Search found 9507 matches

by Spirit Rider
Wed Jan 23, 2019 10:24 pm
Forum: Investing - Help with Personal Investments
Topic: Does the "60-day" rule apply to all tIRA to Roth conversions?
Replies: 2
Views: 203

Re: Does the "60-day" rule apply to all tIRA to Roth conversions?

The early withdrawal penalty is a tax treatment and has nothing to do with the 60 day rollover.

If you do not meet the 60 day limit the distribution is permanent.
by Spirit Rider
Wed Jan 23, 2019 7:23 pm
Forum: Personal Finance (Not Investing)
Topic: 1099-R Inherited IRA: Is this surprising?
Replies: 11
Views: 758

Re: 1099-R Inherited IRA: Is this surprising?

So, we couldn't just put it as a rollover on our 1040? I'm just checking, because getting an institution to change a tax form they already sent can by, let's say, difficult in my experience. Of course, we can try that first, but, if they refuse, will the IRS treat this as a taxable distribution eve...
by Spirit Rider
Wed Jan 23, 2019 6:55 pm
Forum: Personal Finance (Not Investing)
Topic: How does grandparent pay taxes from babysitting income?
Replies: 5
Views: 932

Re: How does grandparent pay taxes from babysitting income?

You are making this harder than it needs to be. Pub 926 makes it clear that the employer has the responsibility and since your parents are exempt, there is no FICA due by anyone. The first intuit link is irrelevant. They are W-2 employees. The second link is wrong, you do have to report this income ...
by Spirit Rider
Wed Jan 23, 2019 6:08 pm
Forum: Personal Finance (Not Investing)
Topic: Solo 401k for startup with no revenue?
Replies: 3
Views: 260

Re: Solo 401k for startup with no revenue?

A business with only one or more self-employed individuals can not adopt a one-participant 401k until there is earned income. An S-Corp with only owners and optionally their spouses can adopt a one-participant 401k at any time. A C-Corp can not adopt a one-participant 401k unless it covers only you...
by Spirit Rider
Wed Jan 23, 2019 4:45 pm
Forum: Investing - Theory, News & General
Topic: Rumor mill - Fidelity starting individual HSA's Nov. 15th
Replies: 867
Views: 66214

Re: Rumor mill - Fidelity starting individual HSA's Nov. 15th

I skip the whole rollover and direct transfer thing. Instead, I went into employee portal and updated direct deposit information to Fidelity HSA. It's still my individual Fidelity HSA which has no fees. I'm still able to avoid FICA tax on the HSA contribution. And last but not least, I don't have t...
by Spirit Rider
Tue Jan 22, 2019 10:47 pm
Forum: Personal Finance (Not Investing)
Topic: Make SEP IRA contribution at beginning of year?
Replies: 5
Views: 277

Re: Make SEP IRA contribution at beginning of year?

You can front load a SEP IRA on day one just like a traditional or Roth IRA. If you contribute too much, you have to remove the excess contributions and earnings which will be taxable. One participant 401k employee elective contributions can not be front loaded on day one. You can only contribute 10...
by Spirit Rider
Tue Jan 22, 2019 7:38 pm
Forum: Personal Finance (Not Investing)
Topic: After-tax 401(k) to Roth IRA conversion - confused about tax treatment
Replies: 23
Views: 1167

Re: After-tax 401(k) to Roth IRA conversion - confused about tax treatment

A direct rollover to a Roth IRA has no interaction with any other IRA account.
by Spirit Rider
Tue Jan 22, 2019 7:32 pm
Forum: Investing - Help with Personal Investments
Topic: HSA reimbursement for Medicare premiums
Replies: 10
Views: 773

Re: HSA reimbursement for Medicare premiums

From IRS Notice 2008-59 Q&A 30 pretty much sums it up. Q-30. If the account beneficiary has not attained age 65, are Medicare premiums for coverage of an account beneficiary’s spouse (who has attained age 65) qualified medical expenses? A-30. No. If the account beneficiary has not attained age 65, M...
by Spirit Rider
Tue Jan 22, 2019 7:16 pm
Forum: Personal Finance (Not Investing)
Topic: Yet another Solo 401k vs SEP question
Replies: 22
Views: 1131

