Search found 9753 matches

by Spirit Rider
Sun Jan 27, 2019 3:13 pm
Forum: Personal Finance (Not Investing)
Topic: Roth solo 401(k) now more attractive given new 199A deduction announcement
Replies: 51
Views: 3518

Re: Roth solo 401(k) now more attractive given new 199A deduction announcement

Are you saying that the EMPLOYEE portion of traditional deductible self employment 401k reduces QBI? And a EMPLOYEE Roth contribution doesn't? Yes, see @FiveK's Sat Jan 26, 2019 4:18 pm post. Employee deferrals are deductible Roth contributions are not. Thanks. I am curious, what makes you (and oth...
by Spirit Rider
Sun Jan 27, 2019 2:45 pm
Forum: Personal Finance (Not Investing)
Topic: Will Medigap plan F become a 'death spiral'?
Replies: 49
Views: 3888

Re: Will Medigap plan F become a 'death spiral'?

Insurance is the sharing of risks. However, risk pools are used to make higher risk individuals pay more. For example, a younger driver with more accidents will have higher car insurance premiums as will an older smoker for health insurance premiums. The reason that there is guaranteed issue and the...
by Spirit Rider
Sun Jan 27, 2019 1:56 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Impact of Prior-year SIMPLE-IRA Contribution
Replies: 2
Views: 144

Re: Tax Impact of Prior-year SIMPLE-IRA Contribution

W-2 employee deferrals must be deducted from pay not already received by a pay date on or before 12/31.

An employee can not make a contribution themselves, and it is too late for a payroll deduction to count for 2018.
by Spirit Rider
Sun Jan 27, 2019 1:48 pm
Forum: Personal Finance (Not Investing)
Topic: Roth solo 401(k) now more attractive given new 199A deduction announcement
Replies: 51
Views: 3518

Re: Roth solo 401(k) now more attractive given new 199A deduction announcement

Sorry I am a little slow on the uptake with this issue. Are you saying that the EMPLOYEE portion of traditional deductible self employment 401k reduces QBI? And a EMPLOYEE Roth contribution doesn't? Yes, see @FiveK's Sat Jan 26, 2019 4:18 pm post. Employee deferrals are deductible Roth contribution...
by Spirit Rider
Sun Jan 27, 2019 1:38 pm
Forum: Personal Finance (Not Investing)
Topic: Payable on death (POD) accounts
Replies: 47
Views: 4196

Re: Payable on death (POD) accounts

POD, TOD and ITF accounts all fall under state Totten Trust laws. In some states, there is potential liability on these accounts to the probate court in the case of insolvent estates. This is rare unless the amount is large and/or there was fraudulent conveyance. Also, the IRS/states can go after su...
by Spirit Rider
Sun Jan 27, 2019 1:14 pm
Forum: Personal Finance (Not Investing)
Topic: Will Medigap plan F become a 'death spiral'?
Replies: 49
Views: 3888

Re: Will Medigap plan F become a 'death spiral'?

... I'm hoping someone with a working understanding of how insurance premiums are set can weigh-in with some insight. For example, are Plan insurance premiums really affected by the "pool" of participants? Insurance companies aren't charities. Thanks, that was productive. But back on point, if Unit...
by Spirit Rider
Sun Jan 27, 2019 12:07 pm
Forum: Personal Finance (Not Investing)
Topic: How to pay Fica for Employee [who is a parent]
Replies: 13
Views: 1607

Re: How to pay Fica for Employee [who is a parent]

rcborsadia wrote:
Sun Jan 27, 2019 11:07 am
Hi Anil, I am in similar Situation now. Wanted to see what was the conclusion and what you did for your parents? I have not filed W-2 or 1099 yet. Wanted your advice.
This is a four year old thread and contains some misinformation. I suggest starting a new thread.
by Spirit Rider
Sun Jan 27, 2019 11:49 am
Forum: Personal Investments
Topic: Sick to my stomach [Class C fund fees and portfolio questions]
Replies: 42
Views: 3971

Re: Sick to my stomach

Index funds at Vanguard, Fidelity and other low cost brokerages do not have loads on their index funds.

For that matter Vanguard and Fidelity do not have loads on the vast majority of their retail active funds.

