help with Personal Investments
Topic: Have you moved to ETF's? Why or why not?
Replies: 84
Views: 9831

Re: Have you moved to ETF's? Why or why not?

I'm considering having Vanguard convert my mutual funds to ETFs in the taxable account just for ease of tax loss harvesting, because there are more options for TLH partners. When it was just buy and hold without the TLH opportunities, it didn't matter as much. There are ample tax loss harvesting pa...
by nolesrule
Sat Dec 22, 2018 9:42 am
Forum: Investing - Help with Personal Investments
Topic: Have you moved to ETF's? Why or why not?
Replies: 84
Views: 9831

Re: Have you moved to ETF's? Why or why not?

I'm considering having Vanguard convert my mutual funds to ETFs in the taxable account just for ease of tax loss harvesting, because there are more options for TLH partners. When it was just buy and hold without the TLH opportunities, it didn't matter as much.
by nolesrule
Sat Dec 22, 2018 9:07 am
Forum: Investing - Help with Personal Investments
Topic: Fidelity 401k - can you choose which fund dividends reinvest to?
Replies: 13
Views: 540

Re: Fidelity 401k - can you choose which fund dividends reinvest to?

You're worrying about nothing. If it's for rebalancing, Fidelity's interface makes it easy to rebalance. But TLH wash sales should not be a concern with 401ks, unless you are a certain poster here who continues to insist 401ks are included in wash sale rules despite lack of evidence.
by nolesrule
Sat Dec 22, 2018 7:49 am
Forum: Investing - Help with Personal Investments
Topic: Fidelity 401k - can you choose which fund dividends reinvest to?
Replies: 13
Views: 540

Re: Fidelity 401k - can you choose which fund dividends reinvest to?

I've never seen a 401k that allows you to redirect dividends. As for TLH, you can read the opinions, but with few exceptions most hold the opinion that a 401k is excluded from causing possible wash sales, and one of the reasons is precisely because you lack control over investment timing and investm...
by nolesrule
Fri Dec 21, 2018 10:58 am
Forum: Personal Finance (Not Investing)
Topic: Solo-401k with 401k
Replies: 5
Views: 342

Re: Solo-401k with 401k

Thanks. I’ve pulled up the 560, but haven’t taken the time to read all 28 pages of it. It’s usually easier and more informative to just post the question on a couple finance forums like this. Thanks again. There are lots of moving parts. We gave you the general answer, but only worksheet can get yo...
by nolesrule
Fri Dec 21, 2018 9:07 am
Forum: Personal Finance (Not Investing)
Topic: Solo-401k with 401k
Replies: 5
Views: 342

Re: Solo-401k with 401k

Assuming you are talking self-employment Schedule C, it would work out to be 20% of your net self employment income after expenses - 1/2 self employment taxes from Schedule SE. See the worksheet in Chapter 5 of Publication 560 (although the current version in a google search is for 2017 which has th...
by nolesrule
Thu Dec 20, 2018 8:50 pm
Forum: Investing - Help with Personal Investments
Topic: 401K Contribution Amount
Replies: 24
Views: 1342

Re: 401K Contribution Amount

Your John Hancock plan is cheaper than my John Hancock plan. 1% is bad but not obscene. My effective expense ratio on funds plus admin fees comes to 1.45%. The additional fees are prorated across the entire plan, so as the plan grows, the fees have been shrinking. When I started I was paying closer ...
by nolesrule
Thu Dec 20, 2018 9:22 am
Forum: Investing - Help with Personal Investments
Topic: Will you contribute all $6,000 to IRA in Jan or DCA?
Replies: 32
Views: 1954

Re: Will you contribute all $6,000 to IRA in Jan or DCA?

We will do lump sum backdoor Roths as soon as we have the earned income to support the contributions. We already have the money on hand.

That will be Jan 31st for me and Jan 18th for my wife.
by nolesrule
Wed Dec 19, 2018 11:44 am
Forum: Investing - Help with Personal Investments
Topic: Ally No Penalty 11 month CD rate increase - bonus participants notice
Replies: 7
Views: 1158

Re: Ally No Penalty 11 month CD rate increase - bonus participants notice

jeam3131 wrote:
Wed Dec 19, 2018 11:42 am
You sure closing the CD and then opening a new one won't void the 1% bonus? It really shouldn't, but I've read mixed responses from their support.
As long as the money doesn't leave Ally and only moves between eligible account types at Ally, you're fine.