Re: Yet another Solo 401k vs SEP question

But see (from https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-seps-establish-a-sep): If I have a SEP, can I also have other retirement plans? You can maintain both a SEP and another plan. However, unless the other plan is also a SEP, you cannot use Form 5305-SEP; you must adopt...
by Spirit Rider
Tue Jan 22, 2019 12:15 am
Forum: Personal Finance (Not Investing)
Topic: Vanguard SIMPLE-IRA questions
Replies: 8
Views: 460

Re: Vanguard SIMPLE-IRA questions

And while I don't have the paperwork in front of me, I don't recall the admin fee being as described. I think the fee was $20-something annually per account, not per fund offered. It is not per fund offered, but per fund actually used by each participant unless they have $50K in Vanguard assets. Si...
by Spirit Rider
Mon Jan 21, 2019 10:04 pm
Forum: Investing - Help with Personal Investments
Topic: HSA reimbursement for Medicare premiums
Replies: 10
Views: 773

Re: HSA reimbursement for Medicare premiums

The date of the expense is always the determining factor for qualification. The date of the distribution is not.
by Spirit Rider
Mon Jan 21, 2019 9:56 pm
Forum: Personal Finance (Not Investing)
Topic: EIN number Solo 401k plan
Replies: 11
Views: 399

Re: EIN number Solo 401k plan

Another question I have: I assume Fidelity will send her a confirmation what $ she contributed in 2018? The form I get each year from Fido has the January 1 and December 31 balances, the investment earnings, the fees deducted ($0), the distributions ($0), and the cash contributions made during the ...
by Spirit Rider
Mon Jan 21, 2019 9:55 pm
Forum: Personal Finance (Not Investing)
Topic: 1099-MISC for moving expenses, help!
Replies: 9
Views: 960

Re: 1099-MISC for moving expenses, help!

Typically these types of payments are grossed up so that you are paid enough to cover taxes on an agreed-upon after tax amount. For example, a $3,000 moving benefit would be paid to the employee as $4,715 (just for illustrative purposes) in gross monies. Is this not the case for you? I agree. If th...
by Spirit Rider
Mon Jan 21, 2019 3:53 pm
Forum: Personal Finance (Not Investing)
Topic: After-tax 401(k) to Roth IRA conversion - confused about tax treatment
Replies: 23
Views: 1167

Re: After-tax 401(k) to Roth IRA conversion - confused about tax treatment

That is, I cannot specifically invest my after-tax contributions, separate from pre-tax ones. This is the way that most plans we hear about work. Only a few people, maybe 2 or 3, have told us they can invest their different accounts in different ways. Interesting. I did not realize that. I have pre...
by Spirit Rider
Mon Jan 21, 2019 3:38 pm
Forum: Investing - Help with Personal Investments
Topic: Using 529 for retirement rather than just education?
Replies: 16
Views: 1711

Re: Using 529 for retirement rather than just education?

Notwithstanding all the good reasons why in general this is a bad idea. I think there could be some small direct uses for a 529 as a deferred investment vehicle. Here is one targeted use. Some 529 plans have rather good stable value plans with above average interest rates. Sometimes by more than 10%...
by Spirit Rider
Mon Jan 21, 2019 3:03 pm
Forum: Personal Finance (Not Investing)
Topic: Yet another Solo 401k vs SEP question
Replies: 22
Views: 1131

Re: Yet another Solo 401k vs SEP question

A 5305-SEP IRA as offered by ETrade, Fidelity, TD Ameritrade and Vanguard can not co-exist with a one-participant 401k. A prototype SEP IRA as offered by Schwab can coexist. Maybe I am misunderstanding the issue, but I maintained for a couple of (dumb) years, both a SEP IRA and a one participant so...
by Spirit Rider
Mon Jan 21, 2019 11:18 am
Forum: Personal Finance (Not Investing)
Topic: Fidelity Solo 401(k): Automatic Investments
Replies: 4
Views: 323

Re: Fidelity Solo 401(k): Automatic Investments

I don't believe that is possible. From their Contribution Remittance Form: Contributions will be deposited in each participant’s core account. Participants can place a trade in their account by going to Fidelity.com or by calling Fidelity. Heck, I'd be thrilled if I could do an electronic contribut...
by Spirit Rider
Mon Jan 21, 2019 10:58 am
Forum: Investing - Help with Personal Investments
Topic: Using 529 for retirement rather than just education?
Replies: 16
Views: 1711

Re: Using 529 for retirement rather than just education?

