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Re: Portfolio review

Hmm, I assumed that if you retire at 45 with massive taxable accounts you wouldn't be drawing anything from your tax-advantaged (although you might choose to do conversions) and your kids would still be dependent college students. The tax burden depends on whether you're trying to compute the tax bu...
by Bob's not my name
Fri Jul 25, 2014 11:19 am
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio review
Replies: 20
Views: 1949

Re: Portfolio review

$140k. That fills the entire 25% bracket for MFJ Haha, no it doesn't. You're forgetting the $40,000 0% bracket for a family of four, the $20,000 10% bracket (in which LTCG/QD are taxed at 0%), and the $55,000 15% bracket (in which LTCG/QD are still taxed at 0%). You'd have so little income sticking...
by Bob's not my name
Fri Jul 25, 2014 6:54 am
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio review
Replies: 20
Views: 1949

Re: Removing a beehive from mailbox newspaper holder

Given the quality of journalism nowadays, I'm pretty sure the newspaper will kill them if you just give it time.
by Bob's not my name
Thu Jul 24, 2014 8:52 pm
 
Forum: Personal Consumer Issues
Topic: Removing a beehive from mailbox newspaper holder
Replies: 34
Views: 3504

Re: Exceptionally high marginal rates on MD, VA students

I'm more of a fix-it-yourself kind of guy :) Surf's up!
by Bob's not my name
Tue Jul 22, 2014 11:04 am
 
Forum: Personal Finance (Not Investing)
Topic: Exceptionally high marginal rates on MD, VA students
Replies: 30
Views: 2863

Re: Exceptionally high marginal rates on MD, VA students

There appears to be no issue in Massachusetts, since the undergraduate tuition deduction, rental deduction, payroll tax deduction, and personal exemption pretty much eliminate taxation at the low end.
by Bob's not my name
Tue Jul 22, 2014 10:24 am
 
Forum: Personal Finance (Not Investing)
Topic: Exceptionally high marginal rates on MD, VA students
Replies: 30
Views: 2863

Re: Exceptionally high marginal rates on students

12. New Jersey – “income” over $10,000 This is an issue, although not a serious one because NJ state taxes are very progressive. For income of $10,000, the tax due is zero (even if you have to file a return to get a refund of withheld tax). For income of $10,001 with one $1000 personal exemption, t...
by Bob's not my name
Tue Jul 22, 2014 6:43 am
 
Forum: Personal Finance (Not Investing)
Topic: Exceptionally high marginal rates on MD, VA students
Replies: 30
Views: 2863

Re: Exceptionally high marginal rates on students

It looks like a significant issue in Virginia. If your Virginia AGI is less than $11,950 (for 2012 and later years) you owe no tax and you are entitled to a refund of any withholding. You must file a return to receive a refund. There's a $3,000 standard deduction, and no exemption for a dependent, s...
by Bob's not my name
Tue Jul 22, 2014 5:21 am
 
Forum: Personal Finance (Not Investing)
Topic: Exceptionally high marginal rates on MD, VA students
Replies: 30
Views: 2863

Re: Exceptionally high marginal rates on students

No issue for Idaho. Standard deduction matches filing threshold for dependents.
by Bob's not my name
Mon Jul 21, 2014 5:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: Exceptionally high marginal rates on MD, VA students
Replies: 30
Views: 2863

Re: Exceptionally high marginal rates on students

It looks to me like there's no significant issue in Kentucky. You have to file if your (essentially) federal AGI exceeds $11,490 (2013 number), but the tax burden at that precise level is $0 and at slightly above that level is less than $100. A dependent student can claim himself. There's a $2,360 s...
by Bob's not my name
Mon Jul 21, 2014 1:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: Exceptionally high marginal rates on MD, VA students
Replies: 30
Views: 2863

Re: Exceptionally high marginal rates on students

Thanks. I'd say a $99 ledge doesn't meet the "significant" threshold. I'm looking for high marginal rates (>50%) that span several thousand dollars of income, such that countervailing steps like 401k contributions (or going to the beach instead of working) are warranted.
by Bob's not my name
Mon Jul 21, 2014 1:15 pm
 
