Search found 6811 matches

by Spirit Rider
Thu Jan 18, 2018 4:01 pm
Forum: Personal Finance (Not Investing)
Topic: Individual 529 vs Custodial (UTMA/UGMA) 529
Replies: 4
Views: 141

Re: Individual 529 vs Custodial (UTMA/UGMA) 529

A UTMA 529 is clearly considered a parental asset for FAFSA purposes. I do not remember where it was reported on the Profile. Your description indicates it should be listed as a student asset. Regardless, in no case is it not reported on one or the other. So your basic idea of getting more aid is no...
by Spirit Rider
Thu Jan 18, 2018 3:47 pm
Forum: Investing - Help with Personal Investments
Topic: Solo 401k options
Replies: 7
Views: 330

Re: Solo 401k options

Vanguard has two additional disadvantages: You can not purchase Admiral Share class funds in Vanguard's Individual 401k. This adds about 0.10% to the index fund expense ratios. Vanguard's Individual 401k does not allow employee eligibility restrictions. The IRS and the other one-participant 401k pla...
by Spirit Rider
Thu Jan 18, 2018 3:27 pm
Forum: Personal Consumer Issues
Topic: Premium gas at BJ's for Mercedes
Replies: 28
Views: 923

Re: Premium gas at BJ's for Mercedes

Yes, all the gas is the same in the sense it all comes from the same refinery and is delivered by the same tanker ship. The discount stores just buy it after it's been sitting in the distributor's tanks longer . How much longer I don't know. I'm just telling you what she said. She's their in-house ...
by Spirit Rider
Thu Jan 18, 2018 3:20 pm
Forum: Personal Finance (Not Investing)
Topic: SEP IRA and 401k (w2 and 1099) questions
Replies: 3
Views: 231

Re: SEP IRA and 401k (w2 and 1099) questions

Both 10509835 and krow36 are correct. You can only contribute 20% of your net self-employment earnings to a SEP IRA. Your net self-employment earnings = business profit - 1/2 SE tax. Business profit = 1099 income - legitimate business expenses. If you manually file your returns. Complete Schedule C ...
by Spirit Rider
Thu Jan 18, 2018 2:48 pm
Forum: Personal Finance (Not Investing)
Topic: Individual 529 vs Custodial (UTMA/UGMA) 529
Replies: 4
Views: 141

Re: Individual 529 vs Custodial (UTMA/UGMA) 529

You learned this from who? and on what financial aid forms? A UTMA 529 is also most definitely considered a parental asset for FSFSA purposes. I can't say for sure, but I have never run into a school even ones using the CSS profile treating a UTMA 529 as a student asset. I wonder is someone isn't co...
by Spirit Rider
Thu Jan 18, 2018 2:35 pm
Forum: Personal Consumer Issues
Topic: Premium gas at BJ's for Mercedes
Replies: 28
Views: 923

Re: Premium gas at BJ's for Mercedes

She said, for what it's worth, that the discount chains buy gas from them after it has been sitting in their holding tanks for a while. The longer it sits in those holding tanks before being transferred to a tanker truck for delivery, the more condensation occurs. That's why the distributor sells i...
by Spirit Rider
Thu Jan 18, 2018 9:53 am
Forum: Personal Consumer Issues
Topic: Premium gas at BJ's for Mercedes
Replies: 28
Views: 923

Re: Premium gas at BJ's for Mercedes

I seriously doubt that BJ's has higher percentages of water unless there has been specific problems at that specific BJ's. Sounds more like FUD to me. However, it is likely that Mercedes recommends the use of top tier gasoline. Top tier gasoline has better detergent and additive packages. Engine tea...
by Spirit Rider
Wed Jan 17, 2018 5:10 pm
Forum: Investing - Help with Personal Investments
Topic: Solo 401k options
Replies: 7
Views: 330

Re: Solo 401k options

It is relatively easy to amend a one-participant 401k plan to a new provider and then transfer the assets. Like most things with these plans it is a little more involved than an IRA trustee -> trustee transfer. However, it is not that difficult and I'm sure your providers will walk you through it.
by Spirit Rider
Tue Jan 16, 2018 11:37 am
Forum: Investing - Help with Personal Investments
Topic: 529 AND UTMA
Replies: 29
Views: 1349

