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The first preparer told me that the form was faulty and that was that, no backtalk. The second preparer told me at first that a conversion wasn't the right transaction for a backdoor. I suppose they get a few cranks and have learned to be defensive, and the way the IRS requires the form to be filled out is ambiguous. The main thing was to persuade the second preparer to actually look at the way that the 1099 had been entered into the system and not just go off assumptions.
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May 20, 2022 20:17
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The fact that so many people seem to have problems with their accountants doing backdoor IRAs correctly gives me more confidence in continuing to do my taxes on my own.
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May 20, 2022 21:12
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Residency Evil posted:The fact that so many people seem to have problems with their accountants doing backdoor IRAs correctly gives me more confidence in continuing to do my taxes on my own.
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May 20, 2022 21:14
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Gazpacho posted:nb a 93% 401(k) deferral is hyperbole and not something that anyone should literally do. Outside of very specific circumstances it would leave you broke and possibly interrupt your benefits, or put you in a tax bind. Deferral percentages are normally quoted relative to your gross pay, not relative to your limit. The OP asked a bad question without enough context. Absent any other info, "contribute as much as you possibly can toward advantageous accounts" seemed sensible, though at the time I couldn't be bothered to be as verbose as I'd like. Leperflesh chimed in with "the right answer" which is great. I might also suggest IRA options as well first, or just a general "follow the flowchart."
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May 20, 2022 22:57
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The real solution is removing the income cap on current year Roth contributions instead of the IRS codifying backdoor conversions but there’s zero political will to do so
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May 20, 2022 23:47
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spwrozek posted:I do something similar although I am not maxed yet, pretty close though. You just have to make sure your employer trues up (I get one match a year so fine for me) and that you have a budget. I want to emphasize that you need to be sure about how your employer does matching so you don't lose out on the match. In my previous employer, I misunderstood and when I discussed with coworkers they also thought the same thing I did and as a result I missed out on a significant amount of matching. It was the most generous match of any employer I've had but capped at an amount per pay period without a true up. It definitely hurt a bit when I double checked what was going on. Oh well, live and learn and double check.
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May 21, 2022 02:06
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Niyqor posted:I want to emphasize that you need to be sure about how your employer does matching so you don't lose out on the match. Yes, absolutely. And to be clear I was talking about an employer who had the worst possible match policy, and a new employer who also does: once a year. But if your match policy doesn't suck you need to make sure they either match to the max right away or somehow true up later.
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May 21, 2022 02:22
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On backdoor tax preparer chat, my tax preparer (CPA, not sure if he is an enrolled agent?) was very unfamiliar with backdoor contributions when I had an exploratory discussion with him. Pretty sure if I did it I would have to walk him through what I need to file. He has a wide ranging customer base too so it's not like I'm a high roller, not sure why it seems to be so uncommon.
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May 21, 2022 02:55
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Ungratek posted:The real solution is removing the income cap on current year Roth contributions instead of the IRS codifying backdoor conversions but there’s zero political will to do so Not an emptyquote
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May 21, 2022 03:48
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I have my cash accounts at Ally. Is there any reason to not use them for "boring" long-term investment accounts, like a brokerage or IRA? Think like Vanguard mutual funds/ETFs and things. It's mentally easier for me to have everything in one place, but it's more of a mild annoyance if there was some reason Ally was a bad idea for these types of accounts.
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May 22, 2022 01:19
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Looks like they have self directed accounts with no fees on etfs and such. So it probably works the same as everyone else.
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May 22, 2022 01:42
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Professional tax prep is all about speed and volume. I bet they resent anything that doesn’t involve the half dozen forms they can do with their eyes closed, you’re taking precious time during the 2-3 months of the year that they get most of their work. That being said backdoor Roths should be common enough that they’d be at least somewhat familiar with the mechanics.
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May 22, 2022 01:42
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Ally charges $10 per mutual fund trade (buy or sell). If you buy a little every payday, you're going to get soaked. If you stay there into retirement and then start selling regularly, you can expect also to get soaked. You of course have ETFs as an alternative, which do not have the same fee. They also charge outflow fees on IRAs. Transferring an IRA in preparation for retirement is not difficult, but I can't say the same of transferring taxable investments. They're not the worst option you could go with, but they won't have what you can get from a full-time brokerage. Gazpacho fucked around with this message at 02:27 on May 22, 2022 |
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May 22, 2022 02:03
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PRADA SLUT posted:I have my cash accounts at Ally. Is there any reason to not use them for "boring" long-term investment accounts, like a brokerage or IRA? Think like Vanguard mutual funds/ETFs and things. Ally is cool, but I would trust vanguard over them for retirement funds. Having one account is nice, but it’s just two logins to have separate accounts.
