Questions tagged [ira]

In the United States, an IRA is an Individual Retirement Arrangement, a tax-deferred retirement account.

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1answer
198 views

Source of funds for formation of IRA-owned LLC

I've been reading the excellent book The Self Directed IRA Handbook by Mat Sorensen. My understanding is that I can achieve personal control of the checkbook for my retirement investments by forming ...
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1answer
28 views

Recharacterizing excess Roth IRA contribution more than once

I realized that I have made excess Roth IRA contributions for 2019. I recharacterized $X as contributions to my Traditional IRA. As I was filling out my tax form, it turns out I did not sufficiently ...
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1answer
82 views

New hardship distribution rule for retirement accounts in the $2T Stimulus Bill

The recent stimulus bill changes The law temporarily loosens the rules on hardship distributions from retirement accounts. Here's a quote from a WSJ article. https://www.wsj.com/articles/whats-in-the-...
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50 views

Withholding taxes when removing an excess contribution?

I am attempting to remove an excess contribution made to my 2019 Roth IRA account before 2020 tax deadline. While removing the contribution, Vanguard asks for whether federal and state taxes should ...
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How do I record roll over of IRA and CMA into the purchase of service credits on my federal income tax?

I work for the a county government with its own retirement system. I served about 10 years in the military. A couple of years ago I found out my dad had put money in an IRA and a UTMA CMA for me. I ...
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60 views

Traditional IRA to Roth IRA conversion

I want to convert part of my traditional IRA to Roth IRA. Where should I report it on the tax return? I read somewhere that form 8606 is to be filled out but I have not made any non-deductible ...
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1answer
262 views

Re-purchasing a stock at a loss. Re:IRA's

I recently sold some stocks at losses, but also some at profit in a regular TD Ameritrade acct. Can I buy those same stocks in an IRA within 30 days without affecting the loss in a regular account ...
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1answer
144 views

Traditional Ira Scam Question

Have you ever heard of a situation where a potential scammer asks you to open a checking and Traditional ira with the goal transferring money to you anonymously? The protection of their identity is ...
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1answer
264 views

During retirement, what if form 8606 is missed one year? Non-deductable traditional IRA contributions

What happens if, during retirement, you miss filing form 8606 one year? Form 8606 is used to track non-deductible contributions to an IRA. In retirement those contributions can't be taken out all at ...
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1answer
68 views

Correcting an ineligible contribution to a Roth IRA

In 2019 I contributed to a Roth IRA, but while preparing my taxes I realized that I am over the income limit for contributing to a Roth IRA. I would like to recharacterize this contribution to a ...
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1answer
1k views

Married Filing Jointly, moved from F1 to H1B on November 6th

I worked on OPT (F1 visa) in 2017 till November 5th and then moved to H1B. After my research, I found out that I don't pass the substantial presence test since I was under F1 student visa (OPT) for ...
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1answer
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Questions about transferring from Roth to Traditional IRA

So I contributed $6000 to 2019 and $6000 to 2020 into a Roth IRA. I bought some ETFs with the $12000 and it’s currently earning. Let’s say the balance is now $13000. Can I transfer $6000 to the 2019 ...
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1answer
61 views

What, exactly, makes an “unrelated business” unrelated in the case of junior partnerships held inside IRAs?

My question is concerning the unrelated business income tax on partnership interests inside a Roth IRA. Specifically, I own common stock in a company that's technically classified as a Limited ...
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1answer
83 views

IRA withdrawals and taxation as non-resident alien

I left the USA for India in January 2019. I retained my traditional IRA and 401(k) accounts because there is a penalty for premature withdrawals apart from the tax liability. Can I convert part of ...
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1answer
200 views

Best use for after-tax dollars if you've already maxed your Roth IRA?

Recent market volatility has me fretting about my taxable account. I figure if I lock up my funds in some tax-efficient vehicle, then I won't even think about it, similar to my 401(k). I'm wondering ...
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1answer
62 views

How to solve an IRA fiasco involving excess contributions and incomplete Roth conversion?

I have (what appears to be) a rather challenging situation involving failed backdoor Roth IRA contributions. At a high level, there were excess contributions for the previous tax year, and last year ...
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1answer
78 views

Does removing excess Roth IRA contribution reduce amount contributed?

