Search found 8559 matches

by Spirit Rider
Mon Sep 24, 2018 7:39 pm
Forum: Personal Finance (Not Investing)
Topic: Self Directed Solo 401k - any one doing it for investing here?
Replies: 3
Views: 298

Re: Self Directed Solo 401k - any one doing it for investing here?

If you do investing in property within a self directed solo 401k there are many rules regarding fixing up the property that can be easily overlooked. Breaking these rules can create significant problems. Is this heading in the direction that you can only spend money / assets from the 401K to fix up...
by Spirit Rider
Mon Sep 24, 2018 7:30 pm
Forum: Investing - Theory, News & General
Topic: Nitty Gritty of solo 401k
Replies: 7
Views: 574

Re: Nitty Gritty of solo 401k

I question the tax efficiency of setting this business up to be taxed as an S-Corp. You might save a little in FICA vs. SE taxes this year, but you may lose out on as much as $5K in a reduced Section 199A QBI 20% deduction. The FICA savings will be less next year but depending on the type of the bus...
by Spirit Rider
Mon Sep 24, 2018 2:00 pm
Forum: Personal Finance (Not Investing)
Topic: Is HELOC interest deductible in 2018?
Replies: 9
Views: 823

Re: Is HELOC interest deductible in 2018?

It also excludes amounts from cash-out refinancing not used to improve the property..
by Spirit Rider
Sun Sep 23, 2018 9:22 am
Forum: Investing - Help with Personal Investments
Topic: Does DBP 401 A mandatory contribution reduce AGI?
Replies: 1
Views: 134

Re: Does DBP 401 A mandatory contribution reduce AGI?

A 401a is actually a Defined Contribution Plan (DCP). Mandatory employee contributions are "picked up" by the employer as pre-tax salary reductions. As such they are not reflected in your; W-2 Box 1, AGI, all the various MAGIs and your taxable income. Also, the are not considered employee elective c...
by Spirit Rider
Sat Sep 22, 2018 5:12 pm
Forum: Personal Finance (Not Investing)
Topic: 2018 UTMA tax gain harvesting
Replies: 12
Views: 1105

Re: 2018 UTMA tax gain harvesting

Don't rely on websites. Go to the source read the 2018 draft IRS Form 8615 and Instructions.
by Spirit Rider
Sat Sep 22, 2018 5:08 pm
Forum: Investing - Help with Personal Investments
Topic: UTMA: Trying to Make it Hassle-Free
Replies: 9
Views: 1191

Re: UTMA: Trying to Make it Hassle-Free

There have been a large number of threads on this.

Yes, the trust tax rates only come into play when you have exceeded the current Form 8615 amount, 2018 = $2100.
by Spirit Rider
Sat Sep 22, 2018 5:00 pm
Forum: Investing - Help with Personal Investments
Topic: SIMPLE IRA salary reduction for wages earned prior to the plan effective date
Replies: 23
Views: 1043

Re: SIMPLE IRA salary reduction for wages earned prior to the plan effective date

I have explained this and explained this. There really isn't any more I can say.
by Spirit Rider
Sat Sep 22, 2018 4:52 pm
Forum: Investing - Help with Personal Investments
Topic: How to fund education for grandchildren: various strategies? Help?
Replies: 23
Views: 1253

Re: How to fund education for grandchildren: various strategies? Help?

If the parent's income/assets and student's income/assets will make them eligible for financial aid. The best option is to have 1/2 of 529 assets owned by a parent or the student and 1/2 of 529 assets owned by a grandparent. 529 plans owned by a parent or the student are considered as if they were p...
by Spirit Rider
Sat Sep 22, 2018 1:49 pm
Forum: Personal Finance (Not Investing)
Topic: ACA subsidy for >2% owner in Scorp
Replies: 16
Views: 973

Re: ACA subsidy for >2% owner in Scorp

You can't deduct the $2700 if a $6000 premium tax credit is taken on a $6000 premium, but you can if it is an $8700 premium.

