Search found 7946 matches

by Spirit Rider
Sun Jun 17, 2018 10:56 pm
Forum: Personal Finance (Not Investing)
Topic: maximzing HSA contributions when changing jobs
Replies: 5
Views: 288

Re: maximzing HSA contributions when changing jobs

Why are we even talking about the last month rule. The OP has an HDHP/HSA through 6/30 and then plans on one 7/1 - 12/31. There is absolutely no need for the last month rule, he will be HSA eligible for the entire year. If they don't have an HDHP/HSA for the rest of the year, they are not eligible f...
by Spirit Rider
Sun Jun 17, 2018 8:53 pm
Forum: Investing - Theory, News & General
Topic: I-bonds look pretty bad right now
Replies: 13
Views: 1235

Re: I-bonds look pretty bad right now

So what is your alternative? Nominal Treasuries, real estate, stocks, private equity, gold, bitcoin, CDs, fallen angels, and Icelandic savings accounts are just a few of the alternatives available. With the exception of T-bills/CDs <= 1yr: none of those are cash equivalent, principal protected, inf...
by Spirit Rider
Sat Jun 16, 2018 10:49 am
Forum: Investing - Theory, News & General
Topic: Will rising inflation increase 401K and Roth contribution limits for 2019?
Replies: 8
Views: 842

Re: Will rising inflation increase 401K and Roth contribution limits for 2019?

The data will be available in September, and the IRS will announce the limits for 2019 in October. Yes....If I am doing the math right, the current calculation using CPI laid out in Internal Revenue Code section 219(b)(5)(C) yields a calculation of 5,900+, which I believe means the limit will go fr...
by Spirit Rider
Sat Jun 16, 2018 10:43 am
Forum: Personal Finance (Not Investing)
Topic: Mega Backdoor Roth conditions
Replies: 8
Views: 694

Re: Mega Backdoor Roth conditions

1. Do I have to actually max out the after-tax contributions to the 401(k) before I can convert it to a mega backdoor Roth? The way I read it, it's either maxed out or I can't do it at all? No, you don't have to max out after-ax contribution. Just make sure your ALL 401k contributions (pre-tax 401k...
by Spirit Rider
Sat Jun 16, 2018 9:55 am
Forum: Investing - Help with Personal Investments
Topic: Mega Backdoor Roth Question
Replies: 5
Views: 438

Re: Mega Backdoor Roth Question

You have to rollover both the after-tax contributions and any pre-tax earnings. You can either rollover both in a single check containing both after-tax and pre-tax amounts or one after-tax check and one pre-tax check. In either case the check containing after-tax assets should be directly rolled ov...
by Spirit Rider
Sat Jun 16, 2018 9:20 am
Forum: Investing - Theory, News & General
Topic: Will rising inflation increase 401K and Roth contribution limits for 2019?
Replies: 8
Views: 842

Re: Will rising inflation increase 401K and Roth contribution limits for 2019?

Based on projections using the just released May CPI. The 402g limit is barely above $19K. It is unlikely inflation will lower, so it is reasonable, but not certain it will increase to $19K. The catch-up isn't even close to $6500, so unless we become more like Venezuela it is unlikely to increase fr...
by Spirit Rider
Fri Jun 15, 2018 8:25 pm
Forum: Personal Finance (Not Investing)
Topic: Mega Backdoor Roth conditions
Replies: 8
Views: 694

Re: Mega Backdoor Roth conditions

1. Do I have to actually max out the after-tax contributions to the 401(k) before I can convert it to a mega backdoor Roth? The way I read it, it's either maxed out or I can't do it at all? No. You can contribute as little or as much as you want to the after-tax employee contribution account. I sup...
by Spirit Rider
Fri Jun 15, 2018 5:58 pm
Forum: Investing - Help with Personal Investments
Topic: Self-employed -- employer contributions
Replies: 7
Views: 385

Re: Self-employed -- employer contributions

The calculated maximum employer contributions are 20% of net self-employment earnings (business profit (Form 1040 Line 12) - 1/2 SE tax (Form 1040 Line 27)). Business profit = business income - business expenses (Schedule C Line 31). The employer contribution is further limited to the lesser of the ...
by Spirit Rider
Fri Jun 15, 2018 5:08 pm
Forum: Personal Finance (Not Investing)
Topic: Rule of 55 is it official?
Replies: 50
Views: 8605

Re: Rule of 55 is it official?

