oped
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Post by oped on Mar 28, 2020 17:38:23 GMT -5
So ‘kids’ ages 17-24 and other adult dependents seem to be in a gap... not children but also not adults so get neither 500 nor 1200.
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Deleted
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Post by Deleted on Mar 28, 2020 17:43:44 GMT -5
Apparently the checks to individuals is based on agi, not taxable income. So think we won’t be eligible, would be eligible if it was taxable income Happy money is going to people having a rough time. If we do receive anything will send either to grandson and wife who lost their jobs or to local food pantry Grandson and wife may be fine with unemployment and the checks coming to them You have confused me . . . because I am not tax savvy. I thought AGI (adjusted gross income) is less than your gross income because it factors in the standard deduction or your itemized deductions. Are you saying that gross income is the defining factor? Is that what you mean by "taxable income"? She said taxable income, not gross income. Taxable income is your adjusted gross income minus your standard (or itemized) deduction and any qualified business deductions.
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msventoux
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Post by msventoux on Mar 28, 2020 17:52:51 GMT -5
Apparently the checks to individuals is based on agi, not taxable income. So think we won’t be eligible, would be eligible if it was taxable income Happy money is going to people having a rough time. If we do receive anything will send either to grandson and wife who lost their jobs or to local food pantry Grandson and wife may be fine with unemployment and the checks coming to them You have confused me . . . because I am not tax savvy. I thought AGI (adjusted gross income) is less than your gross income because it factors in the standard deduction or your itemized deductions. Are you saying that gross income is the defining factor? Is that what you mean by "taxable income"? Gross income -adjustments to income (Traditional IRA contributions, HSA contributions, etc.) =adjusted gross income -standard or itemized deductions =taxable income There’s more that goes into it than that, but that’s the basic overview.
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Deleted
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Post by Deleted on Mar 28, 2020 18:18:50 GMT -5
You have confused me . . . because I am not tax savvy. I thought AGI (adjusted gross income) is less than your gross income because it factors in the standard deduction or your itemized deductions. Are you saying that gross income is the defining factor? Is that what you mean by "taxable income"? She said taxable income, not gross income. Taxable income is your adjusted gross income minus your standard (or itemized) deduction and any qualified business deductions. But that is the opposite of what she implied. She said she thought it would be AGI but instead it is taxable so she is SOL. ETA: No, see post above. It is after your 401k etc., but before your deductions.
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Deleted
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Post by Deleted on Mar 28, 2020 18:21:30 GMT -5
You have confused me . . . because I am not tax savvy. I thought AGI (adjusted gross income) is less than your gross income because it factors in the standard deduction or your itemized deductions. Are you saying that gross income is the defining factor? Is that what you mean by "taxable income"? Gross income -adjustments to income (Traditional IRA contributions, HSA contributions, etc.) =adjusted gross income -standard or itemized deductions =taxable income There’s more that goes into it than that, but that’s the basic overview. I get it now. it is before deductions, standard or itemized.
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Deleted
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Post by Deleted on Mar 28, 2020 18:58:28 GMT -5
She said taxable income, not gross income. Taxable income is your adjusted gross income minus your standard (or itemized) deduction and any qualified business deductions. But that is the opposite of what she implied. She said she thought it would be AGI but instead it is taxable so she is SOL. ETA: No, see post above. It is after your 401k etc., but before your deductions. Yes, I know AGI is after your 401K. I never said otherwise. Jersey thought the income limit would be taxable, her AGI is too high.
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justme
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Post by justme on Mar 28, 2020 19:39:35 GMT -5
Is the 600 for just the next few wks or a while? I'm getting a 2 week furlough which HR said they're doing it this way for the peons to be able to get unemployment for the two wks. But my furlough time isn't until May (they're spreading it out so they still have coverage).
Just wondering whether all the extra 600 would be done before May or not?
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billisonboard
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Post by billisonboard on Mar 28, 2020 19:53:33 GMT -5
Is the 600 for just the next few wks or a while? I'm getting a 2 week furlough which HR said they're doing it this way for the peons to be able to get unemployment for the two wks. But my furlough time isn't until May (they're spreading it out so they still have coverage). Just wondering whether all the extra 600 would be done before May or not? The second is an extra $600 per week over the next four months for those who are out of work and getting jobless benefits in their state. link
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Deleted
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Post by Deleted on Mar 28, 2020 20:55:55 GMT -5
You have confused me . . . because I am not tax savvy. I thought AGI (adjusted gross income) is less than your gross income because it factors in the standard deduction or your itemized deductions. Are you saying that gross income is the defining factor? Is that what you mean by "taxable income"? She said taxable income, not gross income. Taxable income is your adjusted gross income minus your standard (or itemized) deduction and any qualified business deductions. Apparently, you don't get deductions. I have no idea.
