Search found 6192 matches

by Spirit Rider
Fri Oct 20, 2017 4:56 pm
Forum: Investing - Help with Personal Investments
Topic: SEP-IRA vs backdoor
Replies: 3
Views: 159

Re: SEP-IRA vs backdoor

For the self-employed the maximum employer contribution is 20% of net self-employment earnings (net business profit - 1/2 SE tax).
by Spirit Rider
Fri Oct 20, 2017 4:46 pm
Forum: Personal Finance (Not Investing)
Topic: W-2 "Administrative Correction" Box 12
Replies: 3
Views: 189

Re: W-2 "Administrative Correction" Box 12

Thanks Spirit Rider! Looks like I should be ok? Previously reported Correct Information 12 D 15363.12 12 D 4060.32 12AA 0.00 12AA 11302.80 Yes, if there was no change in Box 1 there should be nothing you need to do. My guess is that this was likely discovered by a plan audit. Not an IRS audit, but ...
by Spirit Rider
Fri Oct 20, 2017 4:37 pm
Forum: Personal Finance (Not Investing)
Topic: Back Door Roth and Mega Back Door Roth
Replies: 10
Views: 571

Re: Back Door Roth and Mega Back Door Roth

In-service rollovers only refer to rollovers from the plan. The reverse rollover into the plan is not considered an in-service rollover Yes that is correct that is what vanguard said on the phone when I spoke with them. Also it turns out my employer does allow rollover from IRA to 401k provided it ...
by Spirit Rider
Fri Oct 20, 2017 4:12 pm
Forum: Investing - Help with Personal Investments
Topic: contribution limits with 403b/457/defined contribution, etc
Replies: 4
Views: 276

Re: contribution limits with 403b/457/defined contribution, etc

I would add a couple of points to ofckrupke's excellent summary. From your description of the first plan of each employer: Employer A: defined contribution plan: % of salary put in by employer, not optional, no employee contribution possible Employer B: ARP (alternative retirement plan to ohio STRS)...
by Spirit Rider
Fri Oct 20, 2017 3:46 pm
Forum: Personal Finance (Not Investing)
Topic: W-2 "Administrative Correction" Box 12
Replies: 3
Views: 189

Re: W-2 "Administrative Correction" Box 12

If the correction to Box 12 Code D did not cause a correction to Box 1 there should be no reason to file an amended return, except... In the extremely unlikely event the corrections to Box 12 Codes D and AA caused the sum of Box 12 Codes D, E, F, S, AA and BB of all employers to exceed $17,500, then...
by Spirit Rider
Fri Oct 20, 2017 2:51 pm
Forum: Investing - Help with Personal Investments
Topic: Roth 401(k) as well as back door Roth IRA?
Replies: 2
Views: 176

Re: Roth 401(k) as well as back door Roth IRA?

Sure Roth 401k contribution limits and Roth IRA contributions limits are separate.
by Spirit Rider
Fri Oct 20, 2017 2:45 pm
Forum: Personal Finance (Not Investing)
Topic: Back Door Roth and Mega Back Door Roth
Replies: 10
Views: 571

Re: Back Door Roth and Mega Back Door Roth

In-service rollovers only refer to rollovers from the plan. The reverse rollover into the plan is not considered an in-service rollover
by Spirit Rider
Fri Oct 20, 2017 2:36 pm
Forum: Investing - Help with Personal Investments
Topic: What to do with old 401K
Replies: 10
Views: 701

Re: What to do with old 401K

Both advisors I spoke with were no-fee You have to be careful with the term "no-fee." It does not mean they are acting in your best interest. A no-fee advisor can still receive compensation from the fund company where they place their clients assets at. They are more likely acting in their own best...
by Spirit Rider
Fri Oct 20, 2017 2:27 pm
Forum: Investing - Help with Personal Investments
Topic: New physician - UC retirement options help (403b/457b/401a megabackdoor roth)!
Replies: 94
Views: 9227

Re: New physician - UC retirement options help (403b/457b/401a megabackdoor roth)!

