Search found 10590 matches

by Alan S.
Thu May 13, 2021 7:27 pm
Forum: Personal Investments
Topic: IRA (Roth) funding deadline issues
Replies: 8
Views: 575

Re: IRA (Roth) funding deadline issues

Most IRA custodians use the post mark rule for acceptance of contributions, and VG should be able to confirm that by phone. If they do, a mailed contribution to the Roth account should be accepted even if it takes a week to get there. VG would just check the envelope to see that it was postmarked be...
by Alan S.
Thu May 13, 2021 5:18 pm
Forum: Personal Finance (Not Investing)
Topic: Borrow From a Roth IRA to Buy a House
Replies: 12
Views: 1269

Re: Borrow From a Roth IRA to Buy a House

Question on this same subject: I rolled my Roth account from NW Mutual to Vanguard 3 years ago. I know one of the rules is "a withdrawal counts as qualified if the account is at least five years old". The Roth itself is at least 10 years old but the Vanguard account is only 3. Would I qua...
by Alan S.
Thu May 13, 2021 4:44 pm
Forum: Personal Finance (Not Investing)
Topic: RMD in year of retirement
Replies: 8
Views: 910

Re: RMD in year of retirement

I believe the key factor is age, not employment status... https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum-distributions "If you reached the age of 70½ in 2019 the prior rule applies, and you must take your first RMD by April 1, 2020. If you reach age 70 ½ ...
by Alan S.
Wed May 12, 2021 7:29 pm
Forum: Personal Investments
Topic: Extreme Roth IRA contribution penalty
Replies: 20
Views: 2020

Re: Extreme Roth IRA contribution penalty

With the money invested in a CD for some of this time, the 6% excise tax each year is likely to have been more than the CD earned for at least some of these years. Then it was moved to a balanced fund (asset allocation unknown), it still may not have made more than the 6% tax each year. It is possi...
by Alan S.
Wed May 12, 2021 1:23 pm
Forum: Personal Investments
Topic: Mega Backdoor (paid tax at withdrawal/rollover):Did not receive 1099-R
Replies: 9
Views: 560

Re: Mega Backdoor (paid tax at withdrawal/rollover):Did not receive 1099-R

Don't know why you have no 1099. When you ask Vanguard, tell us what they say. I'm wondering about taking the taxes out of the rollover/conversion, especially if your wife is under 59.5. Something does not feel Ok about that to me. Agree. A 1099R must be issued. With respect to withholding: 1) Only...
by Alan S.
Mon May 10, 2021 7:27 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth and Form 8606
Replies: 9
Views: 548

Re: Backdoor Roth and Form 8606

Yes, this is a confounding scenario because in this cycle timing there will be a Form 8606 line 14 balance to CO every year, and an adjusted YE TIRA balance due to the outstanding recharacterization. The non taxable ratio of each year's conversion will be calculated using two years of basis/adjusted...
by Alan S.
Mon May 10, 2021 5:59 pm
Forum: Personal Investments
Topic: SEP IRA Contribution Year Mix Up?
Replies: 2
Views: 189

Re: SEP IRA Contribution Year Mix Up?

Yes, nothing has changed. Vanguard must report contributions on Form 5498 in the year you actually made them, regardless of which year you indicate they are for on their contribution screen. You then report the SEP contribution on your 1040 for the year you intend them to be for. Maybe the question ...
by Alan S.
Mon May 10, 2021 5:49 pm
Forum: Personal Investments
Topic: Rollover 401k from previous employer - two check question
Replies: 6
Views: 399

Re: Rollover 401k from previous employer - two check question

Thanks all, I used the Fidelity Mobile app to deposit the second small after-tax check as a direct rollover to my Roth IRA. I appreciate the advice from all the posters, thank you. Fidelity's mobile app made this super easy, although I wish the help on their website was a little more clear. Anytime...
by Alan S.
Mon May 10, 2021 3:32 pm
Forum: Personal Finance (Not Investing)
Topic: Excess contribution Roth IRA - Vanguard process question
Replies: 10
Views: 653

