Search found 334 matches

by fyre4ce
Tue Nov 26, 2019 3:25 am
Forum: Personal Finance (Not Investing)
Topic: We have a prenup, now buying a house.
Replies: 117
Views: 7158

Re: We have a prenup, now buying a house.

I'm surprised no one else suggested this: buy the house entirely with your premarital assets, put your name only on the deed, and treat her as a tenant. Write up a lease, agree on a fair market rental price for a bedroom plus use of common areas of the house, and both sign it. She can give you a sec...
by fyre4ce
Mon Nov 25, 2019 11:11 pm
Forum: Personal Finance (Not Investing)
Topic: To much tax deffered investments?????? Put more into Mortage????
Replies: 18
Views: 2124

Re: To much tax deffered investments?????? Put more into Mortage????

Edit: couldn't sleep so decided to add some info to this post Ordinarily I recommend maxing out retirement accounts before making taxable investments or paying down a low-interest mortgage. But you have a lot of retirement accounts available - $90,000, or 64% of your gross income. With a pension an...
by fyre4ce
Sun Nov 24, 2019 11:21 pm
Forum: Personal Finance (Not Investing)
Topic: Am I on track for retirement (decades away)?
Replies: 14
Views: 1460

Re: Am I on track for retirement (decades away)?

Personally, we save as much as we can, within reason. What else can you do? Work longer if you have to. +1. With proper investments, worst case with this strategy is either early retirement or retire wealthy... :beer Agreed. For most people working a normal length career, without some unusual situa...
by fyre4ce
Fri Nov 22, 2019 11:10 am
Forum: Personal Finance (Not Investing)
Topic: Basic Question on Investment Taxes
Replies: 15
Views: 718

Re: Basic Question on Investment Taxes

^Presumably the OP will be contributing to a Roth 401(k) or Roth 403(b) and/or Roth IRA when he has some earned income to do so. They can live off of withdrawals from a taxable investment account and make their tax rate go to zero if they want to. None of this is rocket surgery for someone in medic...
by fyre4ce
Thu Nov 21, 2019 2:41 pm
Forum: Personal Finance (Not Investing)
Topic: What Counts in your Income Total for Tax Brackets?
Replies: 12
Views: 1584

Re: What Counts in your Income Total for Tax Brackets?

FiveK wrote:
Thu Nov 21, 2019 11:29 am
fyre4ce wrote:
Thu Nov 21, 2019 11:11 am
Wow, I learn something new every time I come on here. I thought there was only one "MAGI" but it looks like there are lots for different purposes.
Yup. There are at least eleven different versions of Modified Adjusted Gross Income (MAGI).
Great Wiki page!
by fyre4ce
Thu Nov 21, 2019 11:11 am
Forum: Personal Finance (Not Investing)
Topic: What Counts in your Income Total for Tax Brackets?
Replies: 12
Views: 1584

Re: What Counts in your Income Total for Tax Brackets?

Tax-free interest and bond income is not part of MAGI. This is not always true. For example, MAGIs for ACA and Medicare premium (IRMAA) purposes *do* include tax-exempt interest. drummerboy - Do you have a particular reason you asked about MAGI? (As fyre4ce wrote, the MAGI concept doesn't have any ...
by fyre4ce
Thu Nov 21, 2019 1:43 am
Forum: Personal Finance (Not Investing)
Topic: What Counts in your Income Total for Tax Brackets?
Replies: 12
Views: 1584

Re: What Counts in your Income Total for Tax Brackets?

For a taxable SPIA, the return of principal is tax-free (because it was already taxed), and this return is spread out evenly over some number of months after the annuity starts (anywhere between 120 and 410 - see IRS Form 1040 Instructions Simplified Method Worksheet). Any payments above this return...
by fyre4ce
Wed Nov 20, 2019 8:15 pm
Forum: Personal Finance (Not Investing)
Topic: What Counts in your Income Total for Tax Brackets?
Replies: 12
Views: 1584

Re: What Counts in your Income Total for Tax Brackets?