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May 22, 2022 02:05
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Sometimes it's good to have things in separate accounts. For example, if you can't stand seeing your accounts in the red, it's probably good to have them somewhere where you don't have to look at them everyday.
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May 22, 2022 12:16
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Echoing the sentiments of folks who have had issues with backdoor roths and tax filings. I’ve always gotten where I need to be with them but it’s more frustrating than it should be (which is not at all).
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May 22, 2022 17:52
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Employer is changing providers and doing away with the HSA option so there goes that retirement option. Will have about $3500 in there which is just in a cash account right now. Where should I put it in a brokerage account to sit for the next 15-20 years?
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May 22, 2022 18:13
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Inner Light posted:On backdoor tax preparer chat, my tax preparer (CPA, not sure if he is an enrolled agent?) was very unfamiliar with backdoor contributions when I had an exploratory discussion with him. Pretty sure if I did it I would have to walk him through what I need to file. He has a wide ranging customer base too so it's not like I'm a high roller, not sure why it seems to be so uncommon. I’m seriously shocked at how bad some CPAs are. I had one who literally just misread my W2 and overestimated my tax amount due by a five-figure amount. It was absurd.
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May 22, 2022 18:17
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EmmaDilemma posted:Employer is changing providers and doing away with the HSA option so there goes that retirement option. If you want a good HSA provider, Fidelity's is top-notch. Might be a bit of a pain to get the funds transferred since it's not as standardized as (for example) 401k transfers. Once there, you can invest any of all of it in basically anything Fidelity has available. No fees for anything from an account management standpoint (still pay fund expense ratios though).
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May 22, 2022 18:37
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Just an FYI - the amount of people doing backdoor conversions in this thread is not at all proportionate to all people. I see maybe 1-2x a year, and the client has to give me a heads up since the 1099-R is never coded correctly.
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May 22, 2022 20:54
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CubicalSucrose posted:If you want a good HSA provider, Fidelity's is top-notch. Might be a bit of a pain to get the funds transferred since it's not as standardized as (for example) 401k transfers. Once there, you can invest any of all of it in basically anything Fidelity has available. No fees for anything from an account management standpoint (still pay fund expense ratios though). Just mentioning to make it less intimidating but transferring HSA money into Fidelity has been some of the easiest transfers I've done. The first time it was just a bunch of clicks in Fidelity's website. The second time, Fidelity provided all the forms, pointed out what needed to be filled in, and provided the address where to mail them. I still took the time to confirm with the previous HSA provider the address but it was very straightforward. Much easier than most 401k or IRA transfers I've done. I was very surprised.
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May 22, 2022 23:20
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Thanks. I should have clarified I already moved some of the HSA money to TD Ameritrade and the rest will go there in a month or two. Just deciding on what fund to buy. Maybe VTI.
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May 23, 2022 02:41
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EmmaDilemma posted:Thanks. I should have clarified I already moved some of the HSA money to TD Ameritrade and the rest will go there in a month or two. When do you think you'll actually be using the money for healthcare expenses? Within the next year or three? What if you actually did have a huge medical thing and had to go to your new plan's max out of pocket for the next three years in a row? If so, then investing it might not be the best choice. If you're instead planning on holding it forever and can cover medical costs with cash or other means and maybe you're saving your receipts for future reimbursement. Then...pick one of the components of your overall target asset allocation, depending on your risk tolerance for this specific money but likely on the higher side. All that is to say, VTI seems quite sensible for a certain type of person asking the question.
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May 23, 2022 14:19
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You probably shouldn't sign up for an HDHP/HSA plan if you aren't able to max your annual contributions and invest most or all of the funds in the account. Your emergency fund should be able to cover your catastrophic max for your HDHP plan. But I know some employers only offer HDHP options which can make isn't ideal for most people. grenada fucked around with this message at 14:54 on May 23, 2022 |
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May 23, 2022 14:51
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laxbro posted:You probably shouldn't sign up for an HDHP/HSA plan if you aren't able to max your annual contributions and invest most or all of the funds in the account. Your emergency fund should be able to cover your catastrophic max for your HDHP plan. Or the whole thing about different plans being different and everyone needs to run the numbers for their own situation. This would be horrible advice for me for example.