Re: 529 AND UTMA

I realize it is water under the bridge, but the purpose of this forum is to inform others as well. Not to quibble, but the valid UTMA distribution determination is not essential vs non-essential, but rather parental support obligation or not. While braces may be somewhat optional, but they are not j...
by Spirit Rider
Tue Jan 16, 2018 11:19 am
Forum: Investing - Help with Personal Investments
Topic: tIRA contribution sources
Replies: 2
Views: 221

Re: tIRA contribution sources

First, to make an IRA contribution you must have compensation. Typically, this is Form W-2 box 1 Wages, less Box 11 non-qualified plans and/or self-employment income. However, foreign compensation in excess of the foreign earned income/housing exclusions does apply. The traditional IRA deduction in...
by Spirit Rider
Mon Jan 15, 2018 4:38 pm
Forum: Investing - Help with Personal Investments
Topic: 529 AND UTMA
Replies: 29
Views: 1349

Re: 529 AND UTMA

For UTMA, the first $2100 in income for 2018 is tax free. Maybe I can gift stock to the UTMA account and harvest gains to pay for non-essential child expenses. Seems more flexible than a 529 account which i can only use for school. With the new tax laws, the $2100 number could be higher. It is stil...
by Spirit Rider
Mon Jan 15, 2018 4:28 pm
Forum: Personal Finance (Not Investing)
Topic: Stats on When People Take Social Security
Replies: 133
Views: 7927

Re: Stats on When People Take Social Security

Unfortunately, I have seen many people take SS at 62 just because they could. Many of them were still working and taking SS early allowed them to live even further beyond their means. Don't even get me started on one friend with < $100K in his 401k, took an in-service withdrawal as soon as he turned...
by Spirit Rider
Mon Jan 15, 2018 4:09 pm
Forum: Investing - Help with Personal Investments
Topic: $10K as a sole proprietor; how to invest?
Replies: 12
Views: 1054

Re: $10K as a sole proprietor; how to invest?

I have used TaxAct for many years, but couldn't tell you exactly without it in front of me. You will complete the income section including self-employment income. TaxAct will enter the necessary information in Schedules C and SE to calculate the maximum contribution. I think that will probably be u...
by Spirit Rider
Mon Jan 15, 2018 12:42 am
Forum: Personal Finance (Not Investing)
Topic: Very Small Companies and HCE Tests
Replies: 3
Views: 337

Re: Very Small Companies and HCE Tests

If all employees are > 5% owners or their spouses. As ERISA Stone pointed out there is no need to use a safe harbor 401k. You can simply open a "one-participant" 401k plan. The marketing terms (solo 401k, individual 401k, etc...) for these plans are also a misnomer. They are not just for a single pa...
by Spirit Rider
Sun Jan 14, 2018 1:18 am
Forum: Personal Finance (Not Investing)
Topic: Solo 401(k)-Contributing ALL net income?
Replies: 11
Views: 968

Re: Solo 401(k)-Contributing ALL net income?

If your employee deferral is pre-tax, then the amount not deferred is unlikely to trigger withholding. However, if the employee deferral is Roth then your entire compensation is taxable. Depending on the amount of the deferral, there quite likely to be withholding required. Also, state/local income ...
by Spirit Rider
Sat Jan 13, 2018 4:38 pm
Forum: Investing - Theory, News & General
Topic: Convert to Roth IRA (After-tax 401K ==> Roth 401K ==> Roth IRA)
Replies: 9
Views: 833

Re: Convert to Roth IRA (After-tax 401K ==> Roth 401K ==> Roth IRA)

If the plan and the rollover destination are the same custodian, often you can do in-kind rollovers is the fund is a retail fund. For example many people with Fidelity or Vanguard with both their 401k and IRAs can do this and even have the rollover happen electronically. It they are separate custodi...
by Spirit Rider
Sat Jan 13, 2018 4:31 pm
Forum: Investing - Help with Personal Investments
Topic: New 529 rules -- One state plan's response
Replies: 12
Views: 991

Re: New 529 rules -- One state plan's response

Had IC 21-9-2-19.5 copied and pasted the old definition rather than linking to it, things would have been quite different. Exactly. This is going to come down to how states worded their statutes and how many are going to revise them to include, exclude or let the chips fall as they may. Many intern...
by Spirit Rider
Sat Jan 13, 2018 4:18 pm
Forum: Personal Finance (Not Investing)
Topic: Solo 401(k)-Contributing ALL net income?
Replies: 11
Views: 968

Re: Solo 401(k)-Contributing ALL net income?