Loads are typically found on active funds sold through advisors.
by Spirit Rider
Sun Jan 27, 2019 11:35 am
Forum: Personal Investments
Topic: Sick to my stomach [Class C fund fees and portfolio questions]
Replies: 42
Views: 3971

Re: Sick to my stomach

Could you explain what you mean by a "backend hit"? Is that a tax hit? Or a investment loss hit? Or are you meaning something else? Class C shares have 12b-1 annual fees some of which go to the advisor.. They also have what is called a backend load. This is essentially a commission fee charged when...
by Spirit Rider
Sun Jan 27, 2019 11:15 am
Forum: Personal Investments
Topic: Can you have max out a 401k and have a SEP-IRA?
Replies: 16
Views: 1015

Re: Can you have max out a 401k and have a SEP-IRA?

If the OP's goal is to continue doing the Backdoor Roth, but make pre-tax employer contributions, then any one-participant 401k would be better. If the OP wanted the flexibility to convert employer contributions to be Roth, the best option would be to adopt an ETrade one-participant 401k and select ...
by Spirit Rider
Sun Jan 27, 2019 10:59 am
Forum: Personal Investments
Topic: Sick to my stomach [Class C fund fees and portfolio questions]
Replies: 42
Views: 3971

Re: Sick to my stomach

Ah, so this is how Fidelity can afford to pay for its zero expense ratio Index Funds :wink: I would punish Fidelity by switching to a different low-cost provider, even if Fidelity also has a low-cost plan. I needed a good laugh. (And I am feeling angry enough to punish them indeed :) ) You would be...
by Spirit Rider
Sun Jan 27, 2019 10:47 am
Forum: Personal Investments
Topic: Sick to my stomach [Class C fund fees and portfolio questions]
Replies: 42
Views: 3971

Re: Sick to my stomach

Since it has been more than two years since your first SIMPLE IRA contribution. You can roll your entire SIMPLE balance to a Fidelity traditional IRA tommorow. Then take the backend hit immediately and exchange into index funds. Your current SIMPLE IRA plan is most certainly an advisor based plan. A...
by Spirit Rider
Sun Jan 27, 2019 10:24 am
Forum: Personal Finance (Not Investing)
Topic: Roth solo 401(k) now more attractive given new 199A deduction announcement
Replies: 51
Views: 3518

Re: Roth solo 401(k) now more attractive given new 199A deduction announcement

Can the deduction calculation be super simplified to the following? (there might be other factors I'm missing) 20% of Schedule C Income - SE tax deduction - SE health insurance - SE pre-tax retirement contribution vs. 20% of Taxable income - Roth conversion amount The deductions are applied to inco...
by Spirit Rider
Sun Jan 27, 2019 12:30 am
Forum: Personal Finance (Not Investing)
Topic: solo 401(k) effect on deductible IRA contributions
Replies: 3
Views: 229

Re: solo 401(k) effect on deductible IRA contributions

There is no need to go anywhere or do anything.

Active participant is what the IRS rules, regulations and the tax code actually state and what the actual practice that 401k plan administrators follow. It is just the descriptions in some non-authoritative places that cause the confusion.
by Spirit Rider
Sat Jan 26, 2019 9:40 pm
Forum: Personal Finance (Not Investing)
Topic: solo 401(k) effect on deductible IRA contributions
Replies: 3
Views: 229

Re: solo 401(k) effect on deductible IRA contributions

That is not correct. It is unfortunate that the IRS and others use the imprecise "covered" by an employer retirement plan. When the actual ctriteria is "active participant" in an employer retirement plan. You are only an active participant, when you have made contributions or contributions have been...
by Spirit Rider
Sat Jan 26, 2019 9:27 pm
Forum: Personal Finance (Not Investing)
Topic: Roth solo 401(k) now more attractive given new 199A deduction announcement
Replies: 51
Views: 3518

Re: Roth solo 401(k) now more attractive given new 199A deduction announcement

Am I correct in assuming that this doesn’t really affect S Corp QBI calculations? Those numbers seem like they’re already taken out of our profit/income total. While there is no 1/2 SE tax deduction for an S-Corp, the 1/2 employer share of FICA is already a business expense as is employer retiremen...
by Spirit Rider
Sat Jan 26, 2019 9:12 pm
Forum: Personal Finance (Not Investing)
Topic: Roth solo 401(k) now more attractive given new 199A deduction announcement
Replies: 51
Views: 3518

