Search found 11711 matches

by Spirit Rider
Tue Nov 19, 2019 3:21 pm
Forum: Personal Finance (Not Investing)
Topic: Calculating Self-Employed Solo 401k employER contribution.
Replies: 11
Views: 232

Re: Calculating Self-Employed Solo 401k employER contribution.

So that should allow her to contribute 20% of her net contracting income up to that 37k number (minus what the military has already contributed as her employer). There is only one employee deferral limit (2019 = $19K) across all 401k, 403b, SARSEP and SIMPLE IRA plans. There is a separate (employee...
by Spirit Rider
Tue Nov 19, 2019 2:33 pm
Forum: Personal Investments
Topic: solo 401k to IRA direct rollover; need to report to IRS?
Replies: 10
Views: 458

Re: solo 401k to IRA direct rollover; need to report to IRS?

You cannot do an in-service withdrawal/rollover of vested employer contributions for two (2) years after the contribution for the first five (5) years of service. Then you can do at will. However, just because the plan document allows it does not mean the custodian's policy does. Thanks again So if...
by Spirit Rider
Tue Nov 19, 2019 1:14 pm
Forum: Personal Investments
Topic: Confused about Rolled over IRA vs Traditional IRA
Replies: 14
Views: 652

Re: Confused about Rolled over IRA vs Traditional IRA

It is a good idea if you are going to correct someone that you base it on some factual knowledge and not just some anecdotal experience. @retiredjg's post was correct and beneficial to the OP. Yours was not. sorry for bothering everyone this is the last time you'll ever hear from me, i guess i'm no...
by Spirit Rider
Tue Nov 19, 2019 1:01 pm
Forum: Personal Finance (Not Investing)
Topic: Just learned something about HSAs and independent children that I did not know
Replies: 36
Views: 3552

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

One way to do this is take any distributions/debit card payment amounts and contribute to a Roth IRA. That is far easier and more likely to happen than adjusting an employee deferral rate. We will also be encouraging him to use the gift to fund his Roth IRA It might be better to encourage him to in...
by Spirit Rider
Tue Nov 19, 2019 12:58 pm
Forum: Personal Investments
Topic: Need help with deciding - Trad and SEP IRA/ Solo401k
Replies: 1
Views: 80

Re: Need help with deciding - Trad and SEP IRA/ Solo401k

Another reason to not use Vanguard's Individual 401k that you may or may not find useful. If you ever want to legitimately employ your children in your business and help them get started on a Roth IRA. Vanguard does not allow employee eligibility restrictions. The second you hire any employees inclu...
by Spirit Rider
Tue Nov 19, 2019 12:22 pm
Forum: Personal Finance (Not Investing)
Topic: Just learned something about HSAs and independent children that I did not know
Replies: 36
Views: 3552

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

This discussion makes me think we should encourage him to use some of the gift to fully fund his own HSA for 2020. If he does so, he can cut $7100 off his taxable 2020 income, correct? It also means he can use the card that comes with his HSA to pay his medical expenses if he doesn't want to cashfl...
by Spirit Rider
Tue Nov 19, 2019 11:48 am
Forum: Personal Consumer Issues
Topic: Over the stove microwave lights burning out; replace with LEDs?
Replies: 7
Views: 353

Re: Over the stove microwave lights burning out; replace with LEDs?

LED bulbs are susceptible heat. There is electrical circuitry embedded within the base of the bulbs. I don't know if there are versions that will work in an environment such as yours.
by Spirit Rider
Tue Nov 19, 2019 10:24 am
Forum: Personal Investments
Topic: Confused about Rolled over IRA vs Traditional IRA
Replies: 14
Views: 652

Re: Confused about Rolled over IRA vs Traditional IRA

makes no difference i've rolled over a 401k to a traditional ira and then rolled it back over to a 401k and then rolled it back over again from a 401k into another traditional ira. It made no difference to you in a specific instance or instances. The IRS issued guidance several years ago that allow...
by Spirit Rider
Mon Nov 18, 2019 10:14 pm
Forum: Personal Finance (Not Investing)
Topic: Moonlighting - get paid as 1099 vs single member LLC?
Replies: 21
Views: 1425

Re: Moonlighting - get paid as 1099 vs single member LLC?

