Search found 9769 matches

by Duckie
Wed Mar 27, 2024 5:20 pm
Forum: Personal Investments
Topic: Fidelity 401k what to invest in?
Replies: 16
Views: 1176

Re: Fidelity 401k what to invest in?

Thank you all for the information! I have decided to not utilize the 2065 fund and instead have a split between Fid 500 index 50% Fid glb ex us index 25% Fid us bond index 25% What are your plan expense ratios for these three funds? Is the 401k held at Fidelity? So you are thinking your portfolio Asset allocation should be something like 75% stocks, 25% bonds, with 33% of stocks in international. That breaks down to 50% US stocks, 25% international stocks, and 25% bonds. At age 27 the 25% bonds is very conservative but I'll work with it. So currently besides my 401k: I have deposited the max 7k into my Roth IRA And I am planning on putting the other 3k into my fidelity brokerage account. That changes things a little. You will soon have: Ta...
by Duckie
Tue Mar 26, 2024 8:51 pm
Forum: Personal Investments
Topic: Fidelity 401k what to invest in?
Replies: 16
Views: 1176

Re: Fidelity 401k what to invest in?

Penguin97, welcome to the forum.
Penguin97 wrote: Tue Mar 26, 2024 8:08 pm Below are a list of potential Investments.
Adding the plan expense ratios would be useful, but the easiest way is to start with funds labeled "Index" or "IDX".
My current Investments for this account are:

FID 500 Index 30%
FID GLB EX US IDX 14%
FID FRDM BLND 2060 S 30%
FID US BOND IDX 26%
There is no point in holding a target-date fund and separate funds. Therefore:
  • 55% FID 500 Index
    25% FID GLB EX US IDX
    20% FID US BOND IDX
Do you have any other accounts earmarked for retirement like an IRA?
by Duckie
Sun Mar 24, 2024 4:39 pm
Forum: Personal Finance (Not Investing)
Topic: 1099-NEC for Teen (high school) Taxes
Replies: 8
Views: 621

Re: 1099-NEC for Teen (high school) Taxes

johnpau wrote: Sat Mar 23, 2024 7:29 pm My daughter (16) received 1099-NEC for tax year 2023 for $900 as part of summer work.
What kind of summer work did she do where her employer considered her an independent contractor instead of an employee?
by Duckie
Sat Mar 23, 2024 4:41 pm
Forum: Personal Finance (Not Investing)
Topic: Grad school tax tips
Replies: 6
Views: 582

Re: Grad school tax tips

Tom_T wrote: Sat Mar 23, 2024 2:48 pm My daughter will be pursuing a second graduate degree starting this fall. She's no longer a dependent. She lives in NYC. I am wondering what strategies she could employ that would be financially beneficial. Her income is around 50K.
<snip>
Put some money in a 529?
New York allows up to a $5000 state-tax deduction for contributions to a New York 529 plan. She contributes, takes the state deduction, then pulls the money out for qualified expenses which are federal tax-free.
by Duckie
Fri Mar 22, 2024 4:00 pm
Forum: Personal Finance (Not Investing)
Topic: Should we have Long Term Care Insurance?
Replies: 34
Views: 2960

Re: Should we have Long Term Care Insurance?

csm wrote: Fri Mar 22, 2024 1:57 pm One thing I find frustrating is that every website I've ever visited, whether for a specific location or a search-type website representing multiple locations, they require your email address to get any kind of pricing information. At this stage of my research, I'm not ready to give out my email address and get bombarded with email. We might be 10 or more years (hopefully) away from needing this.
Create a free email account on gmail / hotmail / msn / yahoo. You need to provide very little information and it doesn't even need to be accurate. Once you have what you need you can shut it down.
by Duckie
Thu Mar 21, 2024 5:27 pm
Forum: Personal Investments
Topic: Question about stock sale - LT or ST?
Replies: 2
Views: 275

Re: Question about stock sale - LT or ST?

I am doing my Mom's taxes. Dad passed in June 2022. Community Property state, hence the basis of all the stocks were reset at date of death. Shares of Apple stock had been purchased years earlier. All the Apple stock was sold 11 months later, in May of 2023. Fidelity reported the stock sale on 1099-B as a Long Term transaction. Taxact is quizzing me about this in the Double/Check-Warnings review, since to them, the stock was only held 11 months. When you filled out Form 8949 did you report the "Date acquired" as "Inherited"? Did TaxAct ask if anything was inherited? I guess I just leave it alone and ignore the "warning"? That will work as long as you save the paperwork showing the stocks were inherited in case...
by Duckie
Thu Mar 21, 2024 3:32 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Questions for 26 y/o
Replies: 6
Views: 673

Re: Tax Questions for 26 y/o

investor656 wrote: Thu Mar 21, 2024 8:05 am But if I plan to never take distributions before the age of 59.5, would I still need to prove the Roth IRA basis to the IRS when I go to take tax free distributions?
No. Once you have owned a Roth IRA for five years and are at least age 59.5 your Roth IRA is qualified and you don't need your records. But just because you plan to not withdraw earlier doesn't mean it can't happen. Life can mess up plans so save the verification just in case.
by Duckie
Wed Mar 20, 2024 6:23 pm
Forum: Personal Consumer Issues
Topic: Xfinity equipment update
Replies: 17
Views: 863

