Search found 11649 matches

by Spirit Rider
Tue Nov 12, 2019 12:51 pm
Forum: Personal Finance (Not Investing)
Topic: Evaluating going self employed, what to consider?
Replies: 8
Views: 285

Re: Evaluating going self employed, what to consider?

I thought about a franchise since I have zero experience in running a business. This statement worries me very much. A franchise will not save you from a lack of experience or knowledge. If anything, it could make your losses greater since you would have costs associated with franchising in additio...
by Spirit Rider
Tue Nov 12, 2019 12:23 pm
Forum: Personal Finance (Not Investing)
Topic: How to Calculate Qualified Expense (for 529 Plan) for College Student Living at Home
Replies: 11
Views: 846

Re: How to Calculate Qualified Expense (for 529 Plan) for College Student Living at Home

This university has on its website detailed information on its COA. It includes not only on and off-campus estimates, but also an estimate for students living at home. These estimates include tuition, Housing and Meals, and books and supplies. There is a separate section in each estimate for non-co...
by Spirit Rider
Tue Nov 12, 2019 12:18 pm
Forum: Personal Investments
Topic: Roth IRA Rollover
Replies: 7
Views: 230

Re: Roth IRA Rollover

I thought I would then do an indirect rollover by withdrawing the funds manually and redepositing at Merrill within 60 days. I wouldn’t do an indirect custodian transfer. One problem (lost check, you are incapacitated, etc.) and the entire amount is now in taxable with no recourse. Welcome to perma...
by Spirit Rider
Tue Nov 12, 2019 2:36 am
Forum: Personal Finance (Not Investing)
Topic: Solo 401k + 401k sanity check
Replies: 3
Views: 279

Re: Solo 401k + 401k sanity check

Proposed plan using the 2019 tax year limits: 401k contributions: $14,000 401k employer match: $18,000 Solo 401k contributions: $5,000 Solo 401k "match": $4,000 (20% of net proceeds, Aggregate 401k contribution: $19,000 Total 401k funding: $41,000 Am I understanding this correctly and is this a goo...
by Spirit Rider
Mon Nov 11, 2019 4:17 pm
Forum: Personal Finance (Not Investing)
Topic: Retirement and Tax savings question
Replies: 6
Views: 342

Re: Retirement and Tax savings question

Why not contribute the full $19K to the 401k.
by Spirit Rider
Mon Nov 11, 2019 10:34 am
Forum: Personal Investments
Topic: UTMA v. 529 in no-tax state
Replies: 9
Views: 511

Re: UTMA v. 529 in no-tax state

We have UTMA accounts. The best part is that the money can be used for anything that benefits the child. The downside, as pointed out already, is the tax implication 1) the kiddie tax when the child has too much taxable gains, which also hits the parents return and 2) the tax when shares are sold. ...
by Spirit Rider
Mon Nov 11, 2019 10:27 am
Forum: Personal Investments
Topic: May need to move 401k money by end of year, but not eligible for new 401k until February
Replies: 27
Views: 1368

Re: May need to move 401k money by end of year, but not eligible for new 401k until February

All participant accounts must have a $0 balance before terminating a 401k plan. The plan sponsor usually has one year to terminate the plan after the business ceases to exist. This employer has no requirement to terminate the plan prior to the end of the year. Even if the business ceases to exist o...
by Spirit Rider
Mon Nov 11, 2019 9:55 am
Forum: Personal Investments
Topic: UTMA v. 529 in no-tax state
Replies: 9
Views: 511

Re: UTMA v. 529 in no-tax state

-In Florida, a UTMA can be designated to age 25. -Not worried about a 25 year old getting full access to the money. In fact, it's probably a good test to see how the child will handle it before a much larger inheritance. The custodian of a Florida UTMA with a termination age of 25, must formally no...
by Spirit Rider
Mon Nov 11, 2019 8:46 am
Forum: Personal Investments
Topic: Should I use my 457(b)? Worried about disbursement options...
Replies: 32
Views: 1312

Re: Should I use my 457(b)? Worried about disbursement options...