Forum: Personal Finance (Not Investing)
Topic: Exceptionally high marginal rates on MD, VA students
Replies: 30
Views: 2863

Re: Exceptionally high marginal rates on students

I suppose the filing threshold can be set by regulation vs. legislation if it merely matches the zero tax certainty mark. And the regs may not be issued yet.
by Bob's not my name
Mon Jul 21, 2014 8:43 am
 
Forum: Personal Finance (Not Investing)
Topic: Exceptionally high marginal rates on MD, VA students
Replies: 30
Views: 2863

Re: Exceptionally high marginal rates on students

Caught unawares not by taxes in general. By the confiscatory marginal rate on student income in the $10,000 - $12,000 range. In my experience the general public understands almost nothing about income taxes. Students can't reasonably be expected to know about this feature before they've ever filed a...
by Bob's not my name
Mon Jul 21, 2014 6:34 am
 
Forum: Personal Finance (Not Investing)
Topic: Exceptionally high marginal rates on MD, VA students
Replies: 30
Views: 2863

Re: Exceptionally high marginal rates on students

Arkansas doesn't tax the first $11,411 of AGI, so no issue there.
by Bob's not my name
Mon Jul 21, 2014 5:24 am
 
Forum: Personal Finance (Not Investing)
Topic: Exceptionally high marginal rates on MD, VA students
Replies: 30
Views: 2863

Re: Exceptionally high marginal rates on students

Thanks Auream. Is the filing threshold still $5,500 after the 2014 changes? I couldn't easily find that. Seems likely the threshold is higher now.
by Bob's not my name
Mon Jul 21, 2014 4:08 am
 
Forum: Personal Finance (Not Investing)
Topic: Exceptionally high marginal rates on MD, VA students
Replies: 30
Views: 2863

Re: Exceptionally high marginal rates on students

It's not a premise. I don't follow your argument. Can you elaborate? Federal AGI is not reduced by the federal personal exemption or standard deduction (they come later), and dependent students aren't eligible for the federal personal exemption anyway. Besides, many states don't use the federal exem...
by Bob's not my name
Sun Jul 20, 2014 6:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: Exceptionally high marginal rates on MD, VA students
Replies: 30
Views: 2863

Re: Exceptionally high marginal rates on students

I looked at Iowa and it doesn't appear to be an issue. Iowa says you have to file if you're a dependent and your net income (line 26) is $5,000 or more, and then it says you are exempt from tax if your net income is less than $5,000 -- note that there's a $1 difference between these statements, so I...
by Bob's not my name
Sun Jul 20, 2014 2:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Exceptionally high marginal rates on MD, VA students
Replies: 30
Views: 2863

Re: Exceptionally high marginal rates on students

Looks like it's not an issue in Ohio, either, or a very minor one. I didn't sort everything out, but at most the Ohio tax on your first $11,700 of federal AGI is $80. You do not have to file an Ohio income tax return if you are single and your federal adjusted gross income is less than or equal to $...
by Bob's not my name
Sun Jul 20, 2014 12:47 pm
 
Forum: Personal Finance (Not Investing)
Topic: Exceptionally high marginal rates on MD, VA students
Replies: 30
Views: 2863

Re: Exceptionally high marginal rates on students

I read the Wisconsin instructions and it appears there is no issue for students, because the standard deduction ($9,930 in 2013) exceeds the filing threshold for dependent students ($9,300). $9,300 is "gross income," defined as "all income (before deducting expenses) reportable to Wis...
by Bob's not my name
Sun Jul 20, 2014 5:07 am
 
Forum: Personal Finance (Not Investing)
Topic: Exceptionally high marginal rates on MD, VA students
Replies: 30
Views: 2863

Re: Roth IRA income limit question

Many people have pre-tax health, dental, and disability insurance premiums and FSA contributions withheld from their pay. These also reduce AGI.
by Bob's not my name
Sat Jul 19, 2014 8:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA income limit question
Replies: 24
Views: 1066

