Search found 10481 matches

by Alan S.
Mon Apr 12, 2021 4:51 pm
Forum: Personal Investments
Topic: Withdrawing from 401k/Roth 401k
Replies: 2
Views: 126

Re: Withdrawing from 401k/Roth 401k

In previous years I have invested in a traditional 401k at work. Recently we have been offered a roth 401k option to use. I started to use the ROTH 401k to pay less taxes when it is time for me to withdraw...ie 59 and it has been in a roth 401k for 5 years... I tried looking at my statement...and i...
by Alan S.
Mon Apr 12, 2021 3:16 pm
Forum: Personal Investments
Topic: Question on simultaneous 72t & Roth ladder
Replies: 14
Views: 917

Re: Question on simultaneous 72t & Roth ladder

With 72t plans, complex structures attract IRS attention, attention you would rather not have. Yes, you can have both TIRA and Roth accounts in your SEPP universe and even select which one to distribute from to control your annual taxable income, but the IRS sees very few of these. If you partition...
by Alan S.
Mon Apr 12, 2021 2:00 pm
Forum: Personal Finance (Not Investing)
Topic: 2020 Roth Conversion 8606 Question
Replies: 10
Views: 346

Re: 2020 Roth Conversion 8606 Question

We have heard of many cases where tax preparers do not understand back door Roth transactions and reporting. That said, this is only one facet of your entire return. If all the rest of it is done correctly and efficiently, I would give him another year. 2021 will also be simpler if you can make your...
by Alan S.
Sun Apr 11, 2021 8:50 pm
Forum: Personal Investments
Topic: Partial rollover of current 401k to Vanguard
Replies: 4
Views: 409

Re: Partial rollover of current 401k to Vanguard

I turn 60 this year, I think my plan does allow in service withdrawals (non hardship ) , I just need the okay from the company. Thank you for the link! What is the correct terminology for this? Is it a withdrawal or a in kind transfer? I do not want any tax consequences. Thanks It is a "distri...
by Alan S.
Sun Apr 11, 2021 4:53 pm
Forum: Personal Finance (Not Investing)
Topic: [How to deal with] 1099-R with code(s) PJ
Replies: 1
Views: 154

Re: [How to deal with] 1099-R with code(s) PJ

[Post edited and split into own thread by Moderator Misenplace] Hi - I'm in the exact same situation as the original poster in this thread Subject: Confused by 1099-R with code(s) PJ except I do have a small taxable amount ($370 taxable, $110 federal taxes withheld). In 2019, I contributed to my RO...
by Alan S.
Sun Apr 11, 2021 12:43 pm
Forum: Investing - Theory, News & General
Topic: Strategy for RMD to ROTH
Replies: 4
Views: 463

Re: Strategy for RMD to ROTH

Hello, I have an inherited Vanguard IRA that I need to take out about 8k per year. I want to divide the amount up by 12 ( month in a year) and then move that amount to a Roth. Both accounts have VTSAX funds. So moving the same amount from IRA(VTSAX)...take out 15% fed and 5% state taxes.. and remai...
by Alan S.
Sun Apr 11, 2021 12:29 pm
Forum: Personal Finance (Not Investing)
Topic: Permissible to do a CARES Act withdrawal and Roth IRA contribution the same year?
Replies: 2
Views: 165

Re: Permissible to do a CARES Act withdrawal and Roth IRA contribution the same year?

If someone has made a CARES Act distribution from a Roth 401k and repaid that into a Roth IRA, can they also contribute to the Roth IRA the same taxable year? Or does the repayment into the Roth IRA essentially count as the contribution for that year? What if the repayment was made the following ca...
by Alan S.
Sun Apr 11, 2021 12:03 pm
Forum: Personal Investments
Topic: Question on simultaneous 72t & Roth ladder
Replies: 14
Views: 917

Re: Question on simultaneous 72t & Roth ladder

With 72t plans, complex structures attract IRS attention, attention you would rather not have. Yes, you can have both TIRA and Roth accounts in your SEPP universe and even select which one to distribute from to control your annual taxable income, but the IRS sees very few of these. If you partition ...
by Alan S.
Sun Apr 11, 2021 10:40 am
Forum: Personal Finance (Not Investing)
Topic: Can I have a employer Traditional 401K and a Roth IRA simultaneously and contribute to both in the same year
Replies: 17
Views: 1555

