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Re: How do you figure out your W4 withholding?

I fill out the IRS worksheets, including the instructions for adjustment for qualified dividends and tax credits. This actually works pretty well for a single taxpayer; I usually wind up with a small tax bill, or occasionally a small refund, depending on how well my estimates reflect what happens l...
by grabiner
Thu Mar 05, 2015 1:43 pm
 
Forum: Personal Finance (Not Investing)
Topic: How do you figure out your W4 withholding?
Replies: 20
Views: 1927

Re: Health Savings Account strategy as a US resident / Canad

Is Canada taxing your HSA now? And will your custodian force you to withdraw the HSA if you lose your US residency? If not, you might as well use it. If you retire in Canada, you can treat your HSA just like any other brokerage account, paying normal Canadian taxes on it; you already got the US tax ...
by grabiner
Thu Mar 05, 2015 1:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: Health Savings Account strategy as a US resident / Canadian
Replies: 2
Views: 123

Re: Poll: Increasing international equities

I already have 50% international, and have had that for years. I needed to rebalance into international in January because my international allocation had fallen to 45% of my stock allocation. The reason I hold 50% international is that I overweight the international areas with the most diversificat...
by grabiner
Thu Mar 05, 2015 1:10 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: Increasing international equities
Replies: 55
Views: 2977

Re: Please help me understand Bond ETFs...

, but the yield of existing bonds based on the new price rises to match the rate. I'm confused, what is the difference between coupon and yield? If the coupon stays the same, how is a bond 'rising' to 'match the new rates'? Here is an example from Bonds: Advanced Topics: Yield to maturity Suppose t...
by grabiner
Thu Mar 05, 2015 1:05 pm
 
Forum: Investing - Theory, News & General
Topic: Please help me understand Bond ETFs...
Replies: 11
Views: 1247

Re: Elect 75% of take-home pay to 401k?

Beyond the benefits of tax deferral already described, there's the likelihood that even that if you are in the 39.6% marginal tax bracket at retirement, your effective tax rate is going to be far less*. For instance, if you contribute 18,000 of a 70,000 income into a 401k (filing single), your Fede...
by grabiner
Thu Mar 05, 2015 12:39 pm
 
Forum: Investing - Help with Personal Investments
Topic: Elect 75% of take-home pay to 401k?
Replies: 35
Views: 1290

Re: Possible Backdoor Roth mistake- What to do next?

So a few years before I found this site, I made a non deductible contribution to an IRA that was a rollover from a 401k. It was only a 1 time contribution of I believe $1k, since I wasn't 100% sure of the rules between Traditional/Roth having the same contribution limit. I also had to make a non de...
by grabiner
Thu Mar 05, 2015 12:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: Possible Backdoor Roth mistake- What to do next?
Replies: 8
Views: 521

Re: Elect 75% of take-home pay to 401k?

You might as well contribute as much as you can to the 401(k) for 2015. In 2016, you will probably be earning much more than you can save in tax-deferred accounts, so you will build up a taxable account naturally. Hmm ok. My concern is that ultimately I'll get shafted by putting too much in the tra...
by grabiner
Thu Mar 05, 2015 10:10 am
 
Forum: Investing - Help with Personal Investments
Topic: Elect 75% of take-home pay to 401k?
Replies: 35
Views: 1290

Re: 401k Tax Maneuver

Roll it to a traditional IRA. Then, after you turn 70-1/2, make your charitable contributions as Qualified Charitable Distributions from the IRA instead of from your bank account (assuming that the law allowing them gets renewed; it expired in 2014). These contributions are not reported as income, s...
by grabiner
Thu Mar 05, 2015 10:06 am
 
Forum: Investing - Help with Personal Investments
Topic: 401k Tax Maneuver
Replies: 4
Views: 272

Re: ELI5 European ETF with USD base currency

The currency risk is independent of the currency denomination of the fund; it depends on the fund's holdings. If the euro is worth $1.20, and you buy EUR 10,000 of one fund and USD 12,000 of another fund with the same holdings, your funds will hold the same amount of each holding. Then, if the euro ...
by grabiner
Thu Mar 05, 2015 10:02 am
 
Forum: Investing - Help with Personal Investments
Topic: ELI5 European ETF with USD base currency
Replies: 6
Views: 239

Re: Possible Backdoor Roth mistake- What to do next?

It is probably a good idea for your wife to convert the remaining Traditional IRA to a Roth, unless the balance is very large. Since you made a non-deductible contribution and didn't convert the whole thing, your wife now has a Traditional IRA with some non-deductible contributions. If she keeps the...
by grabiner
Thu Mar 05, 2015 9:57 am
 
Forum: Investing - Help with Personal Investments
Topic: Possible Backdoor Roth mistake- What to do next?
Replies: 8
Views: 521

Re: Elect 75% of take-home pay to 401k?