Withdrawals from Roth IRAs, 401k's, etc. Probably a typo there: Roth 401(k) withdrawals not counted, but deductible traditional 401(k) withdrawals counted. Non-deductible IRA contributions not counted (essentially return-of-basis) and non-deductible 401(k) withdrawals not counted. Did I get that ri...
by fyre4ce
Wed Nov 20, 2019 7:50 pm
Forum: Personal Finance (Not Investing)
Topic: What Counts in your Income Total for Tax Brackets?
Replies: 12
Views: 1584

Re: What Counts in your Income Total for Tax Brackets?

The 0% capital gains bracket isn't determined by your AGI (or MAGI) - it's determined by your taxable income, after either the Standard Deduction or itemized Schedule A deduction (and Section 199A deduction, if applicable) are subtracted. Stuff that counts toward your taxable income: Wages K-1 distr...
by fyre4ce
Wed Nov 20, 2019 1:18 pm
Forum: Personal Investments
Topic: Tax-efficiency confusion!
Replies: 22
Views: 1297

Re: Tax-efficiency confusion!

Analyses like this one suggest that it doesn’t matter where bond with yields of 3-4% or less are located. And this analysis suggests that stocks may have a long-term advantage in tax-advantaged accounts even with bond yields of 5%. With interest rates and bond yields being so low now, as a general r...
by fyre4ce
Wed Nov 20, 2019 10:36 am
Forum: Personal Finance (Not Investing)
Topic: Calculating Self-Employed Solo 401k employER contribution.
Replies: 21
Views: 811

Re: Calculating Self-Employed Solo 401k employER contribution.

The one thing you do not want to do is make excess employer contributions during the tax year . Unlike excess employee deferrals, excess employer contributions can not be returned. The one-participant 401k plan must report these excess employer contributions on Form 5330, pay a 10% excise tax penal...
by fyre4ce
Wed Nov 20, 2019 2:09 am
Forum: Personal Finance (Not Investing)
Topic: Calculating Self-Employed Solo 401k employER contribution.
Replies: 21
Views: 811

Re: Calculating Self-Employed Solo 401k employER contribution.

The one thing you do not want to do is make excess employer contributions during the tax year . Unlike excess employee deferrals, excess employer contributions can not be returned. The one-participant 401k plan must report these excess employer contributions on Form 5330, pay a 10% excise tax penal...
by fyre4ce
Tue Nov 19, 2019 3:57 pm
Forum: Personal Finance (Not Investing)
Topic: Calculating Self-Employed Solo 401k employER contribution.
Replies: 21
Views: 811

Re: Calculating Self-Employed Solo 401k employER contribution.

Right, she will receive a w-2s from the army and 1 side gig, but not the other 2 where the income will be 1099. So maybe I can use the formula in the original post to get an idea of how much to put aside for the 2019 contributions in 2020 ? Self-employment taxes are calculated in a straightforward ...
by fyre4ce
Tue Nov 19, 2019 3:09 pm
Forum: Personal Finance (Not Investing)
Topic: Calculating Self-Employed Solo 401k employER contribution.
Replies: 21
Views: 811

Re: Calculating Self-Employed Solo 401k employER contribution.

SpiritRider is undoubtedly the expert, but I can take a swing. The rules for multiple 401k's are as follows: *Your wife can't make more than $19k employee elective deferrals in a year (assuming age <50), no matter how many jobs she has or how many 401k's she has access to. *EmployER contributions wi...
by fyre4ce
Mon Nov 18, 2019 8:48 pm
Forum: Personal Finance (Not Investing)
Topic: How much is a Roth worth?
Replies: 48
Views: 7418

Re: How much is a Roth worth?

I completely understand. Thanks for he example. It does go to show that maybe spending an extra lets say $1k a year to be able to do a mega backdoor Roth starts to look really good despite the cost if done over long term if the alternative is just having money in taxable. Each person's situation is...
by fyre4ce
Mon Nov 18, 2019 8:11 pm
Forum: Personal Finance (Not Investing)
Topic: How much is a Roth worth?
Replies: 48
Views: 7418

Re: How much is a Roth worth?

I considered three investments types: "stock": 9% return, 2% yield, 90% qualified yield "blend": 7% return, 3% yield, 30% qualified yield "bond": 4% return, 4% yield, 0% qualified yield My apologies for being bit slow. Can you explain the above better? I just don't understand where you got the retu...
by fyre4ce
Mon Nov 18, 2019 7:07 pm
Forum: Personal Finance (Not Investing)
Topic: How much is a Roth worth?
Replies: 48
Views: 7418

Re: How much is a Roth worth?

removed - duplicate post
by fyre4ce
Mon Nov 18, 2019 4:46 pm
Forum: Personal Finance (Not Investing)
Topic: How much is a Roth worth?
Replies: 48
Views: 7418

Re: How much is a Roth worth?

