Search found 9759 matches

by Duckie
Mon Mar 18, 2024 9:11 pm
Forum: Personal Investments
Topic: Request for Portfolio Feedback
Replies: 8
Views: 522

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: 17
Views: 666

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: 740

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: 1213

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: 5
Views: 749

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: 798

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: 798

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: 12
Views: 1448

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: 434

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: 12
Views: 1448

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: 12
Views: 1448

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: 1237

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: 356

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: 1412

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: 1412

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: 27
Views: 1853

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: 309

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: 526

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: 539

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: 539

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: 331

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: 846

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: 801

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: 1223

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: 4800

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: 878

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: 460

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: 709

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: 270

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: 709

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: 454

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: 1773

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: 1000

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: 7786

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: 65
Views: 7221

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: 65
Views: 7221

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: 809

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: 65
Views: 7221

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: 918

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...
by Duckie
Sat Feb 10, 2024 8:09 pm
Forum: Personal Finance (Not Investing)
Topic: traditional IRA and Roth IRA question
Replies: 22
Views: 2337

Re: traditional IRA and Roth IRA question

mymoney2022 wrote: Sat Feb 10, 2024 7:01 pm Let me clarify :
1) We didn't have any IRA accounts before 2023. We opened new Traditional IRA and a new Roth IRA in 2023. So there was no any previous funds there.
2)In 2023, we deposited $6500, it got $3.55 interest. But we only converted $6500 to Roth IRA.
You keep saying "we". IRAs are individual. What is the reason you did not contribute to your own IRA? Do you have a lot of pre-tax IRA assets that would be subject to pro-rata?
for 2023 tax filling, how should I fill the 8606 and pay the interest tax of $3.55?
toddthebod has it right for all three above examples.

In the future convert 100%, not a dollar amount, and make sure any trailing dividends are also converted.
by Duckie
Sat Feb 10, 2024 6:54 pm
Forum: Personal Finance (Not Investing)
Topic: traditional IRA and Roth IRA question
Replies: 22
Views: 2337

Re: traditional IRA and Roth IRA question

toddthebod wrote: Sat Feb 10, 2024 6:07 pm I read it as he converted $6,500 and left the interest in the traditional IRA, and this year he will contribute $7,000 and convert $7,004.
You may be right. If that is the case, that changes the numbers on Form 8606 starting with line 6.
by Duckie
Sat Feb 10, 2024 6:46 pm
Forum: Personal Finance (Not Investing)
Topic: Turbotax guide for Roth Recharacterization and conversion
Replies: 65
Views: 7221

Re: Turbotax guide for Roth Recharacterization and conversion

For 2023 I was already maxing my Roth IRA up to $4900 (vanguard) however realized our combine income went over the qualification for a Roth IRA. I recharacterized this amount in October ($4900). From then on contributed the remaining ($1600) to a backdoor Roth to maximize $6500. When did you contribute the $1600 to the TIRA? If you converted the $1600 and the $4900, when did you? Month and year? During this time I also did a 401k conversion to a ROTH IRA that I know I will pay taxes on. I had two 1099-Rs sent to me. Each one of us for a rollover and one for Roth. The problem I'm facing is how to use turbo tax to characterize all of these? I have a 1099-R roll over 37,000 A 1099-R Roth IRA 4,900 Okay, you did three things in 2023. You: Cont...
by Duckie
Sat Feb 10, 2024 6:02 pm
Forum: Personal Finance (Not Investing)
Topic: traditional IRA and Roth IRA question
Replies: 22
Views: 2337

Re: traditional IRA and Roth IRA question

Due to the incoming limit, we can't contribute to Roth IRA directly, nor tax deduct for the traditional IRA. In 2023, I opened both traditional IRA and a Roth IRA for my spouse. We deposited $6500(post tax money) to the traditional IRA and then converted to Roth IRA after one day. So in 2023 you contributed $6500 to spouse's TIRA for 2023 and the next day converted 100% of the TIRA to a Roth IRA for a total of $6503.55. Good. When you do your 2023 taxes you will tell your tax-software (or accountant) that spouse made the $6500 contribution in 2023, that it was non-deductible, and that it was converted in 2023 for $6503.55. "Non-deductible" and "converted" will trigger Form 8606. If your spouse has no other non-Roth IRAs...
by Duckie
Thu Feb 08, 2024 9:55 pm
Forum: Personal Finance (Not Investing)
Topic: Inadvertently Funded Solo 401K with Non-Deductible T-IRA at Fidelity
Replies: 30
Views: 2285