Let's take these is a different order. You absolutely can make an employee elective deferral in a one-participant 401k of up to 100% of compensation. This present no red flag to the IRS, because you are claiming the compensation, just deferring it. I and many others have done so. It is perfectly leg...
by Spirit Rider
Sat Jan 13, 2018 1:12 pm
Forum: Investing - Help with Personal Investments
Topic: Inherited retirement
Replies: 8
Views: 1527

Re: Inherited retirement

Do NOT rollover into your own IRA! Do NOT title the IRA in your own name! Title the receiving IRA properly! I understand the intent, but while the first action is an irrevocable error. A properly designated Inherited account that is incorrectly titled can be properly titled by corrective action lat...
by Spirit Rider
Sat Jan 13, 2018 1:00 pm
Forum: Personal Finance (Not Investing)
Topic: Mega Backdoor Roth: Conversion or Rollover?
Replies: 15
Views: 881

Re: Mega Backdoor Roth: Conversion or Rollover?

Since IRS Notice 2014-54 allowed split rollovers. There is never a good reason to do this by indirect rollover that would be subject to the 60 day rule.

Your should always do direct rollovers of after-tax contributions and earnings.
by Spirit Rider
Sat Jan 13, 2018 12:48 pm
Forum: Personal Finance (Not Investing)
Topic: COBRA alternative for 1 month? (it's $2,400 per month!)
Replies: 69
Views: 3288

Re: COBRA alternative for 1 month? (it's $2,400 per month!)

Even though I have great respect for dm200, I am going to have to be the Yin on this Yang. I feel as though their response on every COBRA thread represents a FUD campaign. There really are no practical risks to using COBRA for gap pending-coverage if you simply make the election and payments on time...
by Spirit Rider
Fri Jan 12, 2018 10:00 pm
Forum: Investing - Theory, News & General
Topic: Convert to Roth IRA (After-tax 401K ==> Roth 401K ==> Roth IRA)
Replies: 9
Views: 833

Re: Convert to Roth IRA (After-tax 401K ==> Roth 401K ==> Roth IRA)

RMDs are required for the year you turn 70 1/2. Just make sure you do the rollover in the year before the year you turn 70 1/2. Otherwise the RMD must occur before the rollover occurs.
by Spirit Rider
Fri Jan 12, 2018 7:47 pm
Forum: Personal Finance (Not Investing)
Topic: Mega Backdoor Roth: Conversion or Rollover?
Replies: 15
Views: 881

Re: Mega Backdoor Roth: Conversion or Rollover?

If you do a split rollover only, without doing a backdoor, do you have to report that on your tax return in the year that you do the split rollover? I do not think so because there is no taxable event but I am not sure. You report the sum of both rollovers on line 16a, write rollover next to b and ...
by Spirit Rider
Fri Jan 12, 2018 3:48 pm
Forum: Personal Finance (Not Investing)
Topic: "Medical payments" premium on Auto insurance, necessary if you have medical insurance?
Replies: 6
Views: 385

Re: "Medical payments" premium on Auto insurance, necessary if you have medical insurance?

Caution with making generalizations. This is subject to state law. One or the other (usually auto) is considered primary, but this is not universal. My state has a very specific insurance law that the policy holder may determine on an incident by incident and provider by provider basis which policy ...
by Spirit Rider
Fri Jan 12, 2018 3:33 pm
Forum: Personal Finance (Not Investing)
Topic: Pay off student loans after kid graduates?
Replies: 35
Views: 2145

Re: Pay off student loans after kid graduates?