Re: Excess contribution Roth IRA - Vanguard process question

If you either file your 2020 return by 5/17 OR file an extension by that date, you have until 10/15 (the extended due date) to actually complete the excess removal. This assumes that the excess contribution was made in 2020, not in 2021 FOR 2020. The problem is that you need to know the amount of ga...
by Alan S.
Sat May 08, 2021 6:55 pm
Forum: Personal Finance (Not Investing)
Topic: Excess contribution Roth IRA - Vanguard process question
Replies: 10
Views: 653

Re: Excess contribution Roth IRA - Vanguard process question

Following is a typical excess contribution removal form. You do not need to know the amount of gain before submitting the form, since the form instructs the custodian to fund the removal by selling the holdings in the order listed. Therefore, if the first holding listed is not enough to fund the cas...
by Alan S.
Sat May 08, 2021 6:12 pm
Forum: Personal Investments
Topic: 457(b) Distributions
Replies: 7
Views: 841

Re: 457(b) Distributions

Since these plans are unfunded it is important to check your employer’s fiscal health. You can do this by searching for your employer and “bond ratings.” There are firewalls and paid services to wade through, but make sure you find a PDF report of your employer’s bond ratings. If they have good bond...
by Alan S.
Fri May 07, 2021 12:42 pm
Forum: Personal Investments
Topic: IRA rollover problem. Please help
Replies: 75
Views: 6551

Re: IRA rollover problem. Please help

Code Sec 408(d)(3)(B) states that a 60-day tax free rollover of an IRA distribution will not be allowed if during the prior 12 months the taxpayer "received any other amount from an IRA which was not includible in his gross income because of the application of this paragraph" (ie rollover...
by Alan S.
Thu May 06, 2021 5:20 pm
Forum: Personal Finance (Not Investing)
Topic: Secure Act 2.0
Replies: 6
Views: 819

Re: Secure Act 2.0

It would not affect those who are already subject to RMDs. Once an RMD begins it does not stop. A special exception was made for 2020 RMDs, but that only stopped them for that one year due to the pandemic. A similar situation occurred in 2009 due to the stock market crash. So if you were allowed to ...
by Alan S.
Thu May 06, 2021 4:04 pm
Forum: Personal Finance (Not Investing)
Topic: SOLVED: H&R BLOCK 1040 Line 1 (wrongly?) adding "Wages not on W-2 . . . . . . . .Self: 19,500"
Replies: 6
Views: 654

Re: H&R BLOCK 1040 Line 1 (wrongly?) adding "Wages not on W-2 . . . . . . . .Self: 19,550"

I am filling my taxes using H&R BLOCK and I am seeing a discrepancy between the sum of wages from W2 and line 1 of form 1040. When I looked closely, the software has a "Mini-worksheet for line 1, wages" and it shows that the software is adding "Wages not on W-2 . . . . . . . .Sel...
by Alan S.
Thu May 06, 2021 2:21 pm
Forum: Personal Investments
Topic: IRA rollover problem. Please help
Replies: 75
Views: 6551

Re: IRA rollover problem. Please help

Yes, I should have mentioned this parallels the point you made earlier. I tweaked it slightly in case OP remembers that he did receive the big check first. I think it makes the outcome more definite and goes from saying "I choose to have the first deposit returned" to "I must have th...
by Alan S.
Thu May 06, 2021 1:12 pm
Forum: Personal Investments
Topic: IRA rollover problem. Please help
Replies: 75
Views: 6551

Re: IRA rollover problem. Please help

Update: Someone from Ally bank called me. She was from IRA dept. Very nice lady and very helpful. She said they are okay with big check to be rolled over and the small check to be converted to Roth IRA She said she needs time. She said she had a meeting with analysts and tax people to make sure if ...
by Alan S.
Thu May 06, 2021 11:24 am
Forum: Personal Finance (Not Investing)
Topic: Addressing Form 8606 Nerds
Replies: 6
Views: 939

