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If I select my tax status as Married Filing Separately, am I really prohibited from making Roth IRA contributions if I earn more than $10,000?
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Jun 23, 2015 14:38
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Can't you contribute to a non-deductible traditional IRA then convert to a Roth IRA? I guess then it would be taxed twice - once upon earning it originally and once during the conversion - so it's probably not worth it.
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Jun 23, 2015 14:47
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Saint Fu posted:Can't you contribute to a non-deductible traditional IRA then convert to a Roth IRA? I guess then it would be taxed twice - once upon earning it originally and once during the conversion - so it's probably not worth it. you'll only get taxed on the gains. you can put your traditional IRA contributions into something that won't fluctuate (like a money market fund) and then convert as soon as the transaction is finalized, and the tax implications should be roughly nil (i am not your tax preparer etc etc)
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Jun 23, 2015 14:51
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I live outside of the US and the Roth IRA is (from what I can tell) my only way to save for retirement (Germany does not have a good tax advantaged retirement savings plan that I'm aware of and it has laws that treat US based funds as some kind of Passive Foreign Investment Company and the US would treat any German-based fund as a PFIC). And since I can't take advantage of saving money pre-tax in Germany, a Traditional IRA doesn't make sense (or at least didn't when I filed as single). I could always file jointly, but I have a non-citizen alien spouse, so if I could avoid making my tax situation even more complicated by not including her income/assets in the mix, I'd like to. Mr. Glass posted:you'll only get taxed on the gains. you can put your traditional IRA contributions into something that won't fluctuate (like a money market fund) and then convert as soon as the transaction is finalized, and the tax implications should be roughly nil (i am not your tax preparer etc etc) OK, that might work. I'll have to look more into this. I could do a backdoor contribution every year? Total Confusion fucked around with this message at 15:01 on Jun 23, 2015 |
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Jun 23, 2015 14:56
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Gold and a Pager posted:I live outside of the US and the Roth IRA is (from what I can tell) my only way to save for retirement (Germany does not have a good tax advantaged retirement savings plan that I'm aware of and it has laws that treat US based funds as some kind of Passive Foreign Investment Company and the US would treat any German-based fund as a PFIC). And since I can't take advantage of saving money pre-tax in Germany, a Traditional IRA doesn't make sense (or at least didn't when I filed as single). Yes, it's called a backdoor Roth if you want to Google the details of it, including making sure it's taxed the way you expect in Germany.
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Jun 23, 2015 15:07
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If you are filing for the foreign earned income exclusion, be careful contributing to an IRA. If your income is below the $92.5k deduction (or whatever it is now), then you won't be eligible to contribute.
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Jun 23, 2015 15:14
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yeah you may wish to consult with a tax advisor if you're living abroad, i have no idea how that complicates things (probably significantly).
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Jun 23, 2015 15:14
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pig slut lisa posted:pension stuff I'm leaving my state run pension 2 years shy of vesting. My thought process was since I'm 28, a pension is based on your highest 3 earning years, and the system is constantly under attack I'm better off rolling the contributions into an IRA instead of banking on working at a participating agency close enough to 55 that inflation doesn't erode my benefit.
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Jun 23, 2015 15:19
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Saint Fu posted:If you are filing for the foreign earned income exclusion, be careful contributing to an IRA. If your income is below the $92.5k deduction (or whatever it is now), then you won't be eligible to contribute. According to the IRS website the IRA limit calculation uses your income before the foreign earned income exclusion.
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Jun 23, 2015 21:10
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My understanding was that you include that foreign earned income when calculating your max contribution amount with respect to the upper limit phase-outs. It looks like that's what that article is referring to. But it does not count as qualifying income when determining how much you can contribute. Like how dividend income isn't qualifying income. If you made $5,000 of dividends and had no other income, you wouldn't be able to contribute to an IRA, for example. Again, this poo poo is confusing as hell to me, I paid someone to do my taxes the first year I was abroad and that's what they told me. I'm no longer abroad so I don't keep up on the rules any more but that's just my experience. e: I re-read the emails from my accountant and she said that I could contribute to a non-deductible IRA but could not contribute to a Roth IRA. This was when I was abroad for the whole year and made less than the $91.5k FEIE. spf3million fucked around with this message at 21:45 on Jun 23, 2015 |
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Jun 23, 2015 21:42
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I just use Foreign Tax Credits because taxes here are higher and it's not a problem.