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justme
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Post by justme on Mar 28, 2020 21:35:45 GMT -5
Is the 600 for just the next few wks or a while? I'm getting a 2 week furlough which HR said they're doing it this way for the peons to be able to get unemployment for the two wks. But my furlough time isn't until May (they're spreading it out so they still have coverage). Just wondering whether all the extra 600 would be done before May or not? The second is an extra $600 per week over the next four months for those who are out of work and getting jobless benefits in their state. link Thanks. I'm still a little unsure how my 2 week furlough counts, but getting Florida's ridiculously low amount plus 600 would be nice.
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tractor
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Post by tractor on Mar 29, 2020 7:21:49 GMT -5
So ‘kids’ ages 17-24 and other adult dependents seem to be in a gap... not children but also not adults so get neither 500 nor 1200. That’s my understanding
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GRG a/k/a goldenrulegirl
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Post by GRG a/k/a goldenrulegirl on Mar 29, 2020 11:10:22 GMT -5
So ‘kids’ ages 17-24 and other adult dependents seem to be in a gap... not children but also not adults so get neither 500 nor 1200. That’s my understanding Yup!! Not sure why. We shouldn’t be pissing this age group off. They’ll be funding our SS payments. 😂
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NomoreDramaQ1015
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Post by NomoreDramaQ1015 on Mar 29, 2020 11:19:24 GMT -5
OMG my stupid brother is thinking about quitting the business if he gets this check because "he won't need a job anymore". My dad said that is cool then he doesn't need to live under their roof or drive a car anymore (the car is in my dad's name still). Since he has all the money he needs he can figure life out. There is just no way my brother and I came from the same parents. We are going to sit on whatever we get in case I get furloughed. I doubt it at the moment but it is possible because if one of us tests positive in my area it's going to end up being shut down we work in too close a quarters in that lab. We have been promised "something" if that happens but no idea what. If that does not happen I am going to use some of it to pay down debt to get us in a better position for the future and use some of it to pay it forward. I want to show support for businesses I care about the same way that people are showing support for us.
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haapai
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Post by haapai on Mar 29, 2020 11:42:59 GMT -5
I'm a bit surprised that you guys aren't talking about schemes to take money out of battered 401(k)s and IRAs and put them into Roth accounts.
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Deleted
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Post by Deleted on Mar 29, 2020 12:03:04 GMT -5
I'm a bit surprised that you guys aren't talking about schemes to take money out of battered 401(k)s and IRAs and put them into Roth accounts. I give up. What's the scheme?
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Gardening Grandma
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Post by Gardening Grandma on Mar 29, 2020 12:05:15 GMT -5
I'm a bit surprised that you guys aren't talking about schemes to take money out of battered 401(k)s and IRAs and put them into Roth accounts. I will probably do a little of that when rebalancing. But I do believe the market is going to continue to be depressed for quite a while. It was blown up out of proportion and even without a pandemic, was due for a correction.
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jeffreymo
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Post by jeffreymo on Mar 29, 2020 12:15:02 GMT -5
I am assuming that taxes will be owed on the money? Is that correct? I believe it will be reported as income for 2020, but there will be an offsetting credit on the tax return. So basically this is an advance on a 2020 tax credit, and ultimately it will be 2020 income that determines eligibility. ETA: Actually including it as income offset by a credit doesn’t make mathematical sense; there will be a clawback of some type based on some new schedule as part of the return
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haapai
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Post by haapai on Mar 29, 2020 12:18:43 GMT -5
I'm a bit surprised that you guys aren't talking about schemes to take money out of battered 401(k)s and IRAs and put them into Roth accounts. I give up. What's the scheme? I don't have one yet but there have to ways to do it.
The loosened restrictions on 401(k) loans and the waiving of the 10% early withdrawal penalty probably presents some opportunities, especially for folks who do not normally contribute to Roth IRAs.
It also might not be as risky as it sounds, because contributions to Roth IRAs can usually be withdrawn without penalty. (I'm kinda weak on the 5-year rule and whether it applies here, since I've had the Roth IRA for much longer than that.)