I am one of the posters setting up a custom solo 401k for mega backdoor Roth with Employee Fiduciary. I suggest contacting them as soon as you can if you want to get this set up by 12/31/19. They have been very responsive to me, but it will take at least a few weeks to get the paperwork filled out ...
by Spirit Rider
Mon Nov 18, 2019 7:03 pm
Forum: Personal Investments
Topic: Do Inherited IRA's Preclude Backdoor Roth?
Replies: 9
Views: 559

Re: Do Inherited IRA's Preclude Backdoor Roth?

So my piggy-back question on the above is this... Can you roll a deceased spouse's IRA (inherited) into your own, AND then roll it into your own 401k/403b (if the plan allows) to clear space for a backdoor? Once spousal ownership is assumed from an inherited retirement account or the assets are rol...
by Spirit Rider
Mon Nov 18, 2019 6:53 pm
Forum: Personal Investments
Topic: Do Inherited IRA's Preclude Backdoor Roth?
Replies: 9
Views: 559

Re: Do Inherited IRA's Preclude Backdoor Roth?

Two spouses have separate pre-tax IRA balances and non-deductible basis to be reported on Form 8606 if necessary. Inherited IRAs from the same decedent with the same divisor have their own pre-tax IRA balances and non-deductible basis to be reported on Form 8606 if necessary. Just like a spouse's IR...
by Spirit Rider
Mon Nov 18, 2019 6:27 pm
Forum: Personal Finance (Not Investing)
Topic: 401k Catch Up Contributions
Replies: 16
Views: 1314

Re: 401k Catch Up Contributions

Great to hear.
by Spirit Rider
Mon Nov 18, 2019 6:24 pm
Forum: Personal Finance (Not Investing)
Topic: Just learned something about HSAs and independent children that I did not know
Replies: 36
Views: 3552

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

No. The IRS follows state law on the establishment date of a trust. Under almost all state laws, a trust is not considered established until it is funded. An HSA account is a trust account like an IRA, 401k, etc... IRS rules do not allow tax-free disbursements for medical services/products prior to ...
by Spirit Rider
Mon Nov 18, 2019 11:30 am
Forum: Personal Investments
Topic: solo 401k to IRA direct rollover; need to report to IRS?
Replies: 10
Views: 458

Re: solo 401k to IRA direct rollover; need to report to IRS?

Thank you Spirit Rider. Great points. Looks like key is plan must allow in-service withdrawal. VG form said check section 5 of your 401k plan documentation. Which was VG document used while staring the plan. There is nothing specifically mentioned explicitly to allow or not allow in-service withdra...
by Spirit Rider
Mon Nov 18, 2019 8:35 am
Forum: Personal Investments
Topic: Why do you have to "beat the market"?
Replies: 93
Views: 5568

Re: Why do you have to "beat the market"?

Getting back on topic the two of you have made the most specious and flawed argument in the entire thread for "trying" to beat the market. Someone who already has a narrow window to meet their retirement goals. Are the very people who absolutely should not take excessive risks to try and boost retu...
by Spirit Rider
Sun Nov 17, 2019 10:57 pm
Forum: Personal Investments
Topic: solo 401k to IRA direct rollover; need to report to IRS?
Replies: 10
Views: 458

Re: solo 401k to IRA direct rollover; need to report to IRS?

A rollover of a pre-tax 401k account to a traditional IRA is a non-taxable event, but Vanguard will report it on a 1099-R. The taxpayer has to report the amount of the rollover on their Form 1040, but none of it as taxable. As pointed out by @homestretch you can not just do in-service rollovers of c...
by Spirit Rider
Sun Nov 17, 2019 10:12 pm
Forum: Personal Investments
Topic: Why do you have to "beat the market"?
Replies: 93
Views: 5568

Re: Why do you have to "beat the market"?

