Messages

1

Taxes / Traditional IRA to Roth IRA question

« on: April 18, 2020, 04:43:31 PM »

Hey guys,

Question, so I converted my solo 401k into a traditional IRA. The past 2 years I have been converting the maximum amount I can into my roth ira without having to pay taxes. I know I have to wait 5 years to withdraw this amount from each conversion (around 20k each time). I have a question though. What if I was to convert say 300k from my traditional IRA to my roth IRA this year. Obviously I have to pay the taxes on this this year. But what about in 5 years from now? Am I able to withdraw this 300k without any taxes (since i already paid taxes on the conversion from tIRA to rIRA) and minus the 10% penalty fee? Is this 300k conversion considered a "contribution". I know I would be paying a ridiculous amount of tax to do this and it's far from tax efficient and I'm not really considering doing it. I'm just wondering how this "conversion" is regarded and how the 10% penalty fee would apply or not apply to this large "conversion".

Thanks.

2

Taxes / Starting Roth conversion ladder

« on: September 28, 2019, 06:09:10 PM »

Hey guys,

Quick question. I'm not going to have any income this year, so I wanted to start to transfer $24,400 from my traditional IRA to my Roth IRA, since it should be tax free (married filing jointly). It will be the first time I've done this. I have a Vanguard account.

So my question is, am I able to transfer the shares in my tIRA to rIRA that is equivalent to $24,400, or do I need to sell those shares into USD in the money market fund and then transfer the USD over, and then repurchase the shares? I'd love to just do the shares if possible.

Thanks.

3

Taxes / Re: Stacking 2 months on US visit for FEIE during a 12 month period

« on: May 12, 2018, 03:31:24 PM »

You can use any 12-month period and they can overlap.

See Pub 54, Figure 4-B
https://www.irs.gov/pub/irs-pdf/p54.pdf

Thanks Jeremy. Looks like I'm good to go then. Just to be clear....

For my 2018 taxes, I would be able claim my 12 month period to be 6/23/2017 - 6/23/2018. I have 0 days spent in the US during that time frame. Since I'll be back in the US in 8/2018 for the first time since early 2017, would I then be allowed to spend the rest of 2018 in the US and still get the full FEIE deduction since it's outside of that 12 month period? I just wouldn't be able to claim FEIE for 2019 then....

Thanks again for all your help. The past few years I've lived such a similar lifestyle to you, so you've made my life much easier by doing all the dirty work when it comes to this stuff.

Cheers to your 1st home made cold brew!

Anybody have thoughts on this? Maybe I'm missing something here, but I dont think this will work?

I'm basically just trying to spend as much time as I can in the US this year starting at the end of August while still being able to claim FEIE. I haven't visited home in over a year, but I won't be claiming FEIE in 2019. Am I only able to stay the 35 days?

4

Taxes / Re: Moving back to the US after claiming FEIE for years

« on: May 12, 2018, 03:29:03 PM »

If your fianc?e/wife is naturalized as a citizen there is no need to return once a year to maintain her status. As a citizen she is free to roam the world for as long as she wants just like any other citizen.

For legal permanent residents (green card holders) there are restrictions, but not for citizens.

Yup, thanks for the response. Have done some more research since this post. It works out perfectly for my lifestyle. Just travel around in the US for a few years, spend some time with family, etc, until she becomes a citizen, then we're free to be wherever and whenever we want!

5

Taxes / Re: Stacking 2 months on US visit for FEIE during a 12 month period

« on: May 07, 2018, 12:09:14 AM »

You can use any 12-month period and they can overlap.

See Pub 54, Figure 4-B
https://www.irs.gov/pub/irs-pdf/p54.pdf

Thanks Jeremy. Looks like I'm good to go then. Just to be clear....

For my 2018 taxes, I would be able claim my 12 month period to be 6/23/2017 - 6/23/2018. I have 0 days spent in the US during that time frame. Since I'll be back in the US in 8/2018 for the first time since early 2017, would I then be allowed to spend the rest of 2018 in the US and still get the full FEIE deduction since it's outside of that 12 month period? I just wouldn't be able to claim FEIE for 2019 then....

Thanks again for all your help. The past few years I've lived such a similar lifestyle to you, so you've made my life much easier by doing all the dirty work when it comes to this stuff.

Cheers to your 1st home made cold brew!

6

Taxes / Stacking 2 months on US visit for FEIE during a 12 month period

« on: May 06, 2018, 03:45:48 AM »

Hey guys,

I?m wanting to stack two 35 day periods and stay in the US for more than 1 month this year when I return home, so that I?ll still be able to claim FEIE. I?m trying to figure out if it?s possible. I?ve read https://www.gocurrycracker.com/obamacare-expats-and-visits-home/ and some IRS stuff, but I?m still a bit confused if this is possible.

So, I?ve been living abroad claiming FEIE for a few years. 2018 will be my last year claiming it for awhile, as I?ll be moving back to the US with my fianc? for a few years, so she can get her citizenship.

Here?s the details of my situation:

Last year, I was in the US from 5/27/2017 to 6/21/2017 (over intl waters until landing in the Philippines on 6/23)

However, on my taxes, I claimed the physical presence 12 month period based on the dates of 1/1/2017 ? 12/31/2017.

So for this year, I plan to return home on 8/28/2018 or so. Am I able to stack the 2 months and claim the 12th month period next year, by using the starting date of 6/21, (or would It be 6/23 since I was in international waters at the time), even though I used the 12 moth period of 1/1/2017-12/31/2017 last year?

Thanks for the help.

7

Taxes / Re: Moving back to the US after claiming FEIE for years

« on: April 10, 2018, 01:21:08 AM »

Sweet, just the answer I was hoping for! This will work out perfectly! Hate to bother you again, but I have another quick question. After googling around for a bit, I can't seem to find the answer to this.

I know that when living abroad, I'm only able to claim either the FEIE or Foreign Tax Credit for my earned income. Does this apply for capital gains as well? What I mean is, can I claim the FEIE for my earned income and then claim the foreign tax credit for the international stocks I hold in my brokerage account (Vanguard's VXUS)?

8

Taxes / Moving back to the US after claiming FEIE for years

« on: March 06, 2018, 03:00:12 AM »

Hey guys,

I have a few quick questions.

Including 2018, I will have been a digital nomad living abroad for 330+ days and claiming the FEIE for the past 3 years. However, in January 2019 I will be moving back to the US with my fiance and living in the US for 3 years, until she is able to get her citizenship. Then we will leave the US again and only return back once a year to maintain her status. I've read some information about how this affects my tax status etc, but I'm not quite sure I understand it.

1) Since I will no longer be using the FEIE while in the US, do I will have to write in a letter in 2019 saying I will no longer be claiming the FEIE?

2) It says I cannot claim the FEIE for 5 years after this? Is that's true? So when I move back abroad after 3 years, I still have to wait another 2 years before I can claim the FEIE again?

3) What about the foreign tax credit? Can I use this for my international stock holdings I have in my taxable account, or can I not claim any foreign tax benefits at all?

Thanks for all the help.