It depends heavily on tax rates, investment types, and time horizon. I ran some cases through a spreadsheet of mine, and here are the results. I considered three investments types: "stock": 9% return, 2% yield, 90% qualified yield "blend": 7% return, 3% yield, 30% qualified yield "bond": 4% return, ...
by fyre4ce
Fri Nov 15, 2019 8:26 pm
Forum: Personal Investments
Topic: Any Tidbits on Reducing Income for 2,3 Years?
Replies: 9
Views: 1169

Re: Any Tidbits on Reducing Income for 2,3 Years?

Municipal money market funds, or a short or intermediate term muni bond fund, would be a good place to park money that will not generate taxable income. (I know tax-free bond income affects Social Security taxation, but IRMAA is based on MAGI which is not increased by tax-free income.) Edit: I just...
by fyre4ce
Wed Nov 13, 2019 6:32 pm
Forum: Personal Finance (Not Investing)
Topic: Math/excel help -present value, future value, inflation
Replies: 4
Views: 493

Re: Math/excel help -present value, future value, inflation

In general, the best way to account for inflation is to just subtract the predicted inflation rate from the nominal investment return, to get a real return. Doing that will adjust investment performance, tax bracket creep, and contribution size all for inflation; your analysis will be entirely in re...
by fyre4ce
Thu Nov 07, 2019 8:26 pm
Forum: Personal Investments
Topic: May need to move 401k money by end of year, but not eligible for new 401k until February
Replies: 27
Views: 1429

Re: May need to move 401k money by end of year, but not eligible for new 401k until February

Have you made any conversions in 2019 yet? If not, this is not a problem. Just do your next Roth conversion in 2020. You can make your 2019 non deductible contribution in either 2019 or before the April tax filing deadline in 2020. Not yet. But if I have an IRA balance on December 31st, 2019 from m...
by fyre4ce
Thu Nov 07, 2019 7:57 pm
Forum: Personal Investments
Topic: May need to move 401k money by end of year, but not eligible for new 401k until February
Replies: 27
Views: 1429

Re: May need to move 401k money by end of year, but not eligible for new 401k until February

I think your options are: 1) Rollover to a tIRA this year, and then either not do a Backdoor Roth IRA, or just eat the tax bill on the conversion if you already have. 2) If you can generate any 1099 income, open a Solo 401k and use that as a temporary holding account. It's a bit of extra work, but t...
by fyre4ce
Tue Nov 05, 2019 1:06 pm
Forum: Personal Finance (Not Investing)
Topic: Pay down 7% 403b loan or 3.74% car loan first?
Replies: 38
Views: 2095

Re: Pay down 7% 403b loan or 3.74% car loan first?

403b loan is 12.5k at 7% over 30 years. I currently max contributions and I'm told that they wont call the loan if i leave my job. No additional fees. Car loan is 39k at 3.74% over 5 years. The bigger principal on the car means im paying way more interest per month right now. Also the interest for ...
by fyre4ce
Mon Nov 04, 2019 3:46 pm
Forum: Personal Consumer Issues
Topic: Wife's car hit in a parking lot - how to deal with various issues?
Replies: 67
Views: 5554

Re: Wife's car hit in a parking lot - how to deal with various issues?

New information in the last five minutes - Whole new/different story - my wife just got another body shop estimate - over $5,000 because that place saw or found lot more damage beyond just the door. $5k is over the value of the car. Unless something else comes to light - I guess I start looking for...
by fyre4ce
Fri Nov 01, 2019 7:54 pm
Forum: Personal Investments
Topic: Self Employment Contributions to 401K
Replies: 3
Views: 268

Re: Self Employment Contributions to 401K

Do you have a C or S corporation? Some of the things you're saying seem to imply a non pass-through business.
by fyre4ce
Thu Oct 31, 2019 4:34 pm
Forum: Personal Consumer Issues
Topic: Halloween Candy - Favorites; Throw it in the Bag
Replies: 61
Views: 3398