me112964: There is a big difference in the rules between a non-qualified 457b plan at a governmental entity, a non-qualified 457b at a tax-exempt entity and a non-qualified deferred compensation plan at an entity that is not tax-exempt. A governmental 457b can be rolled over to to any other retireme...
by Spirit Rider
Fri Oct 20, 2017 2:00 pm
Forum: Personal Finance (Not Investing)
Topic: Back Door Roth and Mega Back Door Roth
Replies: 10
Views: 571

Re: Back Door Roth and Mega Back Door Roth

Thank you for your response it was very helpful. I am just trying to understand the logic behind why would I want to roll over the pretax earnings? When talking about the pre-tax earnings, are you referring to the earnings in the after tax 401k? Or the earnings in the pre-tax traditional 401k? Than...
by Spirit Rider
Fri Oct 20, 2017 10:31 am
Forum: Personal Finance (Not Investing)
Topic: Back Door Roth and Mega Back Door Roth
Replies: 10
Views: 571

Re: Back Door Roth and Mega Back Door Roth

***From my understanding, 18.5k is the new limit for 2018 (next year), while 5.5k is the same limit.*** Are we allowed to perform the back door roth (non-deductible traditional IRA to roth IRA) and the micro- mega back door roth (9k after tax 401k to roth IRA) in the same year? Yes, $18K is the new...
by Spirit Rider
Fri Oct 20, 2017 12:14 am
Forum: Investing - Theory, News & General
Topic: Charles schwab - why so much cheaper?
Replies: 18
Views: 1817

Re: Charles schwab - why so much cheaper?

Some are skeptical that all of the players are for sure in this for the long run, keeping ERs low perpetually and keeping the funds open. In a taxable account, it might be worth thinking a couple or few decades down the line. I was with you until this last statement. People have been saying the sam...
by Spirit Rider
Thu Oct 19, 2017 11:40 pm
Forum: Investing - Help with Personal Investments
Topic: Confused About 401(k) Rollover as HCE with Backdoor Roth
Replies: 2
Views: 207

Re: Confused About 401(k) Rollover as HCE with Backdoor Roth

Couple of questions for folks more knowledgeable than me: (1) I am classified as a "highly compensated employee" under the 401(k) rules. Is there anything preventing me from rolling the 401(k) over in tax year 2017? Do I have to wait and see if the 401(k) passes the discrimination test (presumably ...
by Spirit Rider
Thu Oct 19, 2017 11:13 pm
Forum: Investing - Help with Personal Investments
Topic: New physician - UC retirement options help (403b/457b/401a megabackdoor roth)!
Replies: 94
Views: 9227

Re: New physician - UC retirement options help (403b/457b/401a megabackdoor roth)!

To summarize, in theory (if my UC income were to go up), I could contribute the following: 18k (457b) + 54k (401a) + 54k (solo 401k or SEP-IRA) = 126k This makes sense, because with you as your own employer, your 403b contributions would be aggregated with both the 401a for your W-2 wages and the S...
by Spirit Rider
Thu Oct 19, 2017 7:39 pm
Forum: Personal Finance (Not Investing)
Topic: Beneficiary Deed, Beneficiary Title, for R/E, Cars, etc.
Replies: 13
Views: 482

Re: Beneficiary Deed, Beneficiary Title, for R/E, Cars, etc.

I was not saying that you should not use beneficiary deeds/titles. In fact, in your case, my caution to you was probably unneeded. It is just that many people when they first find out about these beneficiary options they jump on them without thinking of an overall plan.
by Spirit Rider
Thu Oct 19, 2017 6:42 pm
Forum: Personal Finance (Not Investing)
Topic: Beneficiary Deed, Beneficiary Title, for R/E, Cars, etc.
Replies: 13
Views: 482

Re: Beneficiary Deed, Beneficiary Title, for R/E, Cars, etc.

Just because you can do something, does not mean you should do that something. Maybe bsteiner or some of our other resident estate and trust lawyers will comment. When you leave something directly to a spouse, you can not control who it goes to when they die. Beneficiary distributions of real and p...
by Spirit Rider
Thu Oct 19, 2017 6:30 pm
Forum: Investing - Help with Personal Investments
Topic: Separate Roth IRA accounts for the backdoor and the mega backdoor?
Replies: 9
Views: 627

Re: Separate Roth IRA accounts for the backdoor and the mega backdoor?