Income taxes should not matter for this calculation because my alternative to the 529 is to put the money in a taxable brokerage account on which case I pay taxes every year on interest and dividends. In both cases, I have to pay taxes. In the case of the 529, there is the extra 10% penalty but the...
by Spirit Rider
Mon Jan 21, 2019 10:38 am
Forum: Personal Finance (Not Investing)
Topic: After-tax 401(k) to Roth IRA conversion - confused about tax treatment
Replies: 23
Views: 1167

Re: After-tax 401(k) to Roth IRA conversion - confused about tax treatment

The only plans I am aware of that did not separately track after-tax earnings are legacy plans. A characteristic of this type of plan was they treated excess employee defferals as after-tax contributions. They separately tracked the after-tax contributions, but they deposited them into the tradition...
by Spirit Rider
Mon Jan 21, 2019 10:07 am
Forum: Investing - Help with Personal Investments
Topic: Solo 401k - fidelity vs. vanguard
Replies: 27
Views: 2785

Re: Solo 401k - fidelity vs. vanguard

No, it is not a no brainer to use Vanguard's Individual 401k just because you have other accounts at Vangurd. The increased cost of Investor Shares vs. Admiral Shares is not insignificant on larger one-participant 401k plans. In addition to not accepting rollover contributions, Vangurd does not all...
by Spirit Rider
Sun Jan 20, 2019 11:54 pm
Forum: Personal Finance (Not Investing)
Topic: Yet another Solo 401k vs SEP question
Replies: 22
Views: 1131

Re: Yet another Solo 401k vs SEP question

SIMPLE IRA because you can deduct up to $12k, you'll be limited to 20% (25%?) of profits with a SEP or Solo 401k if you are already maxing out a 401k at work. The salary deferral limit unfortunately applies across all plans so a SIMPLE won't help. My understanding was the Simple IRA was completely ...
by Spirit Rider
Sun Jan 20, 2019 8:31 pm
Forum: Personal Finance (Not Investing)
Topic: After-tax 401(k) to Roth IRA conversion - confused about tax treatment
Replies: 23
Views: 1167

Re: After-tax 401(k) to Roth IRA conversion - confused about tax treatment

I'm asking because , reading information on the IRS website (https://www.irs.gov/retirement-plans/rollovers-of-after-tax-contributions-in-retirement-plans) one finds: Can I roll over just the after-tax amounts in my retirement plan to a Roth IRA and leave the remainder in the plan? No, you can’t ta...
by Spirit Rider
Sun Jan 20, 2019 7:56 pm
Forum: Personal Finance (Not Investing)
Topic: Help resolving overcontribution to 401k.
Replies: 9
Views: 624

Re: Help resolving overcontribution to 401k.

DH switched jobs this spring, and we just received his first job w2. Adding together the contributions from both employers, he is over the 50+ limit of $24500 by $28.70. Is it better to contact the current employer to request a return of contributions, or the previous employer? Given your caveat th...
by Spirit Rider
Sun Jan 20, 2019 12:13 am
Forum: Investing - Help with Personal Investments
Topic: Using 529 for retirement rather than just education?
Replies: 16
Views: 1711

Re: Using 529 for retirement rather than just education?

Non-qualified 529 distributions are subject to state income taxes, penalties and deduction recapture provisions in many states.

