New answers tagged

0

My two cents: I am a pension actuary and see the performance of funds on a daily basis. Is it normal to see down years? Yes, absolutely. It's a function of the directional bias of how the portfolio is invested. In the case of a 401(k) that almost always mean a positive directional bias (being long). Now, in your case I see two issues: The amount of ...


0

First, we need to be clear about what the allowances on your W-4 mean. The more allowances you claim, the lower tax liability it is assumed that you have, and they will take less tax out of your check. So claiming 2 allowances will result in a bigger paycheck and less tax withholding than claiming 0 allowances would. If you claim 0 allowances, you are in ...


1

You have interpreted the instructions correctly. The issue with two jobs at the same time, is that that second job will be taxed at the highest rate; but the second employer has no idea what the other position is paying you. If you make enough to be in the 15% tax bracket for your main job that means: some of the money from each paycheck is taxed zero; ...


0

a link to this article grabbed my Interest as I was browsing the site for something totally unrelated to finance. Your question is not silly - I'm not a financial expert, but I've been in your situation several times with Carmax Auto Finance (CAF) in particular. A lot of people probably thought you don't understand how financing works - but your Car Loan ...


1

Let's start with the short one: Can I set up the beneficiary to be my family members who are not in the US, have never been here, and do not have SSN? Yes. You can define any beneficiary you want. Will there be any complication at the time of withdrawal considering that I may have left the US 20 years ago? What are the things I should be ...


3

This doesn't look particularly unreasonable, but a few notes: He might be somewhat over-withheld for his taxes because he's claiming 0 federal and state allowances. In other words, his employer may be taking more out for taxes than he'll actually owe. This doesn't mean the money is lost--he'll get back any difference next year when he files his tax ...


1

Looking at the numbers quickly, if he makes this amount for the entire year, single, no kids, no investment income, standard deduction only, his taxable income will be about $110,000.* That puts him in the 28% tax bracket. His federal tax would be: $18,481.25 plus 28% of the amount over $90,750 Which comes out to about $23,800 in tax liability. His ...


0

As an FYI, working for a lending company, I can tell you many have a dollar amount limit that they'll just write off at the end of the month/quarter/etc just to get the loan off the books. It's a little goofy, but I actually bothered to plan ahead and save $9.99 on my student loans since the lender would close out all accounts with a < $10 balance.


2

Years before retirement isn't related at all to the Pretax IRA/Roth IRA decision, except insomuch as income typically trends up over time for most people. If tax rates were constant (both at income levels and over time!), Roth and Pretax would be identical. Say you designate 100k for contribution, 20% tax rate. 80k contributed in Roth vs. 100k contributed ...


2

It sounds like you are saying the taxes you owe outweigh your liquid assets. Also without knowing the details, it is a little difficult to give you specific advice. (What was this property you two shared? What are your liquid assets? Also did you share the 401k with your wife and have to split it on the divorce?) "This is the first time I have ever been in ...


3

My simplest approach is to suggest that people go Roth when in the 15% bracket, and use pre-tax to avoid 25%. I outlined that strategy in my article The 15% solution. The monkey wrench that gets thrown in to this is the distortion of the other smooth marginal tax curve caused by the taxation of social security. For those who can afford to, it makes the ...


0

Credit scores have mutated into an overall trustworthiness grade that are used for a lot of purposes other than getting good interest rates. For example: Insurance companies are factoring them into their calculations regarding how likely you are to make a claim. An especially bad credit score can hurt your chances of getting a Government security ...


0

Yes many people operate accounts in usa from outside usa. You need a brokerage account opened in the name of your sister and then her username and password. Remember that brokerages may check the location of login and may ask security questions before login. So when your sister opens her account , please get the security questions. Also note that usa markets ...


6

Rollovers do not count as contributions. It doesn't matter if they're Roth or not.


-1

I used to work for Ally Auto (formerly known as GMAC) and I'd advise not to pay off the account unless you need to free up some debt in your credit report since until the account is paid off it will show that you owe your financial institution the original loan amount. The reason why I am saying not to pay-off the account is because good/bad payments are ...


6

It is absolutely normal for your investments to go down at times. If you pull money out whenever your investments decrease in value, you lock in the losses. It is better to do a bit of research and come up with some sort of strategy about how you will manage your investments. One such strategy is to choose a target asset allocation (or let the "target ...


