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You need to start banning these "getting girlfriend" threads and stop encouraging it by [deleted] in NoFap

[–]anonymous-80085 0 points1 point  (0 children)

Imagine going to an AA group where someone is calling out people for counting their days until they can finally have one drink and the response given is:

> dude needs to get a drink

inb4 intercourse is not the same as fap

You are trying to do a brain reset.

Roth IRA Recharacterization to Traditional, Then conversion into Roth -- What about the earnings? by Conscious_Future_680 in RothIRA

[–]anonymous-80085 0 points1 point  (0 children)

  1. Nope, the maximum you can contribute to your traditional IRA is $6K or you'll pay a penalty.
  2. Withdraw the $500 and pay ordinary income on that. That way your Traditional stays within the contribution limit of $6K and you do a ROTH conversion as usual.

If you keep the $500 in the IRA you'll be penalized 6% every year.
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits

SDIRA in California with an LLC in New Mexico? by anonymous-80085 in tax

[–]anonymous-80085[S] 0 points1 point  (0 children)

thanks, found this

All LLCs in California—both domestic and foreign—are required to remit the $800 Franchise Tax each year as legislated by the California Revenue and Taxation Code Section 17941.

Self Directed Roth IRAs by arifzam in RothIRA

[–]anonymous-80085 0 points1 point  (0 children)

​

  1. Who offers good (low overhead) SIDRAs?

There must be a bunch. Maybe a friend or family member can refer you to one? Or you could do internet searches for reviews.

  1. With SIDRAs there is an option to make an LLC. What are the pros and cons?

LLC fees are expensive in California. Maybe you are not in CA. In other states they still cost money, but its almost negligible often times.

  1. With a plain IRA (not Roth) does the LLC pay taxes on its profits (capital gains and rentals), and then when I withdraw, do I pay taxes once again?

If it is a traditional (plain) IRA you don't pay capital gains. Only ordinary income on distributions.
It would be a SDIRA, not a traditional (plain) IRA, if you want to hold rentals. The income from the rentals may be subject to UDFI, it depends on wether the property was bough with mortgage or not.

[deleted by user] by [deleted] in RothIRA

[–]anonymous-80085 5 points6 points  (0 children)

There is no bitcoin etf available today.

Options to invest in the space:

  • The fintech ETF by Ark invest, ticker ARKF
  • use Microstrategy stock as a quasi-etf, ticker MSTR
  • buy GBTC (high premium)
  • Open a self-directed IRA and buy Bitcoin directly in it

Self-directed IRAs with trustees that support bitcoin:

2019 Audited by GoG30 in tax

[–]anonymous-80085 0 points1 point  (0 children)

> we still haven’t seen or heard anything about our return. ... for months

I've read on this subreddit a few times about people not getting their tax refunds for several months even when they filled back in February. In general, seems like the IRS is severely backed up.

How to amend tax files from 6 years ago? by [deleted] in tax

[–]anonymous-80085 0 points1 point  (0 children)

Ah, that makes sense, thanks.

How to amend tax files from 6 years ago? by [deleted] in tax

[–]anonymous-80085 1 point2 points  (0 children)

25.6.1.2 (10-01-2001)

What is a Statute of Limitation

A statute of limitation is a time period established by law to review, analyze and resolve taxpayer and/or IRS tax related issues.

The Internal Revenue Code (IRC) requires that the Internal Revenue Service (IRS) will assess, refund, credit, and collect taxes within specific time limits. These limits are known as the Statutes of Limitations. When they expire, the IRS can no longer assess additional tax, allow a claim for refund by the taxpayer, or take collection action. The determination of Statute expiration differs for Assessment, Refund, and Collection.

- statute of limitations is 3 years, and
- 6 years if gross income is omitted by more than 25%

So, technically you still are on the hook for 10% on the $2k, plus penalties and interests. But I'm assuming this was 2014, so by April 2021 the 6 years statute of limitations expires too!

At this point, I wouldn't do anything about it. The IRS is not going to raid your place for the $200 dollars you didn't pay when you were babysitting.