Re: Question regarding Traditional IRA for spouse MAGI limits

Hello Friends, My situation is I am married filing jointly. I contribute maximum possible to my employer provided 401K (~19.5K). My wife is a home maker and I put maximum possible 6 K to her IRA. Now the Traditional IRA AGI/MAGI limits for my spouse in our situation, "Married filing jointly wi...
by Alan S.
Sat Apr 10, 2021 10:05 pm
Forum: Personal Finance (Not Investing)
Topic: [Spouse recently passed away. Please help me handle his financial matters]
Replies: 85
Views: 4330

Re: Inherited IRA or IRA rollover?

Background: my husband died in Januray and left me his retirement accounts. I am working but need to replace his income from this money now. I heard that you can tranfer the monies into an inherited IRA and withdraw immediately without penalty (the money is income before taxes, of course). In fact,...
by Alan S.
Sat Apr 10, 2021 7:34 pm
Forum: Personal Finance (Not Investing)
Topic: Help me untangle this Roth tax issues: first time home purchase + rollover + over-contribution
Replies: 8
Views: 469

Re: Help me untangle this Roth tax issues: first time home purchase + rollover + over-contribution

instead of both of you  ‘recharacterizing’ $1310 from your respective Roths to your Traditional IRA, one of you could recharacterize $2620 (or more) instead. After reading the Backdoor Roth wiki page, if one of you has a large ‘Traditional’ IRA and no employer plan to roll the pre-tax money to, the...
by Alan S.
Sat Apr 10, 2021 4:53 pm
Forum: Personal Finance (Not Investing)
Topic: Help me untangle this Roth tax issues: first time home purchase + rollover + over-contribution
Replies: 8
Views: 469

Re: Help me untangle this Roth tax issues: first time home purchase + rollover + over-contribution

I've created a bit of a tricky situation with my family's Roth IRAs and I'd like your help sorting it out. PARTNER Partner withdrew the full value of her Roth ($29K) 6/29/20 to apply towards first time home purchase. The money flowed Roth --> Checking --> Savings --> Checking --> Wired to Escrow. W...
by Alan S.
Sat Apr 10, 2021 11:56 am
Forum: Personal Investments
Topic: Can I contribute the max to a traditional IRA if I made an excess contribution to a Roth IRA then withdrew it?
Replies: 5
Views: 401

Re: Can I contribute the max to a traditional IRA if I made an excess contribution to a Roth IRA then withdrew it?

I contributed $300 to a Roth IRA in early 2020, for tax year 2020. I subsequently found out that I am not eligible to contribute to a Roth IRA. So I withdrew the excess contribution + earnings, as required. I would now like to make a contribution to a traditional IRA for tax year 2020. How much can...
by Alan S.
Fri Apr 09, 2021 5:34 pm
Forum: Personal Investments
Topic: Roth IRA transfer basis
Replies: 4
Views: 583

Re: Roth IRA transfer basis

Thanks a lot for all the information! The additional $12,000 a year of after-tax contributions in my 401k are IRR if I understand that term right (As soon as the contribution is made, Fidelity automatically rolls it into the roth portion of my 401k). So, sounds like this shouldn't be too bad - I ca...
by Alan S.
Fri Apr 09, 2021 3:51 pm
Forum: Personal Investments
Topic: Please Help: After tax - non Roth 401k?
Replies: 10
Views: 917

Re: Please Help: After tax - non Roth 401k?

So, I just asked for a rollover from my 401K from a prior employer at Merrill to my IRA at Fidelity. Merrill cut two checks made out to Fidelity FOB me. The larger one was identified as pre tax 401k money. The smaller check is listed as ‘non-taxable amount eligible to be rolled over’. None of the m...
by Alan S.
Fri Apr 09, 2021 1:59 pm
Forum: Personal Investments
Topic: HELP! Mega Backdoor Roth
Replies: 4
Views: 407