Re: Xfinity equipment update

Nicolas wrote: Wed Mar 20, 2024 6:21 pm When I started with Xfinity they sent me a combined modem/router but I didn’t get good Wi-Fi coverage so I installed my own separate modem and router that I already had. It worked much better. I boxed up their equipment and put it on a shelf as I wasn’t paying anything for it. A few months later they asked me to return it.
So they could somehow tell you weren't using their equipment?
by Duckie
Wed Mar 20, 2024 5:54 pm
Forum: Personal Investments
Topic: Should I rollover 401(k) from previous employer to current employer?
Replies: 20
Views: 1631

Re: Should I rollover 401(k) from previous employer to current employer?

My current 401k is around $90k and my old 401k with my former employer is $14k. I'm considering rolling over my old 401k as they're now charging fees for $6/quarter. <snip> My new 401k I have the following: - VLCSP - BEEMT - BMSIT - VTBMK Any thoughts or advice here? These are Collective Investment Trusts (CITs) which don't have actual ticker symbols. They appear to be: VLCSP -- Vanguard Institutional 500 Index Trust -- Large caps, 80% of US stocks BEEMT -- BlackRock Extended Market -- Mid/small caps, 20% of US stocks BMSIT -- BlackRock MSCI ACWI ex-US -- Almost complete international stocks VTBMK -- Vanguard Institutional Total Bond Market Index Trust -- US bonds If the above is accurate they are excellent options. Most CITs have low expe...
by Duckie
Wed Mar 20, 2024 5:13 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Questions for 26 y/o
Replies: 6
Views: 673

Re: Tax Questions for 26 y/o

investor656 wrote: Wed Mar 20, 2024 12:56 pm Do I need to be keeping records of my own Roth IRA basis?
Yes. You get Form 5498 from your IRA custodian every year you do something with an IRA. (Yours may look different from the sample.) Whether it is a contribution, conversion, recharacterization, or distribution you get the form. Download the pdf and save it in a file on your computer.

It would also be useful to just keep a running list that has the year, the custodian, the type of IRA, the amount, and what you did (contributed, rolled over, etc.). The list is for easy viewing, the 5498 is for verification if needed.
by Duckie
Mon Mar 18, 2024 9:11 pm
Forum: Personal Investments
Topic: Request for Portfolio Feedback
Replies: 9
Views: 1011

Re: Request for Portfolio Feedback

Still new at this, about the unrealized gains do you mean the amount I've made if I were to sell the shares in FZROX? Probably, also it might be less than a year since I bought them so I think I would be taxed even more. Why do you ask, is that something I would have to sell if I ended up moving to just Vanguard? Fidelity ZERO funds are proprietary and can only be held at Fidelity. Because of that they are not suitable for taxable. If you ever wanted to leave Fidelity and transfer your assets to another brokerage you would either have to leave the ZERO fund at Fidelity or sell it and possibly take a large tax-hit. ZERO funds are fine in tax-sheltered accounts because they can be sold there without being concerned with taxes. Target-date fu...
by Duckie
Mon Mar 18, 2024 3:32 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA recharacterization and tax
Replies: 22
Views: 1074

Re: Roth IRA recharacterization and tax

In TurboTax I entered $6500 of Roth contribution and $7695 of recharacterization in the box of explanation. Sounds like I should enter $6500 in recharacterization, even though $7695 is moved from Roth to rollerover IRA? Yes. The question is asking how much of the contribution you recharacterized. Since you recharacterized the entire $6500 contribution, $6500 is the answer. Any gains or losses are not considered for this particular question. I have money (401k rollover from prev. employers) in the rollover IRA before the recharacterization. I may call Vanguard to withdraw the contribution. If in the future I want to do backdoor IRA, do I need to open a brand new IRA so it won't be so messy? It does not matter how many IRAs you have. The IRS...
by Duckie
Sun Mar 17, 2024 5:10 pm
Forum: Personal Investments
Topic: Review of financial picture and asset allocation
Replies: 6
Views: 777

Re: Review of financial picture and asset allocation

Taxable: ~$2.1M 28% - VOO (S&P 500) – ER: 0.03% 25% - VTI (Total stock) – ER: 0.03% 6% - VXUS (Total International) – ER: 0.08% 16% - FXAIX (S&P 500) – ER: 0.02% (50% of new investments) 11% - FSKAX (Total stock) – ER: 0.02% (30% of new investments) 1% - FISMX (International small cap) – ER: 1.01% (10% of new investments) 1% - FSPSX (International Index) – ER: 0.04% (10% of new investments) 9% - T-Bills (maturing within the next few months) 3% - Money market (cash position, and it varies) I don't know why you're bothering to overweight international small caps (FISMX), but if you insist you would be better off with ( VSS ) Vanguard FTSE All-World ex-US Small Cap ETF (0.08%). VSS is small-cap growth not small-cap blend but its expen...
by Duckie
Fri Mar 15, 2024 6:23 pm
Forum: Personal Investments
Topic: Retiring Soon-Questions about rollovers
Replies: 7
Views: 1278

