Roth Withdrawal for New Car

[TromboneAl]

Quote:

Originally Posted by swakyaby It’s true we probably could have gotten by with the regular 110v outlet, but I liked the idea of faster charging for such a large capacity battery.

Via 110v, the charging is not only much slower, but also more inefficient.

[mh]

Quote:

Originally Posted by travelover Wow. Thirty eight posts and not a single rant against Elon Musk, electric cars in general, government rebates to electric car owners, electric cars destroying the roads and not paying for it, nor climate change. I'm proud of us.

And ERD50 didn’t have anything to say say either

[swakyaby]

Quote:

Originally Posted by pb4uski Just curious... what is the cost of electircal work and equipment of a charging station at home for a Tesla?

There you go. Charging stations ranging from $200 to $600 to $2,800. Quite a variation depending on the distance to your electrical panel and whether you use a licensed electrician.

[Faraday]

I think, "Roth"bard , Murray,.would agree,..
Grin factor Nic.,lol,.



https://cleantechnica.com/2019/05/03...ost-scenarios/


No One builds a better vehicle than Tesla Motors.

[Tracer]

Quote:

Originally Posted by TromboneAl I'm sixty-six and about to purchase a Tesla for around $60K. My plan is to withdraw the money from one of our Roths so that it will not have tax consequences. The reason for that is that DW is still on Obamacare, so a big increase in taxable income would drastically reduce the subsidies. Any reason not to do it that way?

My financial adviser plus most anything I've ever read said Roth IRA's should be the LAST thing you should access of your retirement savings AFTER taxable and tax-deferred accounts. I would check with an adviser if your case is the exception.

[travelover]

Quote:

Originally Posted by Tracer My financial adviser plus most anything I've ever read said Roth IRA's should be the LAST thing you should access of your retirement savings AFTER taxable and tax-deferred accounts. I would check with an adviser if your case is the exception.

Did you read the original post? Al needs to keep his reportable income down to maximize his wife's ACA insurance subsidy. Thus, Roth is a good source for the money.

[kfsinc]

Timely post! Newly RE here and contemplating how to afford the next capital expenditure. I've always paid cash, but it seems to me that a HELOC at a low rate might make the most sense -- if I can get one for 4% and make 5% or more on my IRI, it seems that is the way to go. And I'm pretty sure I only have to pay tax on the money I take out for the payment, not the entire expenditure, correct?

[Livefreeordie]

Let’s see, withdraw money from your Roth to buy a luxury car, so as not to inflate your joint income so your wife can continue to be subsidized by working people. I see nothing wrong with that at all. Drop the subsidy, you can afford to pay the full unsubsized premiums, seriously.

[dtbach]

Quote:

Originally Posted by Livefreeordie Let’s see, withdraw money from your Roth to buy a luxury car, so as not to inflate your joint income so your wife can continue to be subsidized by working people. I see nothing wrong with that at all. Drop the subsidy, you can afford to pay the full unsubsized premiums, seriously.

Nice first post.

[REWahoo]

Only took one post to make it to my Ignore list. A new record.

[steveark]

I got to drive my daughter in laws Tesla model S. I floored it in performance mode and hung on for dear life, what a rush!

[kgtest]

I wonder how the heat factor is in the Tesla. I inly ask because I spent the last day driving a 445HP stingray vette around... Well I should say I drove it to 80 or 90% of its ability. Needless to say the drive back from Ft Lauderdale to West Palm was a hot one. Makes me wondee if tha would be similar in the Tesla. I might have run out of range in the Tesla for all the burnouts 0gs and ridicukous acceleration I was doing. Gues I'll have to rent the Tesla S P100D and see whats up.

Did you get your new car yet Al?

[TromboneAl]

Tesla says delivery in early December but probably sooner. It's a Model 3, not a Model X.

On the Roth/Obamacare business, I forget how the timing works.