I'm still thinking this is an entry problem.
by Spirit Rider
Sat Sep 22, 2018 1:43 pm
Forum: Investing - Help with Personal Investments
Topic: SIMPLE IRA salary reduction for wages earned prior to the plan effective date
Replies: 23
Views: 1043

Re: SIMPLE IRA salary reduction for wages earned prior to the plan effective date

These definitions are well established by the IRS and are not open to interpretation. As long as the election is made in sufficient time for the salary reduction to occur on the pay date. There is no problem with what the actual pay period is. As long as it is prior to or coincident with the pay dat...
by Spirit Rider
Sat Sep 22, 2018 1:16 pm
Forum: Personal Finance (Not Investing)
Topic: General 2018 Tax Question
Replies: 33
Views: 3546

Re: General 2018 Tax Question

Simple. They won't bother trying to prove it wasn't. The IRS expects you to keep records. They will assume none of it was used for house improvements if you don't have documentation. That's their fall-back position. It's treated exactly the same as cost basis for sales of capital assets/investments...
by Spirit Rider
Sat Sep 22, 2018 1:01 pm
Forum: Personal Consumer Issues
Topic: Another job interview ‘skip the tie’ question
Replies: 29
Views: 2005

Re: Another job interview ‘skip the tie’ question

The problem with some of these replies are that regardless of what the day-to-day dress code is in the office, that doesn't always apply to people being interviewed there. I work in IT at a major company, and most guys wear jeans, a sports polo or t-shirt, etc. -- all perfectly acceptable. But for ...
by Spirit Rider
Sat Sep 22, 2018 12:45 pm
Forum: Personal Finance (Not Investing)
Topic: ACA subsidy for >2% owner in Scorp
Replies: 16
Views: 973

Re: ACA subsidy for >2% owner in Scorp

Are you entering the numbers correctly?

With a $500/month subsidy and a net monthly premium of $225, your gross premium is $725/month. Respectively, these are $6,000, $2,700 and $8,700.

Tax Act should subtracting the $6,000 from the $8,700 leaving you with $2,700 to deduct
by Spirit Rider
Sat Sep 22, 2018 9:26 am
Forum: Investing - Help with Personal Investments
Topic: Too High Income for Roth - Lower AGI with LLC?
Replies: 2
Views: 277

Re: Too High Income for Roth - Lower AGI with LLC?

In order for a W-2 employee to make an employee deferral of $18,500. They would need a minimum wage of $20,032.50. The employee share of FICA must be deducted first. However, you can't just pay your spouse 100% of the profits as an employee. She has to be paid a Fair Market Value (FMV) wage for the ...
by Spirit Rider
Sat Sep 22, 2018 8:49 am
Forum: Personal Finance (Not Investing)
Topic: Estate Planning Attorney Says Putting tIRA in a Revocable Trust is "Complicated" - True?
Replies: 45
Views: 3005

Re: Estate Planning Attorney Says Putting tIRA in a Revocable Trust is "Complicated" - True?

Do a projection. Pick a percentage for each.

Then you can periodically adjust the percentages while you are alive.
by Spirit Rider
Sat Sep 22, 2018 8:45 am
Forum: Investing - Help with Personal Investments
Topic: Looking for a modest, steady, tax efficient ETF
Replies: 3
Views: 375

Re: Looking for a modest, steady, tax efficient ETF

Modest steady growth implies a lower asset allocation. This all but guarantees it will be tax inefficient.

You would be far better off. Treating your portfolio as a whole, putting the most tax efficient funds in taxable and adjusting the asset allocation of your retirement accounts.
by Spirit Rider
Sat Sep 22, 2018 8:37 am
Forum: Personal Consumer Issues
Topic: Another job interview ‘skip the tie’ question
Replies: 29
Views: 2005

Re: Another job interview ‘skip the tie’ question

I would definitely follow one of the above suggestions. A suit with no tie, looks like you are at happy hour. You don't dress-down a fashion ensemble, you dress-up. The former comes across as being awkward with the simple clothing request. The latter says you might fit it. He is interviewing for a m...
by Spirit Rider
Sat Sep 22, 2018 8:23 am
Forum: Personal Finance (Not Investing)
Topic: Estate Planning Attorney Says Putting tIRA in a Revocable Trust is "Complicated" - True?
Replies: 45
Views: 3005

Re: Estate Planning Attorney Says Putting tIRA in a Revocable Trust is "Complicated" - True?