I would add a reason for the Mega Backdoor Roth. You calculate your after-tax contributions to the penny and then the employer makes a one off contribution, refunds forfeitures, makes payments to correct plan errors, etc.... The employer should catch these, but many will not because they are mandato...
by Spirit Rider
Thu Oct 19, 2017 6:20 pm
Forum: Personal Finance (Not Investing)
Topic: Beneficiary Deed, Beneficiary Title, for R/E, Cars, etc.
Replies: 13
Views: 482

Re: Beneficiary Deed, Beneficiary Title, for R/E, Cars, etc.

Yes, this has been a recent trend. More and more states are offering beneficiary deeds and/or beneficiary titles. Just because you can do something, does not mean you should do that something. Maybe bsteiner or some of our other resident estate and trust lawyers will comment. When you leave somethin...
by Spirit Rider
Thu Oct 19, 2017 6:01 pm
Forum: Personal Finance (Not Investing)
Topic: New Business Entity Decision - Potential Tax Reform Effects?
Replies: 3
Views: 227

Re: New Business Entity Decision - Potential Tax Reform Effects?

I know, that Bogleheads are all about being frugal, but I like the term economical. It is not economical to ask anonymous strangers including yours truly about what is highly dependent on the specific state, facts and circumstances. You should pay the money to consult with a professional, I know som...
by Spirit Rider
Thu Oct 19, 2017 4:32 pm
Forum: Investing - Help with Personal Investments
Topic: 401k options for small company
Replies: 8
Views: 487

Re: 401k options for small company

A one-participant 401k can be used for any owner-only business. This can be a sole proprietorship, partnership or S-Corp.
by Spirit Rider
Thu Oct 19, 2017 3:58 pm
Forum: Personal Consumer Issues
Topic: medicare supplment
Replies: 19
Views: 1184

Re: medicare supplment

Unfortunately, in Rhode Island at least, there is no enforcement mechanism for this, and no federal enforcement mechanism. I saw a doctor who said he did not handle insurance paperwork, so I was to pay by check and file for reimbursement. He charged way over the allowed excess amount, which I didn'...
by Spirit Rider
Thu Oct 19, 2017 10:49 am
Forum: Personal Finance (Not Investing)
Topic: Needs help regarding after tax 401k
Replies: 16
Views: 903

Re: Needs help regarding after tax 401k

Please help explain to me why it may be better to do 401k and IRA instead of doing the respective roths? Or why would I even consider allocating some money into IRA/401k instead of roths (or doing both) to make it a 50:50 or a certain ratio? Of course the government wants us to do roth so they can ...
by Spirit Rider
Thu Oct 19, 2017 1:02 am
Forum: Personal Finance (Not Investing)
Topic: Needs help regarding after tax 401k
Replies: 16
Views: 903

Re: Needs help regarding after tax 401k

Even more so, if you are going to do after-tax contributions. Could you expand on why that is? Most people with your joint income/marginal tax rate would not make the all of their retirement plans contributions Roth 401k and Roth IRA. Many would probably make $18K * 2 - $36K traditional (pre-tax) 4...
by Spirit Rider
Wed Oct 18, 2017 11:48 pm
Forum: Personal Finance (Not Investing)
Topic: Needs help regarding after tax 401k
Replies: 16
Views: 903

Re: Needs help regarding after tax 401k

mega317 wrote:
Wed Oct 18, 2017 10:30 pm
Are you sure Roth 401k is better for you than traditional 401k?
I agree. At your joint income, deferrals, 1040 deduction and exemptions, you are borderline 25%/28% marginal rate. You likely should be making pre-tax deferrals. Even more so, if you are going to do after-tax contributions.
by Spirit Rider
Wed Oct 18, 2017 11:27 pm
Forum: Investing - Help with Personal Investments
Topic: 529 plans : Vanguard vs Merril Edge
Replies: 9
Views: 673

Re: 529 plans : Vanguard vs Merril Edge

I would make some points: I hesitate to second guess Taylor, but I believe that the Morningstar rankings should not be your sole determiner in deciding the best 529 plan for you. I equate this to any rankings based on an artificial weightings of various factors such as Morningstar's Star ratings, Co...
by Spirit Rider
Wed Oct 18, 2017 10:26 pm
Forum: Personal Finance (Not Investing)
Topic: Best way to talk my boss (owner) into setting up Simple IRA retirement plan?
Replies: 2
Views: 223

Re: Best way to talk my boss (owner) into setting up Simple IRA retirement plan?

