DeluxeXL
DeluxeXL t1_iufjjb5 wrote
Reply to comment by supersonic_528 in After-tax 401K to Roth IRA -- pro rata taxes by supersonic_528
> So I guess all I need to do is just move the funds from my after-tax 401K account to my Roth IRA account. Is there any tax form I need to fill out, or any other documentation I need to keep?
You need to tell the 401k custodian and the Roth IRA custodian that this is a rollover so that the 1099-R and 5498 are correctly coded.
> On that topic of after-tax contributions vs gain/loss from it, does the same rule apply when I am trying to do a regular (not mega) backdoor Roth conversion, that is, from my traditional after-tax IRA to Roth IRA?
In general, yes. However, unlike 401k, the IRS treats all of your IRAs (other than Roth IRA and inherited IRA) as one big IRA account.
> am I supposed to pay tax on a pro-rata basis due to that small pre-tax gain?
Yes, because of "one big account."
DeluxeXL t1_iuffp85 wrote
Reply to Should I wire transfer to myself when moving money from one savings bank to another? by EmojiOfAKeyboard
Just do ACH unless you need the money moved in the same business day. Modern ACH takes only one business day to complete after everything is verified (microdeposit, etc.). The chance of you typing your account or wire routing number wrong is higher than ACH because there is no automated verification at all, and there is no "undo" for wire transfers.
DeluxeXL t1_iufevex wrote
> Can I convert the after-tax 401K directly to Roth IRA? Or do I have to first do after-tax 401K to Roth 401K, and then Roth 401K to Roth IRA? I'm guessing both are probably legal, but might have different tax implications.
It will be called a rollover, not a conversion. But otherwise yes, you can move from after-tax 401k to Roth IRA.
> Since I have money in pre-tax 401K too, do I have to pay any pro-rata tax in the process?
No, but you have to deal with pro rata rule in the after-tax 401k alone. Your after-tax 401k account has
- after-tax contributions
- plus or minus pretax gains/losses
When you roll over from this account, both types of balances must go. You can roll over #1 to Roth IRA or Roth 401k, and #2 to the pretax account inside your 401k. Or, you can roll over both #1 and #2 to Roth IRA or Roth 401k, and pay tax on #2 if #2 is positive.
DeluxeXL t1_iudp8ui wrote
> What's the situation where it's better to enroll in HSA? I always do FSA, but I'm scared to enroll in high deductible plan (requirement to enroll in HSA) because for a typical primary care visit, for FSA, I only pay $20 Copay,
FSA is not the insurance plan. Neither is HSA. Read the details of the actual insurance plans! Compare the premiums, coverages, and other employer-provided benefits.
> but with high deductible plan, I need to pay 20% coinsurance. Thanks in advance for the info.
No, you don't just pay coinsurance. You pay the insurance-negotiated full amount until you reach deductible. Then you pay coinsurance until you reach out-of-pocket max.
There is a sweet spot where a non-HDHP PPO is better than HDHP, where you use medical services just frequently enough but not too much.
DeluxeXL t1_iudovsh wrote
Reply to No-interest loan but interest was dumped into my account after it was not fully paid off by a certain date by RevolutionaryLion384
It's called a "deferred interest loan" or "no interest if paid in full within x months or else full retroactive interest applies". Merchants often offer this for large-ish purchases.
Did you sign or agree to anything?
DeluxeXL t1_iu9rpc3 wrote
Reply to comment by MaximumRecursion in Asked Edward Jones to rollover my IRA to Charles Schwab, and they took out federal income tax, even though I made it perfectly clear it's a rollover, not a disbursal. by MaximumRecursion
> Are you saying I just include the amount withheld in taxes from my own momey when depositing the check I got?
Yes. Cover the taxes withheld out of your pocket for now. But don't just deposit the checks. You must tell Schwab that these are indirect rollovers. Otherwise it can't distinguish between a rollover and a contribution.
> And, presumably, I get that money back when completing my taxes at the end lf the year?
Yes. The 1099-R will show the taxes withheld. Enter into your tax return.
DeluxeXL t1_iu9qvdh wrote
Reply to Asked Edward Jones to rollover my IRA to Charles Schwab, and they took out federal income tax, even though I made it perfectly clear it's a rollover, not a disbursal. by MaximumRecursion
You have been using the wrong terms. The term for moving directly from one IRA trustee to the next is called a transfer, not a rollover. The term "rollover" is mainly used when moving to or from a workplace plan and the following: An indirect rollover is when money is sent to you from the first IRA trustee, and you send the money plus any taxes withheld to the next IRA trustee. This is the term you've been using. The EJ rep saw the first button with the word "rollover" in it and clicked it.
You are allowed to complete one indirect rollover from a traditional IRA to a traditional IRA in a rolling 12 month period. All indirect rollovers must be completed within 60 days. You'll need to cover the taxes withheld from your own pocket until you can get them back when you file your tax returns.
DeluxeXL t1_iu9lu2q wrote
Reply to What to do with my self “managed” Roth IRA. by gkeshk
Read and learn from the IRA wiki and choose a target date index fund or three-fund portfolio. Investment managers won't beat passive investing over a long time period due to the added costs. So just liquidate your random stocks and buy one (set) of the above.
And no, you cannot roll over a Roth IRA to anything other than another Roth IRA that you open on your own. It cannot be rolled over to retirement plans.
DeluxeXL t1_iufjwp5 wrote
Reply to Loan against my savings? by [deleted]
Are you talking about a 401k loan, a loan/line of credit via your taxable investment account, or something else like a loan against your life insurance?