So, the purpose of a trust for the IRAs is to support her during her life (and any children, spouses, if that situation changes), but donate the money to various charities upon her death. Is this too ambitious, impractical or unrealistic? With this last information we now know why the estate lawyer...
by Spirit Rider
Sat Sep 22, 2018 8:04 am
Forum: Personal Finance (Not Investing)
Topic: ACA subsidy for >2% owner in Scorp
Replies: 16
Views: 973

Re: ACA subsidy for >2% owner in Scorp

Where are you deducting the $2700 net Insurance premium? If you are deducting it on Schedule A, it does not reduce your AGI and ACA MAGI. You need to deduct it on Form 1040 Line 29. If you are. I have no explanation for the behavior you are describing. Do you have an HSA qualifying HDHP? If so, are ...
by Spirit Rider
Fri Sep 21, 2018 10:29 pm
Forum: Personal Finance (Not Investing)
Topic: ACA subsidy for >2% owner in Scorp
Replies: 16
Views: 973

Re: ACA subsidy for >2% owner in Scorp

The bottom line is that your deduction is the net premium = gross premium - premium tax credit. You should always do this with software if possible. So apparently, you must be below the ACA income limit BEFORE the health insurance premium deduction. That is not correct. You start the iterations with...
by Spirit Rider
Fri Sep 21, 2018 9:02 pm
Forum: Investing - Help with Personal Investments
Topic: SIMPLE IRA salary reduction for wages earned prior to the plan effective date
Replies: 23
Views: 1043

Re: SIMPLE IRA salary reduction for wages earned prior to the plan effective date

OK, Form 5305 says: * No salary reduction election may apply to compensation that an employee received, or had a right to immediately receive, before execution of the salary reduction election. https://www.irs.gov/pub/irs-pdf/f5305sim.pdf 
 I think that this means that a SIMPLE IRA contribution fro...
by Spirit Rider
Fri Sep 21, 2018 8:32 pm
Forum: Personal Finance (Not Investing)
Topic: ACA subsidy for >2% owner in Scorp
Replies: 16
Views: 973

Re: ACA subsidy for >2% owner in LLC

would like to know if deducting the $2,700 throws us off the cliff and we lose the entire $6k subsidy come tax time next year? I'm not sure what you are asking. The only thing that matters is your ACA MAGI. Adjustments to Income such as the Self-Employed Health Insurance Deduction. Reduce your AGI ...
by Spirit Rider
Fri Sep 21, 2018 8:16 pm
Forum: Personal Finance (Not Investing)
Topic: Estate Planning Attorney Says Putting tIRA in a Revocable Trust is "Complicated" - True?
Replies: 45
Views: 3005

Re: Estate Planning Attorney Says Putting tIRA in a Revocable Trust is "Complicated" - True?

I setup a see-through trust which allows IRA put into revocable trust. That preserves the IRA extension over the life time of the beneficiary. No, you did not "put" the IRA into a revocable trust. You named the trust a beneficiary of the IRA. The trust was properly constructed according to the IRS ...
by Spirit Rider
Fri Sep 21, 2018 5:23 pm
Forum: Personal Finance (Not Investing)
Topic: Converting solo 401k and SEP IRA to 401k with loans and/or early withdrawal
Replies: 5
Views: 230

Re: Converting solo 401k and SEP IRA to 401k with loans and/or early withdrawal

It might be a little cleaner if you do before making any contributions for the year, but you can do it anytime.

You should generally make the effective date January 1. So it encompasses all compensation and contributions under both the old provider and the new provider.
by Spirit Rider
Fri Sep 21, 2018 8:51 am
Forum: Investing - Help with Personal Investments
Topic: SIMPLE IRA salary reduction for wages earned prior to the plan effective date
Replies: 23
Views: 1043

Re: SIMPLE IRA salary reduction for wages earned prior to the plan effective date

Retirement plan contributions are always based on the "pay date". @krow36 is correct: Compensation earned in Dec 2018, but paid in Jan 2019 are the basis for 2019 contributions Compensation earned in Sep 2018, but paid in Oct 2018 can be the basis for contributions to a plan with an Oct 1, 2018 effe...
by Spirit Rider
Fri Sep 21, 2018 8:39 am
Forum: Personal Finance (Not Investing)
Topic: Converting solo 401k and SEP IRA to 401k with loans and/or early withdrawal
Replies: 5
Views: 230

Re: Converting solo 401k and SEP IRA to 401k with loans and/or early withdrawal

Find a one-participant 401k provider that allows loans. ETrade and TD Ameritrade are the only ones I know of that allow loans: Use their adoption agreement to "amend" your current one-participant 401k provider to the new one-participant 401k provider and do a trustee -> trustee transfer to the new ...
by Spirit Rider
Fri Sep 21, 2018 8:24 am
Forum: Investing - Help with Personal Investments
Topic: HELOC as a bonds replacement for drawing down from in a downturn?
Replies: 36
Views: 2132

Re: HELOC as a bonds replacement for drawing down from in a downturn?