Answered my own question. This type of 457(b) can't be rolled over into a traditional IRA. Wonder why - doesn't immediately make sense? As has been pointed out, non-governmental 457b assets are not held in a trust. The money is an asset of the company with a future promise to pay. This is a non-qua...
by Spirit Rider
Mon Nov 11, 2019 8:31 am
Forum: Personal Investments
Topic: May need to move 401k money by end of year, but not eligible for new 401k until February
Replies: 27
Views: 1368

Re: May need to move 401k money by end of year, but not eligible for new 401k until February

Old employer is closing, along with the 401k. The OP will be likely forced to roll over the 401k money to an IRA before December. So in general, if the business is shutting down, the accounts should be emptied before the 401k plan is closed? This is something that i never thought before. All partic...
by Spirit Rider
Mon Nov 11, 2019 8:07 am
Forum: Personal Investments
Topic: max contribution mulitple employers 401k 403b
Replies: 10
Views: 1132

Re: max contribution mulitple employers 401k 403b

If you participate in more than one 403(b) plan maintained by different employers, you don’t need to aggregate for annual addition limits. " You are not participating in two 403b plans. You are participating in a 403b plan and a one-participant 401k plan of a business owned > 50% by you. You should...
by Spirit Rider
Sun Nov 10, 2019 3:37 pm
Forum: Personal Investments
Topic: Need advice on maximum IRA contributions - possible oops!
Replies: 8
Views: 421

Re: Need advice on maximum IRA contributions - possible oops!

With a Roth IRA you can simply withdraw the excess contribution as an ordinary distribution. On Form 5329, ordinary Roth IRA distributions reduce excess contributions.
by Spirit Rider
Sun Nov 10, 2019 3:19 pm
Forum: Personal Investments
Topic: Backdoor Roth Gone Wrong
Replies: 12
Views: 1200

Re: Backdoor Roth Gone Wrong

This is not really a big deal. So you have some taxable earnings

Just do as suggested by @retiredjg; file a 2016 8606, file a corrected 2018, make 2019 non-deductible traditional IRA contribution, do Roth conversion of all three years in 2019 and file a 2019 8606 with your tax return.
by Spirit Rider
Sun Nov 10, 2019 1:11 pm
Forum: Personal Finance (Not Investing)
Topic: Who can claim as dependent?
Replies: 5
Views: 327

Re: Who can claim as dependent?

In addition, divorce decrees often determine this. For example, if custody is shared 50/50, it may be that they alternate years for claiming. ^100% this. The dependency tests are overridden in the OP's case. If the mother is the custodial parent, by default the father can NOT claim the child as a d...
by Spirit Rider
Sun Nov 10, 2019 10:50 am
Forum: Personal Finance (Not Investing)
Topic: Do I Understand Safe Harbor rules correctly?
Replies: 27
Views: 2438

Re: Do I Understand Safe Harbor rules correctly?

The OP has two options in order to avoid any penalty: Withhold >= 110% of last year's tax liability and pay 100% of this years tax liability by 4/15. No penalty will be due. Withhold >= 90% of the income and prorated adjustments to income, deductions and credits thru 8/31*. If necessary make a fourt...
by Spirit Rider
Sun Nov 10, 2019 10:02 am
Forum: Investing - Theory, News & General
Topic: When to open new HSA account
Replies: 7
Views: 860

Re: When to open new HSA account

It depends on whether you are self-employed or an S-Corp 2% shareholder-employee. A self-employed individual should make the HSA contributions from personal funds. An S-Corp can directly make or reimburse a 2% shareholder-employee's HSA contributions and directly pay or reimburse health insurance p...
by Spirit Rider
Sat Nov 09, 2019 11:44 pm
Forum: Investing - Theory, News & General
Topic: Are There 529 Plans that Allow Stocks and EFTs?
Replies: 9
Views: 648

Re: Are There 529 Plans that Allow Stocks and EFTs?

A person should spend time researching the "kiddie tax" before adopting this strategy. The IRS doesn't want parents sheltering their own income in their kids name, so the children's passive income quickly becomes taxed at very high rates. So you should not invest so much that annual gains exceed 1k...
by Spirit Rider
Sat Nov 09, 2019 11:32 pm
Forum: Personal Finance (Not Investing)
Topic: Timing on self-employment and income tax
Replies: 2
Views: 189

Re: Timing on self-employment and income tax

The full amount of self-employed business profits are subject to both SE taxes and income taxes. Whether they remain in a business account or not is irrelevant. A draw is an arbitrary accounting exercise that has no bearing on either your SE or income taxes You make quarterly estimated tax payments ...
by Spirit Rider
Sat Nov 09, 2019 8:22 pm
Forum: Investing - Theory, News & General
Topic: Non-deductible IRA and rolling into 401(K)
Replies: 4
Views: 321

Re: Non-deductible IRA and rolling into 401(K)

According to the wiki, one can roll deductible IRA and the taxable portion of non-deductible IRA into a 401(k) and this will leave only the cost basis in the non-deductible IRA. A clarification. It might seem like semantics, but here are no "deductible" IRAs or "non-deductible" IRAs. There are only...
by Spirit Rider
Sat Nov 09, 2019 7:55 pm
Forum: Investing - Theory, News & General
Topic: Are There 529 Plans that Allow Stocks and EFTs?
Replies: 9
Views: 648

Re: Are There 529 Plans that Allow Stocks and EFTs?