A SIMPLE IRA is pretty easy to set up at both Vanguard and Fidelity. They both offer a good range of index funds with roughly equivalent expense ratios. Vanguard only charges $25/year/participant/fund administrative fees and Fidelity only charges $25/year/participant administrative fees. With a SIMP...
by Spirit Rider
Wed Oct 18, 2017 8:35 pm
Forum: Investing - Theory, News & General
Topic: Office wants to pay dentist as contractor (sub-s). Any issues?
Replies: 25
Views: 1489

Re: Office wants to pay dentist as contractor (sub-s). Any issues?

The compensation rate will be the same regardless of which way she goes. This is never a good sign. This indicates that the employer is trying to save money with this move. I realize she will be responsible for more payroll taxes, but with the tax advantaged nature of being a corporation outweigh t...
by Spirit Rider
Wed Oct 18, 2017 4:29 pm
Forum: Personal Finance (Not Investing)
Topic: S-Corp Solo 401k Salary Deferral (How to)
Replies: 15
Views: 748

Re: S-Corp Solo 401k Salary Deferral (How to)

You are reading too much into that statement. All they are doing is giving you the specific exceptions to the "only plan in a calendar year" rule. No, you can not have a SIMPLE IRA and another employer retirement plan in the same calendar year. Also, you can not terminate a SIMPLE IRA before the end...
by Spirit Rider
Wed Oct 18, 2017 4:13 pm
Forum: Investing - Theory, News & General
Topic: Office wants to pay dentist as contractor (sub-s). Any issues?
Replies: 25
Views: 1489

Re: Office wants to pay dentist as contractor (sub-s). Any issues?

All of the above employee vs. Independent Contractor (IC) statements might generally be true for most ICs who should be classified as at will employees. However, it is relatively easy to structure a contract for a professional to qualify as an IC under IRS guidance. You just frame Behavioral Control...
by Spirit Rider
Wed Oct 18, 2017 2:13 pm
Forum: Investing - Help with Personal Investments
Topic: New physician - UC retirement options help (403b/457b/401a megabackdoor roth)!
Replies: 94
Views: 9227

Re: New physician - UC retirement options help (403b/457b/401a megabackdoor roth)!

One thing that still isn't 100% clear to me is whether or not the UC DCP (401a) contributions are also aggregated with the 403b and SEP-IRA under the 53k limit. It seems that you are saying that the 401a is not aggregated with SEP-IRA and 403b, correct? I forgot to ask the Fidelity rep about this, ...
by Spirit Rider
Wed Oct 18, 2017 12:55 pm
Forum: Personal Finance (Not Investing)
Topic: 529 Savings - Is it enough?
Replies: 38
Views: 3411

Re: 529 Savings - Is it enough?

rkhusky wrote:
Wed Oct 18, 2017 12:49 pm
The half-time attendance only applies to room and board, not tuition.
Thanks, I edited my post to remove that.
by Spirit Rider
Wed Oct 18, 2017 12:28 pm
Forum: Personal Finance (Not Investing)
Topic: 529 Savings - Is it enough?
Replies: 38
Views: 3411

Re: 529 Savings - Is it enough?

if by chance I am lucky enough to have some money left over in the account, I'll be using it in retirement to pay for a cooking class or two.......in some nice European town. You probably meant this in a light-hearted manner, but in the case you were serious there might be problem. To qualify as a ...
by Spirit Rider
Wed Oct 18, 2017 11:49 am
Forum: Personal Finance (Not Investing)
Topic: S-Corp Solo 401k Salary Deferral (How to)
Replies: 15
Views: 748

Re: S-Corp Solo 401k Salary Deferral (How to)

have you contributed to the SEP on the employer side this year? If so and it's a 5305 type SEP(most are)..then you can't contribute to both the SEP and 401k in the same year. I just went through this, and there is a work around. Transfer SEP to Schwab as they have a prototype SEP that will allow yo...
by Spirit Rider
Tue Oct 17, 2017 9:38 pm
Forum: Investing - Help with Personal Investments
Topic: Fine tuning retirement savings plans: 401k, IRAs and beyond?
Replies: 18
Views: 988

Re: Fine tuning retirement savings plans: 401k, IRAs and beyond?