Re: HELP! Mega Backdoor Roth

My current 401k plan allows me to make after-tax contributions, which I did last year with $17k after-tax contributions. It's currently in money market fund and has grown by about $200. The plan allows me to make in-service transfer/withdrawal of the after-tax amount (the $17k and $200), or do a Ro...
by Alan S.
Fri Apr 09, 2021 1:43 pm
Forum: Personal Finance (Not Investing)
Topic: desperately seeking help understanding Form 8606 on 2020 tax filing (ROTH recharacterization/conversion issues)
Replies: 25
Views: 1047

Re: desperately seeking help understanding Form 8606 on 2020 tax filing (ROTH recharacterization/conversion issues)

(my statement will be a little longer because the 2019 Roth contributions were spread across 12 months, but I have all the details on all of the dollar flows). For purposes of the statement it's surely OK to summarize, e.g., [of year-2019 Roth IRA contributions totaling $7000.00 on various dates sp...
by Alan S.
Fri Apr 09, 2021 12:48 pm
Forum: Personal Investments
Topic: Roth IRA transfer basis
Replies: 4
Views: 583

Re: Roth IRA transfer basis

Roth basis accounting must be done by you for a Roth IRA, and it is done by the plan administrator for a Roth 401k. Therefore, the 1099R reporting a direct rollover from Roth 401k to Roth IRA will show your Roth 401k basis in Box 5. Once in your Roth IRA, add the Box 5 amount to your existing Roth I...
by Alan S.
Fri Apr 09, 2021 11:11 am
Forum: Personal Investments
Topic: Recharacterization screwup - Can this be fixed?
Replies: 3
Views: 333

Re: Recharacterization screwup - Can this be fixed?

Assuming that VG does not see this as their fault and will not reconstruct your request, you now have a confusing array of choices: 1) You could have the now recharacterized 2020 TIRA contribution returned to you with earnings. Unfortunately, those earnings would be taxable and subject to penalty in...
by Alan S.
Fri Apr 09, 2021 10:36 am
Forum: Personal Investments
Topic: Missed RMD from inherited IRA
Replies: 3
Views: 446

Re: Missed RMD from inherited IRA

LE RMDs can begin in 2021 using the 12/31/2020 balance. The Table I divisor used for the 2021 RMD should be what it would have been for 2020, less 1.0. Complete the 2021 beneficiary RMD by 12/31/2021. You are also responsible for decedent's 2019 year of death RMD if decedent passed after RBD and did...
by Alan S.
Thu Apr 08, 2021 7:10 pm
Forum: Personal Finance (Not Investing)
Topic: TurboTax -- 1099-R Taxable Amount for Mega Backdoor Rollover
Replies: 3
Views: 276

Re: TurboTax -- 1099-R Taxable Amount for Mega Backdoor Rollover

Correction:

The second 4000 1099R should show 0 in 2a, not 4000. Pre tax dollars are going to a TIRA in a non taxable direct rollover.
by Alan S.
Wed Apr 07, 2021 9:33 pm
Forum: Personal Finance (Not Investing)
Topic: Roth 401k RMD's
Replies: 10
Views: 796

Re: Roth 401k RMD's

Most people should have no problem rolling over their Roth 401k to a Roth IRA before reaching 72. That will avoid any RMDs on the Roth money. Even if they are still working at 72 for the plan sponsor, if they complete an in service distribution prior to the year they retire, RMDs will be avoided. Th...
by Alan S.
Wed Apr 07, 2021 3:19 pm
Forum: Personal Finance (Not Investing)
Topic: CARES Act IRA Distribution/repayment - Tax Software
Replies: 13
Views: 797

Re: CARES Act IRA Distribution/repayment - Tax Software

I got the latest update from H&R today. However, it still doesn't work correctly. The issue is on the 8606 line 15b it says to put the amount attributable to disaster relief. The software is not doing that resulting in double taxation. It has 0 on that line. According to the 8606 directions for...
by Alan S.
Tue Apr 06, 2021 9:00 pm
Forum: Personal Finance (Not Investing)
Topic: Tax withheld on corrective distribution
Replies: 2
Views: 245

Re: Tax withheld on corrective distribution

I mistakenly had an excess salary deferral situation in 401k accounts after switching jobs in 2020, which resulted in an excess of employee contributions. I contacted my current employer's 401k custodian and they issued a corrective distribution of the excess salary deferred + the earnings from tha...
by Alan S.
Tue Apr 06, 2021 8:23 pm
Forum: Personal Investments
Topic: Coronavirus Retirement Withdrawal Ideas [Cash withdrawal, what now?]
Replies: 7
Views: 729

Re: Coronavirus Retirement Withdrawal Ideas [Cash withdrawal, what now?]