Re: Halloween Candy - Favorites; Throw it in the Bag

livesoft wrote:
Thu Oct 31, 2019 4:28 pm
Trader Joe's Pound-Plus chocolate bars.
:mrgreen:
by fyre4ce
Wed Oct 30, 2019 2:24 pm
Forum: Personal Finance (Not Investing)
Topic: Solo401k Contributions
Replies: 11
Views: 650

Re: Solo401k Contributions

OK, got it, thanks!
by fyre4ce
Wed Oct 30, 2019 11:09 am
Forum: Personal Finance (Not Investing)
Topic: Solo401k Contributions
Replies: 11
Views: 650

Re: Solo401k Contributions

My understanding isn't quite matching the Mike Piper calculator. Example: Assume $30,000 net business earnings (revenue minus deductible expenses). SE tax is $4,238.87, and half SE tax is $2,119.43. So, net business earnings minus 1/2 SE tax is $27,880.57. I thought you are allowed to contribute $19...
by fyre4ce
Tue Oct 29, 2019 9:42 pm
Forum: Personal Finance (Not Investing)
Topic: California Fires: Landlord/Tenant Question
Replies: 71
Views: 4255

Re: California Fires: Landlord/Tenant Question

Not a lawyer, but... The OP does have a point. The fact that the power outage isn’t the landlord’s fault is relevant, but does not completely settle the issue. What if the fire, clearly not caused by the landlord, burned the whole apartment to the ground? Would the tenants still be responsible for p...
by fyre4ce
Tue Oct 29, 2019 7:52 pm
Forum: Personal Finance (Not Investing)
Topic: Solo401k Contributions
Replies: 11
Views: 650

Re: Solo401k Contributions

Do you have a 401k at your W2 job, and if so, have you already or will you contribute $19k to it? If so, your solo 401k contributions will be limited. You only get one $19k elective deferral per year, regardless of how many jobs and 401ks you have. If so, you’ll only be able to contribute 20% of net...
by fyre4ce
Tue Oct 29, 2019 6:31 pm
Forum: Personal Investments
Topic: Solo Roth 401k contributions after 70.5 and RMDs. How does this work?
Replies: 16
Views: 698

Re: Solo Roth 401k contributions after 70.5 and RMDs. How does this work?

The previous year-end balance determines the following year's RMD, not the current year. This is why your need to rollover the entire balance in the year before the year you turn 70.5 and then every year. Remember, what matters is the 12/31 balance, not when a given tax year's contributions are mad...
by fyre4ce
Tue Oct 29, 2019 3:39 pm
Forum: Personal Investments
Topic: Solo Roth 401k contributions after 70.5 and RMDs. How does this work?
Replies: 16
Views: 698

Re: Solo Roth 401k contributions after 70.5 and RMDs. How does this work?

Every mainstream low-cost prototype one participant 401k plan; E-Trade, Fidelity, Schwab, TD Ameritrade and Vanguard allow in-service withdrawals/rollovers at age 59.5. There is no need for a custom plan. You will want to rollover the main balance at least one year prior to the year you turn age 70...
by fyre4ce
Tue Oct 29, 2019 1:34 pm
Forum: Personal Investments
Topic: Solo Roth 401k contributions after 70.5 and RMDs. How does this work?
Replies: 16
Views: 698

Re: Solo Roth 401k contributions after 70.5 and RMDs. How does this work?

I looked into this recently and concluded that RMDs are required for a Solo 401k, both pre-tax and Roth, after age 70.5, even while working. It looks like the rules are different for Solo 401k vs. 401k at a larger employer. I concluded it might still be worth it because the RMD would effectively re...
by fyre4ce
Tue Oct 29, 2019 1:27 pm
Forum: Personal Investments
Topic: Solo Roth 401k contributions after 70.5 and RMDs. How does this work?
Replies: 16
Views: 698

Re: Solo Roth 401k contributions after 70.5 and RMDs. How does this work?