So depending on the state, a non-qualified 529 distribution could be subject to:
  • Federal and state income taxes
  • Federal and state penalties
  • State deduction recapture.
by Spirit Rider
Sat Jan 19, 2019 11:57 pm
Forum: Investing - Help with Personal Investments
Topic: 401k + aftertax 401k -> roth methodology
Replies: 20
Views: 1463

Re: 401k + aftertax 401k -> roth methodology

Thank you Spirit Rider, reading my SPD it states the following do you what it means? I interpret as being ok for me but I could be misinterpreting: I do not think this applies to me as I make less than $275k. That is the totally different compensation limit. It just means you can not receive employ...
by Spirit Rider
Sat Jan 19, 2019 11:22 pm
Forum: Personal Finance (Not Investing)
Topic: 529 Details
Replies: 28
Views: 2013

Re: 529 Details

Thanks for clarifying the rules on this. Would the gift tax exclusion for tuition figure into this in any way? i.e. Suppose the 529 is used only for tuition (not room and board) for a grandchild (after changing beneficiaries from kids to grandkids). Will the tuition paid be exempt from gift tax rep...
by Spirit Rider
Sat Jan 19, 2019 10:51 pm
Forum: Personal Finance (Not Investing)
Topic: Yet another Solo 401k vs SEP question
Replies: 22
Views: 1131

Re: Yet another Solo 401k vs SEP question

Employee after-tax contributions to a self-employed one-participant 401k are limited to net self-employment earnings - employee elective contributions - (employer contributions * 2). Where does this formula come from? Most people are aware of the 415c annual addition statutory limit = $56K for 2019...
by Spirit Rider
Sat Jan 19, 2019 9:48 pm
Forum: Personal Finance (Not Investing)
Topic: 529 Details
Replies: 28
Views: 2013

Re: 529 Details

The internet consensus is that you can change the beneficiary to someone else in the same generation as the original beneficiary without gift tax consequences. If you change it to someone else in a different generation, it is treated as a gift but it is not clear whether the gift is from the owner ...
by Spirit Rider
Sat Jan 19, 2019 8:31 pm
Forum: Personal Finance (Not Investing)
Topic: Yet another Solo 401k vs SEP question
Replies: 22
Views: 1131

Re: Yet another Solo 401k vs SEP question

I am very sorry, I confused roth with after-tax. Based on the links shared by Duckie, in your list of options, we can add one more which is: - Open prototype plan sponsored by Ascensus - Do 20% employER contributions - The rest as after-tax - Roll after-tax to roth ira Keep in mind that employer co...
by Spirit Rider
Sat Jan 19, 2019 6:32 pm
Forum: Personal Finance (Not Investing)
Topic: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?
Replies: 36
Views: 1464

Re: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?

p I was specifically referring to the additional Roth conversions possibly pushing them into the 32% tax bracket, I know. But he said this...." As for the Roth, even with the added $150k, since I am married, we will come in under the $321,450 limit for 24% tax bracket (sadly) ." I was allowing that...
by Spirit Rider
Sat Jan 19, 2019 2:56 pm
Forum: Investing - Help with Personal Investments
Topic: 401k + aftertax 401k -> roth methodology
Replies: 20
Views: 1463

Re: 401k + aftertax 401k -> roth methodology

3) I'm not sure what the threshold is for highly compensated in your terms. I am towards the top but not top 10. The 2019 HCE compensation limit is $125K or optionally the plan can use the top 20% of participants by compensation. Can you please explain what this means? I have a hard time understand...
by Spirit Rider
Sat Jan 19, 2019 2:48 pm
Forum: Investing - Help with Personal Investments
Topic: 401k + aftertax 401k -> roth methodology
Replies: 20
Views: 1463

Re: 401k + aftertax 401k -> roth methodology

Wow, that is really an anachronism from when plans treated both hardship and non-hardship in-service rollovers the same. Some plans still do this for in-service rollovers of distributable vested employer contributions. However, now most plans do not have any such restrictions on after-tax accounts.
by Spirit Rider
Sat Jan 19, 2019 2:36 pm
Forum: Personal Finance (Not Investing)
Topic: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?
Replies: 36
Views: 1464

Re: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?