Hi Alan-- Thank you for working this out for me. Looks like taxes are the killer here (like usual), and you are recommending I return the money to the pre-tax plan. Thank you! It depends. If you perceive an advantage in adding to your Roth at current marginal rates (tantamount to a conversion) you ...
by Alan S.
Tue Apr 06, 2021 8:03 pm
Forum: Personal Investments
Topic: Are converted Roth IRA Contributions Penalty Free Withdrawal?
Replies: 36
Views: 2451

Re: Are converted Roth IRA Contributions Penalty Free Withdrawal?

The 1099R posted above is incorrect. Box 2a should be 0. Since code H signifies as direct rollover from a Roth 401k to a Roth IRA, there would never be taxable amount in 2a. Conversely, if this had been a distribution to the participant then 2a would be correct, but Box 7 would then have shown code ...
by Alan S.
Tue Apr 06, 2021 5:30 pm
Forum: Personal Investments
Topic: Coronavirus Retirement Withdrawal Ideas [Cash withdrawal, what now?]
Replies: 7
Views: 729

Re: Coronavirus Retirement Withdrawal Ideas [Cash withdrawal, what now?]

In 2020, I withdrew $100,000 from my IRA Rollover account in cash for the coronavirus relief bill. There was no selling of securities. I took the money in case I needed it, but it turns out I don't. My question is; what to do with it? 1. Return the money to the IRA Rollover and not pay taxes. 2. Fu...
by Alan S.
Tue Apr 06, 2021 4:22 pm
Forum: Personal Investments
Topic: Roth conversion order cancellation (1st post)
Replies: 11
Views: 978

Re: Roth conversion order cancellation (1st post)

OP, don’t touch anything in your IRAs until this is resolved. But since you were attempting to convert the small IRA, were you aware that the pro rata rule would apply when calculating taxes on any withdrawal or conversion from your TIRAs (and that it will continue to apply until all your TIRAs are...
by Alan S.
Tue Apr 06, 2021 1:41 pm
Forum: Personal Finance (Not Investing)
Topic: Anyone else see drastic increase in Zillow value today?
Replies: 127
Views: 12156

Re: Anyone else see drastic increase in Zillow value today?

SQRT wrote: Tue Apr 06, 2021 12:14 pm Up 8% in last 30 days. Paradise Valley Arizona.
Mine also - 8%. Prescott, AZ. Maybe the entire state?
They certainly know how to keep people checking. When is the next bump?
by Alan S.
Tue Apr 06, 2021 1:35 pm
Forum: Personal Finance (Not Investing)
Topic: IRA Beneficiary & Estate Question
Replies: 18
Views: 1147

Re: IRA Beneficiary & Estate Question

My mother, aunt, and uncle are all beneficiaries to their uncle's estate. Most accounts were put in a trust, and most of his IRAs had a beneficiary. However, there is one IRA that they were not listed on as beneficiaries (it had no beneficiaries). They didn't want to liquidate this IRA because of t...
by Alan S.
Tue Apr 06, 2021 10:20 am
Forum: Personal Finance (Not Investing)
Topic: CARES Act & Form 8915-E & TIRA to Roth conversions
Replies: 9
Views: 442

Re: CARES Act & Form 8915-E & TIRA to Roth conversions

Don't feel too bad about missing something, since IRS guidance was not clear about this. It was only after Notice 2020-50 was released in June and indicated that CRD repayments must be eligible for non taxable rollover treatment. A conversion is taxable, but the IRS could have been much more clear. ...
by Alan S.
Tue Apr 06, 2021 10:16 am
Forum: Personal Finance (Not Investing)
Topic: CARES Act & Form 8915-E & TIRA to Roth conversions
Replies: 9
Views: 442

Re: CARES Act & Form 8915-E & TIRA to Roth conversions

Don't feel like you missed something that was obvious. After the CARES Act was passed there was considerable confusion over whether a CRD from a pre tax plan could be repaid to a Roth plan. A few tax experts thought it could be for awhile. None of the IRS guidance specifically commented on this, alt...
by Alan S.
Mon Apr 05, 2021 7:43 pm
Forum: Personal Investments
Topic: Inherited IRA received in 2020 - RMD
Replies: 4
Views: 479