Re: Retiring Soon-Questions about rollovers

Hi I have a 403 B through CalSTRS Pension 2 Voya. I am retiring soon. Should I open an IRA at Fidelity or Vanguard or keep the money at Voya? Those fees are kind of high. Since you already have an account at Fidelity I recommend you roll the 403b into a Rollover IRA at Fidelity and purchase one or more of their index funds. Without knowing what else you have you could go with their individual funds: ( FSKAX ) Fidelity Total Market Index Fund (0.015%) ( FTIHX ) Fidelity Total International Index Fund (0.06%) ( FXNAX ) Fidelity U.S. Bond Index Fund (0.025%) Or go with a target-date index fund like: ( FXIFX ) Fidelity Freedom Index 2030 Fund Investor Shares (0.12%) ( FIHFX ) Fidelity Freedom Index 2035 Fund Investor Shares (0.12%)
by Duckie
Fri Mar 15, 2024 5:57 pm
Forum: Personal Investments
Topic: Roth Recharacterization / Backdoor Roth questions
Replies: 6
Views: 913

Re: Roth Recharacterization / Backdoor Roth questions

I had contributed to a Vanguard Roth IRA (about 1,000) but realized that I won't qualify this year. 1) I am thinking to recharaceterize that to a Traditional IRA? Yes. Recharacterize the $1000 2024 Roth IRA contribution to a TIRA. 2) If I recharacterize, then do a Backdoor Roth, which forms would I need to fill out for 2024 season? If you recharacterize and then convert in 2024, when you file your 2024 taxes next year you will: Receive a 1099-R from the Roth IRA reporting the distribution because of the recharacterization. That data needs to be included in your software. __ File Form 8606 Part I for the now non-deductible TIRA contribution. Let's assume it is the full $7000. You will also fill out Part II for the conversion. If you put the...
by Duckie
Wed Mar 13, 2024 3:43 pm
Forum: Personal Investments
Topic: 2023 contribution to Roth IRA after taxes filed?
Replies: 5
Views: 823

Re: 2023 contribution to Roth IRA after taxes filed?

nms2404 wrote: Wed Mar 13, 2024 1:52 pm Because I won't hold assets in the traditional IRA, I can repeat this for 2025 and at least the foreseeable future (barring policy changes about backdoor Roth IRAs, etc.), thereby further growing this Roth IRA (though unlike direct contributions, each conversion will be subject to a 5-year rule or 10% penalty). Is this understanding correct?
Yes.
by Duckie
Tue Mar 12, 2024 6:36 pm
Forum: Personal Investments
Topic: 2023 contribution to Roth IRA after taxes filed?
Replies: 5
Views: 823

Re: 2023 contribution to Roth IRA after taxes filed?

nms2404 , welcome to the forum. Complications : C1) I hired an accountant to help me with my 2023 taxes because of various complexities (international student, 2 state tax returns because of out-of-state internship, etc.), and they suggest not contributing to the Roth IRA as to not complicate the already-filed (and refunded) 2023 return. As long as you are under the income limit a Roth IRA contribution made for 2023 will not complicate your 2023 tax return because it does not affect and is not reported on your tax return. C2) I am not sure where I will retire in 30+ years. It may or may not be in the SF Bay area or even the US (depending on how/whether the immigration process pans out). Now that unknown might affect your decision on whethe...
by Duckie
Tue Mar 12, 2024 3:54 pm
Forum: Personal Investments
Topic: Portfolio review request - helping parents in 70s overhaul their investments
Replies: 13
Views: 1662

Re: Portfolio review request - helping parents in 70s overhaul their investments

TeenyBitBlue wrote: Mon Mar 11, 2024 5:00 pm Some of their tax-deferred employer sponsored accounts have access to a "Domestic Equity Index Fund" that tracks the Russell 3000 index, and others have access to standard S&P 500 index fund--both with very low ER. So my thinking now is to use a combination of these two funds across the tax-deferred accounts, and then use VTI in taxable. If I am understanding correctly, this should alleviate any wash sale concern.
I believe your understanding is correct.
by Duckie
Mon Mar 11, 2024 3:52 pm
Forum: Personal Finance (Not Investing)
Topic: Taxes for Roth IRA Recharacterization and Conversion
Replies: 7
Views: 488

Re: Taxes for Roth IRA Recharacterization and Conversion

I am using TurboTax for filing. Does this action count as contributing $6900 to a traditional IRA (even though it was a rollover ira) which then is converted to a roth IRA ? No. She contributed $6500 to the IRA. The amount recharacterized is not the amount contributed. And do I need to file this action on our tax return due 4/15/2024, or do I account for this next tax season? She will file a 2023 Form 8606 with her return to report the now non-deductible contribution on Part I. Since she did not convert in 2023 her Form 8606 will probably just be lines 1, 2, 3, and 14. She will also fill out the required recharacterization statement. Next year she will get a 1099-R from the Roth IRA reporting the 2024 recharacterization and a 1099-R from t...
by Duckie
Mon Mar 11, 2024 2:35 pm
Forum: Personal Investments
Topic: Portfolio review request - helping parents in 70s overhaul their investments
Replies: 13
Views: 1662