Re: 2 questions - back door Roth IRA and vesting 401k

"Modified adjusted gross income" and "my income" aren't the same thing. You situation remains unclear. If your MAGI is over $191,000 (gross income over about $210,000) then your marginal tax rate must be high. This makes it undesirable to convert your wife's IRA, but it may make ...
by Bob's not my name
Sat Jul 19, 2014 7:20 am
 
Forum: Personal Finance (Not Investing)
Topic: 2 questions - back door Roth IRA and vesting 401k
Replies: 12
Views: 783

Re: Exceptionally high marginal rates on students

grabiner wrote:Income could be reduced by contributing to a 401(k), or up to $2500 to the Maryland 529 plan.
I hadn't considered a state-deductible 529 contribution, which makes sense for a student. I'll add that to the questions above.
by Bob's not my name
Fri Jul 18, 2014 7:31 pm
 
Forum: Personal Finance (Not Investing)
Topic: Exceptionally high marginal rates on MD, VA students
Replies: 30
Views: 2863

Exceptionally high marginal rates on MD, VA students

Hi gang, Mechanical Turk time again. I recently recognized that some states’ tax codes create exceptionally high marginal tax rates for students. I’m asking for your help to lay out which states those are and what measures a student can take to avoid giving up most or all of his paycheck to taxes. W...
by Bob's not my name
Thu Jul 17, 2014 6:57 pm
 
Forum: Personal Finance (Not Investing)
Topic: Exceptionally high marginal rates on MD, VA students
Replies: 30
Views: 2863

Re: Debt Payoff Plan - Student/Car Loans

Total Monthly After-Tax Income: $7,600 The OP is single, but apparently not for long. In another thread he talks of spending an amount greater than his car debt on a ring. That means (1) the student loan interest is not currently deductible because he's waaaaay over the income limit, (2) the studen...
by Bob's not my name
Thu Jul 17, 2014 5:03 am
 
Forum: Personal Finance (Not Investing)
Topic: Debt Payoff Plan - Student/Car Loans
Replies: 9
Views: 1115

Re: Tax benefit to student loan repayment

The deduction is limited by amount, by income, and by marriage. This creates tax incentives to pay down the debt. Example 1: At the typical 6.8% interest rate, only the first $37,000 of debt is accommodated by the deduction. This makes any debt above $37,000 more costly and creates an incentive to a...
by Bob's not my name
Thu Jul 17, 2014 4:37 am
 
Forum: Personal Finance (Not Investing)
Topic: Tax benefit to student loan repayment
Replies: 1
Views: 238

Re: Portfolio Allocation and 401k questions

I agree with your advice.
by Bob's not my name
Tue Jul 15, 2014 10:02 am
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Allocation and 401k questions
Replies: 26
Views: 2054

Re: Portfolio Allocation and 401k questions

So what you're recommending is 6% to traditional 401k, then contribute to Roth IRA until maximum is met, and what's left over back into 401k for both 2014 and 2015? How does the tIRA come into play here? No, I'm not recommending that. I'm recommending that in 2015, when you have a 35% marginal rate...
by Bob's not my name
Tue Jul 15, 2014 3:56 am
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Allocation and 401k questions
Replies: 26
Views: 2054

Re: Portfolio Allocation and 401k questions

I estimate my annual income to be ~$69,500 best case, ~$63,000 worse case. I also have a unique benefit that allows me to pay for transit with pre-tax dollars which I estimate to be $1350 for the year. If I max the 401K and take into account the transit benefit, that leaves me with a range of $45,6...
by Bob's not my name
Mon Jul 14, 2014 8:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Allocation and 401k questions
Replies: 26
Views: 2054

Re: Portfolio Allocation and 401k questions

$32,500 this year and I probably made $7-8,000 as an intern. Sorry, I should have recognized this earlier. You're in the 15% federal bracket this year, not the 25%. Your taxable income will be under $30,000. You don't break into the 25% bracket until you hit $36,900. The 15%-25% step is the biggest...
by Bob's not my name
Mon Jul 14, 2014 4:42 am
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Allocation and 401k questions
Replies: 26
Views: 2054