One trick you might want to look into ASAP - Can you do a quick contribution into a 529, get a state deduction - and use that? I'm not sure that is possible or not, but something that might turn out to juice your own state tax load. I'm pretty sure you cannot use 529 money to pay off student loans....
by Spirit Rider
Fri Jan 12, 2018 3:11 pm
Forum: Personal Finance (Not Investing)
Topic: Mega Backdoor Roth: Conversion or Rollover?
Replies: 15
Views: 881

Re: Mega Backdoor Roth: Conversion or Rollover?

Yes, employee after-tax contribution earnings are subject to ordinary income tax. The best option to avoid this is a split rollover. After-tax contributions -> Roth IRA, earnings -> traditional IRA. Of course this doesn't work if you are also doing a backdoor Roth. If this is true you have two possi...
by Spirit Rider
Fri Jan 12, 2018 2:56 pm
Forum: Personal Finance (Not Investing)
Topic: Failure to Defer 401k Contributions
Replies: 6
Views: 429

Re: Failure to Defer 401k Contributions

t60 is correct. IRS regulations allow the employer reasonable administrative timelines. In fact a company is not required to allow a change in election more than once a year.

Lesson learned, move on.
by Spirit Rider
Fri Jan 12, 2018 2:49 pm
Forum: Investing - Help with Personal Investments
Topic: Contributed to Roth, meant to do IRA
Replies: 7
Views: 460

Re: Contributed to Roth, meant to do IRA

DarkHelmetII is correct. The tax reform only removed the ability to recharacterize Roth Conversions. You are still freely able to recharacterize between IRA types. If we are both wrong your custodian would not let you do it if it wasn't allowed. Why not call them.
by Spirit Rider
Fri Jan 12, 2018 2:24 pm
Forum: Investing - Help with Personal Investments
Topic: Any reason to use employer 401k vs. Individual 401k?
Replies: 5
Views: 414

Re: Any reason to use employer 401k vs. Individual 401k?

It depends on what you mean by front load. Unlike an IRA, you can not make lump sum contributions to a one-participant 401k until you have the compensation available. Employee elective deferrals can only be up to 100% of compensation not already received. If your tax status is that of an S-Corp, you...
by Spirit Rider
Fri Jan 12, 2018 1:45 pm
Forum: Investing - Help with Personal Investments
Topic: What to do when SEP IRA is only option?
Replies: 11
Views: 597

Re: What to do when SEP IRA is only option?

For the self-employed the 25% of compensation is calculated as 20% of net self-employment earnings = business profit - 1/2 SE tax.
by Spirit Rider
Fri Jan 12, 2018 10:44 am
Forum: Investing - Help with Personal Investments
Topic: What to do when SEP IRA is only option?
Replies: 11
Views: 597

Re: What to do when SEP IRA is only option?

The annual addition limit ($55K) is separate for each unrelated employer. Not that it matters in this case, but she could receive $55K from her employer and still contribute $55K to a one-participant 401k. It is only the deferral limit that is across all SARSEP IRA, SIMPLE IRA, 401k and 403b. Since ...
by Spirit Rider
Fri Jan 12, 2018 6:15 am
Forum: Investing - Help with Personal Investments
Topic: Early RMDs to Roth or Taxable?
Replies: 15
Views: 1083

Re: Early RMDs to Roth or Taxable?

celia wrote:
Fri Jan 12, 2018 6:01 am
spaddlewit wrote:
Thu Jan 11, 2018 9:57 pm
I chose 25k because 55k + 25k = 80k, and the upper limit of her current tax bracket will be 82.5k.
You can also add a standard deduction of 12k for a Single person and still be in the 22% bracket.
Also, the next bracket is only 24%, not enough difference to worry about.
by Spirit Rider
Fri Jan 12, 2018 6:11 am
Forum: Investing - Help with Personal Investments
Topic: What to do when SEP IRA is only option?
Replies: 11
Views: 597

Re: What to do when SEP IRA is only option?