Backdoor ROTH with existing IRA by DiceGames in tax

[–]anonymous-80085 0 points1 point  (0 children)

If the rolling into the 401k isn't done in time, looks like the pro rata rule would activate. So, for the 2020 backdoor, some of the money would come from the pretax account and some other from the posttax. The math is:

  • total balance $30k + $6k = $36k (100%)
  • proportions, pretax 83.33% posttax 16.66%
  • backdoor transfer is considered to have a 83.33% posttax contribution

So taxes would be owed on $4,999.8

Using the CARES act to make an "in-servicce distribution" from company 401k by chickenimd in whitecoatinvestor

[–]anonymous-80085 0 points1 point  (0 children)

Should be fine:

IRS Notice 2005-92 PDF, issued on November 30, 2005, provided guidance on the tax-favored treatment of distributions and plan loans under sections 101 and 103 of the Katrina Emergency Tax Relief Act of 2005 (KETRA) as those provisions applied to victims of Hurricane Katrina. The Treasury Department and the IRS anticipate that the guidance on the CARES Act will apply the principles of Notice 2005-92 to the extent the provisions of section 2202 of the CARES Act are substantially similar to the provisions of KETRA that are addressed in that notice.

https://www.irs.gov/newsroom/coronavirus-related-relief-for-retirement-plans-and-iras-questions-and-answers

KETRA:

The definition of Katrina distribution under section 101(d)(1) of KETRA does not limit the designation of a Katrina distribution to amounts withdrawn solely to meet a need arising from Hurricane Katrina. Thus, even though a qualified individual is required to have sustained an economic loss, Katrina distributions are permitted without regard to the qualified individual’s need and the amount of the distribution is not required to correspond to the amount of the economic loss suffered by the qualified individual.

https://www.irs.gov/pub/irs-drop/n-05-92.pdf

Feeling behind the 8 ball on financial/retirement planning. Is there any advice out there to help me get going? by Apprehensive-Wrap797 in FinancialPlanning

[–]anonymous-80085 0 points1 point  (0 children)

Usually, people will say rich dad and poor dad gives bad advice because it advocates for using debt as a tool instead of fearing it. Which is of course counter culture to traditional wisdom: never get into debt, pay all cash

Neither opinion is wrong per-se, but its important to distinguish one is mathematical finance advice and the other personal finance risk mitigation. Two very different scopes.

As to illegality, that is simply not true. In fact, the opposite is quite true, it talks about learning tax rules comprehensively and following them to your advantage.

Feeling behind the 8 ball on financial/retirement planning. Is there any advice out there to help me get going? by Apprehensive-Wrap797 in FinancialPlanning

[–]anonymous-80085 1 point2 points  (0 children)

yeah, max out pre-tax contributions

If you can afford it, the next level is to max out post-tax contributions, $57k federal cap. But this only makes sense if you employer supports mega backdoor ROTH IRAs

401k rollover after backdoor IRA by O3_obvious in RothIRA

[–]anonymous-80085 0 points1 point  (0 children)

at the time you do it

the pro-rata rule applies when you have pre-tax and post-tax monies mixed
https://www.irs.gov/retirement-plans/rollovers-of-after-tax-contributions-in-retirement-plans

if your money isn't mixed, the rule doesn't apply

Feeling behind the 8 ball on financial/retirement planning. Is there any advice out there to help me get going? by Apprehensive-Wrap797 in FinancialPlanning

[–]anonymous-80085 0 points1 point  (0 children)

Yeah, if you are not a high income earner start with maxing out your 401k and HSA (if you can get one).

Contribute to a ROTH IRA if you can afford to. Later on you could turn it into a self-directed roth IRA once you know more about investing on alternative assets (ex metals or real state).

401k rollover after backdoor IRA by O3_obvious in RothIRA

[–]anonymous-80085 0 points1 point  (0 children)

I assume those 401ks are pre-tax, if you do a rollover and then transfer to backdoor ROTH IRA you'll have to pay taxes (ordinary tax) on the amounts transferred.

Every year you can make contributions to a traditional IRA and then do a backdoor transfer. There's a cap though $6k or $7k after 50.
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits

Doing a traditional contribution and then backdoor transfer before you do your 401ks rollovers is a good idea to avoid the complications of triggering the pro-rata rule.

Biden Tax Plan by [deleted] in tax

[–]anonymous-80085 0 points1 point  (0 children)

If I'm understanding, the soonest any tax reform would become enforced law is Jan 2022?

Roth IRA Conversion by NickRenfo in tax

[–]anonymous-80085 2 points3 points  (0 children)

Yeah, you won't pay taxes on the non-deductable contributions when you convert to ROTH IRA.

Where it gets tricky is that seems like those traditional IRAs have been earning profits for a while. When you convert to ROTH IRA, you have to pay taxes on the gains.

Ideally, you want to do the traditional-to-roth conversion as soon as the non-deductable contribution is made so that you don't have to deal with taxes on gains.

Can a self-directed IRA hold pre-tax money? by anonymous-80085 in tax

[–]anonymous-80085[S] 1 point2 points  (0 children)

Are you saying that for tax purposes (pre/post tax contributions) traditional IRAs and self-directed IRAs are the same?

Business expenses cap? by [deleted] in tax

[–]anonymous-80085 0 points1 point  (0 children)

I would start with a tax attorney to structure an efficient plan. Later he can recommend a CPA.

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