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Jun 23, 2015 22:31
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I am a long term savings noobie and had a question about my situation. I currently have no long term savings, but understand that Roth IRA and 401k are the important ones to do. I am a 1099 contractor and my current job doesn't do 401k match. Does this mean I should start a Roth IRA?
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Jun 23, 2015 23:29
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Brotein_Shake posted:I am a long term savings noobie and had a question about my situation. I currently have no long term savings, but understand that Roth IRA and 401k are the important ones to do. I am a 1099 contractor and my current job doesn't do 401k match. E: I'm off my game today, thanks to the below posters to mention the right options. SiGmA_X fucked around with this message at 23:48 on Jun 23, 2015 |
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Jun 23, 2015 23:36
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SiGmA_X posted:Yes. Max it and start throwing money into taxable accounts, too. Unless you make under 37k and maxing your IRA may be a stretch.
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Jun 23, 2015 23:39
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Yeah, I was about to say: as a 1099 worker, once you max your IRA, you can set up a solo 401(k) as a self-employed individual. See: http://www.irs.gov/Retirement-Plans/One-Participant-401%28k%29-Plans It's really cool, actually: depending on how much you make and how much you can afford, you can actually put way more money into a 401(k) per year than a regular employee, because as your own employer you can make big employer contributions for yourself.
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Jun 23, 2015 23:41
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Facepalm, yes definitely. It's one of *those days*, I helped my mom setup a Individual 401(k) a couple of years ago at Vanguard. She + her company (single member LLC) can stick a solid amount of money into retirement savings by doing that.
SiGmA_X fucked around with this message at 23:49 on Jun 23, 2015 |
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Jun 23, 2015 23:46
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Leperflesh posted:It's really cool, actually: depending on how much you make and how much you can afford, you can actually put way more money into a 401(k) per year than a regular employee, because as your own employer you can make big employer contributions for yourself. I had always wondered why the self-employed limit was so much higher than the employee limit. Now that you put it that way it's blindingly obvious 
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Jun 24, 2015 00:57
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Yeah. Typically employers give you anywhere from nothing, to matching a few percent, perhaps with a vesting period. But they could be pouring tens of thousands of dollars into your 401(k) for you! They just don't. It turns out you make a better boss of you than the corporate bosses do.
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Jun 24, 2015 01:19
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Huh, I never thought about that. So essentially I could drive uber and put 100% of the earnings into a self employment 401k?
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Jun 24, 2015 01:23
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If I understand it right, there are limits.quote:Example: Ben, age 51, earned $50,000 in W-2 wages from his S Corporation in 2014. He deferred $17,500 in regular elective deferrals plus $5,500 in catch-up contributions to the 401(k) plan. His business contributed 25% of his compensation to the plan, $12,500. Total contributions to the plan for 2014 were $35,500. This is the maximum that can be contributed to the plan for Ben for 2014. quote:Contribution limits for self-employed individuals So there are limits, I guess you can't just dump 100% of your business income into a 401(k) and call it a day. But you can get a lot more in than you typically can as a W-2 wage slave. Leperflesh fucked around with this message at 01:37 on Jun 24, 2015 |
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Jun 24, 2015 01:34
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Edit: Beaten!!Dead Pressed posted:Huh, I never thought about that. So essentially I could drive uber and put 100% of the earnings into a self employment 401k? quote:Employer nonelective contributions up to:
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Jun 24, 2015 01:39
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Thanks for the clarification, and bringing this up in the first place. I'll have to dig into this a bit. We airbnb our place out, drive uber, and my wife consults on top of her regular employment. We probably have $ 25k of extraneous income we could defer this way.
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Jun 24, 2015 02:03
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Dead Pressed posted:Thanks for the clarification, and bringing this up in the first place. I'll have to dig into this a bit. We airbnb our place out, drive uber, and my wife consults on top of her regular employment. We probably have $ 25k of extraneous income we could defer this way.
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Jun 24, 2015 02:06
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I work for an employer that does not offer 401k, can I set up a solo 401k? Or am I boned? I get a w2 form, not a 1099.
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Jun 24, 2015 02:24
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CannonFodder posted:I work for an employer that does not offer 401k, can I set up a solo 401k? Or am I boned? Something you may have the option to do would be an HSA, which can be invested. That's a great option, but doesn't come close to 18k...