Does the solo 401k (without TPA) allow me to put in pre-tax and after-tax dollars given that I'm maxing out those limits in my w-2 employer's plan? No. If you have a one-participant 401k plan from a mainstream provider and you have already reached the employee deferral limit, your only other option...
by Spirit Rider
Tue Oct 17, 2017 8:40 pm
Forum: Investing - Help with Personal Investments
Topic: Fine tuning retirement savings plans: 401k, IRAs and beyond?
Replies: 18
Views: 988

Re: Fine tuning retirement savings plans: 401k, IRAs and beyond?

The cost of setting up a 401k plan for the small business (e.g. hiring a TPA) appear to be between $500-$1000 per year, so I'd like to explore the SEP-IRA option further as well to make sure I'm not foregoing the easier/better option. Not sure what you are referring to here. If you are talking abou...
by Spirit Rider
Tue Oct 17, 2017 8:12 pm
Forum: Investing - Help with Personal Investments
Topic: Fine tuning retirement savings plans: 401k, IRAs and beyond?
Replies: 18
Views: 988

Re: Fine tuning retirement savings plans: 401k, IRAs and beyond?

Also, with a SEP IRA you could roll the employer contribution to a Roth IRA (I'm not saying that you should). The ability to rollover employer contributions is subject to the one-participant plan in-service withdrawal/rollover policies. Some plans do not allow withdrawals/rollovers before 59 1/2. T...
by Spirit Rider
Tue Oct 17, 2017 7:33 pm
Forum: Investing - Help with Personal Investments
Topic: What to do with old 401K
Replies: 10
Views: 701

Re: What to do with old 401K

Unless these were fee- only advisors, you should seriously consider the inherent conflict of interest. They profit from you rolling the 401k over the IRA. If you have >= $5K in the 401k, you have the option to leave the funds in the previous employer's 401k. What kind of funds are there in that 401k...
by Spirit Rider
Tue Oct 17, 2017 7:16 pm
Forum: Investing - Help with Personal Investments
Topic: Fine tuning retirement savings plans: 401k, IRAs and beyond?
Replies: 18
Views: 988

Re: Fine tuning retirement savings plans: 401k, IRAs and beyond?

I understand that contributing to a SEP IRA would trigger the need for pro-rata calculations when using the backdoor and mega-backdoor Roth IRA conversions. Is that what you mean by "would get in the way of the backdoor Roth IRA" ? Yes. Small clarification. There would be no downside to a SEP IRA w...
by Spirit Rider
Tue Oct 17, 2017 6:46 pm
Forum: Personal Finance (Not Investing)
Topic: S-Corp Solo 401k Salary Deferral (How to)
Replies: 15
Views: 748

Re: S-Corp Solo 401k Salary Deferral (How to)

Doesn't increasing my salary amount to make the 401k contribution also increase the amount that I can contribute 25% of on the Employers side? Not sure if that's box 1 or box 2 income. It is W-2 Box 1 and that can include health insurance premiums and HSA contributions paid or reimbursed by the S-C...
by Spirit Rider
Tue Oct 17, 2017 6:29 pm
Forum: Personal Finance (Not Investing)
Topic: S-Corp Solo 401k Salary Deferral (How to)
Replies: 15
Views: 748

Re: S-Corp Solo 401k Salary Deferral (How to)

No, I've been making the SEP contribution in April for the previous year. At Schwab too so good to know! Since the SEP IRA contribution was for the 2016 tax year, it doesn't matter what year it was contributed in, it will not interfere with a 2017 one-participant 401k. ]Got it. So maybe a $24k bonu...
by Spirit Rider
Tue Oct 17, 2017 6:20 pm
Forum: Personal Finance (Not Investing)
Topic: S-Corp Solo 401k Salary Deferral (How to)
Replies: 15
Views: 748