Re: Portfolio review request - helping parents in 70s overhaul their investments

Finally, could use VOO for taxable--from what I've read, it seems marginally better to hold VOO in taxable as opposed to VTI due to VOO's higher QDI. Does this make sense and alleviate the wash sale concern? The problem is that more employer plans offer a 500 Index option than offer a total US market option which would make holding VOO or equivalent in taxable a risk. Also, since all 500 Index options follow the 500 Index whereas many total US market options follow different indexes it is easier to hold a not "substantially identical" total US market fund in taxable. Secondarily, is the recommendation to use VOO based on a concern that VTI would be too similar to ITOT or SCHB to use one of those? VTI, ITOT, and SCHB are not "...
by Duckie
Sun Mar 10, 2024 6:22 pm
Forum: Personal Investments
Topic: Portfolio review request - helping parents in 70s overhaul their investments
Replies: 13
Views: 1662

Re: Portfolio review request - helping parents in 70s overhaul their investments

TeenyBitBlue wrote: Sun Mar 10, 2024 6:14 pm Any reason you prefer VOO over VTI in tax-advantaged?
Holding the same assets in taxable as in tax-sheltered can inadvertently trigger a wash sale. By not holding VTI in any other account that can be easily avoided.
by Duckie
Sun Mar 10, 2024 5:10 pm
Forum: Personal Investments
Topic: Are these 2 Vanguard Total Stock Market Products The Same?
Replies: 8
Views: 1304

Re: Are these 2 Vanguard Total Stock Market Products The Same?

Royalty wrote: Sun Mar 10, 2024 3:27 am I currently have my portfolio at Schwab due to their merger with TD Ameritrade. Schwab is offering the Vanguard Total Stock Market ETF Shares and I wanted to purchase the Vanguard Total Stock Market Index Fund. Are these the same product?
VTI and VTSAX are the same product in a different wrapper. They hold the exact same stocks.
Or am I going to have to open an account with Vanguard to purchase the index fund I really want?
You can buy VTSAX at Schwab BUT you will have to pay a transaction fee of $74.95 for every purchase. At Schwab if you really want a mutual fund instead of an ETF go with a Schwab fund like SWTSX which has no transaction fees. If you really want Vanguard go with an ETF like VTI. ETFs have no transaction fees.
by Duckie
Sat Mar 09, 2024 6:31 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth - H&R Block issue
Replies: 1
Views: 393

Re: Backdoor Roth - H&R Block issue

bh22 , welcome to the forum. On the “Adjustments” screen within H&R Block it says “Here are your IRA contribution results”: Traditional IRA contributions: 6500 Traditional IRA deduction: 6500 Roth IRA contributions: 0 I have read that with H&R Block if you are allowed to take a TIRA deduction the software makes you take it whether you want to or not. I’m trying to figure out why the system is showing 6500 as a deduction and as a taxable amount, and why the system is showing my Form 8606 entirely blank in Part I and showing 6501 in line 18. Normally for a Backdoor Roth you fill out both Part I and Part II of the 8606 form. So I’m wondering if H&R Block is thinking my traditional IRA contribution is deductible. My AGI is lower th...
by Duckie
Sat Mar 09, 2024 5:37 pm
Forum: Personal Finance (Not Investing)
Topic: Help w 2023 Taxes - Recharacterization & Conversion
Replies: 22
Views: 1450

Re: Help w 2023 Taxes - Recharacterization & Conversion

Not necessarily directed at you specifically, but just to be clear - this notion of 'basis' - I deposited $6k to the Roth, and only converted $4,574 from the recharacterized-TIRA back to the Roth, because I lost money in the meantime. I would have converted $6k if I still had $6k to convert... Is there some sort of guide or primer or explanation to explain the value of this remaining basis? See Understanding Total Basis in IRAs . I don't really know how to ask my question, but am confused about this Line 14 remaining amount, in terms of how it came about, and the benefit of it going forward. This type of basis is the already-taxed portion of an IRA. Non-deductible contributions are already taxed. You track your basis on Form 8606 so you do...
by Duckie
Sat Mar 09, 2024 4:34 pm
Forum: Personal Finance (Not Investing)
Topic: Help w 2023 Taxes - Recharacterization & Conversion
Replies: 22
Views: 1450

Re: Help w 2023 Taxes - Recharacterization & Conversion

Filing my 2023 taxes. First year dealing with backdoor. Do not have a previous Form 8606. I contributed to a Roth between 1/1/2022 and 12/31/2022, for tax year 2022. Realized I was over the income limit. Recharacterized between 1/1/2023 and 4/15/2023. Then, converted back to Roth between 1/1/2023 and 4/15/2023. Did you recharacterize before or after you filed your 2022 taxes? If you recharacterized before you filed did you include anything about the recharacterization on those taxes? Did you file 2022 Form 8606 with your 2022 taxes? You would normally have included a "recharacterization statement" with your 2022 return. I'm not sure you need to amend if the statement is missing. You can download the 2022 Form 8606, fill it out an...
by Duckie
Fri Mar 08, 2024 4:49 pm
Forum: Personal Investments
Topic: Help find Fidelity low Expense funds to: FFFIX, PABGX, ISTIX
Replies: 28
Views: 2057