It's good question. I never had the need to access my emergency funds. BofA never closed the account, even during the financial crisis. I doubt it would have been difficult to access the fund if I did need them. The HELOC came with checks, a VISA or I could have had the $$ directly deposited into m...
by Spirit Rider
Thu Sep 20, 2018 2:41 pm
Forum: Personal Finance (Not Investing)
Topic: self-employed professional - the best way to get things started?
Replies: 19
Views: 1603

Re: self-employed professional - the best way to get things started?

The increased QBI deduction will mostly or even exceed any FICA tax savings. S-Corps will have far less of an advantage over a sole proprietorship with the Section 199A QBI deduction. This is not including any state fees, taxes and does not include increased the tax complexity, payroll and filing c...
by Spirit Rider
Thu Sep 20, 2018 10:15 am
Forum: Investing - Theory, News & General
Topic: Tax Reform - Revised Kiddie Tax
Replies: 57
Views: 7272

Re: Tax Reform - Revised Kiddie Tax

With the latest post by 2beachcombers, does this mean that the draft form is saying that the 0% tax rate is applicable to $4700 of unearned income? (assuming no earned income). Thanks. It depends on how much is ordinary income and how much is LTCG/QDIV. The 0% rate only applies to the latter. With ...
by Spirit Rider
Thu Sep 20, 2018 12:36 am
Forum: Personal Finance (Not Investing)
Topic: General 2018 Tax Question
Replies: 33
Views: 3546

Re: General 2018 Tax Question

The other problem I see is that tax software providers have a lot of changes to make in a very short time. The most recent update from AARP was that the IRS has not given the final OK yet as to what changes need to be made. My personal opinion is that this is going to create a mess of software prob...
by Spirit Rider
Thu Sep 20, 2018 12:27 am
Forum: Investing - Help with Personal Investments
Topic: HELOC as a bonds replacement for drawing down from in a downturn?
Replies: 36
Views: 2132

Re: HELOC as a bonds replacement for drawing down from in a downturn?

Also, keep in mind that HELOC interest that is not used to purchase, refinance or improve the secured property is no longer tax deductible. Further increasing the borrowing costs.
by Spirit Rider
Thu Sep 20, 2018 12:22 am
Forum: Personal Finance (Not Investing)
Topic: self-employed professional - the best way to get things started?
Replies: 19
Views: 1603

Re: self-employed professional - the best way to get things started?

hi guys, ok after your helpful replies we decided to 1. stay sole-prop 2. open SEP IRA and max contribute (i like the idea of less paper work) 3. don't get into stocks or anything yet, just keep saving money for home down payment one last question - what do i do with an LLC we created? we don't wan...
by Spirit Rider
Thu Sep 20, 2018 12:17 am
Forum: Personal Finance (Not Investing)
Topic: self-employed professional - the best way to get things started?
Replies: 19
Views: 1603

Re: self-employed professional - the best way to get things started?

W2 is not counted as QBI. It would therefor be advantageous to have an SCorp, pay yourself the following: Strike 1. The fact that an S-Corps W-2 wages are not QBI means the QBI will be less, a definite disadvantage. Solo 401k max employer contribution is 36500. 36500/.25 is 146,000. Take the remind...
by Spirit Rider
Wed Sep 19, 2018 10:38 pm
Forum: Investing - Theory, News & General
Topic: Tax Reform - Revised Kiddie Tax
Replies: 57
Views: 7272

Re: Tax Reform - Revised Kiddie Tax

No, the capital gains that puts the total unearned income past $4700 should be taxed at the capital tax rate (15%) of the next bracket. $5200 - $4700 = $500 This is the same as the way standard tax brackets work. I really think you should wait until the relevant instructions are released in at leas...
by Spirit Rider
Wed Sep 19, 2018 7:52 am
Forum: Investing - Help with Personal Investments
Topic: UTMA help.... advice needed for inherited UTMA
Replies: 9
Views: 506

