Roth IRA vs Traditional

[Troubled Loner]

Ray,

You express some doubts as to your mental condition. I don’t know if you are crazy, only a licensed mental health professional can provide that diagnosis. But I will say that in some cases a tradional IRA does make more sense.

I’m a professional tax preparer, and all of my clients’ situations are different. There are many factors, both present and future (way too many to discuss here!), that determine if someone should or should not contribute to a tax deferred retirement acct (i.e a traditional IRA) and/or an after tax acct, such as a Roth IRA. Your tax person should be taking all of these factors into account when discussing this with you. If they do not, then you may not have the right tax guy.

You mention that you think a tax guy “feels that if a client has to pay taxes it reflects poorly on him as opposed to potentially getting a return with the use of a Traditional IRA.” If you believe that all tax pros think this way, then yes, I do believe you are crazy. If this is truly how your tax guy thinks, then, again, you may not have the right tax guy. Competent tax preparers who are looking out for their clients don’t think this way.

[Raybyrnes]

Troubled Loner. glad to hear not all tax guys believe in a one size fits all. I also recognize their are some situations out there the traditional makes more sense but when someone categorically says to me that they reccommend the traditional because they can SAVE SOMEONE MONEY in taxes I raise the bullshit flag. They may have deferred a tax liability that MAY be a saving but it MAY also e an expense.

These people are not my tax guys. They are people I know and with their way of thinking about things would never be my tax guy.

[Raybyrnes]

Troubled Loner. glad to hear not all tax guys believe in a one size fits all. I also recognize their are some situations out there the traditional makes more sense but when someone categorically says to me that they reccommend the traditional because they can SAVE SOMEONE MONEY in taxes I raise the bullshit flag. They may have deferred a tax liability that MAY be a saving but it MAY also e an expense.

These people are not my tax guys. They are people I know and with their way of thinking about things would never be my tax guy.

[Raybyrnes]

Troubled Loner. glad to hear not all tax guys believe in a one size fits all. I also recognize their are some situations out there the traditional makes more sense but when someone categorically says to me that they reccommend the traditional because they can SAVE SOMEONE MONEY in taxes I raise the bullshit flag. They may have deferred a tax liability that MAY be a saving but it MAY also e an expense.

These people are not my tax guys. They are people I know and with their way of thinking about things would never be my tax guy.

[Raybyrnes]

Troubled Loner. glad to hear not all tax guys believe in a one size fits all. I also recognize their are some situations out there the traditional makes more sense but when someone categorically says to me that they reccommend the traditional because they can SAVE SOMEONE MONEY in taxes I raise the bullshit flag. They may have deferred a tax liability that MAY be a saving but it MAY also e an expense.

These people are not my tax guys. They are people I know and with their way of thinking about things would never be my tax guy.

[Raybyrnes]

Troubled Loner. glad to hear not all tax guys believe in a one size fits all. I also recognize their are some situations out there the traditional makes more sense but when someone categorically says to me that they reccommend the traditional because they can SAVE SOMEONE MONEY in taxes I raise the bullshit flag. They may have deferred a tax liability that MAY be a saving but it MAY also e an expense.

These people are not my tax guys. They are people I know and with their way of thinking about things would never be my tax guy.

[PatentGuy]

Flu,

Convincing Nevada that you have your “legal residence” in NV is nice, but what matters is convincing a court (should it come to that), should California disagree.

There are lots (millions?) of U.S. citizens that have homes in more than one state, and picking which one is your “principal” residence should be done with care. At a minimum, I would expect your drivers license to match, and also where you register to vote. As far as I know, you can only have one active, valid drivers license, and you have to surrender any others as a condition.

Having said this, I understand that most (all?) states that have an income tax have laws (upheld by federal courts) that entitle them to collect income tax from you based on all wages earned while you are present in their state. For example, if you are visiting for a sales meeting, or a deposition, or the like. They love to pick on high wage earners like sports starts and media personalities (Google Rush Limbaugh and New York state taxes).

But, I am talking about retirement, when our income will be derived solely from a combination of already taxed savings plus taxible pension plan distributions (CB Plan, IRA, 401K, 403(b), 457). for whatever reasons, the federal courts spanked California for trying to come after Nevada residents for taxes on 401k distributions, even though the plan was funded from tax-free earnings made in California. Doesn’t seem much different than the “you owe us cause that’s where you earned it” laws, but ….

[PatentGuy]

Flu,

Convincing Nevada that you have your “legal residence” in NV is nice, but what matters is convincing a court (should it come to that), should California disagree.

There are lots (millions?) of U.S. citizens that have homes in more than one state, and picking which one is your “principal” residence should be done with care. At a minimum, I would expect your drivers license to match, and also where you register to vote. As far as I know, you can only have one active, valid drivers license, and you have to surrender any others as a condition.

Having said this, I understand that most (all?) states that have an income tax have laws (upheld by federal courts) that entitle them to collect income tax from you based on all wages earned while you are present in their state. For example, if you are visiting for a sales meeting, or a deposition, or the like. They love to pick on high wage earners like sports starts and media personalities (Google Rush Limbaugh and New York state taxes).

