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This thread died back a little, but I had a question if CPA is still up for answering...

Income Tax Question

Wife is W2. High income earner, highest tax bracket.

I freelance, have the option of doing 1099 or W2

Married, filing jointly.

Should I go 1099 or W2? I don't think we would qualify (based on wife's income) for any of the 1099 deductions. So go W2 and keep it simple? Or is there some nuance that I'm missing, some way a 1099 can be a benefit.

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Sounds like you're both phased out on deductions, so why on earth would you volunteer to pay the employer's share of FICA via the 1099? Go W2.

*I'm a CFP and not a CPA.*

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CFP practitioner for over 15 years would like to give back to Aggies in need of general, anonymous financial planning guidance.

The Rules - one question per post (be concise), consult your tax/legal/financial advisor prior to implementing any strategy, no solicitations, no hurt feelings and I reserve the right to drag my feet or refuse service to anyone who doesn't play nicely. All CFP/CPA/Financial types welcome to jump in to help our fellow Ags.

And go!

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This is for BTHOtherookie who was just espousing on Alpha and compliance "laws."

I'm working on another certification right now, but am interested in pursuing the CFP in the near future. What preparation course did you use to study and/or prepare for the exam(s)? How long did the process take? Thanks in advance!

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I'm working on another certification right now, but am interested in pursuing the CFP in the near future. What preparation course did you use to study and/or prepare for the exam(s)? How long did the process take? Thanks in advance!

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I suspect it has changed a lot in the 17 years since I did it. Back then, it was self-study with about 5 or 6 books of materials with regular progress exams and I did it through The American College. For anyone with a full-time job it is a solid one-year commitment. I think I did it in about 6 months (because my employer paid me to do it) and then I went to a one week exam preparation course. The exam was administered over two full days, the last component being a 4 hour case study essay.

A friend of mine just completed it through his broker-dealer and it took him a full year to complete (and he said it was a bear) but I don't know which program they sourced. Today, many colleges offer the program. Start by reviewing CFP Board Path to Certification

I take the CFP exam in July of this year.

I started studying in August of 2015. I'm not sure I could possibly do it any faster than I've done considering I'm working full time as well.

I'm doing mine through Dalton Education.

I really appreciate the info! Thank you.

Hey, good luck on that exam! So, I suspect there are several preparation courses that offered through various organizations (colleges and broker-dealers)?

Yes there are a variety of options for where to get your coursework done.
I have about 4 hours a week of online classes and that's if you're not studying outside of the classes.

Great - thanks!

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CFP practitioner for over 15 years would like to give back to Aggies in need of general, anonymous financial planning guidance.

The Rules - one question per post (be concise), consult your tax/legal/financial advisor prior to implementing any strategy, no solicitations, no hurt feelings and I reserve the right to drag my feet or refuse service to anyone who doesn't play nicely. All CFP/CPA/Financial types welcome to jump in to help our fellow Ags.

And go!

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This is for BTHOtherookie who was just espousing on Alpha and compliance "laws."

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In over 20 years in the industry, holding over a half dozen FINRA licenses, an insurance license, and a CFP, and I have never seen a "compliance law".

There are innumerable laws such as the Securities Acts of 1933, Securities Exchange Act of 1934, Investment Company Act of 1940, Investment Advisor Act of 1940, and MSRB Rules. Additional regulations from the Employee Retirement Investment Savings Act (ERISA), Dodd-Frank, and even rules from the Department of Labor are just a few examples of other regulatory input over the investment industry. That doesn't even touch on state regulations and Insurance laws.

With all of that, there is not ONE "Compliance Law" that I am familiar with. Compliance is the act of trying to follow these laws and regulations. While I agree that many broker/dealers would be uncomfortable with their employees dispensing "advice" on an unsupervised or archived channel such as this board, that would be a internal compliance policy and not a law.

If a CFP is independent, they would only need to be concerned with following the CFP Standards of Conduct, which are overseen by the CFP Board.

Before you accuse someone of breaking the law, you may want to make sure you know what the heck your are accusing someone of. (Edit - this was also directed to BTHO rookie dude)

next question!

Here goes...

So I have a 401k, Roth IRA, and some investments for assets (approx $200k) and a house with a mortgage for liabilities. I'm not married and don't have kids.

I have a chronic condition I am finally coming to terms with. I originally thought I would easily be able to work till retirement, then 55. I now hold out that I will continue working full time at least another 12 years till I'm 45. So in the meantime I'm basically trying to sock as much money as possible away, so when the time comes I can quit working but not be dependent on SSDI to make ends meet. I would actually rather avoid SSDI If I can. I hope to be able to work part time if possible.

What kind of investment vehicles should I be looking at? The ones I mostly have right now will not be available till I'm 60 since they are for retirement.

I would like to know this answer was well. However, it's seems reasonable (thus probably not the right answer) that when you convert from traditional to Roth, and pay taxes on the amount converted, that your contribution basis would step up to the amount converted.

You should really sit down with someone because there are a lot of questions that need to be asked before anyone could answer that question.

I will tell you that you can pull out of the Roth every dollar that you contributed at any time without penalty or tax. The rest of the Roth and your 401k, IRA, or annuity, can be paid monthly without a penalty.

In other words, those vehicles can be tapped into before 60, but there are strings attached.

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I would like to know this answer was well. However, it's seems reasonable (thus probably not the right answer) that when you convert from traditional to Roth, and pay taxes on the amount converted, that your contribution basis would step up to the amount converted.

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It does step up, but after 5 years of each conversion.

You are in a bind. You do the easiest of these: look through your records tax records, form 5498 (arrives in May) or year end statements, get with each financial institution for the 5498 or year end statement, and get with the IRS for your tax records.

The older the data the harder to get because some firms still have the old data on micro fiche. I would hope they have converted it all by now, but no telling.

I am not condoning this, but I have heard some CPAs say to come up with the amount the best you can and go with that number. The have told me that they rarely see the IRS audit cost basis for stocks or roth conversion.

Lastly, shouldn't you be close to 60 now? Do you really need the money and can't use other means until this becomes a non-issue at 59 1/2?