Re: UTMA help.... advice needed for inherited UTMA

However, this would enable you to rollover the balance in the UTMA account to a UTMA 529 account prior to college. If you and the student will be on the bubble of financial aid. UTMA accounts can be very detrimental to the FAFSA calculation. But its not like a student-owned 529 account is not detri...
by Spirit Rider
Wed Sep 19, 2018 1:33 am
Forum: Investing - Help with Personal Investments
Topic: UTMA help.... advice needed for inherited UTMA
Replies: 9
Views: 506

Re: UTMA help.... advice needed for inherited UTMA

With the recent tax reform change to trust tax brackets for UTMA unearned income above the dependents standard deduction and tax rate. It is far more favorable to hold equities in UTMA accounts. You can have up to $4700/year in LTCGs and QDIVs and pay no taxes. However, even with that, you will want...
by Spirit Rider
Wed Sep 19, 2018 1:18 am
Forum: Personal Finance (Not Investing)
Topic: self-employed professional - the best way to get things started?
Replies: 19
Views: 1603

Re: self-employed professional - the best way to get things started?

Clarifying some incomplete and misinformation: Best option is to set up a solo 401k for each of you if both doing separate businesses. If wife is employed with you, she can be on your solo 401k plan. You can contribute the most this way. You can contribute $18500 for each individual and the business...
by Spirit Rider
Tue Sep 18, 2018 7:23 am
Forum: Investing - Help with Personal Investments
Topic: SIMPLE IRA, solo 401(k) & Backdoor Roth
Replies: 12
Views: 640

Re: SIMPLE IRA, solo 401(k) & Backdoor Roth

There was nothing in the recent tax reform changing SIMPLE IRA rollovers rules. Rollovers >= 2 years have existed for a significant period of time, possibly since inception. There was never any incentive to roll them into a qualified plan until 2010 and the Backdoor Roth. However, rollover contribut...
by Spirit Rider
Tue Sep 18, 2018 12:07 am
Forum: Investing - Help with Personal Investments
Topic: Solo 401k
Replies: 1
Views: 259

Re: Solo 401k

As has been pointed out many, many times on this forum. You do not have to mail contributions to Fidelity's Self-Employed 401k (SE401K). You can do a one day ACH to a Fidelity Cash Management Account (CMA), wait for the hold to expire and do a phone transfer from the CMA to the SE401K. I prefer inde...
by Spirit Rider
Mon Sep 17, 2018 11:50 pm
Forum: Personal Finance (Not Investing)
Topic: Baby on the way - HSA questions
Replies: 19
Views: 1682

Re: Baby on the way - HSA questions

You are considered to have HSA eligibility for any month you have qualifying HDHP coverage on the first of the month. If you had coverage for any of July 2017. Your 2017 contribution limit would be 7 / 12 * $3400 ~= $1983. Even if your coverage ended on 6/30, your 2017 contribution limit would be 6...
by Spirit Rider
Mon Sep 17, 2018 11:19 pm
Forum: Investing - Help with Personal Investments
Topic: SIMPLE IRA, solo 401(k) & Backdoor Roth
Replies: 12
Views: 640

Re: SIMPLE IRA, solo 401(k) & Backdoor Roth

@FiveK is correct.

When the 2-year rollover restriction is met, you can rollover a SIMPLE IRA to any other retirement plan that accepts IRA rollovers. There is nothing that prevents you from rolling over a SIMPLE IRA after 2 years to a 401k.
by Spirit Rider
Sun Sep 16, 2018 9:09 pm
Forum: Investing - Help with Personal Investments
Topic: Setting up Backdoor Roth IRA, can't figure out where to stuff IRA
Replies: 20
Views: 1767

Re: Setting up Backdoor Roth IRA, can't figure out where to stuff IRA

I'm guessing that pursuing the backdoor Roth IRA plan is still better because it would allow the $18500 in the 401k pretax PLUS the $5500 in the Roth IRA. Right? Yes, a Backdoor Roth is not done because it is a Roth, but rather because it is extra tax-advantaged contribution space. Any decision whe...
by Spirit Rider
Sun Sep 16, 2018 9:03 pm
Forum: Personal Finance (Not Investing)
Topic: Could I open two Solo 401 [Solo 401(k)s]
Replies: 17
Views: 1039