But, I am talking about retirement, when our income will be derived solely from a combination of already taxed savings plus taxible pension plan distributions (CB Plan, IRA, 401K, 403(b), 457). for whatever reasons, the federal courts spanked California for trying to come after Nevada residents for taxes on 401k distributions, even though the plan was funded from tax-free earnings made in California. Doesn’t seem much different than the “you owe us cause that’s where you earned it” laws, but ….

[PatentGuy]

Flu,

Convincing Nevada that you have your “legal residence” in NV is nice, but what matters is convincing a court (should it come to that), should California disagree.

There are lots (millions?) of U.S. citizens that have homes in more than one state, and picking which one is your “principal” residence should be done with care. At a minimum, I would expect your drivers license to match, and also where you register to vote. As far as I know, you can only have one active, valid drivers license, and you have to surrender any others as a condition.

Having said this, I understand that most (all?) states that have an income tax have laws (upheld by federal courts) that entitle them to collect income tax from you based on all wages earned while you are present in their state. For example, if you are visiting for a sales meeting, or a deposition, or the like. They love to pick on high wage earners like sports starts and media personalities (Google Rush Limbaugh and New York state taxes).

But, I am talking about retirement, when our income will be derived solely from a combination of already taxed savings plus taxible pension plan distributions (CB Plan, IRA, 401K, 403(b), 457). for whatever reasons, the federal courts spanked California for trying to come after Nevada residents for taxes on 401k distributions, even though the plan was funded from tax-free earnings made in California. Doesn’t seem much different than the “you owe us cause that’s where you earned it” laws, but ….

[PatentGuy]

Flu,

Convincing Nevada that you have your “legal residence” in NV is nice, but what matters is convincing a court (should it come to that), should California disagree.

There are lots (millions?) of U.S. citizens that have homes in more than one state, and picking which one is your “principal” residence should be done with care. At a minimum, I would expect your drivers license to match, and also where you register to vote. As far as I know, you can only have one active, valid drivers license, and you have to surrender any others as a condition.

Having said this, I understand that most (all?) states that have an income tax have laws (upheld by federal courts) that entitle them to collect income tax from you based on all wages earned while you are present in their state. For example, if you are visiting for a sales meeting, or a deposition, or the like. They love to pick on high wage earners like sports starts and media personalities (Google Rush Limbaugh and New York state taxes).

But, I am talking about retirement, when our income will be derived solely from a combination of already taxed savings plus taxible pension plan distributions (CB Plan, IRA, 401K, 403(b), 457). for whatever reasons, the federal courts spanked California for trying to come after Nevada residents for taxes on 401k distributions, even though the plan was funded from tax-free earnings made in California. Doesn’t seem much different than the “you owe us cause that’s where you earned it” laws, but ….

[PatentGuy]

Flu,

Convincing Nevada that you have your “legal residence” in NV is nice, but what matters is convincing a court (should it come to that), should California disagree.

There are lots (millions?) of U.S. citizens that have homes in more than one state, and picking which one is your “principal” residence should be done with care. At a minimum, I would expect your drivers license to match, and also where you register to vote. As far as I know, you can only have one active, valid drivers license, and you have to surrender any others as a condition.

Having said this, I understand that most (all?) states that have an income tax have laws (upheld by federal courts) that entitle them to collect income tax from you based on all wages earned while you are present in their state. For example, if you are visiting for a sales meeting, or a deposition, or the like. They love to pick on high wage earners like sports starts and media personalities (Google Rush Limbaugh and New York state taxes).

But, I am talking about retirement, when our income will be derived solely from a combination of already taxed savings plus taxible pension plan distributions (CB Plan, IRA, 401K, 403(b), 457). for whatever reasons, the federal courts spanked California for trying to come after Nevada residents for taxes on 401k distributions, even though the plan was funded from tax-free earnings made in California. Doesn’t seem much different than the “you owe us cause that’s where you earned it” laws, but ….

[Coronita]

[quote=PatentGuy]Flu,

Convincing Nevada that you have your “legal residence” in NV is nice, but what matters is convincing a court (should it come to that), should California disagree.

There are lots (millions?) of U.S. citizens that have homes in more than one state, and picking which one is your “principal” residence should be done with care. At a minimum, I would expect your drivers license to match, and also where you register to vote. As far as I know, you can only have one active, valid drivers license, and you have to surrender any others as a condition.

Having said this, I understand that most (all?) states that have an income tax have laws (upheld by federal courts) that entitle them to collect income tax from you based on all wages earned while you are present in their state. For example, if you are visiting for a sales meeting, or a deposition, or the like. They love to pick on high wage earners like sports starts and media personalities (Google Rush Limbaugh and New York state taxes).

