GRS Home  Forum Home
Bank Rates Center
   Savings Account Rates
   Money Market Rates
   Highest CD Rates
Insurance Rates Center
  Auto           Health
   Life              Home
Mortgage Rates Center
  Mortgage Rates
  Mortgage Quotes

Last visit was:
A place for Get Rich Slowly readers to ask questions
and exchange ideas
It is currently Thu Jul 31, 2014 6:43 pm




Post new topic Reply to topic  [ 19 posts ]  Go to page Previous  1, 2
Author Message
 Post subject: Re: MrMiser Financial Health Log
PostPosted: Wed Mar 27, 2013 2:36 pm 

Joined: Fri May 04, 2007 8:14 pm
Posts: 1767
ThriftGenuity wrote:
You mentioned a penalty, I am not aware of a penalty for a conversion, I thought only for taking money out early?

If you do a Roth IRA conversion, you have to pay taxes on the conversion amount, since you took a deduction putting into the traditional IRA. If you wind up owing too much at tax time, you could be penalized for underwithholding.

There are several ways to deal with this, outlined in http://articles.sun-sentinel.com/2010-04-12/business/fl-savings-game-0412-20100412_1_roth-ira-conversion-conversion-income-withholding.


Top
Offline Profile   
 Post subject: Re: MrMiser Financial Health Log
PostPosted: Thu Mar 28, 2013 2:29 am 

Joined: Fri Mar 01, 2013 10:11 am
Posts: 13
VinTek wrote:
If you do a Roth IRA conversion, you have to pay taxes on the conversion amount, since you took a deduction putting into the traditional IRA. If you wind up owing too much at tax time, you could be penalized for underwithholding.

There are several ways to deal with this, outlined in http://articles.sun-sentinel.com/2010-04-12/business/fl-savings-game-0412-20100412_1_roth-ira-conversion-conversion-income-withholding.


Thanks. It sounds like we'll fall into the first safe harbor method. We got a small federal tax return this year. That should help us avoid the penalty this year. I understand that'll we'll still have to pay taxes on the conversion as "income". That "income" will fall into the 25% tax bracket. While that may hurt today, I'm sure the day will come when I'm glad we did it.


Top
Offline Profile E-mail   
 Post subject: Re: MrMiser Financial Health Log
PostPosted: Thu Mar 28, 2013 2:39 am 

Joined: Fri Mar 01, 2013 10:11 am
Posts: 13
ThriftGenuity wrote:
Reading through this post, you have made excellent progress in such a short amount of time! Have you considered picking up some side jobs to build up your EF and pay off the house expenses? For example, I referee soccer and teach guitar lessons on the side. These types of jobs are nice because they are flexible and considered skilled, so they pay better than your standard retail or restaurant


Thanks! I have ample opportunity for overtime at work. I probably don't take advantage of that as often as I should. I take home about $22/hour after taxes, so it's hard to find side work that pays the same. I just need to change my view of working extra...


Top
Offline Profile E-mail   
 Post subject: Re: MrMiser Financial Health Log
PostPosted: Thu Mar 28, 2013 5:15 am 

Joined: Wed Mar 27, 2013 12:38 pm
Posts: 8
Location: Richmond, VA
That definitely works out well to have OT opportunities. I hear you about changing the mind set about working extra. I always think of it like "ok, this will cover the month's electric bill, or cable" and so on. Good luck in your continued progress!

_________________
Blog: http://thriftgenuity.com
Twitter: http://twitter.com/thriftgenuity


Top
Offline Profile E-mail   
Display posts from previous:  Sort by  
Post new topic Reply to topic  [ 19 posts ]  Moderators: kombat, bpgui, JerichoHill, Fiscal Fitness Moderator Go to page Previous  1, 2


Who is online

Users browsing this forum: No registered users and 1 guest


You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot post attachments in this forum

Search for:
Jump to:  
Powered by phpBB © 2000, 2002, 2005, 2007 phpBB Group
Theme created StylerBB.net & kodeki