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No More ROTH recharacterizations
Old 11-09-2018, 04:07 PM   #1
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No More ROTH recharacterizations

Howdy ,


Just got notice from VG that this year we can't do ROTH Recharicterization's due to changes in the tax laws last year.


It appears to get Obamacare subsidies nailed down we need to pretty much do our taxes before Dec 31st and do a ROTH conversion that is accurate to get to our Target MAGI.


Am I accurate in this assumption.


Thanks,


Wally
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Old 11-09-2018, 04:11 PM   #2
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Yes. Old news. Glad you woke up.

I don't get subsidies but if I did I would undershoot a bit to have a little margin for estimating error.

That cliff is a bitch.
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Old 11-09-2018, 04:26 PM   #3
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Yes, old news.

I'm waiting for all mutual fund distributions to be done before I do a conversion. If I had a lot of room I'd have done some already, but I don't have that much room.

Be careful of international funds. The international taxes paid are not part of the actual distributions, but they do count as dividends or cap gains. So the MAGI you get is more than the money you get, and you don't know by how much. 7% more has been a good estimate for VG Total Intl, but I'm going to undershoot a bit. The cliff is steep. I really wish VG would report this. Do any other international funds report taxes paid as part of the taxable distribution?
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Old 11-09-2018, 06:07 PM   #4
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I dunno... I did call last year to see if they could give me an idea how much the foreign taxes paid would be, but no dice.
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Old 11-10-2018, 08:55 AM   #5
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Earlier in the year did about 50% of the ROTH conversion I expect to take for the year. Have received the estimated distributions for the year but based on last years estimates being way off I'll wait until the end of December to do the rest and will undershoot some to be on the safe side.
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