I think it is important to keep in mind that there is really no "Rule of 55". It is an entirely made up term (like Backdoor Roth) You will not find such a term in the tax code or in any IRS regulation. It is simply one of the enumerated exceptions to the 10% early withdrawal penalty. Exceptions to T...
by Spirit Rider
Fri Jun 15, 2018 4:13 pm
Forum: Investing - Help with Personal Investments
Topic: One IRA contribution was non-deductible, but no records
Replies: 14
Views: 969

Re: One IRA contribution was non-deductible, but no records

Ok, so what is the necessary and sufficient condition that allows W-2 income to be deferred into a solo 401k? Is it that it be earned income? Or is it that it be self-employment income? It must be self-employment income. I have seen that the disability income is considered "earned" if it is before ...
by Spirit Rider
Fri Jun 15, 2018 10:44 am
Forum: Investing - Help with Personal Investments
Topic: One IRA contribution was non-deductible, but no records
Replies: 14
Views: 969

Re: One IRA contribution was non-deductible, but no records

It is only about $17K, but I can put 6500 into a new Roth IRA and the rest into a solo 401k (which I would have to create). I won't have any earned income in any future years most likely. This W-2 compensation that would allow you to make a S6500 contribution and a $6500 spousal IRA contribution if...
by Spirit Rider
Thu Jun 14, 2018 11:10 pm
Forum: Investing - Help with Personal Investments
Topic: Where to roll over Roth 401k to
Replies: 8
Views: 587

Re: Where to roll over Roth 401k to

Although, the IRS web page I linked above does give me some pause as they make it sound like I can't just pull out the post-tax balance and rollover to a Roth IRA. Notice 2014-54 doesn’t change the requirement that each plan distribution must include a proportional share of the pretax and after-tax...
by Spirit Rider
Thu Jun 14, 2018 8:20 pm
Forum: Investing - Help with Personal Investments
Topic: Where to roll over Roth 401k to
Replies: 8
Views: 587

Re: Where to roll over Roth 401k to

Traditional 401k account Employee 401k pre-tax: $16,500 Employee elective deferrals Employer match: $12,500 Employer match Special company contribution: $1,500 Could be PS contribution, QNEC or forfeitures Employee rollover: $20,000 Pre-tax rollover contributions from another 401k, 403b, 457b, trad...
by Spirit Rider
Thu Jun 14, 2018 7:06 pm
Forum: Personal Consumer Issues
Topic: cooling upstairs floor without central AC
Replies: 19
Views: 1216

Re: cooling upstairs floor without central AC

I think floor standing dehumidifiers might work.... it cools the air . Technically, they blow warm moist air across a cooled evaporator coil causing condensation. In fact this requires energy, so the net to the space is an increase in heat. However, when combined with air movement (floor or ceiling...
by Spirit Rider
Thu Jun 14, 2018 10:39 am
Forum: Personal Finance (Not Investing)
Topic: Timeshare ever worth it? Please share details
Replies: 92
Views: 7084

Re: Timeshare ever worth it? Please share details

8foot7 wrote:
Thu Jun 14, 2018 8:23 am
Wow. I would assume in the US an heir could simply disclaim the inheritance of that property. Is that not possible in the UK?
An individual heir can disclaim property, an estate can not. Unless the estate is already insolvent. The liabilities of the timeshare will still burden the estate.
by Spirit Rider
Thu Jun 14, 2018 9:40 am
Forum: Investing - Help with Personal Investments
Topic: New employer 401k roth
Replies: 7
Views: 259

Re: New employer 401k roth

As has been pointed out, there are two classes and three types of employee contributions: Elective Pre-tax deferrals Post-tax designated Roth Voluntary After-tax There is a single employee elective contribution limit (2018 = $18.5K) across all (401k, 403b, SIMPLE and SARSEP IRA) plans at all employe...
by Spirit Rider
Wed Jun 13, 2018 8:45 pm
Forum: Personal Finance (Not Investing)
Topic: recommendations for HELOC? does it matter to pick the cheapest rate?
Replies: 11
Views: 952

Re: recommendations for HELOC? does it matter to pick the cheapest rate?