If you're a normal American making 50-60k a year, accepting average returns means you have to spend your entire life putting away a large portion of your salary AND wait 30-50 years until you can retire comfortably. If you could juice those returns, you could save less and retire much earlier--dras...
by Spirit Rider
Sun Nov 17, 2019 6:46 pm
Forum: Personal Investments
Topic: Wife is LLC | Health Ins for her on my plan or her solo for write off?
Replies: 6
Views: 401

Re: Wife is LLC | Health Ins for her on my plan or her solo for write off?

The self-employed health insurance deduction is only available for individuals not eligible for coverage under their or a spouse's employer group health insurance plan. Since your spouse can be covered under your plan. She can not take the self-employed health insurance deduction for her own health ...
by Spirit Rider
Sun Nov 17, 2019 4:40 pm
Forum: Personal Finance (Not Investing)
Topic: Earned income as defined for Roth IRA and Self-Employment income
Replies: 5
Views: 335

Re: Earned income as defined for Roth IRA and Self-Employment income

As @retiredjg is wont to point out, it is compensation and not earned income that is the basis for IRA contributions. Compensation is always earned income, but earned income is not always compensation. Note: Not that it helps you much because of how little self-employed earned income you have. Howev...
by Spirit Rider
Sun Nov 17, 2019 11:50 am
Forum: Personal Investments
Topic: Withdrawing 529 $ without penalty [what counts as a "scholarship"]
Replies: 12
Views: 1608

Re: Withdrawing 529 $ without penalty [what counts as a "scholarship"]

Let's say I wanted to fund some college related expenses that are non-qualified (e.g. transportation). Let's further say that our daughter received a scholarship of $2100. I then transferred $2100 of the 529 to her name. She then uses the $2100 for non-qualified expenses, but would not be subject t...
by Spirit Rider
Sun Nov 17, 2019 9:44 am
Forum: Personal Investments
Topic: Why do you have to "beat the market"?
Replies: 93
Views: 5568

Re: Why do you have to "beat the market"?

If everyone you know earns 10% on avg and you earn 7% over your life, you will have less savings than others. And you don’t think this will impact your future auto or home purchases ? CPI is one measure of inflation, not the only. Anyone who went to all TIPS/I bond porfolio last 10 years may have e...
by Spirit Rider
Sun Nov 17, 2019 9:24 am
Forum: Personal Finance (Not Investing)
Topic: Moonlighting - get paid as 1099 vs single member LLC?
Replies: 21
Views: 1425

Re: Moonlighting - get paid as 1099 vs single member LLC?

He offered to pay me as a 1099 contractor... That's nice, but your old contact apparently does not know that he doesn't get to decide if you're an employee or a contractor. Government decides... While this often stated and true in a literal sense. It is not the end of the story in and of itself. Th...
by Spirit Rider
Sun Nov 17, 2019 3:16 am
Forum: Personal Investments
Topic: Why do you have to "beat the market"?
Replies: 93
Views: 5568

Re: Why do you have to "beat the market"?

Because people operate under the illusion they must be "better than average" to be successful in "all things" not just investing. When the persistent reality is that those "seeking alpa" are far more likely to underperform the market long term. The fundamental philosophy of Bogleheads is that a dive...
by Spirit Rider
Sun Nov 17, 2019 12:40 am
Forum: Personal Finance (Not Investing)
Topic: Allowable HSA Contribution With Only 10 Months HDHP Coverage
Replies: 6
Views: 433

Re: Allowable HSA Contribution With Only 10 Months HDHP Coverage

The OP has until their tax filing deadline (4/15/2020) including extensions (10/15/2020) to remove the 2019 excess contributions and earnings. However, the sooner the better. It will likely reduce earnings. If they fail to do so, there is a six (6) percent excise tax due with their tax return. This ...
by Spirit Rider
Sat Nov 16, 2019 9:09 pm
Forum: Personal Investments
Topic: Paid in VISA gift card - contribute to ROTH?
Replies: 9
Views: 678

Re: Paid in VISA gift card - contribute to ROTH?