I was specifically referring to the additional Roth conversions possibly pushing them into the 32% tax bracket,
by Spirit Rider
Sat Jan 19, 2019 2:32 pm
Forum: Personal Finance (Not Investing)
Topic: Yet another Solo 401k vs SEP question
Replies: 22
Views: 1131

Re: Yet another Solo 401k vs SEP question

Earl Lemongrab wrote:
Sat Jan 19, 2019 1:23 pm
I don't know if any off-the-shelf i401(k)s have Roth accounts and in--plan conversion.
As I pointed out in one of my options, ETrade does. It is an optional election on their adoption agreement.

However, it is only for pre-tax balances. They do not allow employee after-tax contributions.
by Spirit Rider
Sat Jan 19, 2019 1:20 pm
Forum: Personal Finance (Not Investing)
Topic: Yet another Solo 401k vs SEP question
Replies: 22
Views: 1131

Re: Yet another Solo 401k vs SEP question

It took me a while to understand that to do Roth contributions in a solo 401k you can't use the common solo-401k from Fidelity. :oops: If you are maxing your employee elective contributions at your primary w-2 employment, you can not make designated Roth employee elective contributions to your one-...
by Spirit Rider
Sat Jan 19, 2019 12:19 pm
Forum: Personal Finance (Not Investing)
Topic: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?
Replies: 36
Views: 1464

Re: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?

Am I the only one who finds it hard to wrap their heads around the OP's basic premises: If you are not eligible for direct Roth contributions, I really can't see the justification for the amount of Roth 401k contributions that could have been used to get below the Roth MAGI limit. Then you could hav...
by Spirit Rider
Sat Jan 19, 2019 11:52 am
Forum: Personal Finance (Not Investing)
Topic: Best kids savings account
Replies: 22
Views: 1799

Re: Best kids savings account

StealthRabbit wrote:
Thu Jan 17, 2019 6:21 am
Best part... Fafsa considered ZERO of their Roth for CFA(College financial aid). If in personal savings Fafsa would have commandeered 100%.
The FAFSA EFC student asset assessment rate is 50% of their net assets after adjustment by any unused standard deduction.
by Spirit Rider
Sat Jan 19, 2019 11:37 am
Forum: Investing - Help with Personal Investments
Topic: 401k + aftertax 401k -> roth methodology
Replies: 20
Views: 1463

Re: 401k + aftertax 401k -> roth methodology

tmcc wrote:
Sat Jan 19, 2019 11:03 am
3) I'm not sure what the threshold is for highly compensated in your terms. I am towards the top but not top 10.
The 2019 HCE compensation limit is $125K or optionally the plan can use the top 20% of participants by compensation.
by Spirit Rider
Sat Jan 19, 2019 10:57 am
Forum: Investing - Help with Personal Investments
Topic: Are 529 account ownership transfers subject to tax recapture in VA?
Replies: 3
Views: 151

Re: Are 529 account ownership transfers subject to tax recapture in VA?

"the transferee shall succeed to the transferor's tax attributes" I agree. I read this as, when the account ownership is transferred, the new owners retain the same tax treatments as the original owners. There is no tax liability on transfer. Tax liability would only apply to subsequent recapture pr...
by Spirit Rider
Sat Jan 19, 2019 9:54 am
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth & Pro-rata conversion rule - Strategy question
Replies: 3
Views: 365

Re: Backdoor Roth & Pro-rata conversion rule - Strategy question

The pre-tax IRA balances at the time of the Roth conversion do not matter. It is the pre-tax IRA balances on 12/31 of the year of the Roth conversion that matters. If your wife was self-employed, she can adopt a one-participant 401k that accepts IRA rollovers and rollover the SEP IRA. If the investm...
by Spirit Rider
Sat Jan 19, 2019 9:02 am
Forum: Investing - Theory, News & General
Topic: "Wellness" incentive as IRA eligible compensation
Replies: 2
Views: 170

Re: "Wellness" incentive as IRA eligible compensation

If it is on your W-2 in box 1 wages, it is compensation for IRA contribution purposes.