There is no 529 plan that allows investing in individual securities. The only options are mutual funds. Prior to 9/2001 you were not able to make any changes to your investmentsever. Then you could make one change a year and only recently two/year.
by Spirit Rider
Sat Nov 09, 2019 10:57 am
Forum: Personal Finance (Not Investing)
Topic: Just learned something about HSAs and independent children that I did not know
Replies: 21
Views: 2018

Re: Just learned something about HSAs and independent children that I did not know

If she attended college < 5 months and was 23. She was not a dependent for 2019, none of her medical expenses during 2019 can be reimbursed from your HSA account, she can open an HSA account with the family contribution limit, but none of her 2019 medical expenses before the date she opens and funds...
by Spirit Rider
Sat Nov 09, 2019 10:40 am
Forum: Investing - Theory, News & General
Topic: When to open new HSA account
Replies: 7
Views: 860

Re: When to open new HSA account

It depends on whether you are self-employed or an S-Corp 2% shareholder-employee. A self-employed individual should make the HSA contributions from personal funds. An S-Corp can directly make or reimburse a 2% shareholder-employee's HSA contributions and directly pay or reimburse health insurance pr...
by Spirit Rider
Sat Nov 09, 2019 10:25 am
Forum: Personal Investments
Topic: How much is too much in an HSA?
Replies: 51
Views: 4197

Re: How much is too much in an HSA?

As others have said, worst case you end up using the HSA like a traditional IRA, I see no down side saving as much as possible (with the caveat that you actually invest your HSA funds, as opposed to just letting it sit in cash). Actually, even in the worst case, it is still better than a traditiona...
by Spirit Rider
Sat Nov 09, 2019 1:13 am
Forum: Personal Investments
Topic: Am I eligible for a solo 401K?
Replies: 3
Views: 299

Re: Am I eligible for a solo 401K?

It does not matter what the type of the businesses are unless one of them has >= 50 employees. Under family attribution rules both businesses are deemed to be owned 100% by both spouses. These two businesses are a controlled group. You can not adopt a one-participant 401k plan until you have no non-...
by Spirit Rider
Fri Nov 08, 2019 11:30 pm
Forum: Personal Investments
Topic: What to do with small SIMPLE IRA?
Replies: 11
Views: 570

Re: What to do with small SIMPLE IRA?

SEP or SIMPLE IRA contributions are the property of the account owner immediately when deposited. The accounts are only subject to IRS rules and regulations. The employer has no say in what the account owner does or doesn't do with the account.
by Spirit Rider
Fri Nov 08, 2019 3:31 pm
Forum: Personal Investments
Topic: Calculate Vanguard solo 401K limit
Replies: 1
Views: 161

Re: Calculate Vanguard solo 401K limit

There are some nuances in your circumstances: Your one-participant 401k contributions are based in your self-employed earned income (business profit - 1/2 SE tax). However, your SE tax calculation will reflect any W-2 SS wages you had at your prior employer. Your 1/2 SE tax calculation may be incorr...
by Spirit Rider
Fri Nov 08, 2019 2:54 pm
Forum: Personal Investments
Topic: Where should I park my HSA contributions (Employer vs Fidelity)?
Replies: 8
Views: 917

Re: Where should I park my HSA contributions (Employer vs Fidelity)?

It is a little trickier that the Wiki implies. It it does not matter whether your current year Social Security (SS) wages are below the second bend point. What matters, is will your average indexed monthly earnings (AIME) are <= the second bend point. If you expect that your AIME when you collect SS...
by Spirit Rider
Fri Nov 08, 2019 2:41 pm
Forum: Personal Investments
Topic: How much is too much in an HSA?
Replies: 51
Views: 4197

Re: How much is too much in an HSA?

Since a recent study showed that an average married couple can spend up to $250k on healthcare in retirement, I'd say just keep socking it away. Fidelity's latest estimate is that an average 65 year old couple will spend $285K (2019 dollar$) in medical expenses, not including over the counter, visi...
by Spirit Rider
Fri Nov 08, 2019 2:23 pm
Forum: Personal Finance (Not Investing)
Topic: Just learned something about HSAs and independent children that I did not know
Replies: 21
Views: 2018

Re: Just learned something about HSAs and independent children that I did not know

She can have her cake and eat it so to speak. Or rather the tax deduction of the HSA contributions and make Roth contributions from any tax-free distributions for qualified medical expenses. Cash flowing HSA medical expenses on;y makes sense if you are maximizing all tax-advantaged contribution spac...
by Spirit Rider
Fri Nov 08, 2019 1:22 pm
Forum: Personal Investments
Topic: What to do with small SIMPLE IRA?
Replies: 11
Views: 570

Re: What to do with small SIMPLE IRA?