Option 1 is certainly viable depending on when the employer's SEP IRA contribution is made and when the rollover occurs. What matters is that all pre-tax balances are $0 in all traditional, SEP and SIMPLE IRAs on 12/31 of the year any Roth conversion is done. Why should there be any fees for a SEP I...
by Spirit Rider
Fri Jan 12, 2018 5:38 am
Forum: Investing - Help with Personal Investments
Topic: Inherited retirement
Replies: 8
Views: 1527

Re: Inherited retirement

It is almost always better to elect lifetime distributions on an Inherited retirement account than it is to cash it out. If you prefer, it makes tax sense and you have other funds to pay the taxes. You should use one of the quirks mentioned by gsmith to rollover the inherited qualified plan to a Inh...
by Spirit Rider
Thu Jan 11, 2018 10:23 pm
Forum: Personal Finance (Not Investing)
Topic: Select account Preimeraccount not FDIC covered
Replies: 8
Views: 367

Re: Select account Preimeraccount not FDIC covered

My original reply was directly following these two posts. So clearly by context, I was referring to the credit union and not Select Account.
susa wrote:
Thu Jan 11, 2018 3:12 pm
Our HSA is with connexuscu.org, pays 2.00%
wow!howmuch? wrote:
Thu Jan 11, 2018 3:51 pm
FDIC coverage with that 2%??
by Spirit Rider
Thu Jan 11, 2018 8:36 pm
Forum: Personal Finance (Not Investing)
Topic: Select account Preimeraccount not FDIC covered
Replies: 8
Views: 367

Re: Select account Preimeraccount not FDIC covered

I could have worded that better. I checked their website before reporting that.

Instead of "It is a Credit Union so it is covered by NCUA which is just as good as FDIC."

I should have said; "It is a Credit Union covered by NCUA which is just as good as FDIC."
by Spirit Rider
Thu Jan 11, 2018 6:47 pm
Forum: Investing - Help with Personal Investments
Topic: Wisdom of funding children's roth IRAs for disabled sibling
Replies: 10
Views: 516

Re: Wisdom of funding children's roth IRAs for disabled sibling

I'm not sure how investing after-tax dollars and then using it to help your disabled brother pay his bills in the future constitutes a scheme. :confused Gifts to multiple people with the understanding that they should be re-gifted to a single person is a well defined form of gift tax evasion. This ...
by Spirit Rider
Thu Jan 11, 2018 6:08 pm
Forum: Personal Finance (Not Investing)
Topic: Select account Preimeraccount not FDIC covered
Replies: 8
Views: 367

Re: Select account Preimeraccount not FDIC covered

It is a Credit Union so it is covered by NCUA which is just as good as FDIC.
by Spirit Rider
Thu Jan 11, 2018 6:03 pm
Forum: Investing - Help with Personal Investments
Topic: Wisdom of funding children's roth IRAs for disabled sibling
Replies: 10
Views: 516

Re: Wisdom of funding children's roth IRAs for disabled sibling

You should at a minimum open a ABLE 529 account for the disabled sibling. Contributions from all sources/year can not exceed the gift tax annual exclusion amount currently $15K. As long as the account balance does not exceed $100K, it does not interfere with any means tested benefit programs. Distri...
by Spirit Rider
Thu Jan 11, 2018 5:10 pm
Forum: Investing - Help with Personal Investments
Topic: Question regarding investment options
Replies: 18
Views: 1117

Re: Question regarding investment options

I'll answer the Actual Contribution Percentage (ACP) testing issues and leave the Roth IRA ordering rules, qualification status and five (5) year rule to Alan S, if he responds. (there are a lot of moving parts there). Even if you have a safe harbor 401k plan. Employee after-tax contributions are su...
by Spirit Rider
Wed Jan 10, 2018 2:57 pm
Forum: Investing - Theory, News & General
Topic: Why are 401k ROTH rare?
Replies: 11
Views: 1205

Re: Why are 401k ROTH rare?