3

There are lots of opinions on the meaning of different credit scores. Each lender can ultimately choose whatever cutoff they want for their products. Creditscoring.com has a fascinating page that they call The Bar. It is a series of quotes from different credit reporting agencies, news outlets, and lenders about what different scores mean. The quotes are ...


3

Having a more-than-adequate score need not take effort. Normal economic activity over the years, being careful to pay on time and otherwise not do anything blatently stupid, is probably quite sufficient. (I'm convinced that the obsession with credit scores has been deliberately drummed up by those selling advice on how to improve your scores. If you've ...


8

Depends on how the money is invested within the 401k... but in general, prices move both up and down with a long-tem bias toward up. Think of it this way: with fund shares priced lower now, you are getting shares cheaper than when you entered the plan. So this dip is actually working in your favor, as long as you are comfortable trusting that long-term ...


1

I had a client looking to buy a house, and the bank told her she needed 630 to be approved for their normal loans. Lower than that, and the rate jumped, quite a bit.


-1

Among the other fine answers, you might also consider that owning a vehicle outright will free you from the requirement to carry insurance on the vehicle (you must still carry insurance on yourself in most states).


2

In short: yes, as long as you have Internet access. See, for example this question or this one about opening a brokerage account from outside the US. Your sister could even open an account here in the US and provide you with access. However, I'm guessing you're not a registered or even formally trained financial advisor and if you make bets with her money ...


1

In some states there are significantly higher automobile insurance costs and higher coverage requirements for vehicles that have a lien on them. I suspect this is not your scenario, or you probably would not be considering holding the loan open. But it is something to consider. If you live in a state where insurance coverage and costs depend on a clear ...


0

Once the business is shut down, you'll need to show that the corporation is in bankruptcy and the amounts are unrecoverable. You can then report it as investment loss. I suggest talking to a tax adviser (EA/CPA licensed in your State), and maybe an attorney, on what the specific technical details are.


1

I have never heard of that, sounds weird. What would you write in the introduction letter that would affect the lender, and is not in your financial support? Whatever that might be - chances are that lender would be breaking an anti-discrimination law. I now some real-estate agents in the area ask to write such letters to sellers to convince them to accept ...


3

It's certainly possible that someone stole it, but it's way more likely that it was just lost in the mail. This happens to me a couple of times a year, and there's no evidence of any theft in my case. I have to call the entity issuing whatever check is lost and have it re-issued. There's usually no problem in doing this. They may or may not put a ...


2

Can someone steal a check? Absolutely - check fraud of this variety is quite common. Sometimes people don't even need to forge a name or ID, because bank staff are human and don't always do their job as thoroughly as they are supposed to. Years ago a national TV program had a special where they went out and got banks to deposit - or even cash - checks made ...


2

Not sure if it is the same in the States as it is here in the UK (or possibly even depends on the lender) but if you have any amount outstanding on the loan then you wouldn't own the vehicle, the loan company would. This often offers extra protection if something goes wrong with the vehicle - a loan company talking to the manufacturer to get it resolved ...


2

Here are some important things to think about. Alan and Denise Fields discuss them in more detail in Your New House. Permanent work. Where do you want to live? Are there suitable jobs nearby? How much do they pay? Emergency fund. Banks care that you have "reserves" (and/or an unsecured line of credit) in case you have a run of bad luck. This also ...


1

Would I have to pay some kind of capital gains tax? And if so, when? Converting Tax paid USD into CAD is not a taxable event. A taxable even will occur if you convert back the CAD into USD. If you receive interest on the CAD then the interest is also a taxable event. Also, is there any reason this is a terrible idea? That will only be known in ...


0

I may not have the best answer to your question, but it depends on your spouse. If your spouse is filing independently, you should file independently. Or if you decide to file together, you would both only submit one tax form. If your spouse is still back in India and is not planning on filing, then I'm not positive but I'm pretty sure it would just be you ...


3

Yes. Dying works great for what you'd like to accomplish. The key point is that you need to specify a beneficiary (or multiple beneficiaries) on the account . When you meet your maker, the beneficiary would have no tax to pay for withdrawals from a Roth IRA. For a regular pre tax IRA, withdrawals are taxed. Either account would have RMDs, required minimum ...


0

You can contribute to both but the total contribution is capped: More than one plan. If you contribute to a defined contribution plan (defined in chapter 4), annual additions to an account are limited to the lesser of $53,000 or 100% of the participant's compensation. When you figure this limit, you must add your contributions to all defined ...