Re: S-Corp Solo 401k Salary Deferral (How to)

To add a little more information on S-Corp employee deferrals and employer contributions. The earliest you can make W-2 employee deferrals is the first pay period after the effective date of the one-participant 401k and the date employee deferral election that is on compensation not already received...
by Spirit Rider
Tue Oct 17, 2017 4:45 pm
Forum: Personal Finance (Not Investing)
Topic: Basic HSA question
Replies: 8
Views: 617

Re: Basic HSA question

As long as you do not have a gap of more than eighteen months in which you have $0 in an HSA account, that first date remains the HSA establishment date. From where does the 18 months come? It doesn't appear to be in 2016 Publication 969 - p969.pdf or 26 U.S. Code § 223 - Health savings accounts | ...
by Spirit Rider
Tue Oct 17, 2017 1:34 pm
Forum: Personal Finance (Not Investing)
Topic: Basic HSA question
Replies: 8
Views: 617

Re: Basic HSA question

I would add one other important consideration. The date of your first HSA contribution, constitutes your HSA establishment date, which is the beginning date for reimbursing unreimbursed qualified medical expenses. As long as you do not have a gap of more than eighteen months in which you have $0 in ...
by Spirit Rider
Tue Oct 17, 2017 1:23 pm
Forum: Investing - Help with Personal Investments
Topic: Yet another 529 superfund question
Replies: 5
Views: 630

Re: Yet another 529 superfund question

The maximum an individual can contribute to a 529 in a year is 5 * annual exclusion (2017 = $14K) = $70K. This means that each of you can contribute $70K to each child = $140K/child = $280K total. However, you should understand that any contribution >= the annual exclusion is always treated as a fiv...
by Spirit Rider
Tue Oct 17, 2017 12:53 pm
Forum: Personal Finance (Not Investing)
Topic: HSA taxation in Calif
Replies: 14
Views: 913

Re: HSA taxation in Calif

Well, they do get your 5498-SA which shows this year's contributions and the end-of-year FMV of the account. If they compare that to the previous year it will show the net gain in the account. Now, I don't know what degree of automated matching the CA FTB has, but you would think the presence of all...
by Spirit Rider
Tue Oct 17, 2017 12:30 pm
Forum: Personal Finance (Not Investing)
Topic: 529 Savings - Is it enough?
Replies: 38
Views: 3411

Re: 529 Savings - Is it enough?

529: - fed-only tax at income * - no taxes on gains at withdrawal No? * A significant number of states do not offer a deduction for 529 contributions and most of those that do, it is an insufficient amount to fully fund even in-state tuition room and board. Even those that do have a higher deductio...
by Spirit Rider
Tue Oct 17, 2017 11:34 am
Forum: Personal Finance (Not Investing)
Topic: HSA taxation in Calif
Replies: 14
Views: 913

Re: HSA taxation in Calif

I think any interest is also taxable annually, whether or not you withdraw it. Your custodian will send any needed 1099-Int or B or Div (I only ever got the first one...). Are you sure? Have you received such a form for an HSA account? I'm not sure how that would be possible. Forms 1099-INT, 1099-B...
by Spirit Rider
Tue Oct 17, 2017 11:25 am
Forum: Investing - Theory, News & General
Topic: State Tax Avoidance with 529 Rollover
Replies: 4
Views: 366

Re: State Tax Avoidance with 529 Rollover

The PATH Act of 2015 did make a change in the treatment of non-qualified distributions. Prior to the Path Act all 529s were aggregated as one plan for allocating principal and earnings. Now each plan is treated separately for allocating principal and earnings for non-qualified distributions. However...
by Spirit Rider
Tue Oct 17, 2017 11:06 am
Forum: Investing - Help with Personal Investments
Topic: Wash sale rule unclear if not married at time of buy or sell
Replies: 5
Views: 468

Re: Wash sale rule unclear if not married at time of buy or sell

Why not just avoid the problem altogether and coordinate your sales and purchases like you would if you were married? Maybe, because a significant number of threads on this forum are about optimizing your portfolio through the use of legal tax avoidance mechanisms. If the OP has the opportunity for...