The title of this question might not make sense, so let me explain. The "excess" contribution here refers to the full 6000 (filing as single) amount in the situation in which the person is not ...
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49 views

Reversing an IRA contribution?

I contributed $6,000 to my IRA last year but turns out I made too much money to be able to deduct IRA contributions. I've read that I can reverse an IRA contribution if I withdraw the money before ...
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0answers
120 views

How can you leverage the benefits of an older spouse's retirement account?

Can a marriage with a large age gap and a young high-earning spouse benefit from, for example, a Roth IRA? Let's say Jack and Jill are married. Jill is 50 and makes $25,000/year while Jack is 25 and ...
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0answers
45 views

Can this Aussie drawdown the funds in 'Traditional IRA ' by way of Credit Card

I am an Australia Citizen by birth. I lived / married an American Citizen (by Birth). My ex Husband set up our IRA's while married. I hold a Traditional IRA with a Financial firm in USA. I am now ...
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2answers
216 views

Net Worth of Money in IRA vs Roth vs Cash

Consider three people: Person A has $1,000,000 in cash. Person B has $1,000,000 in an IRA or 401(k). Person C has $1,000,000 in a Roth IRA or Roth 401(k). I assume Person A has a higher net worth ...
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1answer
75 views

Contribute to non-deductible IRA or something else?

I already have a traditional IRA (rollover from former employer's 401(k)) and my current employer doesn't offer a retirement plan, so I'd been funding a Roth IRA up to the maximum allowed each year ...
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1answer
67 views

What is the deadline to put money in 2019 IRA

I have Traditional and Roth IRA accounts, where I have not put any money in and I was reading What's the deadline to contribute to a Roth IRA I am not eligible for a direct Roth IRA. So if I ...
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1answer
100 views

I do not understand how investing works in conjunction with an IRA

I understand why/how I should put money into an IRA (basically a CD right?); however, what I don't understand is how investing that money works. So let's say for instance I open up an IRA with ...
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1answer
203 views

Contributing to a IRA with a large income?

I recently started a job that pays $150K per year on paper(i.e. my offer letter says my yearly salary will be this) in NYC. In reality, after taxes and all the deductions, I will probably take home ...
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Roth vs Traditional Investing assuming same tax bracket in retirement

I've done a little (simplified) math to determine the difference in investing in a Roth account and a Traditional retirement account. I'm assuming that I will be in the same tax bracket in retirement ...
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1answer
50 views

Multiple W2s, Traditional IRA Deductions

I changed jobs in the middle of 2019, which means I have multiple W2s. My job in the earlier part of the year did provide me with a 403b retirement plan, so there's a check in the "Ret plan" ...
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1answer
51 views

How much of an RMD from an inherited IRA with basis is taxable?

My wife received an inherited IRA last year, so took an RMD (required minimum distribution) last year (still under the pre Secure Act rules, thought that doesn't really matter). We got a 1099R for ...
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1answer
82 views

Does an in-service rollover of a Roth 401(k) to an existing 15 year old Roth IRA incur any tax?

I have a Roth 401(k) and want to roll it over into my existing 15 year old Roth IRA while still employed. Vanguard is the fiduciary for both. Is any part of this rollover considered taxable? I am ...
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1answer
58 views

Can you roll a traditional IRA into a 401k and do a Backdoor Roth IRA same year?

The following is a situation a few of my friends are in: Significant assets in traditional IRA Income above Roth IRA limits Their 401k plan allows you to roll regular IRAs into it Now, the prorata ...
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2answers
180 views

Strategic rollover from traditional to Roth IRA for a young person (pre-retirement)

So we have this: Contributions to traditional IRA: Pre-tax Distributions from traditional IRA: Taxed at the time of distribution Contributions to Roth IRA: Post-tax Growth and distributions (...
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4answers
9k views

Federal Taxes on Retirement Money - Puerto Rico Taxes after Retirement

Puerto Rico is a commonwealth of the USA. Puertoricans are US Citizen, but while they live in the island they don't have to pay Federal Taxes. My question is for someone that have lived in the US ...
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2answers
69 views

SEP IRA Contribution

I opened an SEP IRA account with chase and transferred $500. Do I need to buy bonds or stocks using this amount this year itself or can I buy bonds after 2 years?
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3answers
255 views

Best Way to minimize taxes on 401K distribution?

