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Absolutely wrong thread
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Oct 29, 2020 04:08
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| # ¿ May 3, 2024 16:19 |
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KYOON GRIFFEY JR posted:ah drat, well, still uhh a hundred bucks is a hundred bucks It’s still a guaranteed return of 5% realized each year in addition to saving for college
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Jan 6, 2022 00:46
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Residency Evil posted:Thanks for the advice everyone. I kind of calculated that front loading with 80k or so would let us "finish" college savings, but I wasn't sure if people had different thoughts about whether that was a good idea or not. Make sure you talk to an accountant if you're going to frontload. You can contribute up to 80k per kid (160k if married) without incurring gift tax liability, but you need to file a return to spread the gift prorata over five years.
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Jan 7, 2022 17:40
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GoGoGadgetChris posted:Is there a special different kind of gift tax for 529 plans? You don't pay a penny in taxes until you hit your lifetime limit of like 12 million dollars. The annual exclusion is just for reporting Anything over 16k is supposed to be reported since it incurs gift tax. You can use your lifetime exemption to absorb that amount (which everyone does). It still needs to be reported. There’s a separate provision for front loading 529s where they give you five years of exclusion and then spread it prorata over coming years
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Jan 7, 2022 18:30
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GoGoGadgetChris posted:I mean, having $12.06M in lifetime exclusion is better than having $11.98M in lifetime exclusion, so your advice is good, but I just wanted to make sure nobody thought you would have to pay even 1 tiny penny in "gift taxes" for frontloading a 529 Agreed there, just making sure people are aware of compliance
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Jan 7, 2022 19:33
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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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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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Muni bonds have less return (usually 30-40%) than taxable bonds so you better be crossing those tax rate thresholds to make up the difference. They also pay interest so they qualified div/cap gains rates don’t really apply. There’s more to it but that’s the quick and dirty I’ll type while on my phone and making dinner.
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Aug 17, 2022 23:46
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The 529 into Roth rollover is just to help people with older kids now that didn't use all the savings, as well as slightly changing the calculus regarding whether to use a 529 at all. I would not advise using this as an investment strategy - the timeline is way too long and the payoff is really small. There's way better methods of savings for your children's retirement.
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Jan 31, 2023 16:20
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Nope
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Dec 9, 2023 06:25
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USAA has a $100k limit but they did a one-day limit increase when I needed to deposit a larger check. I just had to call ahead of time to let them know.
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Dec 19, 2023 19:32
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TraderStav posted:Is it possible to rollover a traditional Ira into a solo 401k? I have both at Schwab and would love to get my traditional Ira's flattened for future back doors. Yes Technically yes, but I would be surprised if the plan will allow it
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Jan 9, 2024 13:25
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One thing to consider for 529s is most states offer a deduction on your state tax return for contributing to their plan, which has its own immediately realized benefit. The deduction is capped at fairly low amounts (2500-5000), but it’s a perk for using your own states plans.
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Jan 11, 2024 19:16
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Xenoborg posted:For my first backdoor roth in 2023, is is normal to have the 1099-R show the full 6.5k in 2a Taxable Amount and have distribution code of 2--Early distribution, exception applies (under age 59½), or did I gently caress something up? Yes, and you’ll report the conversion through Form 8606 make it non taxable
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Jan 25, 2024 01:36
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drk posted:I think we're talking about the same thing. Here’s a quick way to think about it and why taxable loses to tax advantaged. Roth IRA v Taxable Brokerage: the principle is taxed on the way in. Taxable brokerage pays tax on dividends/interest/gains, Roth IRA pays no more. Traditional IRA has the same benefits, just on the front end instead of the back end.
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Apr 23, 2024 01:28
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Significant medical expenses can offset the tax on RMDs which a lot of people have later in life.
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Apr 23, 2024 02:05
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| # ¿ May 3, 2024 16:19 |
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Jabarto posted:If I ever had to do a backdoor roth and had less than 50 cents in my traditional IRA to begin with, am I correct in assuming it would round down to 0 as far as the IRS is concerned and avoid any pro rata nonsense? Correct
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May 2, 2024 17:31
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