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teen persuasion
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Post by teen persuasion on Mar 29, 2020 12:20:14 GMT -5
I'm a bit surprised that you guys aren't talking about schemes to take money out of battered 401(k)s and IRAs and put them into Roth accounts. Things are way too unsettled for that right now. May be a possibility at the tail end of the year, when your AGI is more set in stone, and you know how much room you have to do conversions. But by then, the market might have rebounded and the opportunity lost. Or not. Who knows what our earned income will be? How long will our employers continue paying us regular pay for staying home? What will the new fiscal year budgets look like in July? What happens with "retention pay" that DH expected this spring like he got last year? How much permanent change trickles down from this shock to the economic system? We have certain windows of time where we have to consider extra economic factors. For example, DS5 was expected to graduate from HS in 2023, which would mean FAFSA income years would be 2021-24. In other words, starting next year, we wanted to target AGI < $26k for EFC = 0. Our stash was on track for FIRE then, until the market pulled back. So we are likely to have to keep working to rebuild the stash, but that makes the FAFSA target harder to hit. I'm not even sure that he will graduate and begin college on schedule, right now. Also not sure the FAFSA calculations won't change measurably in the meantime.
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brdsl
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Post by brdsl on Mar 29, 2020 15:00:02 GMT -5
The removal will have to go back into a like account (pre-tax), etc. within three years, or pay the tax on it. So, if I take 30k out of my 401k, you either pay the tax on it, or you put it back in a 401k account within three years. I don't see being able to move it from 401k to a ROTH.
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Deleted
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Post by Deleted on Mar 29, 2020 16:36:27 GMT -5
There has been no changes to Roth contribution limits either, so even if you could pull 30K out of your 401K it's not like you could just it in a Roth.
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hoops902
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Post by hoops902 on Mar 30, 2020 8:18:46 GMT -5
The scary part is as big as this package is, it’s not going to be enough if this pandemic stretches on for a year or more. I'm going to hazard a guess and say that regardless of how long the pandemic itself stretches, at some point there's going to be a decision that the economy goes back to work in a more normal way. Ideally...absent the virus simply going away...the pandemic going on for a year is fine. That's the whole thing about flattening the curve...spread out the infection rate so the hospitals can handle the volume. At some point it just becomes the flu with a higher death rate from an economic perspective. People try not to get it...but they decide it's not worth shutting down the economy as a whole over. We're in a situation now where the best thing for health is the worst thing for the economy...economically it would be much better if everyone just got it Day 1, and then anyone who wasn't sick just kept working. That's horrible health-wise though. Healthwise it would be great if we all just avoided social contact till it's gone. That's horrible economically. At some point the economy is going to win out...and I'd guess much quicker than a year.
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hoops902
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Post by hoops902 on Mar 30, 2020 8:25:25 GMT -5
I'm a bit surprised that you guys aren't talking about schemes to take money out of battered 401(k)s and IRAs and put them into Roth accounts. If you haven't lost your income this year then who wants to pay the tax bill on taking $100k out of a 401k? If I'd lost my income this year, I'd probably pull the max from my 401k, pay the normal tax bill on it, then reduce my income in the next few years by upping my contributions as allowed. But as it stands now...I'd just be paying higher taxes this year on that extra $100k in a higher bracket, then saving taxes in a lower bracket the next couple of years. Why pay X% to save less than X%? Am I missing something? I haven't put a lot of thought into it as it seemed pretty straightforward that if you haven't lost your income you aren't going to scheme a break...but I'm certainly up for listening!
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teen persuasion
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Post by teen persuasion on Mar 30, 2020 10:33:55 GMT -5
I'm a bit surprised that you guys aren't talking about schemes to take money out of battered 401(k)s and IRAs and put them into Roth accounts. If you haven't lost your income this year then who wants to pay the tax bill on taking $100k out of a 401k? If I'd lost my income this year, I'd probably pull the max from my 401k, pay the normal tax bill on it, then reduce my income in the next few years by upping my contributions as allowed. But as it stands now...I'd just be paying higher taxes this year on that extra $100k in a higher bracket, then saving taxes in a lower bracket the next couple of years. Why pay X% to save less than X%? Am I missing something? I haven't put a lot of thought into it as it seemed pretty straightforward that if you haven't lost your income you aren't going to scheme a break...but I'm certainly up for listening! I think the confusion is about the difference between Roth conversions while the market is down, vs the option to withdraw from retirement accounts penalty free now and the option to put it back within 3 years. I'd assumed haapai was talking about Roth conversions. Withdrawals and replacement should be to the same account type, not different. If I were in a situation where I'd planned to do Roth conversions now, I would. I could either convert the same number of shares for 65% of the tax cost (because the share price is 65% of what it was before), OR I could convert the same $ value as planned but effectively I convert more shares than if I'd done it before the stock plummet.