Re: Portfolio Allocation and 401k questions

I have $1,100 from a previous employer 401k. I was setting up a Vanguard Roth and I was wondering if I could roll that amount over into the IRA and help supplement my emergency fund? I don't have a firm opinion of what you should do. You can always reverse the decision roll the money over to your c...
by Bob's not my name
Mon Jul 14, 2014 4:21 am
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Allocation and 401k questions
Replies: 26
Views: 2054

Re: Portfolio Allocation and 401k questions

I agree on the short term bond fund. For stocks, I don't think international matters at this early stage.
by Bob's not my name
Sun Jul 13, 2014 8:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Allocation and 401k questions
Replies: 26
Views: 2054

Re: Portfolio Allocation and 401k questions

He'll need to almost double his income and stay single to move from a 25% to 28% federal rate. The 3% difference will definitely be offset, probably more than offset, by a move to another location. His income will have to more than triple to put him in the 33% bracket, which would still be break eve...
by Bob's not my name
Sun Jul 13, 2014 1:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Allocation and 401k questions
Replies: 26
Views: 2054

Re: Portfolio Allocation and 401k questions

You can withdraw your contributions, but not your earnings, at any time for any reason, penalty-free. Read the wiki.
by Bob's not my name
Sun Jul 13, 2014 12:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Allocation and 401k questions
Replies: 26
Views: 2054

Re: Moving from Midwest to Coastal Cities: COL Adjustment?

AndroAsc wrote:Have I missed anything?
Taxes.
by Bob's not my name
Sun Jul 13, 2014 7:40 am
 
Forum: Personal Finance (Not Investing)
Topic: Moving from Midwest to Coastal Cities: COL Adjustment?
Replies: 25
Views: 2546

Re: Portfolio Allocation and 401k questions

1. You're young. That means that any investments you make now will have a lot of time to grow. You're a finance guy and thoroughly understand the rule of 72s. Since the OP is a finance guy he'll also understand the commutative property of multiplication and understand that time period is irrelevant...
by Bob's not my name
Sun Jul 13, 2014 4:28 am
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Allocation and 401k questions
Replies: 26
Views: 2054

Re: Portfolio Allocation and 401k questions

I'm not sure where the 45% you talking about is coming from. That would be your marginal rate if you were eligible for the LLC and in the phaseout. It's a $2,000 credit that phases out over $10,000 of marginal income, so $2,000/$10,000 = 20%. Combined with your nominal 25% tax bracket that makes 45...
by Bob's not my name
Sun Jul 13, 2014 4:22 am
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Allocation and 401k questions
Replies: 26
Views: 2054

Re: Portfolio Allocation and 401k questions

in NYC the taxes are high and I do not plan on spending my entire career there (I'm originally from the south). Would it make sense to contribute all to the traditional 401k to avoid the taxes in these circumstances? Yes. Your 401k has awesome choices, which you've already figured out. Are you maki...
by Bob's not my name
Sat Jul 12, 2014 9:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Allocation and 401k questions
Replies: 26
Views: 2054

Re: Tax gain harvesting in grad school?

Yes, provided you have no other income (e.g., dividends paid out by the remaining stock later in the calendar year, interest or other investment income from the liberated cash, etc.) and "tax-free" means free of federal income tax -- state tax may apply.
by Bob's not my name
Fri Jul 11, 2014 5:25 am
 
Forum: Personal Finance (Not Investing)
Topic: Tax gain harvesting in grad school?
Replies: 24
Views: 1374

Re: Tax gain harvesting in grad school?

total is now $62,921 Hmm. Something else wrong here. The LLC is phased out starting at $54,000 MAGI, so you definitely want to avoid that ... except that you can only use as much credit as needed to offset your tax, so the magic number must be somewhere in the phaseout (around $56,000) for AGI comp...
by Bob's not my name
Fri Jul 11, 2014 5:11 am
 
Forum: Personal Finance (Not Investing)
Topic: Tax gain harvesting in grad school?
Replies: 24
Views: 1374

Re: Choosing brokered CD's- what should I look at?