Make sure you are comparing Apples to Apples when comparing rates. This will be the current benchmark rate (Prime, LIBOR, etc...) + the margin. There maybe temporary rates for the first six months/1 year, that it not what matters unless you are planning to pay it off quickly. Also, be aware that the...
by Spirit Rider
Wed Jun 13, 2018 8:32 pm
Forum: Personal Finance (Not Investing)
Topic: Profit Sharing S-Corp % for Spouse and Self
Replies: 1
Views: 161

Re: Profit Sharing S-Corp % for Spouse and Self

S-corp solo 401k. I max out the 403b on day job, wife is a SAHM helping me out in the business. Would the employER contributions be? Wife: 8,615.00 - 6,470.15 = 2,144.85 x .25 = $536.25 Self: 9,000.00 x.25 = $2,250 Now, since the rules state I must give the same profit sharing amount percentage to ...
by Spirit Rider
Tue Jun 12, 2018 3:29 pm
Forum: Investing - Help with Personal Investments
Topic: One IRA contribution was non-deductible, but no records
Replies: 14
Views: 969

Re: One IRA contribution was non-deductible, but no records

1. Re a possible 8606 from 1987, I have read that IRS does not keep tax returns from that far back, but what I don't know is if they carry forward each tax payer's 8606 non deductible IRA basis from each year to the next. Yup, forgot six years only. 2. I still don't know for sure if the Rollover IR...
by Spirit Rider
Tue Jun 12, 2018 1:38 pm
Forum: Investing - Help with Personal Investments
Topic: [Looking for ways to reduce taxes and keep more of my income]
Replies: 91
Views: 8441

Re: Getting killed on taxes - any ideas?

My question is - any advice on how to minimize our current tax burden? If we are able to earn some side income, at what point does it make sense to open a solo 401k or something similar? If I made $10K a year doing that, am I able to put all of that away pre-tax? Not if you are the one making the $...
by Spirit Rider
Tue Jun 12, 2018 1:18 pm
Forum: Personal Finance (Not Investing)
Topic: Mega backdoor Roth & self directed solo 401k
Replies: 27
Views: 1582

Re: Mega backdoor Roth & self directed solo 401k

I'm confused. I thought an SE is prevented from using all of his SE compensation as an employee elective deferral (even if other funds were available to do so), because the max contribution is reduced by half of SE tax. Form 1040 Line 12 is the business profit (loss) from Schedule C. It is not comp...
by Spirit Rider
Tue Jun 12, 2018 7:55 am
Forum: Personal Finance (Not Investing)
Topic: Recommendation for High Deductible Health Care Plan - Ages 61/56
Replies: 17
Views: 1190

Re: Recommendation for High Deductible Health Care Plan - Ages 61/56

They are wrong about #3. You can buy full one year plans that must meet the ACA minimal essential requirements off the marketplace. The majority of these plans are in fact, no different than the plans available on the marketplace. In order to receive a subsidy, you must use the marketplace or state ...
by Spirit Rider
Tue Jun 12, 2018 1:05 am
Forum: Personal Finance (Not Investing)
Topic: Mega backdoor Roth & self directed solo 401k
Replies: 27
Views: 1582

Re: Mega backdoor Roth & self directed solo 401k

The term after-tax is referring to compensation. A self-employed individual does not need to use compensation to pay either SE taxes or income taxes. They can use other money to pay for those. This allows a self-employed individual to use 100% of compensation for employee elective contributions and/...
by Spirit Rider
Mon Jun 11, 2018 10:47 pm
Forum: Investing - Help with Personal Investments
Topic: No Roth 401k - Workaround?
Replies: 9
Views: 755

Re: No Roth 401k - Workaround?