I recently retired at 57 after 36 years with the same employer. I live pretty frugally and my pension is $90K covers all my normal living expenses. I have approximately $2M in retirement savings most ...
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0answers
67 views

Return of excess employer contribution after transfer to IRA

A few years ago, I had an internship, and had to set up an account with the employer's retirement fund company. A couple of years after leaving the company, I was closing out old accounts, and ...
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1answer
149 views

Do I have to take an RMD from my IRA next year?

I turned 70.5 last year and was required to take my required minimum distribution. I took it, but the laws changed at the end of last year making the new age for RMD at 72. Do I have to take the ...
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2answers
195 views

Can one generate 'self-employed income' with a friend, to be able to contribute to IRA?

Let's assume A is happily living from interest and capital gains, but for various reasons he would like to contribute to his IRA. The IRS allows only contributions that come from income earned by ...
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1answer
81 views

Tax Strategy: Take Inherited Traditional IRA deduction now, or let the money ride?

How can I best calculate the fiscal impact of these two choices? Take a $50k distribution from a traditional IRA to offset an expense, thus saving taxes now. Leave the money in the IRA, allowing tax ...
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1answer
128 views

Do we need to consider the account balance as limit when converting from Traditional IRA to Roth IRA?

Please consider the following scenario for a Traditional IRA to Roth IRA conversion using Betterment. A Traditional IRA account was created & funded with $6000. After a week, the account balance ...
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1answer
61 views

Federally Recognized Tribal Income

My understanding is that tribal members of a federally recognized tribe who receive income from 1040 on Line 21 as :INDIAN GAMING PROCEEDS, INDIAN TRIBAL DISTRIB, NATIVE AMERICAN DISTRIB receive a ...
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1answer
61 views

What is the time window to deposit IRA account to handle this year tax benefit?

I don't have a 401K account, but am considering opening an IRA account to save some taxes. How long the time window is available for me to have the IRA account? Also in my understanding in the later ...
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1answer
82 views

If I am opening an IRA can I put 2x the limit in and say half is for 2019 and the other half is 2020?

I am finally looking to invest and have some cash on hand over my emergency fund. I do not have an IRA but am contributing to my 401K. I opened a betterment account investing in ETFs for general ...
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1answer
387 views

Buy Land Using Old 401K?

I have a 401K from a job I left ~7 months ago. I'm looking to buy some land and do construction on it. I need to put about $40K down on the land, but I only have ~$30K in savings. What's the best way ...
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2answers
1k views

529 vs IRA for kids education and future scholarship

I have young kids going in preschool. I have already started investing in 529. However, many of my friends mention that if I invest single penny in 529 plan for my kids, they will miss out on any ...
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2answers
104 views

Does a pro-rata backdoor Roth IRA conversion come from each IRA proportionally or just the one being converted?

Let's say you have $5,000 in a deductible traditional IRA. You want to contribute $5,000 to a backdoor Roth IRA so you open a non-deductible traditional IRA and fund it with $5,000 to convert to a ...
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3answers
111 views

Possibly better to pay RMD penalties than to take RMDs?

Could it ever be advantageous for a wealthy retired person over the age of 70-1/2 with significant taxable investment income to intentionally fail to take a Required Minimum Distribution (RMD) from an ...
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2answers
173 views

Should I contribute more to my 401(k) or IRA?

I am trying to figure out a reasonable strategy for my situation. I make over the limit to write off traditional IRA contributions on my taxes starting in 2020. I currently contribute 8% to my 401k. ...
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5answers
335 views

Refinancing student loans in the context of an impending recession

I am a 23 year old, employed, Software Engineer working for a startup in an inexpensive city in the United States. I make $71k/year plus stock options that incrementally vest over 3 years. I have no ...
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4answers
721 views

Income too high for a Roth IRA

I now make too much money to invest in a Roth IRA. I get no tax benefit from putting money into a traditional IRA since I already have a 401k plan which I max out. What should I consider investing ...
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1answer
180 views

What is a Mega Backdoor Roth IRA?

The so-called "Mega Backdoor Roth IRA" was coined in the following article in 2014: I don’t hear about new ideas very often, but here is one that a few people might find very useful. I call it the “...

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