Re: Roth solo 401(k) now more attractive given new 199A deduction announcement

I converted, after talking to my tax accountant, $40,000 from my SEP IRA to a ROTH IRA to get my taxable income up to what I thought was my QBI to maximize he 20% deduction. I also contributed $46,000 to my SEP IRA. Does this mean that my $46,000 to my SEP IRA reduces my QBI and that my conversion ...
by Spirit Rider
Sat Jan 26, 2019 9:09 pm
Forum: Personal Finance (Not Investing)
Topic: Roth solo 401(k) now more attractive given new 199A deduction announcement
Replies: 51
Views: 3518

Re: Roth solo 401(k) now more attractive given new 199A deduction announcement

It also includes other deductions attributable to the trade or business including, but not limited to, deductible tax on self-employment in- come, self-employed health insurance, and contributions to qualified retirement plans. That is the same verbage from the final regulations. I want more detail...
by Spirit Rider
Sat Jan 26, 2019 9:01 pm
Forum: Personal Finance (Not Investing)
Topic: Roth solo 401(k) now more attractive given new 199A deduction announcement
Replies: 51
Views: 3518

Re: Roth solo 401(k) now more attractive given new 199A deduction announcement

Yes, the EE vs. ER distinction is only for the distributable nature of in-service rollovers. Yes, both EE and ER contributions are eligible for IRRs. I don't know Etrades policies for how they would treat a transfer from Fidelity. Would this be different than a rollover from an old 401(k) to a new ...
by Spirit Rider
Sat Jan 26, 2019 2:54 pm
Forum: Personal Finance (Not Investing)
Topic: Will Medigap plan F become a 'death spiral'?
Replies: 49
Views: 3888

Re: Will Medigap plan F become a 'death spiral'?

With Plan F high deductible, the Part B is included in the OOP expenses while Plan N high deductible, if it appears, presumably would not. Arguably this is less coverage. I wonder if the CA birthday rule would allow transfer from FHD to NHD with no medical underwriting? Is there such a thing as N-H...
by Spirit Rider
Sat Jan 26, 2019 1:09 pm
Forum: Personal Finance (Not Investing)
Topic: Roth solo 401(k) now more attractive given new 199A deduction announcement
Replies: 51
Views: 3518

Re: Roth solo 401(k) now more attractive given new 199A deduction announcement

This also means there is separate Roth vs traditional math for solo 401(k) vs IRA. Even this seems to still be under debate by the accountants though. One-participant Roth 401k vs. traditional 401k affects QBI, Roth vs. traditional IRA does not. A caveat, we are discussing preliminary interpretatio...
by Spirit Rider
Sat Jan 26, 2019 12:54 pm
Forum: Personal Finance (Not Investing)
Topic: Roth solo 401(k) now more attractive given new 199A deduction announcement
Replies: 51
Views: 3518

Re: Roth solo 401(k) now more attractive given new 199A deduction announcement

effectively have a 20% lower marginal tax rate, at least for those of us who can take the full deduction. Not to derail the thread, but I’ve been conceptually struggling to understand this myself. If I’m in the 22% tax bracket, aren’t I in that bracket regardless of whether I have a QBI deduction? ...
by Spirit Rider
Sat Jan 26, 2019 12:30 pm
Forum: Personal Finance (Not Investing)
Topic: Roth solo 401(k) now more attractive given new 199A deduction announcement
Replies: 51
Views: 3518

Re: Roth solo 401(k) now more attractive given new 199A deduction announcement

Terran's point is that with the QBI deduction, that 22% marginal rate is really 22% * 80% = 17.6%.

For someone going from 22% - 24% If the Roth contribution pushes you into the 24% marginal rate, tat is really 24% * 80% = 19.2%.