Re: Help find Fidelity low Expense funds to: FFFIX, PABGX, ISTIX

Old 401K portfolio from prior employer at Fidelity (I sold other 4-5 funds and kept these 3 based on performance): FFFIX = Fidelity Advisor Freedom 2045 I (FFFIX) .75% PABGX = T. Rowe Price Blue Chip Growth Advisor Class(PABGX) 0.97%? ISTIX = Delaware Ivy Science and Technology Fund Class 1.00% These are expensive funds. What are the other options? Although considering the monthly charges I would get away from this 401k completely. Will your current 401k take incoming rollovers? Because that plan is very good. Current employer 401k The best options in this plan are: S&P 500 INDEX FUND (0.01%) -- Large caps, 80% of US stocks US EXTD EQTY MKT IDX (0.02%) -- Mid/small caps, 20% of US stocks VG IS TL INTL STK MK (0/06%) -- Complete interna...
by Duckie
Mon Mar 04, 2024 6:02 pm
Forum: Personal Finance (Not Investing)
Topic: Back Door Roth for 2023 Jan-April 2024 contribution
Replies: 3
Views: 319

Re: Back Door Roth for 2023 Jan-April 2024 contribution

However, this year is the only time I will be contributing the 2023 contrbutions in 2024 (the Jan-April period of the following year). Have you already made the 2023 contributions? Are you using the download version or the online version of TurboTax? In turbotax it asks me if I have a 1099-R form which I don't have either for me or my Wife. Why would TT ask you for a 1099-R for a contribution? You report the contribution in the Deduction section. All you did was contribute $X to a TIRA and that it was non-deductible. That will get you Form 8606. That being said I did go into the first part of performing the backdoor roth which is showing (what would be) the initial 2023 traditional contribution. I went through both of them and it came with...
by Duckie
Sun Mar 03, 2024 6:45 pm
Forum: Personal Finance (Not Investing)
Topic: IRS 1040 / 8606 / where to track 403b
Replies: 5
Views: 527

Re: IRS 1040 / 8606 / where to track 403b

ps56k wrote: Sun Mar 03, 2024 3:42 pm Where exactly should we track and/or report the contributions and balances of the 403b with regard to our IRS 1040 ?
Your wife's 403b contributions are listed on her Form W-2 in box 12. The code is "E" for pre-tax and "BB" for Roth contributions. The W-2 is included with her tax return but that is the only 403b information the IRS receives from her until she begins taking money OUT of the 403b. At that point she will receive a 1099-R for any distributions and will include that information on her tax return.
by Duckie
Sat Mar 02, 2024 7:18 pm
Forum: Personal Finance (Not Investing)
Topic: Turbotax and Mega Backdoor Roths
Replies: 8
Views: 572

Re: Turbotax and Mega Backdoor Roths

1095tofi wrote: Sat Mar 02, 2024 5:27 pm My 1099R shows the following
box 1 15000, box 5 14000
You wrote: "0 in 2a and 0 in 2b". If 2a is 0 then you shouldn't be getting $1000 on Form 1040 line 5b. And 2b is either checked or not checked. It can't be 0. What code(s) are shown in box 7?
how would I split into 2 1099R, request this from Fidelity?
Splitting is done by you manually. You create two almost identical 1099-Rs in the TurboTax income section. A few of the boxes will have different dollar amounts.
by Duckie
Sat Mar 02, 2024 6:45 pm
Forum: Personal Finance (Not Investing)
Topic: Turbotax and Mega Backdoor Roths
Replies: 8
Views: 572

Re: Turbotax and Mega Backdoor Roths

Performed a mega back door roth conversion through fidelity. I had 15000 after tax dollars within my standard 401k. I transferred through an in service distribution the after tax basis of 14000 to a roth IRA, I transferred the 1,000 gain to a TIRA My 1099R shows the following box 1 15000, box 5 14000 What is shown in boxes 2a and 2b? When using turbotax online and I go through the process and it is pretty straight forward except for the fact that because the 1099R shows a 1,000 difference between box 1 and box 5 it assumes it should be taxed and the 1,000 is placed on line 5b on the 1040. Since I transferred the 1,000 direct to a TIRA this is a non tax event. The question is how do I get the 5b to show zero? Do I just force the 1099R detai...
by Duckie
Sat Mar 02, 2024 6:27 pm
Forum: Personal Investments
Topic: ROTH IRA Recharacterization for Deduction - TurboTax
Replies: 2
Views: 360

Re: ROTH IRA Recharacterization for Deduction - TurboTax

We are pondering recharacterizing ROTH contributions to a traditional IRA to deduct the contribution on his 2023 return. Before recharacterization, his marginal rate is 24% with kiddie tax. What is his marginal rate after recharacterization? If he is being taxed at your rate how much would the $6500 deduction move the needle? Is the below correct? Yes. When will he pay tax on the growth on the contributions that is included in recharacterized amount? He will pay taxes on the growth when it is removed from the TIRA in the same way he will pay taxes on anything else he removes from the TIRA, whether pulling out to spend or converting back to a Roth IRA. Will he pay tax on this 'growth' amount at some point in the future when he hypotheticall...
by Duckie
Sat Mar 02, 2024 4:20 pm
Forum: Personal Investments
Topic: Merill Lynch Self-Directed Brokerage - Recommendations
Replies: 12
Views: 919