I don’t believe any prototype Solo 401k plan allows in-service rollovers to a Roth IRA. A custom plan (for a fee) can have that feature. Do you know of any custom 401k plans that allow in-service rollovers into a Roth IRA? I think the Mega Backdoor can be done with either in-plan Roth conversions (...
by fyre4ce
Tue Oct 29, 2019 10:08 am
Forum: Personal Investments
Topic: Solo Roth 401k contributions after 70.5 and RMDs. How does this work?
Replies: 16
Views: 698

Re: Solo Roth 401k contributions after 70.5 and RMDs. How does this work?

I looked into this recently and concluded that RMDs are required for a Solo 401k, both pre-tax and Roth, after age 70.5, even while working. It looks like the rules are different for Solo 401k vs. 401k at a larger employer. I concluded it might still be worth it because the RMD would effectively red...
by fyre4ce
Sat Oct 26, 2019 10:16 pm
Forum: Personal Investments
Topic: SEP IRA vs Backdoor Roth
Replies: 9
Views: 455

Re: SEP IRA vs Backdoor Roth

E*Trade's Solo 401k is indeed very good. They also recently added in a bunch of low cost Schwab mutual funds. If you would like more opportunities to save, you could consider getting a Solo 401k that supports the Mega Backdoor Roth (MBR). If you make $100k in your locums job (after subtracting 1/2 S...
by fyre4ce
Sat Oct 26, 2019 4:11 pm
Forum: Personal Finance (Not Investing)
Topic: Is principal portion of mortgage counted for savings rate purposes?
Replies: 126
Views: 6877

Re: Is principal portion of mortgage counted for savings rate purposes?

I find it helpful to think in terms of "wealth-building." Anything that increases the value of assets or decreases the value of liabilities (eg. pays off a debt) is building wealth. Under this definition, paying down a mortgage, either as an extra payment, or just the principal part of PITI payments...
by fyre4ce
Sat Oct 26, 2019 1:14 pm
Forum: Personal Finance (Not Investing)
Topic: Is principal portion of mortgage counted for savings rate purposes?
Replies: 126
Views: 6877

Re: Is principal portion of mortgage counted for savings rate purposes?

The same goes for buying a car. The buying the car event isn't a spending event. It has no net impact on net worth. You are trading one asset (cash) for another asset (a car) and debt if you took a loan. The spending comes from the operating cost of the car which includes the depreciation of the as...
by fyre4ce
Fri Oct 25, 2019 7:09 pm
Forum: Personal Finance (Not Investing)
Topic: Part time job (20h/wk) - how to shield income from taxes?
Replies: 36
Views: 2349

Re: Part time job (20h/wk) - how to shield income from taxes?

I was being a bit cryptic. My main point was, you have five years (in my example; or as many years as you are deferring) to think about how to get out of that predicament, or mitigate its effects. Once it is gone, it is gone forever. But if you have it deferred, if you happen to get laid off, or fo...
by fyre4ce
Fri Oct 25, 2019 5:21 pm
Forum: Personal Finance (Not Investing)
Topic: Part time job (20h/wk) - how to shield income from taxes?
Replies: 36
Views: 2349

Re: Part time job (20h/wk) - how to shield income from taxes?

You are not really shielding them from anything, but only postponing it to a later date. Gov will get their taxes one way or another. If a robber comes to your home and tells you "I can take your stuff today, or I can come back in 5 years and take them away", what would you say? Putting aside the t...
by fyre4ce
Thu Oct 24, 2019 12:28 pm
Forum: Personal Finance (Not Investing)
Topic: Part time job (20h/wk) - how to shield income from taxes?
Replies: 36
Views: 2349

Re: Part time job (20h/wk) - how to shield income from taxes?

I've never held a part-time job and had no idea what a 1099 is. Brief explanation - the IRS requires one of the parties in a work-for-pay situation to act as the "business". The "business" party gets a lot of freedom in deducting work-related expenses, and also gets the choice of retirement account...
by fyre4ce
Thu Oct 24, 2019 11:47 am
Forum: Personal Finance (Not Investing)
Topic: Part time job (20h/wk) - how to shield income from taxes?
Replies: 36
Views: 2349

Re: Part time job (20h/wk) - how to shield income from taxes?