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Deleted
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Post by Deleted on Mar 30, 2020 10:40:56 GMT -5
If you haven't lost your income this year then who wants to pay the tax bill on taking $100k out of a 401k? If I'd lost my income this year, I'd probably pull the max from my 401k, pay the normal tax bill on it, then reduce my income in the next few years by upping my contributions as allowed. But as it stands now...I'd just be paying higher taxes this year on that extra $100k in a higher bracket, then saving taxes in a lower bracket the next couple of years. Why pay X% to save less than X%? Am I missing something? I haven't put a lot of thought into it as it seemed pretty straightforward that if you haven't lost your income you aren't going to scheme a break...but I'm certainly up for listening! I think the confusion is about the difference between Roth conversions while the market is down, vs the option to withdraw from retirement accounts penalty free now and the option to put it back within 3 years. I'd assumed haapai was talking about Roth conversions. Withdrawals and replacement should be to the same account type, not different. If I were in a situation where I'd planned to do Roth conversions now, I would. I could either convert the same number of shares for 65% of the tax cost (because the share price is 65% of what it was before), OR I could convert the same $ value as planned but effectively I convert more shares than if I'd done it before the stock plummet. I could have sworn haapai's post originally was talking about the penalty being waived on withdrawals being an incentive to withdraw and put in a Roth, but it doesn't say it was edited, so maybe I'm just losing my mind. Quite possible.
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teen persuasion
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Post by teen persuasion on Mar 30, 2020 10:49:20 GMT -5
Ok, one way I can think of for using the penalty free withdrawal window to get $ out of traditional and into Roth that's preferable to Roth conversions would be IFF you were not currently contributing to Roth IRAs (but you were eligible to). Withdraw from traditional, make new contribution to Roth IRA. No 5 year seasoning required for Roth IRA withdrawals of contributions, but same tax cost as a Roth conversion.
Limited to the amount of your and spouse's annual Roth contributions, and only makes sense if you aren't already contributing something there AND are eligible for direct Roth contributions AND want to pay the tax cost to convert. Backdoor Roth people can't do this.
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bobosensei
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Post by bobosensei on Mar 30, 2020 11:12:18 GMT -5
Apparently the checks to individuals is based on agi, not taxable income. So think we won’t be eligible, would be eligible if it was taxable income Happy money is going to people having a rough time. If we do receive anything will send either to grandson and wife who lost their jobs or to local food pantry Grandson and wife may be fine with unemployment and the checks coming to them You have confused me . . . because I am not tax savvy. I thought AGI (adjusted gross income) is less than your gross income because it factors in the standard deduction or your itemized deductions. Are you saying that gross income is the defining factor? Is that what you mean by "taxable income"? taxable income is figured by subtracting your deductions from the AGI. So my gross is 83k, my AGI is 76k because they reduce it by my nontaxable contributions like hsa and 401k but add in things like capital gains and interest income, but my taxable income is in the 50s because of my itemized deductions.
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haapai
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Post by haapai on Mar 30, 2020 12:06:54 GMT -5
Ok, one way I can think of for using the penalty free withdrawal window to get $ out of traditional and into Roth that's preferable to Roth conversions would be IFF you were not currently contributing to Roth IRAs (but you were eligible to). Withdraw from traditional, make new contribution to Roth IRA. No 5 year seasoning required for Roth IRA withdrawals of contributions, but same tax cost as a Roth conversion. Limited to the amount of your and spouse's annual Roth contributions, and only makes sense if you aren't already contributing something there AND are eligible for direct Roth contributions AND want to pay the tax cost to convert. Backdoor Roth people can't do this. Or something along those lines. Mostly it's an option for folks who have no savings except in a 401(k) to get money out of there and into a Roth IRA where there are fewer restrictions. Normally, getting money out of a 401(k) when you are under 59 and 1/2 is a tricky, expensive, and risky thing to do. There's stuff in the CARES act that may make it much easier and far less risky. A lot of 401(k) plans don't allow borrowing more than half of the vested balance or charge huge loan fees, or don't allow withdrawals while you are still an employee. There may be stuff in the CARES act that allows folks to get around these usual hurdles.
Sadly, these moves may be most beneficial to folks who lose their jobs, or have had their hours reduced to the point that they can't make rent or the payments on prior 401(k) loans. These probably aren't the most responsible folks, but there may be some relief in this bill. I think the folks that might benefit the most from it are the young people with non-essential service jobs who have to evacuate back to their relatives homes in order to get through this winter.
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lynnerself
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Post by lynnerself on Mar 30, 2020 15:23:39 GMT -5
I just read that you can skip the Required distribution in 2020 on an inherited IRA also. The way mine is structured I won't be taking advantage of this.
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MN-Investor
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Post by MN-Investor on Mar 30, 2020 17:50:50 GMT -5
I just read that you can skip the Required distribution in 2020 on an inherited IRA also. The way mine is structured I won't be taking advantage of this.
Yay! Maybe I can do a Roth conversion this year without inherited RMDs driving up my income. (Yeah, first world problem. I know.)
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