By "take out" I mean I expect I'll try to do a Roth Conversion - I'm not taking it out to spend it or live on, just to take advantage of a low tax bracket to minimize the tax hit of removing money from an IRA. You don't liquidate assets to convert to Roth. Perhaps what you mean is that yo...
by Bob's not my name
Fri Jul 11, 2014 4:02 am
 
Forum: Personal Finance (Not Investing)
Topic: Choosing brokered CD's- what should I look at?
Replies: 17
Views: 1666

Re: Realtor Recommendations in General and for Fishers, Indi

We want someone that 2) strong negotiator You want a realtor who is a weak negotiator. The realtor negotiates with you. The realtor wants you to buy the house so he can make his fee. The buyer's realtor is your enemy. The seller's realtor is your enemy. The seller is your enemy. You have no allies.
by Bob's not my name
Fri Jul 11, 2014 3:59 am
 
Forum: Personal Consumer Issues
Topic: Realtor Recommendations in General and for Fishers, Indiana
Replies: 4
Views: 775

Re: Tax gain harvesting in grad school?

The Tuition and Fees Deduction expired. So much for tax software.

Also, I have no idea how a $4,000 deduction could offset $16,667 of income. $16,667 is clearly $2,500/15%. The AOTC is $2,500.

You want to take the $2,000 Lifetime Learning Credit.
by Bob's not my name
Fri Jul 11, 2014 3:55 am
 
Forum: Personal Finance (Not Investing)
Topic: Tax gain harvesting in grad school?
Replies: 24
Views: 1374

Re: Tax gain harvesting in grad school?

Grad Student wrote:If I put 24k in as tuition I can add 16,667 to my LTCG (total is now $62,921) and pay only $1 in taxes.
It appears to me that your tax software is assuming you're eligible for the $2,500 American Opportunity Credit, which likely isn't the case. Read up on the education credits at irs.gov
by Bob's not my name
Thu Jul 10, 2014 6:57 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax gain harvesting in grad school?
Replies: 24
Views: 1374

Re: Should I stop contributing to non-deductible traditional

HHI: $230K Does that include investment income thrown off by your taxable account? If your total gross income is $230,000 you're probably just missing being eligible for direct Roth IRA contributions. For 2014 the phaseout is MAGI $181,000 - $191,000. $191,000 + $35,000 401k contributions + $2,500 ...
by Bob's not my name
Thu Jul 10, 2014 10:15 am
 
Forum: Investing - Help with Personal Investments
Topic: Should I stop contributing to non-deductible traditional IRA
Replies: 8
Views: 687

Re: Tax gain harvesting in grad school?

You appear to be ignoring the $2,000 Lifetime Learning Credit. Maybe you're not paying any tuition to go to grad school. If you are paying tuition, then make sure you don't pay your last semester's bill before January 1, or you will forfeit another $2,000 LLC in 2015. $2,000/15% = another $13,333 of...
by Bob's not my name
Thu Jul 10, 2014 5:04 am
 
Forum: Personal Finance (Not Investing)
Topic: Tax gain harvesting in grad school?
Replies: 24
Views: 1374

Re: Help College Student Invest

Don't pay your last semester's tuition bill before Jan 1. Read up on the Lifetime Learning Credit. Make sure you get it in 2015.
by Bob's not my name
Wed Jul 09, 2014 6:25 am
 
Forum: Investing - Help with Personal Investments
Topic: Help College Student Invest
Replies: 24
Views: 2003

Re: Offer on home accepted- Sellers want to rent for sometim

Yes, you're right. Mortgage interest, HOA fee, and property taxes are deducted against the rental income.
by Bob's not my name
Tue Jul 08, 2014 7:22 am
 
Forum: Personal Consumer Issues
Topic: Offer on home accepted- Sellers want to rent for sometime
Replies: 19
Views: 1679

Re: Offer on home accepted- Sellers want to rent for sometim

andyandyandy wrote:They are paying cots of Principal, interest, HOA, utilities, taxes for 2 months(trying less than 59 days as lender's condition)
Have you considered the income tax cost to you? You have to report their payments to you as rental income.
by Bob's not my name
Tue Jul 08, 2014 6:43 am
 
Forum: Personal Consumer Issues
Topic: Offer on home accepted- Sellers want to rent for sometime
Replies: 19
Views: 1679
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