Re: Addressing Form 8606 Nerds

We tend to avoid the pro rata rule here. Unless you can move the tax-deferred to an employer plan or convert it all in a few years, you will be stuck with the pro rata rule until all your tax-deferred IRAs are all emptied out. I can’t recall a recommendation here for someone to get into that situat...
by Alan S.
Wed May 05, 2021 9:33 pm
Forum: Personal Finance (Not Investing)
Topic: Addressing Form 8606 Nerds
Replies: 6
Views: 939

Addressing Form 8606 Nerds

Kitces via Jeff Levine has released the following extensive article on TIRA basis, including a history and source of such basis, and a decription of the many ways that IRA basis may be lost in the shuffle. The article includes several ways to reconstruct missing IRA basis, and includes in one articl...
by Alan S.
Wed May 05, 2021 6:31 pm
Forum: Personal Investments
Topic: 401k to Roth Rollover. Do I need to contribute the tax amount into Roth?
Replies: 26
Views: 1296

Re: 401k to Roth Rollover. Do I need to contribute the tax amount into Roth?

Per Sec 3405(c)(2), there is no withholding even though a rollover to a Roth IRA will be taxable. As long as the transfer is made by direct rollover you will not have to deal with withholding, but since this rollover will add taxable income you need to figure out some other way to pay the taxes. Of ...
by Alan S.
Wed May 05, 2021 1:06 pm
Forum: Personal Finance (Not Investing)
Topic: difference between rollover and conversion
Replies: 9
Views: 722

Re: difference between rollover and conversion

A conversion is limited to a distribution from a non Roth IRA and a rollover to a Roth IRA, so it's a special type of rollover. A transfer from a pre tax qualified plan to a Roth IRA functions like a conversion in most ways, but is not a conversion. Technically, it is called a "qualified rollov...
by Alan S.
Tue May 04, 2021 7:42 pm
Forum: Personal Finance (Not Investing)
Topic: Excess contribution 401k > Mega backdoor IRA Filing
Replies: 5
Views: 492

Re: Excess contribution 401k > Mega backdoor IRA Filing

I think I got the last question regarding the excess contribution sorted as well but would love a sanity check if someone has some knowledge on this. So for the excess amount of 388.19 that will come from the Roth account next year - I have entered a dummy 1099-R with box 1 388.19 box 2a 90.29 and ...
by Alan S.
Tue May 04, 2021 3:59 pm
Forum: Personal Finance (Not Investing)
Topic: Rolled over Roth 401K into Traditional IRA
Replies: 3
Views: 475

Re: Rolled over Roth 401K into Traditional IRA

First of all thank you for taking the time to explain, it means alot to us. Yes box 5 is $28,722. So that means will be be taxed on the difference of that right? do you know at what rate? Yes, the taxable amount would be Box 1 less Box 5, so about 14,000+. This would also be subject to the 10% pena...
by Alan S.
Tue May 04, 2021 3:42 pm
Forum: Personal Finance (Not Investing)
Topic: Coronavirus related distribution
Replies: 7
Views: 611

Re: Coronavirus related distribution

Thank you! The 2020 tax return has not been filed, so it sounds like there will be no need to amend, just decide whether to repay $600 or $1800 or none. If the regular IRA contribution will increase their EIC, then declaring all of the CRD in income would reduce it unless the entire 1800 is repaid ...
by Alan S.
Tue May 04, 2021 2:27 pm
Forum: Personal Finance (Not Investing)
Topic: "Rollover" on 1040 lines 4/5 for Roth conversions?
Replies: 6
Views: 334

Re: "Rollover" on 1040 lines 4/5 for Roth conversions?

Which tax software? Turbotax has a confusingly worded question that, if answered incorrectly, causes this "Rollover" symptom during reporting of a Roth conversion. The Finance's Buff's step-by-step illustrated guide to entering the Roth conversion portion of a the backdoor Roth process sp...
by Alan S.
Tue May 04, 2021 2:14 pm
Forum: Personal Finance (Not Investing)
Topic: Coronavirus related distribution
Replies: 7
Views: 611

Re: Coronavirus related distribution

Therefore, if friend can afford to repay the entire 1800, this will be reported on the 8915 E for 2020. The 8915 E form is somewhat complex, but if friend can repay the entire 1800 in the next few days, an 8915 will not be required in 2021 or 2022, and an amended return will be avoided. In this cas...
by Alan S.
Tue May 04, 2021 1:34 pm
Forum: Personal Finance (Not Investing)
Topic: "Rollover" on 1040 lines 4/5 for Roth conversions?
Replies: 6
Views: 334

Re: "Rollover" on 1040 lines 4/5 for Roth conversions?