Notwithstanding the OP's anecdotal experiences with 401k plans, Roth Designated accounts are far from rare. There are surveys from this year that show > 50% of 401k plans with > 1,000 participants have Roth Designated accounts. They do tend to be less common in small and medium plans, but even there...
by Spirit Rider
Wed Jan 10, 2018 1:11 pm
Forum: Personal Consumer Issues
Topic: Cobra plans and insurance gap
Replies: 7
Views: 428

Re: Cobra plans and insurance gap

Yes, and that piece from the Chinese space station in a decaying orbit it what will do it. If you are really worried, Oh, I don't know... You could complete the Cobra paperwork, puting it in an envelope, dating it a couple of weeks before it is due and giving to a trusted source for mailing on the i...
by Spirit Rider
Wed Jan 10, 2018 12:54 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth strategy - your thoughts
Replies: 12
Views: 1198

Re: Backdoor Roth strategy - your thoughts

I'm not sure I understand your fixation on paying income taxes. You were at least in the 28% marginal federal income tax bracket and likely additional state income taxes. Yet you made all Roth 401k contributions. In 2018 and for the next decade at least, you will be solidly in the 24% bracket. A sli...
by Spirit Rider
Wed Jan 10, 2018 12:08 pm
Forum: Investing - Help with Personal Investments
Topic: Switching from SEP-IRA to Solo 401k
Replies: 5
Views: 296

Re: Switching from SEP-IRA to Solo 401k

One "gotcha" is not to contribute to both in the same year. If you're going with the solo 401k for 2018, do not contribute to the SEP. Maybe this is what you meant, but a small clarification. You can not make a contribution to a 5305-SEP IRA for the same tax year you have a one-participant 401k. Ho...
by Spirit Rider
Tue Jan 09, 2018 9:29 pm
Forum: Personal Finance (Not Investing)
Topic: Employer Restricting 401k Contribution
Replies: 3
Views: 418

Re: Employer Restricting 401k Contribution

It is not your employer who is restricting HCE contributions. They are following IRS anti-discrimination regulations as required. In addition to a safe harbor plan. A company can elect to treat the top 20% of employees by compensation as HCE instead of the statutory limit. This can limit the effect ...
by Spirit Rider
Tue Jan 09, 2018 9:20 pm
Forum: Personal Finance (Not Investing)
Topic: Can two businesses contribute to the same SEP IRA?
Replies: 2
Views: 148

Re: Can two businesses contribute to the same SEP IRA?

I would know the answer if this was a one-participant 401k plan. You could amend the plan to add the affiliated employer and use the same plan for both companies. I suggest you call Vanguard, but I think you might be able to use the Vanguard SEP–IRA Plan Authorization Form to add the additional affi...
by Spirit Rider
Tue Jan 09, 2018 7:52 pm
Forum: Investing - Help with Personal Investments
Topic: cash balance plan for retirement investment?
Replies: 2
Views: 370

Re: cash balance plan for retirement investment?

The article covers the basics. They are good additions to a one-participant 401k for high income middle aged small business owner(s) and optionally their spouse(s). They can be less useful for businesses with other eligible employees depending on the census. Pros: They allow you to defer more than j...
by Spirit Rider
Tue Jan 09, 2018 7:36 pm
Forum: Personal Consumer Issues
Topic: Noise in my attic
Replies: 307
Views: 77380

Re: Noise in my attic

fishandgolf: What you probably heard was the effect of temperature/humidity change and different contraction/expansion rates of disparate materials. In your case this is probably aggravated by the contraction/expansion rates of the logs differing from the other timber in your house construction. I c...
by Spirit Rider
Tue Jan 09, 2018 5:33 pm
Forum: Investing - Help with Personal Investments
Topic: 401k withdrawl question for a friend...
Replies: 8
Views: 554

Re: 401k withdrawl question for a friend...

I agree with Silk McCue, but a previous reply was not entirely correct. At 59 1/2 a hardship withdrawal would not be required if the 401k plan allowed in-service withdrawals. Almost all 401k plans allow in-service withdrawals >= 59 1/2. The withdrawal would be subject to ordinary income taxes their ...
by Spirit Rider
Tue Jan 09, 2018 4:51 pm
Forum: Personal Finance (Not Investing)
Topic: Coverdell really killed by TJCA?
Replies: 12
Views: 1304

Re: Coverdell really killed by TJCA?

You can only rollover five (5) years of the annual gift tax exclusion to any new next generation beneficiary every five years without using up some of the lifetime unified estate/gift tax exclusion. Then again with the tax reform doubling the lifetime exclusion to $11.2M, it kind of makes that large...