The IRS relevant regulation section/subsection is 26 CFR 1.401(k)-1 - Certain cash or deferred arrangements, (d) Distribution limitation. This regulation prohibits the non-hardship in-service withdrawal/rollover of employee elective contributions prior to age 59 1/2. So the bottom line answer for th...
by Spirit Rider
Mon Jun 11, 2018 12:44 pm
Forum: Investing - Help with Personal Investments
Topic: Moving Employer 401K to Vanguard- Questions on RMD Strategy
Replies: 6
Views: 390

Re: Moving Employer 401K to Vanguard- Questions on RMD Strategy

Just be aware that if you will be 70 1/2 in 2018. The IRS requires that the RMD be distributed before any rollover occurs. 401k plans have been known to screw this up. If you will be 70 1/2 in 2019 it is much better to do the rollover this year. Then the entire amount can be rolled over and the RMD ...
by Spirit Rider
Mon Jun 11, 2018 12:36 pm
Forum: Personal Finance (Not Investing)
Topic: Pre 65 Retirees - Healthcare
Replies: 21
Views: 1993

Re: Pre 65 Retirees - Healthcare

The trick is to plan in advance to keep your taxable income down. Hence the value of TLH and substantial capital loss Carryforward and Roth contributions even when in the same or slightly lower tax bracket in retirement. I'm saving > $1K/person/month in ACA premium subsidies and cost sharing reduct...
by Spirit Rider
Mon Jun 11, 2018 12:23 pm
Forum: Personal Consumer Issues
Topic: The effect of a difficult last name on employment prospects...
Replies: 43
Views: 3457

Re: The effect of a difficult last name on employment prospects...

First, I said “all other things being equal” meaning that the only change is the added ice cream. Any rational person would conclude the added ice cream is responsible for the weight gain. We either have a fundamental failure to communicate or you still don't get it. You have absolutely no idea tha...
by Spirit Rider
Mon Jun 11, 2018 12:05 pm
Forum: Investing - Help with Personal Investments
Topic: Newbie - i401k with Fidelity
Replies: 3
Views: 225

Re: Newbie - i401k with Fidelity

Starting new i401k with Fidelity after much research here. 51yo wife 48 would like to max it out for the next 15 years or so. Looks like... FSTVX 50% FTIPX 20% FSITX 30% Does this look acceptable? I've got some catching up to do. Why not FXAIX instead of FSTVX? S&P 500, 5 star Morningstar rating wi...
by Spirit Rider
Mon Jun 11, 2018 10:52 am
Forum: Personal Consumer Issues
Topic: The effect of a difficult last name on employment prospects...
Replies: 43
Views: 3457

Re: The effect of a difficult last name on employment prospects...

Except when it does. If I start eating a pint of ice cream a day and I gain 10 pounds in a month, is there a correlation and causation between the ice cream and the weight, all other things being equal? Nope, you still don't get the fundamental difference between correlation and causation. You are ...
by Spirit Rider
Mon Jun 11, 2018 10:41 am
Forum: Investing - Help with Personal Investments
Topic: One IRA contribution was non-deductible, but no records
Replies: 14
Views: 969

Re: One IRA contribution was non-deductible, but no records

You only file a form 8606 for any given year when it is required: You made nondeductible contributions to a traditional IRA in the current year. You took distributions from a traditional, SEP, or SIMPLE IRA in the current year and you made nondeductible contributions to a traditional IRA in the curr...
by Spirit Rider
Mon Jun 11, 2018 9:18 am
Forum: Personal Consumer Issues
Topic: The effect of a difficult last name on employment prospects...
Replies: 43
Views: 3457

Re: The effect of a difficult last name on employment prospects...

If people who know you are on the panel, it's not your name that's holding you back, IMO. My sentiments too. If you are being interviewed by folks you have worked with before and NOT gotten advanced then it is YOU and not your name. Always hard to hear, but true. This applies to both the OP and the...
by Spirit Rider
Mon Jun 11, 2018 7:59 am
Forum: Personal Finance (Not Investing)
Topic: ACA subsidies and single LLC
Replies: 14
Views: 1226

Re: ACA subsidies and single LLC

... My main point was that an LLC didn't really gain you anything. You can deduct the same exact business expenses as an LLC and as a sole proprietor (you file the exact same tax return). ... Electing to file as an S-Corp provides additional tax advantages. Making a subchapter S election may save y...
by Spirit Rider
Sun Jun 10, 2018 6:03 pm
Forum: Investing - Theory, News & General
Topic: Vanguard's own 401k plan eliminating S&P 500 Index option!
Replies: 86
Views: 7431

Re: Vanguard's own 401k plan eliminating S&P 500 Index option!