But, I am talking about retirement, when our income will be derived solely from a combination of already taxed savings plus taxible pension plan distributions (CB Plan, IRA, 401K, 403(b), 457). for whatever reasons, the federal courts spanked California for trying to come after Nevada residents for taxes on 401k distributions, even though the plan was funded from tax-free earnings made in California. Doesn’t seem much different than the “you owe us cause that’s where you earned it” laws, but ….[/quote]

Yes, this was my question after I stopped earning money/doing business here. And I know it’s pretty far off into the future. I was just wondering how folks relocate out of CA say they aren’t a resident and yet still own a home and (from what I can tell live a good portion here). The second link that I included highlighted a litmus test which included 29 “tests”. So inquiring minds wanted to know.

[Coronita]

[quote=PatentGuy]Flu,

Convincing Nevada that you have your “legal residence” in NV is nice, but what matters is convincing a court (should it come to that), should California disagree.

There are lots (millions?) of U.S. citizens that have homes in more than one state, and picking which one is your “principal” residence should be done with care. At a minimum, I would expect your drivers license to match, and also where you register to vote. As far as I know, you can only have one active, valid drivers license, and you have to surrender any others as a condition.

Having said this, I understand that most (all?) states that have an income tax have laws (upheld by federal courts) that entitle them to collect income tax from you based on all wages earned while you are present in their state. For example, if you are visiting for a sales meeting, or a deposition, or the like. They love to pick on high wage earners like sports starts and media personalities (Google Rush Limbaugh and New York state taxes).

But, I am talking about retirement, when our income will be derived solely from a combination of already taxed savings plus taxible pension plan distributions (CB Plan, IRA, 401K, 403(b), 457). for whatever reasons, the federal courts spanked California for trying to come after Nevada residents for taxes on 401k distributions, even though the plan was funded from tax-free earnings made in California. Doesn’t seem much different than the “you owe us cause that’s where you earned it” laws, but ….[/quote]

Yes, this was my question after I stopped earning money/doing business here. And I know it’s pretty far off into the future. I was just wondering how folks relocate out of CA say they aren’t a resident and yet still own a home and (from what I can tell live a good portion here). The second link that I included highlighted a litmus test which included 29 “tests”. So inquiring minds wanted to know.

[Coronita]

[quote=PatentGuy]Flu,

Convincing Nevada that you have your “legal residence” in NV is nice, but what matters is convincing a court (should it come to that), should California disagree.

There are lots (millions?) of U.S. citizens that have homes in more than one state, and picking which one is your “principal” residence should be done with care. At a minimum, I would expect your drivers license to match, and also where you register to vote. As far as I know, you can only have one active, valid drivers license, and you have to surrender any others as a condition.

Having said this, I understand that most (all?) states that have an income tax have laws (upheld by federal courts) that entitle them to collect income tax from you based on all wages earned while you are present in their state. For example, if you are visiting for a sales meeting, or a deposition, or the like. They love to pick on high wage earners like sports starts and media personalities (Google Rush Limbaugh and New York state taxes).

But, I am talking about retirement, when our income will be derived solely from a combination of already taxed savings plus taxible pension plan distributions (CB Plan, IRA, 401K, 403(b), 457). for whatever reasons, the federal courts spanked California for trying to come after Nevada residents for taxes on 401k distributions, even though the plan was funded from tax-free earnings made in California. Doesn’t seem much different than the “you owe us cause that’s where you earned it” laws, but ….[/quote]

Yes, this was my question after I stopped earning money/doing business here. And I know it’s pretty far off into the future. I was just wondering how folks relocate out of CA say they aren’t a resident and yet still own a home and (from what I can tell live a good portion here). The second link that I included highlighted a litmus test which included 29 “tests”. So inquiring minds wanted to know.

[Coronita]

[quote=PatentGuy]Flu,

Convincing Nevada that you have your “legal residence” in NV is nice, but what matters is convincing a court (should it come to that), should California disagree.

There are lots (millions?) of U.S. citizens that have homes in more than one state, and picking which one is your “principal” residence should be done with care. At a minimum, I would expect your drivers license to match, and also where you register to vote. As far as I know, you can only have one active, valid drivers license, and you have to surrender any others as a condition.

Having said this, I understand that most (all?) states that have an income tax have laws (upheld by federal courts) that entitle them to collect income tax from you based on all wages earned while you are present in their state. For example, if you are visiting for a sales meeting, or a deposition, or the like. They love to pick on high wage earners like sports starts and media personalities (Google Rush Limbaugh and New York state taxes).

But, I am talking about retirement, when our income will be derived solely from a combination of already taxed savings plus taxible pension plan distributions (CB Plan, IRA, 401K, 403(b), 457). for whatever reasons, the federal courts spanked California for trying to come after Nevada residents for taxes on 401k distributions, even though the plan was funded from tax-free earnings made in California. Doesn’t seem much different than the “you owe us cause that’s where you earned it” laws, but ….[/quote]

Yes, this was my question after I stopped earning money/doing business here. And I know it’s pretty far off into the future. I was just wondering how folks relocate out of CA say they aren’t a resident and yet still own a home and (from what I can tell live a good portion here). The second link that I included highlighted a litmus test which included 29 “tests”. So inquiring minds wanted to know.

[Author]

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