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Jun 24, 2015 02:46
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What are the best savings accounts right now? I wasn't paying attention to the rate on mine and it is awful, ~0.15%
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Jun 24, 2015 03:02
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dms666 posted:What are the best savings accounts right now? I wasn't paying attention to the rate on mine and it is awful, ~0.15% discover and ally bank are both 0.9% i believe
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Jun 24, 2015 03:08
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Dead Pressed posted:Huh, I never thought about that. So essentially I could drive uber and put 100% of the earnings into a self employment 401k? Well, possibly not in that particular example since there was just a labor commission ruling that Uber drivers are considered employees! http://money.cnn.com/2015/06/17/technology/uber-employee-ruling/?iid=EL flowinprose fucked around with this message at 03:13 on Jun 24, 2015 |
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Jun 24, 2015 03:09
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Mr. Glass posted:discover and ally bank are both 0.9% i believe Ally bumped up to 0.99% last year 
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Jun 24, 2015 03:22
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pig slut lisa posted:Ally bumped up to 0.99% last year The 'best' as in highest interest rate and FDIC insured is probably Synchrony (1.05%) - https://www.synchronybank.com/banking/promotions/onlinesaving - but I don't know if it's worth chasing them for 6 bps.
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Jun 24, 2015 04:54
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I've had an Ally account for two years and it's really nice. Easy to sign up, easy to use.
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Jun 24, 2015 16:40
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Bisty Q. posted:The 'best' as in highest interest rate and FDIC insured is probably Synchrony (1.05%) - https://www.synchronybank.com/banking/promotions/onlinesaving - but I don't know if it's worth chasing them for 6 bps. Synchrony's website interface/password system/etc. is not worth the extra 0.05%. Go with Ally.
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Jun 24, 2015 16:56
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ETB posted:Synchrony's website interface/password system/etc. is not worth the extra 0.05%. Go with Ally. I use it and it's not bad for something you dump a pile of money in, then maybe dump a few bucks a month into, but mostly let it sit and earn interest.
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Jun 24, 2015 16:58
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Henrik Zetterberg posted:I use it and it's not bad for something you dump a pile of money in, then maybe dump a few bucks a month into, but mostly let it sit and earn interest. I just had a bad time setting up and then closing my account, so my views are a bit tainted, I think.
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Jun 24, 2015 17:04
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I've used Capital One 360 since they were ING Direct and have been very satisfied with them as my main bank. Their saving rates are only .75% but you get interest on checking account balances too, and if you have a lot of money the checking actually pays .90% Plus the integration with Capital One seems to be going well and you can use their branches and ATMs for most of the same banking stuff. No more bright orange color scheme though. I am hoarding my remaining orange checks.
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Jun 24, 2015 18:37
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Synchrony's interface got a lot better a couple months ago but I'm leaving them to go to Ally to consolidate all my accounts with one bank because my credit union isn't really worth it anymore and .06% a year is negligible.
100 HOGS AGREE fucked around with this message at 20:59 on Jun 24, 2015 |
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Jun 24, 2015 20:55
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CannonFodder posted:I work for an employer that does not offer 401k, can I set up a solo 401k? Or am I boned? Yeah the solo 401k is intended for people who run a small business without any employees, so you need things like self-employed income to qualify.
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Jun 25, 2015 06:02
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I'm slowly transitioning to banking with Schwab instead of BoA because I have the option of using Schwab to handle my stock rewards at work (that and banking with BoA in the first place was a terrible mistake). I wish they still dealt with credit cards so I could consolidate more, but at least their savings interest rates are ten times as good as BoA's: 0.1% instead of 0.01%.  I wouldn't prioritize interest rates when picking a bank/CU - customer service and convenience are king. Even with a 0% APY the cost to maintain your emergency fund's value after inflation is negligible and you shouldn't be holding on to too much more than that. There's a Schwab brokerage two blocks away from me or I might have gone with Ally, though.
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Jun 25, 2015 07:27
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I'm actually transitioning away from Schwab because it's so inconvenient. Even though brokerage branches are easily accessible, I can hardly do anything banking related there.
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Jun 25, 2015 11:05
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Huh. Well my actual banking needs are minimal and I'd heard good things about their customer service that matches what I've experienced so far from them without going into a brokerage yet. Really I just want to move away from BoA and Schwab seemed the best choice. If there's a real problem a brokerage can't handle I have actual Schwab Bank branches within a few subway stops. The runners up were ally, alliant, and chase. The biggest downside is Schwab not doing credit cards but I was already spreading myself out a bit for other reasons.
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Jun 25, 2015 15:31
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