Hi, I used new tax SW to file my 2020 return and at the time was unsure when the word "Rollover" should appear on lines 4/5 of the 1040 (and now a little confused by the IRS instructions). After inputing the data, I wound up with "Rollover" on both lines 4 & 5 and now questi...
by Alan S.
Tue May 04, 2021 11:34 am
Forum: Personal Finance (Not Investing)
Topic: Coronavirus related distribution
Replies: 7
Views: 611

Re: Coronavirus related distribution

I'm helping a friend with their 2020 tax return and uncertain how to treat this issue. Any help is greatly appreciated. First issue: In 2020 the friend withdrew $1,800 from a Rollover IRA and closed the account. If they ask Turbotax to treat the distribution as a CRD, it automatically taxes $600. I...
by Alan S.
Mon May 03, 2021 11:08 pm
Forum: Personal Finance (Not Investing)
Topic: Segregating Inherited/Non-Inherited Funds - Philosophy
Replies: 7
Views: 956

Re: Segregating Inherited/Non-Inherited Funds - Philosophy

Hello, Was curious about board members' approaches to segregating inherited and self-earned funds. I understand money is fungible, but I keep my earned-money account separate from my inherited account. I (late 30's) feel like I've been pretty successful in my own right, but keeping the amounts sepa...
by Alan S.
Mon May 03, 2021 10:57 pm
Forum: Personal Finance (Not Investing)
Topic: Excess contribution 401k > Mega backdoor IRA Filing
Replies: 5
Views: 492

Re: Excess contribution 401k > Mega backdoor IRA Filing

I am getting a bit confused regarding an excess contribution I made and how to enter it into TaxAct and was looking for a bit of help. I made a clerical error and contributed 57,297.90 to my 401k plan leaving me with an excess contribution of after-tax dollars of 297.90 for 2020. Prior to catching ...
by Alan S.
Mon May 03, 2021 10:03 pm
Forum: Personal Investments
Topic: "Spousal IRA" limits for higher income
Replies: 8
Views: 984

Re: "Spousal IRA" limits for higher income

Thank you both. The bottom line, I think, is that whatever my maximum is for a Roth IRA is also the maximum for the spousal IRA. Yes. But, your wife can also make a partial contribution to a traditional IRA and deduct it. This is in addition to the Roth contribution for the wife. Whether or not the...
by Alan S.
Mon May 03, 2021 9:33 pm
Forum: Personal Investments
Topic: 401(K) Rule of 55 and roll over IRA funds in 401(K)
Replies: 4
Views: 576

Re: 401(K) Rule of 55 and roll over IRA funds in 401(K)

The age 55 penalty exception is automatic for any qualified plan from which the participant separates from service in the year of the 55th birthday or later. Therefore, if the participant separates at 55 from one plan and again at 57 from the next plan, distributions from either plan qualify for the...
by Alan S.
Mon May 03, 2021 8:00 pm
Forum: Personal Finance (Not Investing)
Topic: Excess 2018 Traditional IRA contribution
Replies: 30
Views: 1319

Re: Excess 2018 Traditional IRA contribution

Thank you. I did report all non-deductible contributions since last couple years, including 2018. I have not included the forgotten excess contribution as basis on the 2018 form 8606. Sounds like you are suggesting to amend it . following is the paragraph from publication 590-A for contributions wi...
by Alan S.
Mon May 03, 2021 8:00 pm
Forum: Personal Finance (Not Investing)
Topic: Excess 2018 Traditional IRA contribution
Replies: 30
Views: 1319