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May 23, 2022 16:46
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At the end of last year my mother, who is not a US citizen or resident, opened a US-based brokerage account and bought a bunch of VOO. The goal is for the money to grow and eventually be passed on to us. I know that this is already triggering a bunch of alarms in every thread regular, but I hope you believe me when I tell you that we went over her finances first and made projections on her spending for the next 10 years to make sure she wouldn't need the money. This is made easier by the fact that healthcare where she lives is not a tool of Satan. We also explicitly went over the possibility of the market tanking in the short term and how she needed to understand risk, market performance in the long-term, dividend reinvestment, etc. At the time I forgot to take into account the fact that the estate tax exemption for non-residents is a lot lower. The way to get around this is to hold non-US domiciled indexes. From what I've been reading, the fix for this is to switch to VUSD which is based in Ireland (the ETF will essentially pay a 15% rate, which she will offset against her income tax rate in her country, which is higher). I figured that since she's, unfortunately, around 15% down, this might be a good chance to exchange the position without realizing profits. So essentially sell all her VOO and immediately buy VUSD (I'm aware of T+2 but the new position wouldn't be touched again so it shouldn't be a problem). I guess this isn't so much a question, but just wanted to get some confirmation that this makes sense. Thanks!
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May 23, 2022 17:14
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What are good options for online HYSAs these days ("high" yield...)? I have all my online savings with Barclays currently but have been on the fence about them for a while, given how terrible their weird savings account website is, and the fact that their app looks like it was developed for a gen 1 Blackberry, but a truly awful customer service experience has pushed my over the edge. I'm getting 0.7% there right now, and I don't expect to get much more than that, but I'd prefer not to get much less.
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May 26, 2022 18:02
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I think CapOne and Marcus are at 0.7. Ally is at 0.6
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May 26, 2022 21:41
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I got an email this afternoon saying Ally is bumping to 0.75% tomorrow, so others may follow suit soon too.
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May 26, 2022 22:19
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My Cap One accounts are at .6
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May 27, 2022 04:56
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Wow I'm apparently getting screwed, my Cap One accounts (360 Savings & Money Market Savings) are at 0.3% wtf
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May 27, 2022 05:20
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Long term investing & retirement: once again being screwed by 0.3%
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May 27, 2022 05:57
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Oh homey, you gotta fix that. They ditched their separate money market and trad savings accounts a few years ago and now just offer a "performance savings" account or something similar in wording. Happened around the same time they decided to get rid of all the functionality and useful features on their website.
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May 27, 2022 06:27
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Wait what. Capital One has been my secondary bank since they bought ING, and I've had a 360 checking and savings account since then. So they made a new type of 360 savings account with over twice the yield and said nothing to existing customers? That's some real bullshit.
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May 27, 2022 07:12
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Just got the Ally email just as I was thinking of switching away to somewhere with a higher yield. Anyone reliable/good significantly beating .75%? Looks like some are up to 1% now.
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May 27, 2022 12:05
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I finally have a good job and (relatively) stable career in my 40s, and I can max out my Roth IRA and 401k contributions. Is that still the best course of action for most people? Also, I have 3 401k accounts from previous employers with a few thousand in them. Can I roll those over into my current 401k at any time, and does that count toward my yearly contribution limit? Thanks, everyone!
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May 27, 2022 13:31
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runawayturtles posted:Wait what. Capital One has been my secondary bank since they bought ING, and I've had a 360 checking and savings account since then. So they made a new type of 360 savings account with over twice the yield and said nothing to existing customers? That's some real bullshit. That just about sums it up, yeah.
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May 27, 2022 13:32
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Residency Evil posted:Just got the Ally email just as I was thinking of switching away to somewhere with a higher yield. It probably just depends on what each banks algorithm / planning is on rate adjustments. Ally was 0.5% last month. Now 0.75%. I would bet all the standard HYSA: Ally, Amex, etc, will do what they’ve always done and match each other, and based on rates we’ll probably get back to somewhere around 1.5-2.0% (it was up to 2.2% before Covid hit)? Like, if it benefits you to switch banks, switch, but I wouldn’t switch in chasing an interest rate alone right because with a month said other bank will likely match it up anyway.
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May 27, 2022 13:34
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Personally, I wouldn’t switch banks over 0.25%. That amounts to $50 a year for me.
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May 27, 2022 13:44
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dexter6 posted:Personally, I wouldn’t switch banks over 0.25%. That amounts to $50 a year for me. Just curious since it seems like there are a good number of banks that are at 1% now, and to word it differently, I'm not sure I'd pay a few hundred dollars/year for my HYSA at Ally.
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May 27, 2022 13:49
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