Now she'll be getting it all as cash and I expect that income will be taxed heavily when we file our joint return. Is it not her obligation to pay the correct amount of taxes on the income she earned? The rest of us pay our taxes. I don't think he was proposing tax evasion, just deferring taxes to ...
by fyre4ce
Thu Oct 24, 2019 11:46 am
Forum: Personal Finance (Not Investing)
Topic: Part time job (20h/wk) - how to shield income from taxes?
Replies: 36
Views: 2349

Re: Part time job (20h/wk) - how to shield income from taxes?

Will continue to search for a job with a 401k. Want to make sure a key point doesn't get missed here - if she gets paid on a 1099, she can open a Solo 401k and put away $19,000 (assume under age 50) plus 20% of net business income. This should be a question that could be easily answered by talking ...
by fyre4ce
Thu Oct 24, 2019 10:10 am
Forum: Personal Finance (Not Investing)
Topic: Part time job (20h/wk) - how to shield income from taxes?
Replies: 36
Views: 2349

Re: Part time job (20h/wk) - how to shield income from taxes?

I make 200k/year. I max my own 401k and HSA. Your $200k and her $21k = $221k Subtracting your $19k 401k contribution does not get you under the $193k MAGI for her contribution to tIRA to be deductible. That eliminates that approach. Also subtract $7,000 for HSA, and possibly other above-the-line de...
by fyre4ce
Thu Oct 24, 2019 10:08 am
Forum: Personal Finance (Not Investing)
Topic: Part time job (20h/wk) - how to shield income from taxes?
Replies: 36
Views: 2349

Re: Part time job (20h/wk) - how to shield income from taxes?

Is your combined income low enough to qualify for tax advantaged traditional IRA contributions? It wouldn't matter in this case, because she doesn't have access to a retirement account at work. It does matter if her spouse is covered by a plan at work and the joint MAGI is greater than $193k. I gue...
by fyre4ce
Thu Oct 24, 2019 9:43 am
Forum: Personal Finance (Not Investing)
Topic: Part time job (20h/wk) - how to shield income from taxes?
Replies: 36
Views: 2349

Re: Part time job (20h/wk) - how to shield income from taxes?

Is your combined income low enough to qualify for tax advantaged traditional IRA contributions? It wouldn't matter in this case, because she doesn't have access to a retirement account at work. She will gross 20*52*$20=$20,800, and a tIRA will allow her to shelter $6000 (29%) or $7000 (34%) of the ...
by fyre4ce
Tue Oct 22, 2019 6:05 pm
Forum: Personal Finance (Not Investing)
Topic: Has anyone used MySolo401k.com, DiscountSolo401k.com, or Solo401k.com?
Replies: 147
Views: 8537

Re: Has anyone used MySolo401k.com, DiscountSolo401k.com, or Solo401k.com?

I am one of the "warn-ers". My warning is only for the mega back door Solo 401k (so far). This is because I think most ordinary solo 401k users are using mainstream plan providers that also do plan administration. This could be complete ignorance on my part, but that is how I currently understand i...
by fyre4ce
Tue Oct 22, 2019 4:31 pm
Forum: Personal Finance (Not Investing)
Topic: Has anyone used MySolo401k.com, DiscountSolo401k.com, or Solo401k.com?
Replies: 147
Views: 8537

Re: Has anyone used MySolo401k.com, DiscountSolo401k.com, or Solo401k.com?

This thread has contained some strong warnings from some very respected community members (Spirit Rider, tfb) about the Solo 401k, and the recommendation to hire a "real" Third Party Administrator (like Ascensus, but evidently not any of the businesses listed in the original post). To be crystal-cle...
by fyre4ce
Wed Oct 16, 2019 3:06 pm
Forum: Investing - Theory, News & General
Topic: Asset location for commodities
Replies: 16
Views: 1232

Re: Asset location for commodities

I appreciate the advice that commodities are not a good investment in general, but I'm trying to set that aside for the purposes of this thread, and asking more, in theory, what is the best location (not al location) for commodity assets - I don't understand this line of thinking. If you agree that...
by fyre4ce
Tue Oct 15, 2019 11:55 am
Forum: Investing - Theory, News & General
Topic: Asset location for commodities
Replies: 16
Views: 1232

Re: Asset location for commodities

I appreciate the advice that commodities are not a good investment in general, but I'm trying to set that aside for the purposes of this thread, and asking more, in theory, what is the best location (not al location) for commodity assets - basically asking whether taxable or tax-advantaged accounts ...