Re: Excess 2018 Traditional IRA contribution

Thank you. I did report all non-deductible contributions since last couple years, including 2018. I have not included the forgotten excess contribution as basis on the 2018 form 8606. Sounds like you are suggesting to amend it . following is the paragraph from publication 590-A for contributions wi...
by Alan S.
Mon May 03, 2021 4:25 pm
Forum: Personal Finance (Not Investing)
Topic: Excess 2018 Traditional IRA contribution
Replies: 30
Views: 1319

Re: Excess 2018 Traditional IRA contribution

Thank you. As far as the 8606 goes-- the instructions state the I dont have the include distributions that are the result of returned excess contribution. I also realize that I cant just leave the excess 5500$ in my account as of dec 31st 2021 as this is the first year of me performing a backdoor r...
by Alan S.
Mon May 03, 2021 2:55 pm
Forum: Personal Finance (Not Investing)
Topic: Rolled over Roth 401K into Traditional IRA
Replies: 3
Views: 475

Re: Rolled over Roth 401K into Traditional IRA

Hi Boggleheads, On March 2020 my husband moved his 401K (which consisted of 49K TIRA & 43K ROTH) to a Vanguard retirement account as a rollover. The previous bank sent him one check for 92K. As soon as he got the check he sent it to Vanguard for deposit. The check did not specify Roth or Tira, ...
by Alan S.
Mon May 03, 2021 2:08 pm
Forum: Personal Investments
Topic: Beneficiary designation for a 401k trust in AZ
Replies: 3
Views: 258

Re: Beneficiary designation for a 401k trust in AZ

If an individual sets up a custom 401k for a mega-backdoor Roth in the form of a trust (The trust would hold 4 accounts: Pretax and Roth contributions for husband+wife), how can the individual ensure that his next of kin are beneficiaries for the 401k? When the custodian was asked, the response was...
by Alan S.
Sun May 02, 2021 1:05 pm
Forum: Personal Investments
Topic: IRA rollover problem. Please help
Replies: 75
Views: 6551

Re: IRA rollover problem. Please help

OK, the answer eliminates a possible work around to Ally's decision to consider the small check as the permitted rollover, making the large check an excess contribution. Even if the ML checks were deposited and commingled in a checking account does not mean that Ally would change their position. As...
by Alan S.
Sun May 02, 2021 12:23 pm
Forum: Personal Investments
Topic: Taxation of missed RMD's / inherited IRA
Replies: 5
Views: 631

Re: Taxation of missed RMD's / inherited IRA

Surprised at what Fidelity indicated about the 403b RMD. An employer plan is required to complete current year RMDs before doing direct rollovers to either participants or beneficiaries. Therefore, the inherited 403b plan should distribute the RMD before the direct rollover since the direct rollover...
by Alan S.
Sat May 01, 2021 9:10 pm
Forum: Personal Investments
Topic: IRA rollover problem. Please help
Replies: 75
Views: 6551

Re: IRA rollover problem. Please help

OK, the answer eliminates a possible work around to Ally's decision to consider the small check as the permitted rollover, making the large check an excess contribution. Even if the ML checks were deposited and commingled in a checking account does not mean that Ally would change their position. As ...
by Alan S.
Sat May 01, 2021 6:40 pm
Forum: Personal Investments
Topic: Does getting a W2 each year allow me to delay RMDs from 401K?
Replies: 18
Views: 2488

Re: Does getting a W2 each year allow me to delay RMDs from 401K?

We have been addressing the question of plan RMDs, however OP's 401k contains a designated Roth option to which recent contributions have been made. No telling what the breakdown is between the pre tax balance and the Roth balance. While prior comments regarding RMDs in general apply to both section...
by Alan S.
Sat May 01, 2021 2:10 pm
Forum: Personal Finance (Not Investing)
Topic: Please Help - No Beneficiary Listed on Deceased IRA
Replies: 31
Views: 3226

Re: Please Help - No Beneficiary Listed on Deceased IRA

If the decedent’s spouse disclaims the IRA, then wouldn’t it revert to the estate and thus go into the trust as intended? Yes, but then the trust would have to withdraw it over five years turning it into a hugely inefficient tax bomb. Good point. If a pour over will transferred the IRA to the trust...
by Alan S.
Sat May 01, 2021 1:53 pm
Forum: Personal Investments
Topic: Does getting a W2 each year allow me to delay RMDs from 401K?
Replies: 18
Views: 2488

Re: Does getting a W2 each year allow me to delay RMDs from 401K?

