<p>"Roth was never meant to be a tax shelter for the haves. It was to encourage lower tax income group to save for retirement. Was it 2010 law that changed that and allowed backdoor? If you think about it, backdoor roth is oxymoron. If you allow backdoor why shouldn’t allow direct contribution to roth? "</p>
<p>Anything that helps people avoid taxes will always be a boondoggle for the wealthy, that is obvious. They shouldn’t allow backdoor Roths, and they shouldn’t allow conversions. I understand why they allow conversions, because they are collecting plenty of tax money upfront, but it could be very costly in the long run. However, as long as this is completely legal for people to take advantage of, they should feel free to do so. The tax law should be changed.</p>
<p>My daughter receives ssi. The amount starts at $640 a month. Anything she earns over $65 a month reduces her benefits by half. Kind of like a 50 percent tax rate. </p>
<p>She just started grossing about $145 a month. $145-$65=$80. </p>
<p>$80x1/2= $40. </p>
<p>So her SSI is going to be cut $40 a month. </p>
<p>I am happy she got these two jobs. </p>
<p>The muni issue bugs me a little because I own munis. Paying more for medicare kind of sucks. </p>
<p>I want these programs to be solvent so I can accept this. </p>
<p>The Roth and IRAs are a little out of hand. Once you go over $3 million a person with inflation kickers in a roth or ira, we arent really talking about retirement programs anymore. Now we are talking about tax avoidance schemes. </p>
<p>There should be mandatory non taxable withdrawals in roths after age 70 1/2 just like there are mandatory withdrawals in regular iras. </p>
<p>Sometimes the closing of loopholes is a good thing.</p>
<p>"My daughter receives ssi. The amount starts at $640 a month. Anything she earns over $65 a month reduces her benefits by half. Kind of like a 50 percent tax rate’</p>
<p>That is terribly wrong. That would encourage most people not to seek work at all, if they take half of their benefits away.</p>
<p>“There should be mandatory non taxable withdrawals in roths after age 70 1/2 just like there are mandatory withdrawals in regular iras”</p>
<p>I’m not sure what that does except stopping the Roths from growing infinitely. I doubt people would put that money into circulation, they’d find some other sort of tax free vehicle instead.</p>
<p>SSI benefits are income and asset based. I think the 50 percent number is a little onerous. The government is trying to help people and save money. </p>
<p>I dont see why roths should have an advantage over regular iras. Roths are retirement programs. If people arent using roths for retirement, then the roth program should be rethought imo. </p>
<p>I dont think roths should grow infinitely. I dont think roths should be taxed. I just think there should be a limit.</p>
<p>Mandatory withdrawals will make sure roths dont grow infinitely. The withdrawal period can be over 30+ years similar to regular iras.</p>
<p>dstark, that gets to be put back on later when she stops earning. It’s not taken away permanently. </p>
<p>If a direct contribution to roth is not allowed why do they allow a backdoor contribution? It’s a loophole that should be closed. Backdoor was created when the gov needed quick cash in 2010. Since the crisis is passed, maybe it’s time to address the loophole. If anyone is interested, I have both roth and munis.</p>
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<p>They do require RMD for roth 401k. So who knows? Besides, if you close the backdoor contribution, most affluent people can’t contribute to roth. The only other abuse of roth is from business owners who put their shares in roth before going public. They will have to meet income limit test.</p>
<p>You are right about SSI. SSI is looked at on a month to month basis. So if the income drops, she can receive more ssi payments per month. </p>
<p>My daughter can only have $2,000 in assets. One month, she had assets of $2003. (There was a bank account we didnt know she had that we discovered). She lost a month of ssi payments. That cost $640.</p>
<p>The bank account was very old. The amount in the bank account is added retroactively to my daughter’s assets every month my daughter receved ssi. </p>
<p>The amount of her monthly assets are reconfigured. If any prior month my daughter had assets over $2,000, I have to repay those ssi payments.</p>
<p>I dont know how big the bill is going to be yet. Soon, I will know. </p>
<p>It’s things like this, that make me crazy. The unreasonable rules that are the onces that are enforced. Your daughter will be okay, as she has her parents support, painful as it will be for you. But what about the people who don’t, how do they come up with the money because of a $3 technicality?</p>
<p>Cliffs like this are easy and simple because they can be described in one sentence and are very easy to codify. It’s a lot harder to describe and then implement some sort of gradual phaseout or reduction.</p>
<p>If you fall off the cliff though, you are scr**ed. I doubt anyone would agree that penalizing someone $640 over $3 is what was intended, which means whoever drafted this was lazy and sloppy.</p>
<p>They payback by taking less in payments in the future. The social security office works with people, but they want to be paid back. First within 12 months if possible. Then within 36 months. A minimum of $10 a month if that is all a person can afford. If things are really bad…the ssa may take 60-80 percent as a full repayment.</p>
<p>If you eliminate cliffs, then many people under the former cap, in this case $2,000 are going to receive less without the cliff.</p>
<p>Or, we are going to have to increase funding. </p>
<p>I dont think we are going to increase funding. </p>
<p>I have mixed feelings about this situation. It is my fault. The account existed. </p>
<p>The penalty is severe. I closed the account. A check was made out to my daughter. I am not that good a person. I was thinking of ripping up that check. The check wasnt that large. Just enough to do some damage. </p>
<p>Maybe the penalty should just be the amount of the check. Or maybe add up the overages over $2,000 over the many months and pay those back. </p>
<p>SSA doesnt have the resources. The people I talk to at the SSA dont want to spend taxpayer money on people that dont qualify. (I never talked to anybody at ssa about this particular issue. The small amount over issue).</p>
<p>So… I guess there is some silver lining for the taxpayers. :)</p>
<p>dstark, you are screwed financially, but you have integrity. You want your daughter to feel and be normal, and have a job (s). It makes sense why parents look for jobs that pay under the table for their disabled children. I look forward to your posts on what she can earn, how you account for her earnings, and how it effects SSI.</p>
<p>I really have gotten to hate doing taxes, and I also have yet to do for 2013. We are getting $$ back. Hopefully when I actually sit down to do it, it will go better than I expect. Did not transition well from the paper form to online. That and chemo, not a good combination - now I realize that with having long term ins in the same deduct bucket with health spending, I actually had more of a deduction with 4 years maxing out co-pays and deductibles. Have to look how much $$ and is it worth sending in the correction…</p>
<p>I have been doing my taxes for nearly 40 years, not going to outsource to somebody because I will know what kind of deduction matter. My family had at one time own a tax business but I did not use it, even if it’s free. Once you gather all the paperwork(I think that’s the hard part), the rest is not hard. It’s just I’ve been busy with my garden but I’m nearly done.</p>
<p>I also don’t think Roth IRA is for the wealthy, the wealthy people have all sort of things to avoid tax. Even those whose advocate to pay more tax, for example Bill Clinton and his wife. They do go out of their way to paying the least amount of tax if they can, there is nothing wrong with it. Like I’ve often posted here, who wants to pay any more taxes? Probably nobody, not even Warren Buffet.</p>
<p>Ah well, DrGoogle, what else is to be expected? You fools need to do as we direct, but we personally are going to shelter all of our assets to do what is best for US.</p>
<p>Wish I knew what the royalty does, but I have no clue.</p>
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