DW will turn 65 next October (I'm already on Medicare). Her Obamacare subsidy has already been determined for next year, but I forget how it works. If we have a big income this year, would we retroactively have to pay back the subsidy?

[pb4uski]

Quote:

Originally Posted by Livefreeordie ....I see nothing wrong with that at all. ....

I agree... that is the way that Congress wrote the law.

[PaddyMac]

Quote:

Originally Posted by TromboneAl On the Roth/Obamacare business, I forget how the timing works. DW will turn 65 next October (I'm already on Medicare). Her Obamacare subsidy has already been determined for next year, but I forget how it works. If we have a big income this year, would we retroactively have to pay back the subsidy?

FWIW, we are doing the same thing - withdrawing from our Roths to buy a new car, as we don't want to blow the ACA subsidy.

Curious as well as to how that all works from year to year. We got the subsidy for 2018 for the first time, and should be able to get it for 2019 (we are paying full price now, but if we can qualify again, we have another huge tax refund coming in the spring ).

I'm thinking that once I do our tax estimate in a few weeks, if we do qualify, I will sign up for ACA in 2020 and enter a lower income so we will get the subsidy starting in January. I would just hate to have to return it...

[aaronc879]

Quote:

Originally Posted by TromboneAl Tesla says delivery in early December but probably sooner. It's a Model 3, not a Model X. On the Roth/Obamacare business, I forget how the timing works. DW will turn 65 next October (I'm already on Medicare). Her Obamacare subsidy has already been determined for next year, but I forget how it works. If we have a big income this year, would we retroactively have to pay back the subsidy?

Technically you are required to report a change in income. If you have a subsidy based on expected income of $50K but now you realize you will make $70K then you should report that. If you don't then your actual subsidy will be calculated based on what your income really was. Then they take what you got for a subsidy and subtract what you should have gotten and you have to repay the rest. There is a cap on what you have to pay back though. Not sure what the cap is currently. If you try to reduce your reported income to get a higher subsidy next year they will likely require you to send proof before your coverage will begin.

[MRG]

Quote:

Originally Posted by pb4uski I agree... that is the way that Congress wrote the law.

+1

[pb4uski]

Quote:

Originally Posted by TromboneAl .... DW will turn 65 next October (I'm already on Medicare). Her Obamacare subsidy has already been determined for next year, but I forget how it works. If we have a big income this year, would we retroactively have to pay back the subsidy?

Bolded part is not correct... her subsidy has been tentatively determined for next year... for the purpose of advance premium credits to be used to reduce premiums due in 2020.... but when you file your 2020 income tax return there will be a calculation of what your subsidy should have been based on your actual 2020 tax return MAGI.... if the premium tax credits based on your actual income exceeds what you were advanced then the difference will be added to your refund.... if the premium tax credits based on your actual income is less than what you were advanced then you owe the difference (subject to certain constraints).

So if you have more income than what your subsidy is based on, when you file your 2020 income tax return you'll need to pay back some of the advanced premium credits that you received in 2020.

[Dtail]

Quote:

Originally Posted by pb4uski Bolded part is not correct... her subsidy has been tentatively determined for next year... for the purpose of advance premium credits to be used to reduce premiums due in 2020.... but when you file your 2020 income tax return there will be a calculation of what your subsidy should have been based on your actual 2020 tax return MAGI.... if the premium tax credits based on your actual income exceeds what you were advanced then the difference will be added to your refund.... if the premium tax credits based on your actual income is less than what you were advanced then you owe the difference (subject to certain constraints). So if you have more income than what your subsidy is based on, when you file your 2020 income tax return you'll need to pay back some of the advanced premium credits that you received in 2020.

Agree with the above.
But related to a Silver Plan, if one receives the "cost sharing reductions" upfront based on X MAGI but the actual MAGI ends up higher, then one doesn't have to pay back these reductions.

This would be different than the Premium Tax Credits same type of example.

Is this correct?

[pb4uski]

Yes.