The plan should have a policy regarding the amount of work required to meet the "still working" exception. Due to part time hours, job sharing, etc most plans should have a clear rule. It is also possible that a plan might require RMDs for all staff at 72, as a plan can be more restrictive...
by Alan S.
Fri Apr 30, 2021 7:49 pm
Forum: Personal Finance (Not Investing)
Topic: Excess 2018 Traditional IRA contribution
Replies: 30
Views: 1319

Re: Excess 2018 Traditional IRA contribution

What if nobody discovered this excess contribution and it went unrecognized till I started taking rmds at retirement? Not sure if I have done myself a favor by discovering this now or just opened a pandora box for no reason. Vanguard or fidelity didnt pickup on it. My CPAs from 2018 and 2019 certai...
by Alan S.
Fri Apr 30, 2021 7:36 pm
Forum: Personal Finance (Not Investing)
Topic: Please Help - No Beneficiary Listed on Deceased IRA
Replies: 31
Views: 3226

Re: Please Help - No Beneficiary Listed on Deceased IRA

When an IRA agreement includes a default beneficiary, the IRA goes directly to that beneficiary, and avoids probate. Of course, if the default beneficiaries run out, then it doesn't. The estate attorney who originally set up this plan should be consulted to see if they have any notes regarding what ...
by Alan S.
Fri Apr 30, 2021 1:08 pm
Forum: Personal Finance (Not Investing)
Topic: Excess Roth IRA contribution withdraw before 2020 deadline
Replies: 8
Views: 619

Re: Excess Roth IRA contribution withdraw before 2020 deadline

If the corrective distribution 1099R shows an early distribution code, a 5329 is not needed. The 10% penalty can be entered directly on the appropriate 1040 schedule.
by Alan S.
Fri Apr 30, 2021 12:38 pm
Forum: Personal Investments
Topic: IRA rollover problem. Please help
Replies: 75
Views: 6551

Re: IRA rollover problem. Please help

Could BOTH contributions be distributed as excess contributions? And then either the larger one be “re-deposited” into tIRA and the smaller one converted to Roth, or The larger one rolled into 401(k)? I am not sure What is tIRA by the way? No. Unless you are going to state that BOTH of these are ex...
by Alan S.
Fri Apr 30, 2021 12:13 pm
Forum: Personal Investments
Topic: IRA rollover problem. Please help
Replies: 75
Views: 6551

Re: IRA rollover problem. Please help

Just talked to a tax attorney but he was not specialized in IRAs but he said this about Roth IRA. Even though i try to convert 2nd check of 340k to roth ira from traditional , i would not be able to do that due to income limitations. But he was not positive. Agree, he does not specialize in IRAs! 2...
by Alan S.
Fri Apr 30, 2021 11:51 am
Forum: Personal Investments
Topic: Community Prop. State-specific Restrictions on Creating a CPWROS Brokerage Account?
Replies: 2
Views: 192

Re: Community Prop. State-specific Restrictions on Creating a CPWROS Brokerage Account?

Hi Bogleheads I would like to create a brokerage account titled as Community Property with Rights of Survivorship (CPWROS). Spouse and I live in a Community Property state (Washington state). However, in my attempt to open such an account at Schwab, I was told that they cannot since "Washingto...
by Alan S.
Fri Apr 30, 2021 11:37 am
Forum: Personal Finance (Not Investing)
Topic: Please Help - No Beneficiary Listed on Deceased IRA
Replies: 31
Views: 3226

Re: Please Help - No Beneficiary Listed on Deceased IRA

If the estate plan included a trust inheriting the IRA, the trust must be specified in the IRA beneficiary clause. If the trust was a testamentary trust created in the will, then the IRA agreement must state that. This could be a case where the owner thought that the will would take care of everythi...