It doesn't make it a slam dunk, but it changes the scales somewhat.
by Spirit Rider
Sat Jan 26, 2019 12:20 pm
Forum: Personal Investments
Topic: Mega Backdoor Roth - Earnings Portion
Replies: 5
Views: 259

Re: Mega Backdoor Roth - Earnings Portion

There is nothing you want to do at this point except pay taxes on the earnings, which should be minimal.
by Spirit Rider
Sat Jan 26, 2019 12:11 pm
Forum: Personal Finance (Not Investing)
Topic: Roth solo 401(k) now more attractive given new 199A deduction announcement
Replies: 51
Views: 3518

Re: Roth solo 401(k) now more attractive given new 199A deduction announcement

Looking at a couple of solo 401(k) applications I now see they have an option to amend an existing plan. So you're saying as long as I apply to the new custodian by indicating that I'm amending an existing plan, do a trustee to trustee transfer of the assets, then close the accounts held at the old...
by Spirit Rider
Sat Jan 26, 2019 10:55 am
Forum: Personal Finance (Not Investing)
Topic: Roth solo 401(k) now more attractive given new 199A deduction announcement
Replies: 51
Views: 3518

Re: Roth solo 401(k) now more attractive given new 199A deduction announcement

Spirit Rider already replied to this, but I'll reply in my words too as this is a tricky topic and you never know what might make sense to someone. My understanding is actually the other way around from what you've written. That is, the various deductions that can be attributed to self employment i...
by Spirit Rider
Sat Jan 26, 2019 10:51 am
Forum: Personal Finance (Not Investing)
Topic: Roth solo 401(k) now more attractive given new 199A deduction announcement
Replies: 51
Views: 3518

Re: Roth solo 401(k) now more attractive given new 199A deduction announcement

I did something similar by converting some traditional IRA to Roth thinking that our taxable income would be less than my QBI given my solo 401(k) contributions. Since it now seems that those solo 401(k) contributions will also reduce my QBI, that no longer seems to be the case. Luckily, I only con...
by Spirit Rider
Sat Jan 26, 2019 12:59 am
Forum: Personal Finance (Not Investing)
Topic: calculating inflation-adjusted social security wages
Replies: 6
Views: 433

Re: calculating inflation-adjusted social security wages

The SSA has the downloadable anyPIA calculator that will do this and more.
by Spirit Rider
Sat Jan 26, 2019 12:56 am
Forum: Personal Investments
Topic: Want to buy $5k Paper i-Bond: Do I have prepay tax before 2019?
Replies: 14
Views: 1477

Re: Want to buy $5k Paper i-Bond: Do I have prepay tax before 2019?

AndroAsc wrote:
Sat Jan 26, 2019 12:31 am
I'm inferring this can be avoided if we overpay by $6k, so if you have a $1k "buffer zone" for errors in calculations?
It is the fact there is an error in the return that voids the I Bond purchase, not the change in the amount of the refund.
by Spirit Rider
Sat Jan 26, 2019 12:16 am
Forum: Personal Investments
Topic: 2018 contribution to a SEP / 2019 solo 401(k)
Replies: 2
Views: 308

Re: 2018 contribution to a SEP / 2019 solo 401(k)

You can not maintain a 5305-SEP IRA and a one-participant 401k for the same tax year. A SEP IRA is only maintained for a tax year that you make contributions. 2018 tax year SEP IRA contributions even if made in 2019, do not maintain the SEP IRA for 2019. You do not have to rollover the SEP IRA unles...
by Spirit Rider
Fri Jan 25, 2019 11:48 pm
Forum: Personal Investments
Topic: Can you have max out a 401k and have a SEP-IRA?
Replies: 16
Views: 1015

Re: Can you have max out a 401k and have a SEP-IRA?

Yes, you can continue to do the things you are currently doing. You can additionally open and contribute to a SEP IRA. For self-employed individuals, the maximum 25% of compensation is calculated as 20% of net self-employment earnings. You can convert the SEP IRA contribution immediately to a Roth ...
by Spirit Rider
Fri Jan 25, 2019 11:13 pm
Forum: Personal Finance (Not Investing)
Topic: Roth solo 401(k) now more attractive given new 199A deduction announcement
Replies: 51
Views: 3518

Re: Roth solo 401(k) now more attractive given new 199A deduction announcement

I answered this on WCI, but will repeat it here for the BH community. It is the opposite. Not only do the 1/2 SE tax, self-employed health insurance and retirement plan contribution deductions reduce taxable income, they must be deducted from business profits to calculate your QBI. Roth and after-ta...
by Spirit Rider
Fri Jan 25, 2019 6:42 pm
Forum: Personal Finance (Not Investing)
Topic: SIMPLE IRA contributions and MAGI
Replies: 3
Views: 168