Re: Inherited IRA received in 2020 - RMD

I agree. You must start life expectancy RMDs in 2021. The disability will qualify you as an "EDB" (eligible designated beneficiary) that qualifies for the stretch. But you should secure some official documentation of your disability now such as a statement from your MD that you are disable...
by Alan S.
Mon Apr 05, 2021 5:50 pm
Forum: Personal Finance (Not Investing)
Topic: 401k distribution and taxes
Replies: 13
Views: 969

Re: 401k distribution and taxes

My wife's brokerage sent a check for $200 from a old 401k on Dec 21, 2020. We deposited the check into an IRA early February and plan to convert it to a Roth this year. My accountant says I would owe taxes and penalty on this for 2020: 1. Is this accurate? 2. How would I report the conversion and b...
by Alan S.
Mon Apr 05, 2021 3:17 pm
Forum: Personal Finance (Not Investing)
Topic: Tax software (Tax-Act) keeps track of prior Roth contributions, conversions, earnings?! New to me.
Replies: 11
Views: 607

Re: Tax software (Tax-Act) keeps track of prior Roth contributions, conversions, earnings?! New to me.

For the life of me, I can't figure out who to model a pre-60 Roth withdrawal correctly. I suspect it's because i'm not using the appropriate code on the 1099-R. I'm off to research how a custodian might report a (for example) $50,000 Roth withdrawal for my age (taxable amount not determined? What c...
by Alan S.
Mon Apr 05, 2021 2:50 pm
Forum: Personal Finance (Not Investing)
Topic: RMD(s) for Traditional IRA and Rollover IRA?
Replies: 10
Views: 887

Re: RMD(s) for Traditional IRA and Rollover IRA?

The only situation where the RMD result would be wrong using a total balance is having an IRA with a sole spousal beneficiary more than 10 years younger (Table II), and another IRA with a different beneficiary (Table III). Thank you for this comment. My spouse actually is more than 10 years younger...
by Alan S.
Mon Apr 05, 2021 2:37 pm
Forum: Personal Investments
Topic: Are converted Roth IRA Contributions Penalty Free Withdrawal?
Replies: 36
Views: 2451

Re: Are converted Roth IRA Contributions Penalty Free Withdrawal?

Thank you. I recently transferred to Fidelity, and before Vanguard closed my accounts, it looked like I only could download statements from my and her Roth IRAs when they became brokerage accounts (approx 2012). I could not find statements for my Roth IRA contributions from 2007-2011. Would this ma...
by Alan S.
Mon Apr 05, 2021 12:12 pm
Forum: Personal Finance (Not Investing)
Topic: RMD(s) for Traditional IRA and Rollover IRA?
Replies: 10
Views: 887

Re: RMD(s) for Traditional IRA and Rollover IRA?

For IRA owners, the IRS states that the RMD should be calculated separately for each IRA account, then added together. Why not just total the balances and apply the divisor just once? The vast majority of people can. The only situation where the RMD result would be wrong using a total balance is hav...
by Alan S.
Sun Apr 04, 2021 1:22 pm
Forum: Personal Investments
Topic: Capital loss on Inherited Home?
Replies: 4
Views: 692

Re: Capital loss on Inherited Home?

Yes, an inherited property is treated as investment property as long as you do not convert it to personal use. If you move into the house, even for a short period, the IRS may consider this personal use property. Same if you allow a relative to live there rent free. That would eliminate any cap loss...
by Alan S.
Sun Apr 04, 2021 1:07 pm
Forum: Personal Investments
Topic: Required Minimum Distribution???
Replies: 20
Views: 2922

Re: Required Minimum Distribution???

This can be somewhat confusing. If you defer some portion of your 2021 RMD to 4/1/2022, the amount of your 2021 RMD does not change. However, by not completing the 2021 RMD in 2021, the 12/31/2021 balance will be somewhat higher than it would have been. This somewhat higher 12/31/2021 balance will s...
by Alan S.
Fri Apr 02, 2021 3:54 pm
Forum: Personal Finance (Not Investing)
Topic: do the covid-based rules affect when you inherit an IRA?
Replies: 3
Views: 490

Re: do the covid-based rules affect when you inherit an IRA?