Hopefully, the two year period has or will soon expire. If not, the only practical thing is to do is wait.
by Spirit Rider
Fri Nov 08, 2019 10:18 am
Forum: Personal Investments
Topic: What to do with small SIMPLE IRA?
Replies: 11
Views: 570

Re: What to do with small SIMPLE IRA?

A SIMPLE IRA can only be rolled over to another SIMPLE IRA for two years after the first contribution.

A withdrawal or Roth conversion during the two year period would be subject to a 25% penalty.
by Spirit Rider
Thu Nov 07, 2019 11:31 pm
Forum: Personal Investments
Topic: MFJ - 2 HSAs - can 1 HSA receive the full family contribution?
Replies: 12
Views: 820

Re: MFJ - 2 HSAs - can 1 HSA receive the full family contribution?

As @jhfenton has pointed out. This is not really an HSA contribution issue. This is a section 125 "cafeteria" plan operational consideration. Q&A 81 is guidance to the employer.
by Spirit Rider
Thu Nov 07, 2019 12:45 pm
Forum: Personal Investments
Topic: MFJ - 2 HSAs - can 1 HSA receive the full family contribution?
Replies: 12
Views: 820

Re: MFJ - 2 HSAs - can 1 HSA receive the full family contribution?

An employer must limit HSA contributions by salary reduction to the HDHP plan coverage provided by their group insurance plan. If the spouse's have different employer's, HSA salary reduction contributions are limited to that spouse's HDHP coverage. Are you saying that if I have Self-Only HDHP cover...
by Spirit Rider
Thu Nov 07, 2019 9:41 am
Forum: Personal Investments
Topic: Mega Backdoor - Conflicting Feedback
Replies: 11
Views: 706

Re: Mega Backdoor - Conflicting Feedback

Fast forward today, when I called Fidelity to perform my first mega backdoor conversion, I was told that I can only make one annual conversion and there might be tax consequences if I tried to perform additional conversions this year.[ This last bolded part of the statement is false. Which makes me...
by Spirit Rider
Thu Nov 07, 2019 9:20 am
Forum: Personal Investments
Topic: Small Family Business and 401k
Replies: 4
Views: 178

Re: Small Family Business and 401k

1. Employer retirement plans are the way they are, because that is how Congress writes the laws. They are a mismash evolution without any grand malevolent intent. Sometimes life just isn't fair. 2. You can have low cost or simple to administer, but not both. If you go with a low cost TPA 401k plan, ...
by Spirit Rider
Thu Nov 07, 2019 8:39 am
Forum: Personal Investments
Topic: MFJ - 2 HSAs - can 1 HSA receive the full family contribution?
Replies: 12
Views: 820

Re: MFJ - 2 HSAs - can 1 HSA receive the full family contribution?

@curmudgeon is not entirely correct. Yes, if one spouse has a family plan then under the rules for married people, you can split the family contribution in any mutually agreeable way. However, that does not necessarily mean you can do it by HSA salary reduction contributions. An employer must limit ...
by Spirit Rider
Thu Nov 07, 2019 12:15 am
Forum: Personal Investments
Topic: Solo 401k With multiple "Businesses"
Replies: 7
Views: 548

Re: Solo 401k With multiple "Businesses"

The partnership and the sole proprietorship are considered a controlled group. You should only have a single one-participant 401k plan with two employee accounts under that plan. One for you and one for your spouse. However, the partnership can only base employee and employer contributions based on ...
by Spirit Rider
Wed Nov 06, 2019 10:22 pm
Forum: Personal Finance (Not Investing)
Topic: Yet another HSA spouse question
Replies: 4
Views: 409

Re: Yet another HSA spouse question

There are no "family" HSA accounts. All tax advantaged accounts are for a single individual. There are individual and family HDHP plans and coverage. The coverage controls the contribution limit. The "rules for married people" control how a family plan contribution limit can be allocated.
by Spirit Rider
Wed Nov 06, 2019 10:08 pm
Forum: Personal Investments
Topic: How to track down a long lost 401k?
Replies: 8
Views: 807

Re: How to track down a long lost 401k?