Re: SIMPLE IRA contributions and MAGI

That document is flat out wrong. Seems like a Washington State employee was partaking of a little recreational marijuana on the job. A SIMPLE IRA employee deferral is not reported on W-2 Box 1 wages. There is no possible way for it to be included in AGI and therefore MAGI.
by Spirit Rider
Fri Jan 25, 2019 6:11 pm
Forum: Personal Finance (Not Investing)
Topic: Roth solo 401(k) now more attractive given new 199A deduction announcement
Replies: 51
Views: 3518

Re: Roth solo 401(k) now more attractive given new 199A deduction announcement

Yes, this is a pretty critical clarification in the 199A final regulations that changes a lot of assumptions. I have been waiting for a decade for Fidelity to add designated Roth accounts. I'm not hopeful, but then again, I never thought they would add fee free individual HSA accounts. I don't have ...
by Spirit Rider
Fri Jan 25, 2019 5:45 pm
Forum: Personal Consumer Issues
Topic: light fixtures with integrated LED
Replies: 19
Views: 1057

Re: light fixtures with integrated LED

LEDs are "driven" and controlled on circuit boards. Those electronic components are far more likely to fail than the embedded power supply circuitry. However, that is likely a distinction without a difference. When the fixture fails, the fixture fails and full replacement is likely. However, I would...
by Spirit Rider
Fri Jan 25, 2019 5:17 pm
Forum: Personal Consumer Issues
Topic: Too early to start on my taxes?
Replies: 45
Views: 3412

Re: Too early to start on my taxes?

I think it is unwise to file early this year with so many tax changes from the TCJA. This is especially true for anyone with a pass-thru business. The section 199A QBI deduction final regulations were just released within the last week. There are significant clarifications not included in the the pr...
by Spirit Rider
Fri Jan 25, 2019 5:05 pm
Forum: Personal Investments
Topic: Question about SEP IRA contributions for 2018?
Replies: 3
Views: 220

Re: Question about SEP IRA contributions for 2018?

As included in the link provided by @krow36. You actually have longer with a SEP IRA. You have until your tax filing deadline (4/15, MA/ME 4/17) and if you file an extension (10/15). The reason that TIAA only shows 2019 is because you do not designate the year of SEP IRA reporting. It is always repo...
by Spirit Rider
Fri Jan 25, 2019 2:48 pm
Forum: Personal Finance (Not Investing)
Topic: SIMPLE IRA contributions and MAGI
Replies: 3
Views: 168

Re: SIMPLE IRA contributions and MAGI

Yes, it was deferred from her salary and not included in her W-2 Box 1 wages that was reported as part of her agi.
by Spirit Rider
Fri Jan 25, 2019 2:43 pm
Forum: Personal Finance (Not Investing)
Topic: Sec 199A business tax deduction
Replies: 46
Views: 2454

Re: Sec 199A business tax deduction

§1.199A-3: QBI, Qualified REIT Dividends, Qualified PTP Income, A. QBI Section 199A(c)(1) provides that the term "QBI” means, for any taxable year, the net amount of qualified items of income, gain, deduction , and loss attributable to any qualified trade or business of the taxpayer. I'm not so sur...
by Spirit Rider
Fri Jan 25, 2019 1:11 pm
Forum: Personal Finance (Not Investing)
Topic: Sec 199A business tax deduction
Replies: 46
Views: 2454

Re: Sec 199A business tax deduction

There was critical clarifying information in the final regulations. 199A(IV)(A)(5) on pages 43 and 44 clarified that the QBI must be reduced by 1/2 SE tax, self-employed health insurance and and retirement plan deductible amounts. It was always known that those reduced taxable income that might ind...
by Spirit Rider
Fri Jan 25, 2019 11:03 am
Forum: Personal Finance (Not Investing)
Topic: Implementing a wealth tax
Replies: 64
Views: 3206

Re: Implementing a wealth tax

The U.S. has a long history with wealth taxes, but the trend since WW2 has been away from such taxes. Estate and inheritance taxes used to hit a very large number of people. However, the federal exclusion of > $10M has reduced that significantly. States have similarly raised their exclusions or elim...
by Spirit Rider
Fri Jan 25, 2019 10:14 am
Forum: Personal Investments
Topic: Mega Backdoor Roth Questions
Replies: 64
Views: 2828