Given that a traditional IRA owner that died in 2019 (at 95) and had multiple beneficiaries (all people), normally the rules state that the inherited IRA would have to be inherited by all of the beneficiaries by 2020 to allow for each of the beneficiaries to take their RMDs based on their respectiv...
by Alan S.
Fri Apr 02, 2021 2:39 pm
Forum: Personal Investments
Topic: Required Minimum Distribution???
Replies: 20
Views: 2922

Re: Required Minimum Distribution???

If the OP takes his first RMD in 2021 he should probably wait until mid-December in case there is an age-based changed to the RMD rules. The IRS is implementing the new RMD tables effective in 2022. There will be no change to the 2021 RMD divisors. 2022 RMDs will therefore be a little lower (~ 6%) ...
by Alan S.
Fri Apr 02, 2021 11:39 am
Forum: Personal Investments
Topic: JTWROS investment acct owned by parent & adult child [Questions]
Replies: 2
Views: 332

Re: JTWROS investment acct owned by parent & adult child [Questions]

Hi there, I have a bunch of questions about an account owned Joint With Rights of Survivorship between a parent and an adult child that I'm hoping someone can help with. The account in question has several hundred thousand of investments (stocks) with significant capital gains on many of them. The ...
by Alan S.
Fri Apr 02, 2021 11:11 am
Forum: Personal Investments
Topic: Odd missing Q1 Dividend Distribution-Invesco S&P 500 Pure Growth ETF
Replies: 4
Views: 264

Re: Odd missing Q1 Dividend Distribution-Invesco S&P 500 Pure Growth ETF

You might also check if the 2020 dividend dates changed from 2019. A revised schedule might have started in 2020 that you did not notice and then 2021 dates would also be affected.
by Alan S.
Fri Apr 02, 2021 11:06 am
Forum: Personal Investments
Topic: Required Minimum Distribution???
Replies: 20
Views: 2922

Re: Required Minimum Distribution???

Because you are also over 70.5 years old, if you are charity-minded, you also can take some or all of your withdrawals as Qualified Charitable Distributions. QCDs don’t increase your taxable income, but the charity gets to spend them, not you. I'm curious how that works. Just for planning purposes....
by Alan S.
Thu Apr 01, 2021 10:06 pm
Forum: Personal Finance (Not Investing)
Topic: Cares ACT distribution and repayment questions
Replies: 11
Views: 835

Re: Cares ACT distribution and repayment questions

Box 7 code is 1 and Box 1 and 2a are the same. Its all pretax with no roth component. Why is it important to know how I am planning to file? Because the form is tricky and even some retail tax programs are having issues. If you are filing on paper, this may be one of the more complex forms you have...
by Alan S.
Thu Apr 01, 2021 7:15 pm
Forum: Personal Finance (Not Investing)
Topic: Roth conversions if still working into 70s
Replies: 7
Views: 791

Re: Roth conversions if still working into 70s

If an individual is still working well into their 70's because they love their job, so, well beyond the age at which they would they would have to take RMDs if they were instead retired - can they do a Roth conversion from their 401K now, while working? The websites on Roth conversions emphasize th...
by Alan S.
Thu Apr 01, 2021 6:27 pm
Forum: Personal Finance (Not Investing)
Topic: CARES Act & Form 8915-E & TIRA to Roth conversions
Replies: 9
Views: 442

Re: CARES Act & Form 8915-E & TIRA to Roth conversions

Why are you completing Form 8915 E? You cannot use a CRD to convert to Roth but perhaps you qualified for a CRD that you did not convert? As for the conversions, they are valid but cannot be reported on Form 8915 E as CRDs and the conversion income therefore must be fully reported in 2020. The 8915 ...
by Alan S.
Thu Apr 01, 2021 2:18 pm
Forum: Personal Investments
Topic: Roth IRA backdoor conversion question
Replies: 15
Views: 833

Re: Roth IRA backdoor conversion question

Put another way, if you have multiple TIRA accounts and have TIRA basis, it does not matter which account you make the non deductible contribution to or which account funds the conversion. The tax result is the same since all the accounts are treated as one combined account. Therefore, opening addit...