Investment

» allancoleman - taxes

In response to taxes posted by Happy_2:

My steep price was approximately 14 cents , effective tax rate of 14% , on every dollar of my Roth conversion of over a $100k this year ( 2006 ) . My Roths will pass taxfree to my heirs when I surf my last wave .

The answer to your last question is probably yes . My intent is to convert all my deferred accounts to Roths while I'm a resident of Alaska , a taxfree income tax state . Hawaii doesn't tax Roth distributions as they are taxfree forever in all states .

-- posted by allancoleman

» Happy_2 - taxes

In response to taxes posted by allancoleman:

$14,000 is still a lot of dollars. This is about three years interest on your
GNMAE's.

I would also not like living somewhere, I wouldn't otherwise like to be, just to save on taxes. At our age three years is a lot.

-- posted by Happy_2

» allancoleman - taxes

In response to taxes posted by Happy_2:

Although $14,000 sounds like alot of dollars today , Happy_2 , with my critical mass , it would be higher if I were required to take my RMD now without done all the Roth conversions I've done in the past since they were first allowed . And when I pull another double in eight years by the time I'm 70 , my RMD could be well over $185k a year and could have been as high as $300k if I didn't already begin this Roth conversion strategy years ago .

And although I agree at our age , three years is a long time , If I don't do these Roth conversions NOW in these lower tax brackets , I will be in the highest tax bracket FOREVER at RMD age . Sometimes too much money can be a problem . But a good problem . . With my Roth conversion strategy , I hope to be the first multi - millionaire that pays NO taxes , legally .

-- posted by allancoleman

» lcha - taxes

In response to taxes posted by allancoleman:
Watch out Allancoleman, some Democrat congressman could discover your millionaire no-tax status and try to amend ROTH IRA legislation to 'fix' the situation. Isn't this how the Alternative Minimum Tax legislation got started back in the 60's? A few millionaires using loopholes to pay very little or no taxes?

Never underestimate the ability of the mediocore masses to confiscate wealth from the industrious few.

-- posted by lcha

» allancoleman - taxes

In response to taxes posted by lcha:

Appreciate your concern , Icha , but until " they " ' fix ' this situation , I'll keep paying taxes at these lower tax rates every year on a portion of my deferred accounts until I reach RMD age when it'll be much more difficult to keep myself in a lower tax bracket .

Recent studies done by AAII suggest that it may actually be beneficial for tax payers over the age of 70 with RMD to also do Roth conversions .

After having to deal with AMT in the past , I have found it easy to invest in such a manner that I have not had to deal with it again .

If the " mediocore masses " subject us to paying taxes on our Roths , I'll deal with it at that time along with the rest of the " industrious few " .

-- posted by allancoleman

» allancoleman - taxes on High Net Worth

In response to taxes on High Net Worth posted by Kirk:

Good morning , Capt. ,

Wish you could find a reliable reference to that discussion by Hillary and Laura too about taxing Roths . The Roth message board I also frequent couldn't find such a reference either . ? ?

In the meanwhile I have converted to Roths over 22% of my Total asset base and over 44% of my deferred invested portfolio ( 401k & IRAs ) and expect to increase that in the future until i come under RMD and I'll have to look at the tax rate structure at that time and see if " they " have ' fixed ' the problem .

Hope you'll stay in contact when you hit the beach and waves further south .

p.s. and for those interested , the deadline for Roth conversions is the end of the calendar year , December 31st , and NOT April 15th as contributory Roths . And a year lost can never be recovered and the increasing amounts of your deferred accounts will just make your RMD worse later . One fellow on that Roth message board that was close to RMD age had over 8 million in his deferred accounts I believe and was asking help on what to do . It's rather late at that time .

-- posted by allancoleman

» allancoleman - HSAs even better next year

The president just signed legislation making HSAs even better :

http://www.treas.gov/press/releases/hp20...

Enjoy .

I will mail / make my $6,450 maximum deposit for 2007 the end of next week to give me over $14k in my taxfree HSA account for use to pay my medical expenses , and even extended Medicare costs , later in the future if necessary .

-- posted by allancoleman

» rice1 - HSAs even better next year

In response to HSAs even better next year posted by allancoleman:

This is great news Allan. Looks like I will increase my contribution from $4000 (family deductable) to the maximum contribution limit of $5650 for year 2007. The inflation indexing is a good idea too.

Eric

-- posted by rice1

» allancoleman - HSAs even better next year

In response to HSAs even better next year posted by rice1:

Yes , it is excellent news , Eric . I wish I had figured out that I qualified for them sooner and that they were allowed AFTER Medicare age of 65 .

ALSO don't forget that if you're over 55 , you can also contribute an additional $800 for 2007 , Eric . $5,650 plus that $800 brings my total HSA deposit for next year ( 2007 ) up to $6,450 .

As soon as I've completed my tax return early next year , I'll give a full post here how much my deposit for this tax year ( 2006 ) saved me on my return .

-- posted by allancoleman

» allancoleman - Another HSA message board

As my wife , who usually does our federal income taxes because I tend to get too " creative " in making up my own rules and regulations when I'm solely responsible for the tax return , , is getting our tax return mostly ready before we head for Hawaii next weekend . She noticed how effective our HSA was in lowering our taxes owed , and even though I'm the TurboTax computer geek , she was asking me alot of HSA questions that I couldn't answer off the top of my head . So I went to a really good HSA message board that has excellent folks who answer questions over there :

http://benefitslink.com/boards/index.php...

In reading through the archives of this message board , I've figured a long term strategy of how to continue putting money into a HSA for us after I'm 65 in 2009 and qualify for Medicare and no longer can deposit money into our family HSA . We'll open a single HSA in my wife's name and make a couple years worth of deposits in her name , probably over $8k by that time , before she is 65 on Medicare , and get more money into these excellent health care vehicles , before we both are locked out of them .

Please feel free to ask your HSA questions here too . But it is nice to have another " opinion " on HSA issues . Because the more I study and utilize HSAs , the more I realize how complicated they can be for some folks with different personal issues and medical plans . And , as usual , the federal government and the IRS can really overly complicate something .

-- posted by allancoleman