Re: Merill Lynch Self-Directed Brokerage - Recommendations

millenialflyer wrote: Sat Mar 02, 2024 8:56 am I suppose I could also auto-invest it across the following

BTMKX (iShares MSCI EAFE International Index Fund Class K) 0.04% expense ratio
WFSPX (iShares S&P 500 Index Fund Class K) 0.03% expense ratio
PHYQX (PGIM High Yield Fund- Class R6) 0.38% expense ratio
WFSPX for US large cap stocks is good.
BTMKX for international developed markets is good.
PHYQX for junk bonds is NOT good.
Go with FBKWX for bonds. It is not an index fund but it covers good quality US bonds.
by Duckie
Fri Feb 23, 2024 8:54 pm
Forum: Personal Finance (Not Investing)
Topic: Tax help with foreign spouse
Replies: 8
Views: 809

Re: Tax help with foreign spouse

I (US citizen) got married in February of this year to a Mexican citizen and we are living in Mexico. I have already contributed 1,100 to my ROTH IRA this year because I had no idea that getting married effected contribution limits so drastically. Because he is not a US citizen I will be filing as "married filing separately" and that means if I make over 10,000 I cannot contribute a single penny to my IRA. Does anyone know of a tax specialist who could advise me of what to do? It seems that pulling out my 1,100 investment and just putting things into a brokerage account until we move to the US in a few years is the best option. I would appreciate any ideas or any contact info for people to hire for help. If your income is too hig...
by Duckie
Thu Feb 22, 2024 9:40 pm
Forum: Personal Investments
Topic: what's the problem of having both pre-tax IRA and ROTH IRA
Replies: 3
Views: 1241

Re: what's the problem of having both pre-tax IRA and ROTH IRA

rainwingdragon wrote: Wed Feb 21, 2024 10:53 pm I have pre-tax IRA which was rolled over from traditional 401K of my previous employers. With my current employer, I have ROTH IRA. I heard about those talking about issues having both pre-tax IRA and ROTH IRA. But I still don't understand what issues will arise in my case?
Can somebody please kindly explain it to me? Thanks!
If your income is too high to contribute to a Roth IRA directly you can use the Backdoor Roth IRA method to get money into the Roth IRA. But if you also have assets in a pre-tax IRA that will make the backdoor method less desirable because of the pro-rata rule.

If your income is not too high there is no problem having a pre-tax IRA and Roth IRA.
by Duckie
Wed Feb 21, 2024 10:41 pm
Forum: Personal Investments
Topic: Why should I back door Roth?
Replies: 49
Views: 4964

Re: Why should I back door Roth?

Carguy85 wrote: Wed Feb 21, 2024 10:34 pm So if I have a tIRA with only pretax dollars at vanguard, can I open another tira at vanguard and fully fund it to $7k with after tax dollars and then convert it to a Roth and avoid pro rata issues
No. The IRS considers all your IRAs (whether titled Traditional IRA, Rollover IRA, SEP IRA, or SIMPLE IRA) to be one big fat IRA. Pro-rata applies to the lump sum. Only Roth IRAs and Inherited IRAs are exempt.
by Duckie
Wed Feb 21, 2024 10:32 pm
Forum: Personal Investments
Topic: HSA consolidation
Replies: 6
Views: 899

Re: HSA consolidation

I think, someone check me, that you can only roll over an IRA once every 12 months, It depends on how and where you roll. If you roll it IRA to 401k or 401k to IRA there is no 12-month rule. Only IRA to IRA is affected. If you roll IRA to IRA and it is done as a trustee-to-trustee transfer where you never see a check, there is no 12-month rule. If you roll IRA to IRA and it is done by IRA #1 sending you check made out to "IRA #2 FBO Raspberry" and you forward the check to IRA #2, this is a direct rollover and there is no 12-month rule. There is also no 60-day limit but you still want to get that check to the new custodian ASAP. If you roll IRA to IRA and it is done by IRA #1 sending you a check made out to "Raspberry" a...
by Duckie
Mon Feb 19, 2024 6:22 pm
Forum: Personal Investments
Topic: Are the funds INSIDE the 401k protected by ERISA when you withdraw from the plan?
Replies: 2
Views: 462

Re: Are the funds INSIDE the 401k protected by ERISA when you withdraw from the plan?

taxinthecat, welcome to the forum.
taxinthecat wrote: Mon Feb 19, 2024 4:26 pm Are the funds INSIDE the 401(k) protected by ERISA when you withdraw from the plan? I understand that the funds that are taken out are subject to state laws regarding protection, but what about the funds still inside the 401(k)? Thank you!
Taking a partial distribution from a 401k does not affect the ERISA protection for the assets left inside the 401k.
by Duckie
Mon Feb 19, 2024 4:18 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Overcontribution – Recharacterization questions
Replies: 7
Views: 723