Re: Could I open two Solo 401 [Solo 401(k)s]

E*Trade is a bit wonky in this regard--I can't require 1000/year, but I can require "a year of service". ... So, it seems that 1,000/year is in fact part of the plan, if I choose the minimum of 1 year of service in the adoption agreement? I should have stated that the 1000 hours/year is a sub restr...
by Spirit Rider
Sun Sep 16, 2018 2:32 pm
Forum: Personal Finance (Not Investing)
Topic: Could I open two Solo 401 [Solo 401(k)s]
Replies: 17
Views: 1039

Re: Could I open two Solo 401 [Solo 401(k)s]

BusterMcTaco wrote:
Sun Sep 16, 2018 12:13 pm
I'm pretty sure Spirit Rider was making fun of himself* (and his own prior phrasing).

*Or herself? I hate the lack of gender neutral pronouns.
Yup, I was making fun of the previous gibberish.

Hint: A Spirit Rider would appear as a brave astride a white horse.
by Spirit Rider
Sun Sep 16, 2018 10:09 am
Forum: Personal Finance (Not Investing)
Topic: Could I open two Solo 401 [Solo 401(k)s]
Replies: 17
Views: 1039

Re: Could I open two Solo 401 [Solo 401(k)s]

Or maybe the answer is in the wording that Spirit Rider has used. Maybe they don't accept a "rollover" but they would do an adoption agreement to amend a current plan at some other provider and accept that money.... which might not be called a "rollover". Wow, who wrote that post. I think that verb...
by Spirit Rider
Sun Sep 16, 2018 7:39 am
Forum: Personal Finance (Not Investing)
Topic: Could I open two Solo 401 [Solo 401(k)s]
Replies: 17
Views: 1039

Re: Could I open two Solo 401 [Solo 401(k)s]

Correct. A one-participant 401k plan cannot have eligible non-spouse employees. Any employee not meeting the eligibility requirements is excluded from the plan. Note: Employee eligibilty restrictions apply to all employees including the owner-employee(s) and spouse-employee(s). You need to adopt or ...
by Spirit Rider
Sat Sep 15, 2018 6:47 pm
Forum: Investing - Help with Personal Investments
Topic: What if I exceed the 55k 401k limit?
Replies: 4
Views: 865

Re: What if I exceed the 55k 401k limit?

A plan is required to have processes in place to proactively limit employee after-tax contributions to prevent excess annual additions during the plan year. Excess annual additions are a plan error. However, excess annual additions due to forfeitures and non-scheduled profit sharing are not usually ...
by Spirit Rider
Sat Sep 15, 2018 6:19 pm
Forum: Personal Finance (Not Investing)
Topic: Could I open two Solo 401 [Solo 401(k)s]
Replies: 17
Views: 1039

Re: Could I open two Solo 401 [Solo 401(k)s]

Thanks I think this is what I will do and leave i40k at Fidelity. I have not yet funded the vanguard account. Could I simply close it down? Then open a new one at Fidelity? Thanks A 401k plan exists as soon as it is adopted. If you terminated the Vanguard Individual 401k plan, there is what is call...
by Spirit Rider
Sat Sep 15, 2018 6:05 pm
Forum: Personal Finance (Not Investing)
Topic: Employee to Consultant - What to Do with Previous 401k, Solo 401k
Replies: 2
Views: 291

Re: Employee to Consultant - What to Do with Previous 401k, Solo 401k

nt contr I am in the process of transitioning from employee to consultant (consulting back to the same company). Be aware, on the 8/8/18 notice of proposed Section 199A rulemaking, the IRS regulations specifically disallow the 20% QBI deduction for independent contractors who were previously employ...
by Spirit Rider
Sat Sep 15, 2018 5:15 pm
Forum: Personal Finance (Not Investing)
Topic: Could I open two Solo 401 [Solo 401(k)s]
Replies: 17
Views: 1039

Re: Could I open two Solo 401 [Solo 401(k)s]

@niceguy7376 is correct. An employer may only have one 401k plan active at the same time covering the same employees. This is still true for a one-participant 401k You would need to do the following: Complete the Fidelity Self-employed 401k adoption agreement by selecting the option to amend a curre...