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Recent Roth IRA questions

There Lane. Jamie Eckard here again. I hope all is well

Hi there Lane. Jamie Eckard here again. I hope all is well your way. I have a client who has $22k in a traditional IRA and they want to convert to a Roth IRA. The client has the following items as far as income for 2016.W-2 - $13,000Interest - $2,100Dividends - $17,600 and $6,700 qualifiedCapital Gains - $15,000Social Security - $16,000 (taxable, she is only in her 30's, her husband passed away in 2013)My question is what would be the best way to make this transfer? Roll the amount over and just pay the tax? Or is there some other way to do this now?Thanks so much for your help.Jamie

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

17,686 satisfied customers
1. You are considering opening a bagel restaurant aimed

1. You are considering opening a bagel restaurant aimed primarily at the breakfast trade. You'll sell bagels, coffee, and other items in relatively fixed proportions to one another. For each bagel sold, you expect the company to sell two cups of coffee and $2 of other items. You'll earn $0.50 on each bagel, $0.50 on each cup of coffee, and $1.00 on the other items. Salaries, equipment, and rent cost about $100,000 per year. What is the break-even quantity of bagels?2. You are a financial planner who helps clients plan for retirement. Suppose one of your clients is 4 years away from retirement and has only $1,500 in pretax income to devote to either a Roth or traditional IRA. The traditional IRA permits investors to contribute the full $1,500 since contributions to these accounts are tax-deductible, but they must pay taxes on all future distributions. In contrast, contributions to a Roth IRA are not tax-deductible, meaning that at a tax rate of 17 percent, the investor is able to contribute only $1,245 after taxes; however, the earnings of a Roth IRA grow tax-free. Your company has decided to waive the one-time set-up fee of $25 to open a Roth IRA; however, investors opening a traditional IRA must pay the $25 set-up fee (in the first year only). Assuming that your client anticipates that her tax rate will remain at 17 percent in retirement and will earn a stable 8 percent return on her investments, will she prefer a traditional or Roth IRA?

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PDtax

Owner

Master's Degree

6,972 satisfied customers
I have a regular IRA. If we are in our 40s and 50s, would it

I have a regular IRA. If we are in our 40s and 50s, would it make more sense to switch to a Roth IRA, pay the taxes now while we're still earning, and then get the tax free money later when our earning potential has diminished? What would be the tax burden now to switch it over? Is it a percentage or is there a penalty too?

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TaxRobin

Vocational, Technical or Trade School

21,184 satisfied customers
Roth IRA contribution questing wish to purchase house with

Roth IRA contribution questing wish to purchase house with down payment coming from Inherited IRA. Wish to take distribution of $50,000. AGI appears to be about $175,000 this year (2016) We have a Roth IRA with small monthly contributions of $200/mo. Are we up against Roth AGI limits and is there a way to avoid penalties?

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Lev

Retired

Bachelor's Degree Equivalent

24,192 satisfied customers
I don't like my companies 401(K) plan and want know my

I don't like my companies 401(K) plan and want know my options regarding tax deferred retirement plans if I don't want to go through my employer.

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TaxRobin

Vocational, Technical or Trade School

21,184 satisfied customers
Ray My tax bracket can go up to $300,000 or

Hi RayMy tax bracket for 2016 can go up to $300,000 or $500,000Can you tell me which entity is better for tax shelter, 401K, Stock option, Roth IRA saving account, good health care and asset protection?Should I go with option 1 and 3 or choose option 2 below?1. LLC setup as a Corporation with 1 % account. I am looking to have an excellent tax break, 401k, good health care coverage and asset protection. Claim payroll for two employees2. Should I setup either S-corps or Corp?3. Do you have any refer for this Non-profit organization?

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Lev

Retired

Bachelor's Degree Equivalent

24,192 satisfied customers
This is the first year I have to file Form 5500-EZ

This is the first year I have to file Form 5500-EZ for my solo 401(k). I am a self-employed single member LLC Schedule C filer. I'm not sure how to file the 5500-EZ properly:I have both an Individual 401(k) and an Individual Roth 401(k) as two separate accounts with the same firm. The firm had me fill out two separate applications; at the time I gave them sequence numbers 001 and 002. The regular 401(k) has over $250,000 and the Roth 401(k) has less than $5,000. Both accounts are for my benefit and I consider them parts of a single plan.Do I: (a) file one 5500-EZ with the combined value of both accounts, (b) file two 5500-EZs, one for each account even though one account balance is very small, (c) file one 5500-EZ only for the account that is over $250,000, or (d) something else entirely? Thank you.

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

17,686 satisfied customers
I am considering switching employers and would like to

Hello. I am considering switching employers and would like to utilize a sign-on bonus to pay off debts. Would a sign-on bonus paid directly to creditors be taxable income? My reported adjusted gross income (nearly all W2 income) is typically $250,000.

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

17,686 satisfied customers
In 2015 I opened a Roth IRA account on Vanguard and funded

In 2015 I opened a Roth IRA account on Vanguard and funded it to the maximum amount ($5500). This year, I found out that my income was higher than I expected, which placed me in the phase-out range for Roth IRAs.I was told by TurboTax that I could only contribute $720 to a Roth IRA and should remove the exceeding amount. Then I opened my Vanguard account and requested to sell part of my shares, enough to leave only $720 in it.Then I contacted Vanguard to confirm that everything was OK. It turns out that I should have requested the withdrawal using a paper form. What are my options to clear out this mess and file my taxes this year?

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TaxWhisperer

Principal

Masters Science Taxation

580 satisfied customers
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