Re: Roth Overcontribution – Recharacterization questions

Eagle33 wrote: Mon Feb 19, 2024 1:40 pm Should the recharacterized date be February 15, 2024, not 2023?
Yes. The recharacterization will happen in 2024. Sorry.
by Duckie
Sat Feb 17, 2024 8:46 pm
Forum: Personal Finance (Not Investing)
Topic: Recharacterizing a Roth IRA to TIRA and then Backdoor
Replies: 1
Views: 271

Re: Recharacterizing a Roth IRA to TIRA and then Backdoor

My initial contribution to the Roth IRA was around March 2023 for the 2023 Tax Season. Since I recharacterized, does it essentially mean that I contributed to a TIRA at March of 2023, even though I did not do the recharacterization until February 2024? Yes. I'm worried that that would mean that my TIRA balance was non-zero at 12/31/23, which in that case, am I still allowed to use the backdoor method for the 2023 Tax Season? You did not convert in 2023 so the TIRA balance as of 12/31/2023 does not matter. If you convert in 2024 what matters is the TIRA balance as of 12/31/ 2024 . If I am allowed to, am I able to convert my entire TIRA that I recharacterized back into the Roth IRA (X initial contribution + Y gains)? Yes. When you tell your ...
by Duckie
Sat Feb 17, 2024 7:20 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Overcontribution – Recharacterization questions
Replies: 7
Views: 723

Re: Roth Overcontribution – Recharacterization questions

DAKn2 , welcome to the forum. Long story short, I over-contributed to both my and my DW’s Roth IRAs for 2023, to the tune of the full $900 penalty. If I understand correctly, I can go back and re-characterize the original contributions (done at Fidelity), and any earnings, to a traditional IRA. A few questions – • Do I now claim BOTH the (over the limit) Roth contributions and their re characterizations on our taxes, or do I not enter the Roth contribution at all? First, although you can recharacterize a portion of the contribution it is just easier to recharacterize the entire contribution. Second, once Fidelity has recharacterized what you choose you then convert 100% of that TIRA to your Roth IRA. On your taxes in the deduction section ...
by Duckie
Sat Feb 17, 2024 6:44 pm
Forum: Personal Investments
Topic: Rolling IRA funds into employer plan (TSP)
Replies: 3
Views: 457

Re: Rolling IRA funds into employer plan (TSP)

BuyAndOld678, welcome to the forum.
BuyAndOld678 wrote: Sat Feb 17, 2024 7:37 am Am I correct that the above course of action will effectively clean up my retirement account picture and free me from the pro rata rule?
Yes.
And that the entirety of this process would be a non-taxable event?
Maybe not entirely. There might be earnings between rolling the pre-tax and converting the non-deductible. Sometimes a dividend posts just at the wrong time, although if caught that could also be rolled over before converting. Then convert 100% of what is left. If you have to pay a few dollars in taxes it is not a big deal.
by Duckie
Thu Feb 15, 2024 7:09 pm
Forum: Personal Finance (Not Investing)
Topic: Tax filing software
Replies: 33
Views: 1853

Re: Tax filing software

Cocoa Beach Bum wrote: Thu Feb 15, 2024 4:21 pm
livesoft wrote: Thu Feb 15, 2024 4:09 pm What's that saying in the movie "Forest Gump"?
Forest Gump wrote:My Mom always said life was like a box of chocolates. You never know what you're gonna get.
?
Wrong quote. In this case I'm sure livesoft means "Run Forrest! Run!"
by Duckie
Wed Feb 14, 2024 6:34 pm
Forum: Personal Investments
Topic: All equity for Roth 401K for future contributions?
Replies: 10
Views: 1003

Re: All equity for Roth 401K for future contributions?

fi_no_retire wrote: Wed Feb 14, 2024 5:14 pm 401k: $1.17M in pre-tax and $263K in Roth 401K invested 100% VG 2035 TDF (VTTHX) (ER: .04%)
Can you hold Fund A on the pre-tax side and Fund B on the Roth side or must they be the same for both?
by Duckie
Wed Feb 14, 2024 6:25 pm
Forum: Personal Investments
Topic: Advice for 53 year old single female
Replies: 52
Views: 7846

Re: Advice for 53 year old single female

I currently have the following: Old TIAA 401-K: VMFXX - 57,000 TCII - 88,000 What is TCII? What are the other options in this 401k (fund name, ticker symbol, plan expense ratio)? TIAA has some funny rules. Can you roll this into another plan? Old Voya 401-k SSCKX 160,000 This a good low-cost target-date fund. Retail is 0.09%. What are the other options? Current Fidelity 401-K FSNUX 37,000 This has a retail expense ratio of 0.60%. What are the cheaper options? Can I open an IRA if I have a work 401(K) and make 6 figures and get any tax benefit? If you just got a $100,000 raise that is doubtful. In order to deduct TIRA contributions you have to have an MAGI less than $73,000 if single in 2023. To contribute to a Roth IRA your MAGI must be un...
by Duckie
Tue Feb 13, 2024 5:39 pm
Forum: Personal Investments
Topic: How to remove IRA cash deposits prior to 8606 form
Replies: 6
Views: 635

