Mailbag...Ask Andy Anything!
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- เผยแพร่เมื่อ 2 มี.ค. 2022
- This is a special "mailbag" edition of Taxes in Retirement LIVE! where group members ask Andy all sorts of retirement planning questions.
Questions addressed (and time stamps at which point in the video the question starts) in tonight's video are:
3:32 - Can you explain the Social Security Windfall Elimination Provision (“WEP”)
14:34 - Do I need to refile or amend prior year tax return to claim my deceased parents’ unclaimed property?
16:20 - If you make a large Roth conversion, do estimated federal and state taxes need to be paid in that quarter to avoid underpayment penalties?
20:08 - My defined benefit pension will increase by 0.5% per month for each month I delay it past age 65. Should I delay it? Or maybe start it early (with 0.5% per month reduction)?
27:10 - When is interest from a Home Equity Line of Credit (“HELOC”) deductible?
30:07 - If I have a Roth 401(k) and a Health Savings Account (“HSA”), will I have different “gross” and “taxable” wages on my W-2?
32:14 - Can you discuss Social Security spousal benefits and when one spouse may be able to take just a spousal benefit while delaying his or her own benefit?
36:05 - With a revocable living trust, can the same person be named the trustee and beneficiary?
36:18 - When considering doing Roth conversions, are there thresholds where it is probably a good idea, such as having a traditional IRA of $1,000,000 or more?
40:48 - Can I name a charity and an individual as beneficiaries of my traditional IRA?
42:23 - Can you explain the benefits (or not) for those who say they want to convert all of their tax-deferred money to Roths?
47:38 - What is the 2021 MAGI limit for Medicare IRMAA premium surcharges? How will I or my tax return preparer know what my MAGI is?
55:16 - I just did a recharacterization of a Roth IRA contribution to a traditional IRA contribution. Will I get a 1099-R for this?
57:52 - I’m over 59 ½ and have already had a Roth IRA for more than five years. I will be retiring and rolling over my Roth 401(k) into a new Roth IRA. Will I need to wait to take money out of that new Roth IRA?
59:05 - I did a large Roth conversion in January and I paid the estimated taxes on it in the first quarter. Will I need to file a Form 2210 with my tax return?
1:00:39 - Is there an easy way to figure out my after-tax “basis” in my traditional IRA if I’ve never filed Form 8606 or otherwise kept track of the basis?
1:02:56 - If someone rebalances their portfolio every 90 days and there is a big drop in the markets right after doing the rebalance, should they wait another 90 days to rebalance again, or do it after the market drop?
1:05:33 - Has there been any further talk about the RMD starting age increasing from age 72 to 75?
1:06:16 - Can foreign tax credits be used to pay for U.S. Capital Gain tax?
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DISCLAIMER: This video is only helpful hints and education. It is not specific tax, legal or investment advice. Before considering acting on anything you see in this video, first consult with your tax, legal or investment advisor. While the information expressed in this video is believed to be accurate, neither Andy Panko, CFP®, RICP®, EA nor Tenon Financial LLC make any guarantees to its accuracy.
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Thanks for the Rethinking 65 mention! Just subscribed...
On the unclaimed property they are worried they need to file tax returns for the 36 years of dividend income received
On the $300K savings from Roth conversions comment, I don't have a problem with a CFP or FA stating things like that, but only AFTER clearly stating the parameters that were used in the calculation, the values of those parameters, and the fact that the numbers can vary. If I didn't hear that info from someone who wanted my business, he/she wouldn't be getting my business.
For Roth conversions, are we required to pay quarterly estimated tax payments even if we are not sure if or how much a conversion we are doing and if that conversion is being done in November or December which is what is being suggested by most retirement folks?
You’ll likely have to pay estimated taxes in the latter quarter(s) of the year, when you do the conversion(s). And then you’ll likely have to “annualize” your income on Form 2210 of your tax return to minimize or avoid interest charges on underpayments.
Love the Greetings from AP shirt.
Thanks! That's my go-to beach spot in the summer. Beach, bars, restaurants, live music...what else can you ask for?!
Regarding sticking to a rebalancing plan, would rebalancing when the balance is off by >5% be considered too often?
That's a great point. And in reflecting on that question after the fact, I should have actually said that it could make sense to do interim rebalancing if your allocations get too far askew.
For example, if your target allocation is 60% stocks and 40% bonds, and the stock market drops a lot such that your actual allocation drifts down to 50%/50%, then yes, it could make sense to do a rebalance at that time instead of waiting for the next regularly scheduled rebalance.
But again, don't do it subjectively. Set a trigger ahead of time, and stick to it. For example, your investment policy with yourself could be something like "I'm going to rebalance every three months on the 15th of the month OR if my actual allocations differ from my target allocation by more than 10%." And then leave it alone...don't rebalance outside of those parameters, otherwise you're just market timing.
If my dad was retired since age 62. He did receive retirement income and was disabled. I have been his caregiver for at least 10 years or more. My dad died in September, 2021. Can I claim him on my 2021 income tax return, and do I need to file a separate return for his final taxable income
It depends. Your father being a depending is not about how much physical care you gave; it's more about financial support provided.
This table from the IRS will help you determine if your father was a "qualifying relative dependent"
apps.irs.gov/app/vita/content/globalmedia/table_2_dependency_exemption_relative_4012.pdf
I look forward to your deep dive regarding Estimated payments on Roth Conversions. However, that puts it close to when 1st quarterly due date of April 15 (technically not quarterly, but rather Apr 15, June 15, Sept 15, and Jan 15 of following year) I hope to get a quick answer before your deep dive as I need to decide how much to pay ASAP.
In my case I plan on doing a total Roth conversion in 2022 of $100K but because of the down market recently, I have done $70K already, and may do another $20K in 2nd qtr, and the final $10K in Dec 2022. My belief is that I can do 4 equal payments by the due dates stated above. I estimate the total tax liability for all income, including the conversions for 2022 will be $24K. So is it correct that I can pay $6K by each of the due dates and avoid penalties, even though the bulk of the conversion was done in the 1st half of the year?
Your understanding about four equal payments of $6k is correct. If your total 2022 tax obligation ends up being $24k, the four payments of $6k will avoid underpayment penalties.
@@RetirementPlanningEducation Thank you, One last quick question. Based on comments you made during the video, I will NOT need to file a Form 2210 when doing my taxes for 2022, correct? This form is only used in the event that 4 equal installments are not made, correct?
PS. This is the first time I have watched one of your live Q&A sessions (after the fact). Very helpful! I plan on doing it again. Thanks for your contributions!
@@apeel2008 Correct; no Form 2210 required if you're doing four equal estimated payments that cover at least 90% of your ultimate tax obligation for the year.
And I'm glad you enjoyed the video, thanks! I may actually start live streaming them through TH-cam instead of Facebook. More people can access them that way (as opposed to needing to be a member of the Facebook group in order to see it live)
@@RetirementPlanningEducation Good plan. I do not use, or want to use, Facebook. I think more and more people feel that way, but I could be wrong!
@@apeel2008 I think you're right. Facebook can be absolutely toxic. But it's actually a great tool if used and moderated carefully to keep out the rabble rousers, political commentary, name calling, etc. I barely do any personal activity on it; I really only use it for my group, Taxes in Retirement. Which the moderators and I put A LOT of time and effort into screening out the jokers. To try to keep it a pure educational and Q&A place for retirement and tax planning info.
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