That narrowing gap since 2008 (between the grey and the green line) indicates that they have not been keeping up with inflation for the past 10 years. People need to stop using Treasury data starting with 2008. The '08 financial crisis and the subsequent some ten year period of Fed quantitative eas...
by Spirit Rider
Sun Jun 10, 2018 3:26 pm
Forum: Personal Consumer Issues
Topic: The effect of a difficult last name on employment prospects...
Replies: 43
Views: 3457

Re: The effect of a difficult last name on employment prospects...

If your family is the one who was encouraging you to change it, I would have done it. The only blow back I have seen for people with similar issues who changed their surnames was from their family (disrespecting elders/ancestors). However, this is best done sooner rather than later. At some point yo...
by Spirit Rider
Sun Jun 10, 2018 3:09 pm
Forum: Investing - Help with Personal Investments
Topic: Solo 401k - fidelity vs. vanguard
Replies: 20
Views: 1267

Re: Solo 401k - fidelity vs. vanguard

I don’t believe there is anyplace offering a free solo 401k allowing after tax (non Roth) contributions. For this I use mysolo401k.net, with pension-trust accounts held at Schwab. Many use non-prototype accounts at Fidelity for this structure. This costs a little bit of money to setup and maintain,...
by Spirit Rider
Sun Jun 10, 2018 2:56 pm
Forum: Investing - Help with Personal Investments
Topic: Solo 401k, other portfolio tweaks
Replies: 8
Views: 494

Re: Solo 401k, other portfolio tweaks

If they calculated to maximize the employer contribution instead of the employee max in the above scenario, it seems they could squeeze in an extra $138 in combined contributions (unless I made a math mistake). This is a very good catch, thinking outside the box. The calculation on the Deduction Wo...
by Spirit Rider
Sun Jun 10, 2018 12:05 pm
Forum: Investing - Theory, News & General
Topic: Vanguard's own 401k plan eliminating S&P 500 Index option!
Replies: 86
Views: 7431

Re: Vanguard's own 401k plan eliminating S&P 500 Index option!

Since the the rate on a 30 day t-bill "resets" every 30 days it keeps up with inflation. Unless you belive that the real rate on a t-bill is negative it will therefore keep up with inflation. The rate doesn't "reset". It goes out for competitive bid. The rate is purely set by supply and demand. 30-...
by Spirit Rider
Sun Jun 10, 2018 11:53 am
Forum: Investing - Help with Personal Investments
Topic: Solo 401k, other portfolio tweaks
Replies: 8
Views: 494

Re: Solo 401k, other portfolio tweaks

I have looked into the solo 401k and found that if used I should be able to contribute 18.5k as my wife's employee contribution. I can also contribute the employer portion for both my wife and myself which would be if using a hypothetical income of 40k 40,000 - 2.9% medicare tax (max social securit...
by Spirit Rider
Sun Jun 10, 2018 9:40 am
Forum: Investing - Help with Personal Investments
Topic: High expense ratios in Vanguard 401k
Replies: 16
Views: 1404

Re: High expense ratios in Vanguard 401k

Thanks Spirit Rider. Not knowing much about the 401k industry, I assumed my employer was dealing with Vanguard directly. But it sounds like they are likely using a third party administrator. I'm a little surprised that Vanguard thinks it is ok for third parties to sell overpriced funds in 401k plan...
by Spirit Rider
Sat Jun 09, 2018 7:30 pm
Forum: Investing - Help with Personal Investments
Topic: Solo 401k - fidelity vs. vanguard
Replies: 20
Views: 1267