Re: Help with Backdoor Roth and FreeTaxUSA

To confirm, your 2022 Form 8606 has $6000 on line 14? That's correct. So you did NOT deduct the $6000. Did you convert the $6000 basis in 2023? After more research and checking notes; no, I didn't convert the basis to ROTH but I did roll over to Solo 401k. You are NOT allowed to roll non-deductible IRA basis into a 401k. I don't know how you correct that. Do I ignore the basis on the '22 8606 and proceed to answer "No" to the "Did you have any nondeductible IRA contribution in prior years..." question? I don't know the regulations here but if you do choose to leave the non-deductible basis in the solo 401k then the answer to the question would be NO because the basis is gone. But if you do that (and they don't catch it)...
by Duckie
Thu Feb 08, 2024 8:24 pm
Forum: Personal Finance (Not Investing)
Topic: Inadvertently Funded Solo 401K with Non-Deductible T-IRA at Fidelity
Replies: 30
Views: 2285

Re: Help with Backdoor Roth and FreeTaxUSA

I then reach the Prior Year IRA Contributions screen. This is where I am getting a bit confused. The program asks "If you had any nondeductible IRA contribution in prior years, the prior year tax return would usually have a Form 8606 showing the amount." As it turns out, yes - I have a Form 8606 in our tax file from 2022 (just one for me, there isn't one for my wife) showing a basis of $6,000. To confirm, your 2022 Form 8606 has $6000 on line 14? The article states that I should click "yes" and enter this figure on the next page under "Enter total basis, if any, in traditional IRAs (including SEP and SIMPLE) for 2022 and earlier years:" I have tentatively placed $6,000 in this spot. Did you convert the $6000 b...
by Duckie
Thu Feb 08, 2024 6:13 pm
Forum: Personal Finance (Not Investing)
Topic: Turbotax guide for Roth Recharacterization and conversion
Replies: 65
Views: 7221

Re: Turbotax guide for Roth Recharacterization and conversion

I downloaded the desktop TT. Looked at my form 8606-T. It doesn't look right and I can't figure out why. Line 1: $6,500 (my 2023 contribution to traditional IRA which was later converted to roth) Line 2: $6,000 (from 2022 form 8606 line 14 - total basis - represents the recharacterized roth contribution from 2022 (i think)) Line 3: $12,500 Line 4: blank Line 5: $12,500 Lines 6-12: blank Line 13: $12,202 Line 14: $298 Line 15 a: 0 b: blank c: 0 Line 16-18: BLANK! I have followed the steps and put in all my 1099R's - 3 of them (the rollover 1099, the roth 1099, and the traditional 1099). Okay, in Wages & Income you entered: A 1099-R for the $5,985 Roth IRA recharacterization to the TIRA which happened in 2023 but was for 2022. A 1099-R f...
by Duckie
Tue Feb 06, 2024 6:21 pm
Forum: Personal Investments
Topic: Wash Sale
Replies: 6
Views: 675

Re: Wash Sale

Can someone help explain what qualifies as not substantially similar. The term is "substantially identical". In the future during a down turn market I will be selling VTSAX (Vanguard Total Stock Market Index Fund Admiral Shares) in my Brokerage account and I would like be able to buy a similar product in my tax deferred accounts at vanguard ideally with bond fund (VBTLX) that is not so heavily hit by the down turn, but obviously I would like it to not be substantially similar. I understand VTI would not work, but would something like VFIAX (Vanguard 500 Index Fund Admiral Shares) work? VFIAX would not trigger a wash sale with VTSAX. The two funds follow different indexes. Here is a list of possible Tax-Loss Harvest (TLH) retail p...
by Duckie
Mon Feb 05, 2024 5:12 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth (can l use my current Roth?)
Replies: 40
Views: 3231

Re: Backdoor Roth (can l use my current Roth?)

Okay, thanks, and I just completed it. But does this affect my 8606 (or do I just account on my current (unfiled) 8606 for the additional .14? This is a conversion IN 2024 so it does not affect your 2023 taxes. When you file your 2024 taxes you will get a 1099-R for the conversion of $6500.14. When you add that 1099 to your tax-software that amount should be transferred to your Form 8606 line 8 and show up on line 16. When it is transferred to the 1040 line 4a the 14 cents gets rounded down so line 4b will probably be $0. When you converted the $6500 did you request to convert $6500 or 100%? I'm not sure 100% will take care of trailing pennies, but even if not it is better to use 100% rather than the dollar amount because values sometimes ...
by Duckie
Sat Feb 03, 2024 5:28 pm
Forum: Personal Finance (Not Investing)
Topic: How to do a SEP to Roth IRA conversion in Turbotax
Replies: 2
Views: 389

Re: How to do a SEP to Roth IRA conversion in Turbotax

Rockbottomdweller , welcome to the forum. In 2023, I converted $5,769 and $2,618 of a SEP to my Roth IRA via Vanguard, for a total conversion of $8387. (I still have about $6,000 in the SEP that I hope to convert in '24, and separately, I made a $7,500 contribution to my Roth for TY23.) I enter the info from my 1099R, and Turbotax asks me, "What did you do with the money?" I select, "I moved the money to another retirement account." Next, Turbotax says: "Choose which of the following applies" - I rolled all of this money to another traditional IRA or other retirement account (or returned it to the same account). - I did a combination of rolling over, converting, or cashing out the money. This is where I get st...