Why do people keep referring to "earned income" when the IRS only looks at "compensation"? Publication 590 does not talk about earned income (other than foreign earned income). It talks about compensation. I don't know if this makes a difference in the answer to the question, but this could be an i...
by Spirit Rider
Sat Nov 16, 2019 1:23 pm
Forum: Personal Finance (Not Investing)
Topic: Moonlighting - get paid as 1099 vs single member LLC?
Replies: 21
Views: 1425

Re: Moonlighting - get paid as 1099 vs single member LLC?

But it got me started, and that income grew every year. S-Corp proved beneficial, as I could later decide how much to pay myself in salary (yes, double FICA taxes), and how much to take in distribution. That, in turn, allowed me to contribute 20% of profits into SEP IRA. Later, I established i401k ...
by Spirit Rider
Sat Nov 16, 2019 10:28 am
Forum: Personal Finance (Not Investing)
Topic: Moonlighting - get paid as 1099 vs single member LLC?
Replies: 21
Views: 1425

Re: Moonlighting - get paid as 1099 vs single member LLC?

I'm sure people will find this post a little strange coming from me as I provide a very strong caution on going it alone with these plans. OP, there is an option for you to contribute your entire self-employed earned income (business profit - 1/2 SE tax). This is to use a custom one-participant 401k...
by Spirit Rider
Fri Nov 15, 2019 7:53 pm
Forum: Personal Finance (Not Investing)
Topic: Moonlighting - get paid as 1099 vs single member LLC?
Replies: 21
Views: 1425

Re: Moonlighting - get paid as 1099 vs single member LLC?

Yeah You'll be taxed the same, unless you pick S corp taxation for the llc which allows distribution income as you suggest. But 24k a year is not even close to what someone should be making for them to switch over to s corp where you can do distribution income. You need to have at least 100k in dis...
by Spirit Rider
Fri Nov 15, 2019 7:38 pm
Forum: Personal Finance (Not Investing)
Topic: Moonlighting - get paid as 1099 vs single member LLC?
Replies: 21
Views: 1425

Re: Moonlighting - get paid as 1099 vs single member LLC?

This is a common misconception. A single member LLC provides little to no liability protection for the personal acts of the owner. Providing software development services for a client is the very definition of personal acts not covered by the liability protections of an LLC. You have the same liabil...
by Spirit Rider
Fri Nov 15, 2019 7:22 pm
Forum: Personal Investments
Topic: Solo 401K post ownership change...
Replies: 3
Views: 223

Re: Solo 401K post ownership change...

The problem is that you had a control group until you sold the LLC. All of the profits from the LLC that pass thru to your S-Corp and the resulting compensation can not be the basis for adopting a one-participant 401k. If the S-Corp owned the interest in the LLC, your CPA should definitely be able t...
by Spirit Rider
Fri Nov 15, 2019 6:04 pm
Forum: Personal Investments
Topic: Rollover from Fidelity to less preferable 401K plan to make back-door?
Replies: 5
Views: 361

Re: Rollover from Fidelity to less preferable 401K plan to make back-door?

I see from another post you are 49 and retiring in 5 years, so I would say it is not worthwhile. You might check out POF posts on the value of the backdoor Roth. https://www.physicianonfire.com/?s=Value+back+door This advice is seriously misguided and does not reflect that there are far more benefi...
by Spirit Rider
Fri Nov 15, 2019 12:04 pm
Forum: Personal Finance (Not Investing)
Topic: When do I apply for Medicare?
Replies: 4
Views: 346

Re: When do I apply for Medicare?

If your employer insurance is primary (> 20 employees), you could have Parts A, B and D and any Medicare Supplement plan to start on 3/1. You could apply for Parts A and B anytime after 12/1. If you have any kind of reasonable employer health insurance plan, Medicare Part A as secondary will not be ...
by Spirit Rider
Fri Nov 15, 2019 11:41 am
Forum: Personal Investments
Topic: Can a business have two separate Solo401k accounts?
Replies: 4
Views: 166

Re: Can a business have two separate Solo401k accounts?