Re: Mega Backdoor Roth Questions

6) The after tax 401K link in the wiki says under Disadvantages: "Legislative Risk: hopefully you could complete the rollover before the benefits were ended." What is meant by this please? To add a little context to why this is in the Wiki. In the 2016 and 2017 Whitehouse budget blueprints, it was ...
by Spirit Rider
Fri Jan 25, 2019 9:52 am
Forum: Personal Finance (Not Investing)
Topic: Sec 199A business tax deduction
Replies: 46
Views: 2454

Re: Sec 199A business tax deduction

There was critical clarifying information in the final regulations. 199A(IV)(A)(5) on pages 43 and 44 clarified that the QBI must be reduced by 1/2 SE tax, self-employed health insurance and and retirement plan deductible amounts. It was always known that those reduced taxable income that might indi...
by Spirit Rider
Thu Jan 24, 2019 10:28 pm
Forum: Personal Finance (Not Investing)
Topic: HSA Rollover
Replies: 31
Views: 3231

Re: HSA Rollover

I did a direct HSA rollover to Fidelity (no fees). The fidelity website has "account transfer" forms which you fill out and fidelity will take care of the rest. Other brokers may same similar features but I only know about fidelity. There are only two options with an HSA. Indirect rollovers or trus...
by Spirit Rider
Thu Jan 24, 2019 7:42 pm
Forum: Personal Finance (Not Investing)
Topic: HSA Rollover
Replies: 31
Views: 3231

Re: HSA Rollover

  1. An indirect rollover is a normally coded distribution followed by a contribution treated as a rollover.
  2. This is reported on Form 8889.
by Spirit Rider
Thu Jan 24, 2019 3:51 pm
Forum: Personal Finance (Not Investing)
Topic: Will Medigap plan F become a 'death spiral'?
Replies: 49
Views: 3888

Re: Will Medigap plan F become a 'death spiral'?

Medigap plan F is being phased out for new enrollees as of Jan 1, 2020. A small clarification. It is newly eligible enrollees as of Jan 1, 2020. If you become eligible for Medicare prior to Jan 1, 2020. You can enroll in Plan F and Plan F HD at any future date. There will be some opt-out by people ...
by Spirit Rider
Wed Jan 23, 2019 10:24 pm
Forum: Personal Investments
Topic: Does the "60-day" rule apply to all tIRA to Roth conversions?
Replies: 4
Views: 547

Re: Does the "60-day" rule apply to all tIRA to Roth conversions?

The early withdrawal penalty is a tax treatment and has nothing to do with the 60 day rollover.

If you do not meet the 60 day limit the distribution is permanent.
by Spirit Rider
Wed Jan 23, 2019 7:23 pm
Forum: Personal Finance (Not Investing)
Topic: 1099-R Inherited IRA: Is this surprising?
Replies: 17
Views: 1334

Re: 1099-R Inherited IRA: Is this surprising?

So, we couldn't just put it as a rollover on our 1040? I'm just checking, because getting an institution to change a tax form they already sent can by, let's say, difficult in my experience. Of course, we can try that first, but, if they refuse, will the IRS treat this as a taxable distribution eve...
by Spirit Rider
Wed Jan 23, 2019 6:55 pm
Forum: Personal Finance (Not Investing)
Topic: How does grandparent pay taxes from babysitting income?
Replies: 12
Views: 1967

Re: How does grandparent pay taxes from babysitting income?

You are making this harder than it needs to be. Pub 926 makes it clear that the employer has the responsibility and since your parents are exempt, there is no FICA due by anyone. The first intuit link is irrelevant. They are W-2 employees. The second link is wrong, you do have to report this income ...
by Spirit Rider
Wed Jan 23, 2019 6:08 pm
Forum: Personal Finance (Not Investing)
Topic: Solo 401k for startup with no revenue?
Replies: 3
Views: 303

Re: Solo 401k for startup with no revenue?

A business with only one or more self-employed individuals can not adopt a one-participant 401k until there is earned income. An S-Corp with only owners and optionally their spouses can adopt a one-participant 401k at any time. A C-Corp can not adopt a one-participant 401k unless it covers only you...