Re: How to remove IRA cash deposits prior to 8606 form

Xrb3 , welcome to the forum. I have an IRA that started with an old employer 401k rollover. I only worked there for a year. I created the rollover IRA 3 years ago and I've been contributing to it with cash post tax deposits. $6000 in 2022, $6500 in 2023, and $3700 in 2024. So you have an IRA which contains pre-tax assets rolled over from an old 401k. It also contains contributions. Did you deduct the 2022 contributions on your 2022 taxes or did you choose to make them non-deductible contributions? Did you file Form 8606 with your 2022 taxes? What exactly do you mean by "post tax"? Does it mean non-deductible? Does it mean you made the contribution with after-tax dollars (i.e. from your bank account)? Or does it mean something els...
by Duckie
Tue Feb 13, 2024 3:38 pm
Forum: Personal Finance (Not Investing)
Topic: Turbotax guide for Roth Recharacterization and conversion
Replies: 66
Views: 7617

Re: Turbotax guide for Roth Recharacterization and conversion

alamoclark wrote: Tue Feb 13, 2024 1:05 pm I think it worked!!!
<snip>
The net effect of all this seems to be that the tax forms are correct, at least in terms of substance. My only concern is the form that the information is taking--specifically, the fact lines 6-7 are blank and the fact that lines 8-9 do not have $12,202 listed in form 8606 and instead are blank. What are your thoughts?
Your Form 8606 is correct. Lines 6 through 12 being blank is normal in software. The numbers that do show are the right numbers. You're good to go. However, if you update TurboTax things might change, so to be safe check this form again right before you file the return.
by Duckie
Mon Feb 12, 2024 4:48 pm
Forum: Personal Finance (Not Investing)
Topic: Turbotax guide for Roth Recharacterization and conversion
Replies: 66
Views: 7617

Re: Turbotax guide for Roth Recharacterization and conversion

It looks like something is definitely wrong with my worksheet--so I must have done something wrong somewhere. Yeah, there's a glitch somewhere. I had updated TT yesterday and had a fit making your return work this morning. So I started over completely with a new dummy return. I entered all three 1099-Rs as you reported in the Wages & Income section -- Retirement Plans -- IRAs. These are the screens that showed after the entries (a lot of them are irrelevant but I'm showing EVERYTHING). First new 1099-R $12,201.53 TIRA conversion to Roth IRA where I got the "Good News you don't owe extra taxes on this No the 1099-R is not for an employer contribution No I did not inherit this IRA I moved the money to another account, I did a combin...
by Duckie
Sun Feb 11, 2024 6:14 pm
Forum: Personal Investments
Topic: Portfolio review and suggestions
Replies: 8
Views: 823

Re: Portfolio review and suggestions

Age: both 49 Desired Asset allocation: 90% stocks / 5% bonds 5% bonds is really low for ages 49. I'd increase that to at least 20% bonds. Desired International allocation: 5% stocks 5% is almost not worth bothering. Fund Details: Mutual Funds Capital World Growth and Income Fund CWGIX: 14.5k American Funds Europacific Growth A AEPGX: 12.4k American Funds Fundamental Invs A ANCFX: 15.8k The Investment Company of America - A AIVSX: 16.2k SMALLCAP World Fund - A SMCWX: 11.6k Is this a taxable account? If so, find out the unrealized gains/losses for every fund. You need to know what the tax-hit will be if you sell. You might choose to roll these to Fidelity "in-kind" and sell there when optimal. Roth IRA Sell everything and move the ...
by Duckie
Sun Feb 11, 2024 3:25 pm
Forum: Personal Finance (Not Investing)
Topic: Turbotax guide for Roth Recharacterization and conversion
Replies: 66
Views: 7617

Re: Turbotax guide for Roth Recharacterization and conversion

so beginning of 2023 in January I made contributions to the vanguard Roth Ira 541.66 monthly. It wasn't until 10/23 did I realize that our income might exceed MAGI so I called vanguard and they helped me recharacterize this in November 2023 of $4970.64. This was then converted to a Roth IRA at $5,110.99. So a gain of $140.35. My ROTH IRA 1099-R is 4970.64 How much did you actually contribute to the Roth IRA before you recharacterized it? Not how much was it worth but how much money had you contributed before you stopped? You are only allowed to contribute $6500 for 2023. If the IRA gains or loses value that does not change the amount you can contribute. I would think Vanguard would stop your contributions at $6500, but what with the rechar...
by Duckie
Sat Feb 10, 2024 9:23 pm
Forum: Personal Investments
Topic: New to Boglehead
Replies: 8
Views: 928

Re: New to Boglehead

Brokerage Account about $3k Symbol Description E/R AIVSX American Funds Investment Company of America® Class A 0.58% BFCAX American Funds Corporate Bond Fund Class A 0.68% If this account is really just $3000 sell both funds and buy VTSAX/VTI at Vanguard. IRA about 200k If moving to Vanguard sell everything and consider holding just VFIAX/VOO (500 Index) for US stocks, VTIAX/VXUS for international stocks, and VBTLX/ BND for US bonds. IRA Roth about 85k If moving to Vanguard sell everything an hold just VFIAX/VOO for US stocks. Work 401k - contribution match 3% and contribute 3% - approx $3,0000 Is this $3000 or $30,000? What are the plan expense ratios for the following funds? MMWVT State Street S&P 500 Index MWTIX Metropolitan West To...