Interesting, how does one open a new solo401k account with a different firm and roll-over the previous solo401k into the new solo401k if you can't have two open at the same time? It is important to understand that a one-participant 401k plan is first and foremost a 401k plan . It is not bigger IRA-...
by Spirit Rider
Fri Nov 15, 2019 11:30 am
Forum: Personal Investments
Topic: Advice on Re-characterization of Traditional IRAs and Solo 401(k) to Roth?
Replies: 9
Views: 196

Re: Advice on Re-characterization of Traditional IRAs and Solo 401(k) to Roth?

All of the above information is accurate. But, in general, it describes a method to get the non deductible contributions to a Roth without incurring any tax liability. OP stated an interest in converting because it was a low income year. My plan fully supported doing a Roth conversion of as much pr...
by Spirit Rider
Fri Nov 15, 2019 11:24 am
Forum: Personal Investments
Topic: Can a business have two separate Solo401k accounts?
Replies: 4
Views: 166

Re: Can a business have two separate Solo401k accounts?

No. A single business can not have more than one 401k plan covering the same employees. Even if you had multiple businesses, the adoption agreements from E-Trade, Schwab, TD Ameritrade and Vanguard explicitly includes all controlled and affiliated service groups. Fidelity requires the affiliated emp...
by Spirit Rider
Fri Nov 15, 2019 11:15 am
Forum: Personal Investments
Topic: Advice on Re-characterization of Traditional IRAs and Solo 401(k) to Roth?
Replies: 9
Views: 196

Re: Advice on Re-characterization of Traditional IRAs and Solo 401(k) to Roth?

You should change the post title. None of what you are talking about are recharacterizations. That refers to changing current tax year traditional or Roth IRA contributions to Roth or traditional IRA contributions respectively. There are no non-deductible IRAs. There are only pre-tax balances and no...
by Spirit Rider
Thu Nov 14, 2019 9:39 pm
Forum: Personal Investments
Topic: Investment Allocation & Solo 401 or SEP?
Replies: 1
Views: 145

Re: Investment Allocation & Solo 401 or SEP?

2. We are self employed with an S-Corp LLC and we will have about 20k in profit from the company and we were thinking that maybe we could use the profit to invest in our retirement account and remove the 20k of profit hence lowering our taxes. We want to know if it is best to do a SEP IRA or a Solo...
by Spirit Rider
Thu Nov 14, 2019 4:14 pm
Forum: Personal Finance (Not Investing)
Topic: 401k Catch Up Contributions
Replies: 16
Views: 1314

Re: 401k Catch Up Contributions

While this may be a "blunder", the plan document might still be written so that the OP cannot contribute his full catch-up contribution. It all depends on how it's written in the document. A 401k plan may but is not required to support catch up contributions. Unless the OP was unaware or left out t...
by Spirit Rider
Wed Nov 13, 2019 9:20 pm
Forum: Personal Investments
Topic: Bank set account up as UTMA instead of savings
Replies: 1
Views: 187

Re: Bank set account up as UTMA instead of savings

Minors can not own financial accounts, including savings accounts. They must be opened as custodial accounts. These are UTMA accounts in all states but SC. Which still uses the legacy UGMA accounts. Just like an adult can open a savings, brokerage, IRA, etc... account. A UTMA savings, brokerage, IRA...
by Spirit Rider
Wed Nov 13, 2019 8:01 pm
Forum: Personal Investments
Topic: Inherited 403(b) question
Replies: 5
Views: 298

Re: Inherited 403(b) question

The Fidelity 403b has institutional funds with better ERs than you would have in a retail IRA account. If there is a compelling reason to move the 403b account right now, that’s fine but if not then leaving it in the 403b is fine too. That was once true, but last November Fidelity eliminated invest...
by Spirit Rider
Wed Nov 13, 2019 6:23 pm
Forum: Personal Investments
Topic: Inherited 403(b) question
Replies: 5
Views: 298

Re: Inherited 403(b) question

If you are going to rollover this account to an inherited IRA. It must be by direct rollover. Any distribution by a non-spouse beneficiary is irrevocable. You would have to take the year's RMD before the rollover. You would continue the RMDs the following year in the inherited IRA. The primary reaso...
by Spirit Rider
Wed Nov 13, 2019 4:23 pm
Forum: Personal Finance (Not Investing)
Topic: Mysolo401k.com vs Vanguard solo 401k at higher income levels
Replies: 4
Views: 237