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 allo...
by Spirit Rider
Sat Jun 09, 2018 7:13 pm
Forum: Investing - Help with Personal Investments
Topic: High expense ratios in Vanguard 401k
Replies: 16
Views: 1404

Re: High expense ratios in Vanguard 401k

This is an area of mystery to me as well. Vanguard's 401k offering American Funds and many Fidelity's 401k offering mostly Vanguard funds? How does this happen? I'm sure someone here knows. This is a common misconception that people have when they say; I have a "Vanguard" 401k plan or I have a "Fid...
by Spirit Rider
Sat Jun 09, 2018 1:19 pm
Forum: Investing - Help with Personal Investments
Topic: EE savings bonds to 529 for grandkids?
Replies: 22
Views: 992

Re: EE savings bonds to 529 for grandkids?

The qualified educational expense (including 529 plan contributions) must be of a dependent. Okay, so I’m not clear then on how the grandparent can use this for a 529 for the benefit of the child and get a tax benefit. The bottom line is that they can't use this tax-free for a 529 for the benefit o...
by Spirit Rider
Sat Jun 09, 2018 10:44 am
Forum: Investing - Help with Personal Investments
Topic: EE savings bonds to 529 for grandkids?
Replies: 22
Views: 992

Re: EE savings bonds to 529 for grandkids?

A couple of points on the U.S. Savings Bonds tax-free redemption for qualified educational expenses relevant to this thread. The qualified educational expense (including 529 plan contributions) must be of a dependent. Grandparents can not make a tax-free redemption for contributors to a grandchild's...
by Spirit Rider
Sat Jun 09, 2018 10:07 am
Forum: Investing - Help with Personal Investments
Topic: Individual Roth 401K For Young Adult Musician
Replies: 6
Views: 443

Re: Individual Roth 401K For Young Adult Musician

No there is no problem with the checks being to her personally. The IRS considers a self-employed individual and their business as one in the same. It is the Form 1040 Schedule C and goes with your personal tax return. One important thing I just thought of. Contributions to a one-participant 401k pl...
by Spirit Rider
Sat Jun 09, 2018 12:23 am
Forum: Investing - Help with Personal Investments
Topic: Individual Roth 401K For Young Adult Musician
Replies: 6
Views: 443

Re: Individual Roth 401K For Young Adult Musician

This sounds like a great and generous idea. The maximum Roth 401k contribution a self-employed individual can make to a one-participant 401k. Is up to 100% of their net self-employment earnings (business profit - 1/2 SE tax). Not to exceed the employee elective contribution limit (2018 = $18.5K). Sh...
by Spirit Rider
Fri Jun 08, 2018 6:16 pm
Forum: Investing - Help with Personal Investments
Topic: 401k plan: adding after tax contributions for Mega-backdoor Roth
Replies: 6
Views: 376

Re: 401k plan: adding after tax contributions for Mega-backdoor Roth

Some ways to increase non-HCE participation in after-tax contributions to help pass after-tax ACP testing or at least have a reasonable limit for HCEs: Allow the designation of contributions percentages by contribution type; pre-tax deferrals, post-tax designated Roth contributions and employee afte...
by Spirit Rider
Fri Jun 08, 2018 5:53 pm
Forum: Investing - Help with Personal Investments
Topic: Solo 401k, other portfolio tweaks
Replies: 8
Views: 494

Re: Solo 401k, other portfolio tweaks

Contrary to megabad's recommendation. I can think of no circumstance where a SEP IRA is more advantageous to you than a one-participant 401k. The employer contribution is exactly the same and allows your wife to make employee elective deferrals. You need all the tax deductions you can get. Also, the...
by Spirit Rider
Fri Jun 08, 2018 5:25 pm
Forum: Investing - Help with Personal Investments
Topic: Solo 401K Excess Employer Profit Sharing Contribution--Ugh
Replies: 19
Views: 1210

Re: Solo 401K Excess Employer Profit Sharing Contribution--Ugh

Excess employer contributions are not deductible. So yes, you will have to file an amended return for 2017 reducing your Form 1040 Line 28 deduction by the excess amount. For next year remember to contribute less than your maximum contribution amount by the excess carryover. You will then have to fi...