1

If you are exchanging money for travel then you should not have to pay any capital gains on any exchange that is in your favour. Exchanging currency for travel is different from trading currencies for an attempt at making profits.


2

There's two scenarios: the loan accrues interest on the remaining balance, or the total interest was computed ahead of time and your payments were averaged over x years so your payments are always the same. The second scenarios is better for the bank, so guess what you probably have... In the first scenario, I would pay it off to avoid paying interest. ...


14

One problem with this plan is that the individual must have earned income to contribute to a Roth IRA. If you have an infant, unless she is the new Gerber baby or something like that, there is probably no legitimate way for her to earn income. If you own a business and have kids who are older, you can employ them to do work for you, but they must really do ...


7

The problem with this plan is that in order for your children to put money in their own IRA, they need earned income of their own. If your child doesn't have $3000 in earned income for the year, you won't be able to put the $3000 into their Roth IRA.


5

If there is land for sale, you can buy it. The United States doesn't have many restrictions on the purchase of land. However, you need to be able to afford it. Dependent on where you are looking $20,000 can either be a lot or very little land, I suspect that the question you were looking to ask is 'can I afford it?'. Have a look around, there should be ...


0

If you're not a US tax resident (and on F-1, you're probably not) then the ACA tax provision doesn't apply to you. You need to have the health insurance that is required by the visa conditions.


86

If I were you, I would pay off the car loan today. You already have an excellent credit score. Practically speaking, there is no difference between a 750 score and an 850 score; you are already eligible for the best loan rates. The fact that you are continuing to use 5 credit cards and that you still have a mortgage tells me that this car loan will have a ...


3

You're supposed to file a 1040X (amended return) and include the missing information about the 1099-R, even though there is no additional tax due. It's a straightforward form and not too much of a hassle. If this will stress you even a little, take the 15-20 minutes to file the 1040X. You could also just wait -- there's a chance you'll get a letter from the ...


1

You didn't specify where in the world you account is - ScotiaBank operates in many countries. However, for large amounts where there is a currency conversion involved, you are almost guaranteed to be better off going to a specialist currency broker or payments firm, rather than using a direct method with your bank (such as a wire transfer). Based on my ...


2

In the last decade I have only seen somebody want to keep their "old" plan in a few cases. In those cases the old plan was desired because they were a government or military retiree and the new company offered them a bonus if they declined the insurance. One company gave everybody a stipend for insurance, so if they didn't spend it all they could keep the ...


2

Generally, you can continue your previous employer group policy under COBRA provisions for a certain period of time. However, the premiums will be your personal responsibility and will be paid with after-tax money. Unless that plan allows multiple employers to participate (which is something I've never heard of), you won't be able to have your new employer ...


3

In both the US and UK you are taxed on your income. Transferring your own money from one country to another does not count as income, so you won't be taxed on it. If it's not your money you are transferring that will be different. You may have to report transfers to comply with money laundering rules. You have to report large amounts of cash you bring with ...


1

"Reasonable" is a bit of a judgement call. I can answer that the one time that I needed a correction, I got it within 3 days. Someone in payroll just got a W-2c and wrote it out long-hand. My correction was simple, however, and the company not so big. If there's a dispute about what correction to apply, for example, rather than just the mechanics of ...


0

Income tax laws vary by state, but it's fairly common for the state where you're employed to want income tax (in states that have income tax) regardless of where you live. In your case, it sounds like you're employed in NYC. (That's how I interpreted your comment about being a "remote" worker.) The fact that you live elsewhere probably isn't relevant. ...


2

This probably isn't an appropriate venue for this question, but HSBC offers currency accounts which are free if you have your main current account with them. You should'nt ever need to step into the US to open a USD account, just like most major currencies (i.e GBP, EUR, CHF) it has no major limits on who may hold it, so banks in most countries can offer ...


3

At exactly 105K you can take a deduction of 13/20*5500 = $3575 each and the rest ($1925) as a Roth deposit. No need to have non-deducted money, when you can just make use of both flavors of IRA.


2

It depends on the notice. It should usually be explicitly mentioned on the notice. Since in your case they're rejecting the amended return, you are not limited by the usual 30/60/90 days, but by the dead-line to amend the return. Worst case you can just resubmit the amended return and attach the missing documentation to the submission. But better to ...



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