Re: Mysolo401k.com vs Vanguard solo 401k at higher income levels

If you do decide to move from mysolo401k to a different provider. Keep in mind a one-participant 401k is not an account, it is a plan. You can not just open another one-participant 401k at a different provider. You must amend the plan to the new provider.
by Spirit Rider
Wed Nov 13, 2019 2:31 pm
Forum: Personal Finance (Not Investing)
Topic: Grandparents helping with college
Replies: 24
Views: 1862

Re: Grandparents helping with college

Write a check as a gift to your grandchild’s parent(s). If the parents turn around and use that money to pay for the grandchild's college expenses. There is well established and extensive precedence that this is considered gift tax fraud. The presumption is that this was never a completed gift to t...
by Spirit Rider
Wed Nov 13, 2019 12:35 pm
Forum: Personal Finance (Not Investing)
Topic: Medicare [Can I contribute to a Health Savings Account?]
Replies: 38
Views: 3721

Re: Medicare [Can I contribute to a Health Savings Account?]

They have her included on my HSA. She has never had her own HSA. When I log on it shows as 8000.00 for my 2019 limit which I have met. She has been on my HDHP plan all along. I'll get it figured out this coming year. Thanks for replying. You are still not understanding. A spouse is never included i...
by Spirit Rider
Wed Nov 13, 2019 10:50 am
Forum: Personal Finance (Not Investing)
Topic: Intra Family Loan tax consequences
Replies: 5
Views: 401

Re: Intra Family Loan tax consequences

The applicable federal rate (AFR) for >= 3 year -> < 9 years is 1.20% for November 2019. Anything >= this rate is fine.
by Spirit Rider
Wed Nov 13, 2019 10:17 am
Forum: Personal Finance (Not Investing)
Topic: HSA questions
Replies: 9
Views: 699

Re: HSA questions

Many employers pass on most of not all of the cost savings of an HDHP with lower employee share of the premiums and/or employer HSA contributions.
by Spirit Rider
Wed Nov 13, 2019 10:11 am
Forum: Personal Investments
Topic: IRA to 401K Roll In Rules, 60 Days, Vanguard Screw Ups
Replies: 12
Views: 478

Re: IRA to 401K Roll In Rules, 60 Days, Vanguard Screw Ups

Several points. Almost all rollovers between institutions are by check. You should be doing a direct rollover? Are you? There is no 60 day limit on direct rollovers. The fact that they mail you a check does not make it an indirect rollover unless it is made out to you personally. Even if it were to ...
by Spirit Rider
Wed Nov 13, 2019 10:04 am
Forum: Personal Finance (Not Investing)
Topic: Timing on self-employment and income tax
Replies: 12
Views: 447

Re: Timing on self-employment and income tax

Like a sole proprietorship, a partnership does not pay taxes, it's owners do. The partnership tax return is for reporting the partnership income, deductions, gains, losses, etc... and distribution of the business profits to the partners. Partnership returns can range from very easy to exceedingly co...
by Spirit Rider
Wed Nov 13, 2019 9:56 am
Forum: Personal Finance (Not Investing)
Topic: How to Calculate Qualified Expense (for 529 Plan) for College Student Living at Home
Replies: 19
Views: 1335

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

A general tenent of tax enforcement is; "that which is not prohibited is allowed." The problem with section 529 is that there are no final regulations. Only the original 1998 "proposed" regulations and a 2007 superceding "advanced notice of proposed rule making." They are considered "substantial aut...
by Spirit Rider
Wed Nov 13, 2019 9:07 am
Forum: Personal Finance (Not Investing)
Topic: Timing on self-employment and income tax
Replies: 12
Views: 447

Re: Timing on self-employment and income tax

I am not a lawyer or a tax expert... but I’m interested to know how can you have self-employment with a partner? I too am not a lawyer or tax expert, but pretty sure you'd just have a LLC with multiple partners That is how partnerships are treated by the IRS. All materially participating partner's ...