IRS rules allow a plan to force you out of the plan if you have a balance < $5K. If the balance is < $1K, they can simply cut you a check. If the balance is >= $1K and <$5K they can open an IRA account for you and rollover the balance there. In both cases they are required to provide 30 days notice....
by Spirit Rider
Wed Nov 06, 2019 6:45 pm
Forum: Personal Finance (Not Investing)
Topic: HSA Contributions With Spouse On Cobra
Replies: 4
Views: 323

Re: HSA Contributions With Spouse On Cobra

HSA eligibility is based on HDHP coverage of the individual. The fact that it is COBRA has no bearing on this and neither does the fact she is getting COBRA from it being your plan. The only thing that will impact this is if either of you will be > age 65 when enrolling in Medicare. If this is the c...
by Spirit Rider
Wed Nov 06, 2019 6:36 pm
Forum: Personal Finance (Not Investing)
Topic: Yet another HSA spouse question
Replies: 4
Views: 409

Re: Yet another HSA spouse question

@fabdoor is correct. The rules for married people allow the $7100 to be allocated in any manner the two spouses agree too. Only the $1000 catch-up contributions must go to your respective HSA accounts. If either or both of you have never had HSA accounts before, you will want to open and at least mi...
by Spirit Rider
Wed Nov 06, 2019 6:28 pm
Forum: Personal Investments
Topic: In-Plan 401k After-Tax to Roth conversion with backdoor Roth
Replies: 11
Views: 606

Re: In-Plan 401k After-Tax to Roth conversion with backdoor Roth

If your current employer's 401k plan accepts IRA rollovers. You can rollover the previous employer's employee after-tax contributions to a Roth IRA and the associated pre-tax earnings to a traditional IRA. Then you can rollover the pre-tax IRA balance into the current employer's 401k plan. The Backd...
by Spirit Rider
Wed Nov 06, 2019 5:59 pm
Forum: Personal Investments
Topic: Solo 401k With multiple "Businesses"
Replies: 7
Views: 548

Re: Solo 401k With multiple "Businesses"

I have done a lot of reading on the Solo 401k here and elsewhere, I think I have the basics down. Still a few questions though, and I hope someone can point me in the right direction. 1. When funding the Employers portion, how do you account for multiple businesses for the one person? For example A...
by Spirit Rider
Wed Nov 06, 2019 5:07 pm
Forum: Personal Investments
Topic: Extra cost to become an S-corp vs sole proprietorship?
Replies: 7
Views: 505

Re: Extra cost to become an S-corp vs sole proprietorship?

OP keep in mind an S-Corp has to pay $420 ($7K * 6%) in state and federal unemployment insurance for each W-2 employee. Your state may have an annual filing fee to maintain an S-Corp. Some states have low fees, some have high fees. For example, I believe California has an $800+/yr fee to maintain a ...
by Spirit Rider
Wed Nov 06, 2019 5:00 pm
Forum: Personal Finance (Not Investing)
Topic: Crazy? S-corp renting your own property tax-free for 14 days?
Replies: 12
Views: 894

Re: Crazy? S-corp renting your own property tax-free for 14 days?

This year was a big year financially for me, I work as a writer/artist type and after close to a decade of teaching and doing corporate gigs for, I sold a pitch to a major company and am now getting about $215,000 to write it on top of my normal income of around $70,000. I started an s-corp and hav...
by Spirit Rider
Wed Nov 06, 2019 12:13 pm
Forum: Personal Finance (Not Investing)
Topic: Health Insurance Options For FIRE Newly Diagnosed with Cancer
Replies: 22
Views: 2456

Re: Health Insurance Options For FIRE Newly Diagnosed with Cancer

*Because it was Halloween most of the clinic staff were in costume. They had chosen a Wizard of Oz theme so the Physician's Assistant was dressed as Dorothy, and the Radiologist who delivered the bad news that I have cancer was dressed as The Wicked Witch. It was quite surreal. This is unprofession...
by Spirit Rider
Tue Nov 05, 2019 10:56 pm
Forum: Personal Investments
Topic: Roth 401K or Taxable
Replies: 50
Views: 1993

Re: Roth 401K or Taxable

1. In plan conversion. You contribute post-tax. The plan converts post-tax dollars to Roth 401k. Dollars stay in the 401k. Not allowed in my plan 2. In plan rollover. Everything happens in 1, but they let you take the Roth 401k dollars out of your 401k and put them in your Roth IRA. Allowed only af...
by Spirit Rider
Tue Nov 05, 2019 11:48 am
Forum: Personal Investments
Topic: Excess contribution to Roth
Replies: 12
Views: 672

Re: Excess contribution to Roth

Thank you for all the advice and clarifications. The best way to take care of the problem would have been to recharacterize to my traditional IRA, I understand. I will ask about the discrepancy in inputed income amount, which is quite clear to me, and see where it goes from there. I think you shoul...