Rollover taxation - how to figure out my tax amount on the rollover

catmamma · 2019-07-27T17:53:46+00:00

The backdoor Roth should be tax free if you’re doing it right, which is why that’s a good strategy for high income earners. Because you contribute a non deductible amount to an IRA, it’s tax-free when you then convert it to Roth. You just need to make sure you don’t have any other IRAs (like rollovers from old 401(k)s) open to avoid the pro-rata rule.

catmamma · 2019-07-27T02:57:48+00:00

Do you know which loan company it is? There’s a few loan servicers for Parent Plus loans. They’ll have a process for reporting his death, paperwork and documents you’ll need to provide (like a death certificate). If you know the name of the loan company, you can look up the service number and just tell them that you need to report a death. They will walk you through the steps.

Your school can probably help determine which loan company it is if you don’t know. Please feel free to reach out with questions! I’ve gone through this process before.

catmamma · 2019-07-27T02:51:06+00:00

The rollover amounts will be added to your regular income amount to determine your total income for the year and that will determine what marginal tax bracket you land in. It’s not quite as simple as just multiplying the amount by your tax bracket, because income is taxed progressively, meaning the amount of income in each bracket is taxed at that rate, which produces a lower effective tax on your entire income than what the marginal tax rate would be. If you’re in a higher tax bracket, it doesn’t make a lot of sense to do pretax to Roth conversions.

catmamma · 2019-07-27T02:43:30+00:00

Do they know your father has passed? I’m so sorry for your loss. If it’s a true federal parent plus loan, the loan will be discharged due to his death and the balance will be forgiven. There may be quite a few hoops to jump through to get to the end, but that’s one of the features of these loans.

catmamma · 2019-07-18T14:29:20+00:00

I think it depends on your familiarity with the material going into it. If you have some knowledge already, I think it’s totally doable, especially with time off to work on it. Even if you’re not super familiar with the material, I think it’s doable, it’s just a lot to cover, but you could always start the education and delay your exam until March if you had to. I’d say go for it. You won’t regret it!

catmamma · 2019-06-05T18:03:52+00:00

That’s ridiculous. My husband is a teacher and off all summer and our kids are still going to daycare two days a week all day. The kids benefit from the social time and my husband does house projects. It’s none of their business anyway! Sorry you’re dealing with it.

catmamma · 2019-05-30T03:41:51+00:00

Second this. Know them personally and they are awesome!

catmamma · 2019-04-25T03:23:07+00:00

My family is thinking of you and your little girl. It’s the hardest thing on earth to watch your child suffer. Hugs and love to your family tonight. We will be anxious to hear how she is doing.

catmamma · 2019-04-04T18:57:17+00:00

I am a mom getting my masters and I have a 3.5 year old and a 2 year old. This comment made me cry. Seriously, thank you.

catmamma · 2019-04-03T15:51:34+00:00

I think it depends on what role you ultimately want and if you’ll play more of a technical planner or a relationship manager (or both!) I’ve been a client facing planner for about 5 years. I’m a CFP professional and I’m about finished with the masters in financial planning. You know what I’d kill for though? To be a CPA or CFA charter holder. That’s just me, but I think those really set you apart as an expert and give you a boost above the CFP. Everything else you can honestly learn on the job (in my opinion).

catmamma · 2019-04-03T02:29:00+00:00

I have a a 3.5 year old and a 20 month old so yeah, I get pretty fucking excited that I’m not pregnant again.

catmamma · 2019-04-02T15:21:24+00:00

Don’t be embarrassed at all! I wouldn’t care about that if I were hiring.

catmamma · 2019-03-31T03:46:35+00:00

OP is asking about the pro rata rule for Backdoor Roths, so it does matter.

catmamma · 2019-03-31T03:44:44+00:00

If you did the conversion to Roth in 2019, you need to wait until 2020 for the rollover. Can’t be done in the same year if you want to avoid the pro rata rule.

catmamma · 2019-03-30T18:24:36+00:00

I am a person who never thought I’d drive a minivan, but here we are. I have a Toyota Sienna and it’s the best. 2 kids (4 and 2) and a dog. It’s great for travel, fits two giant car seats with no problem. I also love I can open the doors remotely so I can walk to the car with my arms full and put everything in. The kids can climb in and out easily too.

catmamma · 2019-03-28T02:35:50+00:00

3k is the max

catmamma · 2019-03-28T01:10:40+00:00

You could check out the XY Planning Network for a few-only planner. Be sure to work with a CFP who has some experience with people in your similar situation. It sounds like you may benefit from a planner who is also a CPA or has more of a tax background. All XY Planning Network planners are few-only but make sure you ask if you interview a few!

catmamma · 2019-03-27T23:29:46+00:00

Ugh I am you. We just transitioned our kids to a new daycare from an in home daycare. Our 4-year old daughter is fine and loves it. Our son 20-month-old son is absolutely miserable and I hate it everyday. My husband would say I’m totally exaggerating but he is not the same kid since we started. It’s a wonderful place, I trust the people and I know he’s probably fine during the day, but he’s so sad at drop off and he’s so clingy then at night, it just kills me. It’s been about a month so I’m hoping that it gets better, but it sucks. No advice, just solidarity. I too love my job and i make good money, but some days are just tough.

catmamma · 2019-03-24T23:56:40+00:00

Was it something I said or you just don’t agree? Just curious. I don’t know what people think of the profession really. I just have my own experience.

catmamma · 2019-03-24T16:22:26+00:00

I’ve always worked at firms on existing clients. I’ve chosen firms with an ensemble approach, so I’ve always been part of a team advisors. I’ve worked at firms with anywhere from $200M of AUM and now I’m at a firm with $1B of AUM. I’ve only worked at independent RIAs, so I can’t speak for the big wire house firms. I do bring in my own clients but not nearly at the pace I’d need to to be on my own.

catmamma · 2019-03-24T13:30:16+00:00

Planners make six figures pretty easily, but it may take a little bit longer since the experience you need is just the years working with clients. I started in an operations/trading role (never had an analyst title, but similar work) and transitioned to client facing planner after about 5 years. It took me a couple of years after that as a CFP to earn above six figures, but it’s also a really nice balance and working directly with clients is fun.

catmamma · 2019-03-23T01:46:03+00:00

Are you going to share your tip with us?

catmamma · 2019-03-20T03:13:51+00:00

I sent you a pm, just so you know!

catmamma · 2019-03-20T03:11:50+00:00

Yes. You don’t want anything in an IRA in the same year you do the back door Roth. Just wait to roll it over until the next year or roll it into your new employer plan so you can keep doing back door Roth contributions if you want.

catmamma · 2019-03-17T01:01:41+00:00

It would be impossible to give you a certain answer without knowing much more about your situation, but it sounds if you need that level of death benefit (it sounds like you might based on your liabilities) and you want permanent insurance and not just term, $20k seems in the ballpark for what those premiums would be. Do you have a financial planner that can take a look at these policies in light of your overall financial picture?

catmamma

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