See IRS Pub 590-A, "What is compensation?"
by Spirit Rider
Fri Jan 18, 2019 9:57 pm
Forum: Personal Finance (Not Investing)
Topic: 529 Details
Replies: 28
Views: 2013

Re: 529 Details

As has been pointed out, gifting > $15K annually or > $75/5-years is a gift reporting requirement and not a gift tax issue until the total exceeds the lifetime exclusion, 2018 = $11.18M. Technically, you should report any non-excluded gifts, but I don't think anyone including the IRS worries about ...
by Spirit Rider
Fri Jan 18, 2019 8:41 pm
Forum: Personal Finance (Not Investing)
Topic: Yet another Solo 401k vs SEP question
Replies: 22
Views: 1131

Re: Yet another Solo 401k vs SEP question

A SEP IRA contribution can immediately be rolled over to any retirement account that accepts IRA rollovers.

A rollover to a Roth IRA would be taxable. You could also make a tax-free rollover to your 401k plan if it accepts IRA rollovers.
by Spirit Rider
Thu Jan 17, 2019 11:57 pm
Forum: Personal Finance (Not Investing)
Topic: Self employed, ACA cliff questions
Replies: 5
Views: 457

Re: Self employed, ACA cliff questions

This is why there is tax software to calculate this.

And yes, any tax liability caused by the loss of advanced premium tax credits will be subject to penalties if you don't meet one of the safe harbors.

Note: The IRS recently announced they are reducing the 90% safe harbor to 85% for just 2018.
by Spirit Rider
Thu Jan 17, 2019 10:00 am
Forum: Investing - Theory, News & General
Topic: Rumor mill - Fidelity starting individual HSA's Nov. 15th
Replies: 867
Views: 66214

Re: Rumor mill - Fidelity starting individual HSA's Nov. 15th

It was/is proper as long as the HSA custodian authorized the transfer. This was often the biggest delay in getting it accomplished. When this all started to months ago, I thought this option was nuts on Fidelity's part knowing how bad some HSA custodians are. I can't even begin to imagine the thousa...
by Spirit Rider
Thu Jan 17, 2019 9:30 am
Forum: Investing - Help with Personal Investments
Topic: Sep IRA and Solo 401k
Replies: 28
Views: 1251

Re: Sep IRA and Solo 401k

Yes. The "P" indicates that any earnings are taxable in the year the excess contributions were made. The "1" indicates that the earnings are an early distribution with no known exception. This means that the earnings will also be subject to the 10% early withdrawal penalty. Reference: Instructions f...
by Spirit Rider
Thu Jan 17, 2019 9:03 am
Forum: Personal Finance (Not Investing)
Topic: Using Medicare while having employer insurance
Replies: 4
Views: 452

Re: Using Medicare while having employer insurance

I don't understand why the OP's dad would sign up for Medicare Parts B and D and not Part A while still working with employer sponsored coverage The Part B premium is $135.50 and his IRMAA could be $54.10 - $325 extra a month if his MAGI is > $85K/$170K S/MFJ. Part D could also be subject to IRMAA o...
by Spirit Rider
Thu Jan 17, 2019 8:22 am
Forum: Investing - Help with Personal Investments
Topic: Roth contribution with the HEART act
Replies: 8
Views: 791

Re: Roth contribution with the HEART act

Not necessarily, as you noted it is by registration.

If there are children, you could do one by yourself and one with each child as a beneficiary.
by Spirit Rider
Thu Jan 17, 2019 12:53 am
Forum: Personal Finance (Not Investing)
Topic: How do I indicate an HSA rollover contribution on Fidelity's website UI? (screenshot included)
Replies: 11
Views: 529

Re: How do I indicate an HSA rollover contribution on Fidelity's website UI? (screenshot included)

You'll need to use a deposit form. Make sure to indicate '60-day rollover' as well as the HSA current year or previous year. You do NOT indicate current/previous year contribution. Those check boxes are for respective direct contributions, which are mutually exclusive from each other and a rollover...
by Spirit Rider
Thu Jan 17, 2019 12:22 am
Forum: Personal Finance (Not Investing)
Topic: How do I indicate an HSA rollover contribution on Fidelity's website UI? (screenshot included)
Replies: 11
Views: 529

Re: How do I indicate an HSA rollover contribution on Fidelity's website UI? (screenshot included)

You can not do a rollover online. You have to mail a paper deposit form designating it as a rollover contribution.