You might as well contribute as much as you can to the 401(k) for 2015. In 2016, you will probably be earning much more than you can save in tax-deferred accounts, so you will build up a taxable account naturally. If you expect to need a certain amount of money in 2015 or 2016 (for example, to buy a...
by grabiner
Thu Mar 05, 2015 9:52 am
 
Forum: Investing - Help with Personal Investments
Topic: Elect 75% of take-home pay to 401k?
Replies: 35
Views: 1290

Re: VBILX and VWIUX on Morningstar

Morningstar's charts are charts of total return before taxes, because many funds (although not muni funds) are held in IRAs and 401(k)s where taxes are irrelevant. Morningstar does have a Tax tab for each fund, listing after-tax returns. However, the fund provider's data is more reliable; Morningsta...
by grabiner
Thu Mar 05, 2015 9:49 am
 
Forum: Investing - Help with Personal Investments
Topic: VBILX and VWIUX on Morningstar
Replies: 1
Views: 224

Re: Help with mortgage interest tax deduction

- Had $400k 2.75% mortgage on home 1 until mid-November 2014 - Took out $1.5m 4.0% mortgage on home 2 in early September 2014 - Paid home 2's mortgage down to $900k after selling home 1 As an unrelated note, you should either recast or refinance the mortgage on home 2. When you paid down the mortga...
by grabiner
Thu Mar 05, 2015 9:25 am
 
Forum: Personal Finance (Not Investing)
Topic: Help with mortgage interest tax deduction
Replies: 6
Views: 742

Re: Help with mortgage interest tax deduction

Usual disclaimer: do not treat anything on this forum as tax advice. As I read the tables on page 12 of IRS Publication 936 , you take the average balance of your home acquisition debt ($1M limit) plus home equity debt ($100K limit), and divide it by the average balance of your total mortgage debt, ...
by grabiner
Thu Mar 05, 2015 12:25 am
 
Forum: Personal Finance (Not Investing)
Topic: Help with mortgage interest tax deduction
Replies: 6
Views: 742

Re: Anyone investing in Vanguard Global ex-U.S. Real Estate

I have held the mutual fund (rather than the ETF class) since it started.

I split my allocation equally between US and foreign, so I made the same split in real estate once the new fund became available, with 5% of my portfolio in each.
by grabiner
Tue Mar 03, 2015 9:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Anyone investing in Vanguard Global ex-U.S. Real Estate ETF
Replies: 16
Views: 1057

Re: Roth TSP vs. TSP Contributions

Wiki article link: Traditional versus Roth As long as you are in the 15% tax bracket, you should prefer the Roth TSP. If you move into the 25% bracket and expect to retire in the 15% bracket, it is probably better for you to use the traditional TSP even if you could max out the Roth. Since you will ...
by grabiner
Tue Mar 03, 2015 8:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth TSP vs. TSP Contributions
Replies: 15
Views: 1064

Re: Taxation of NSF REU undergraduate research stipend

itstoomuch wrote:If I remember, no 1099, W2, or other wage income statement will be issued for a stipend. Treat the stipend as such.
[no one wants to count a stipend as income]


Even if no 1099 was issued, a stipend is still income if it meets the IRS definition, and you have to report it on your taxes.
by grabiner
Mon Mar 02, 2015 11:02 pm
 
Forum: Personal Finance (Not Investing)
Topic: Taxation of NSF REU undergraduate research stipend
Replies: 12
Views: 887

Re: Taxable Investing at Vanguard - For extra cash?

So, it would be okay to hold Total Stock Market and Total Bond Market in Taxable even if I'm using Target Retirement in Roth? This would be OK since you are allocating the two accounts separately. If you view all your investments as one portfolio, then using Target Retirement does not help with sim...
by grabiner
Mon Mar 02, 2015 10:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: Taxable Investing at Vanguard - For extra cash?
Replies: 5
Views: 1318

Re: Why Isn't Pension Distribution Taxable? (1099-R, Code G)

This does bring up a similar question that occured last year I've been curious about - if I can bend your collective ears once again... My spouse participated in some sort of company retirement savings plan through her employer back in the late 70s or early 80s. It was NOT a 401k. She contributed a...
by grabiner
Mon Mar 02, 2015 10:57 pm
 
Forum: Personal Finance (Not Investing)
Topic: Why Isn't Pension Distribution Taxable? (1099-R, Code G)`
Replies: 14
Views: 1509

Re: TurboTax question (Vanguard/Two states)

Grabiner, thanks for your help. The system actually walks you through the process quite well, parsing the W-2 income and laying out the steps to calculate dividend, interest, and other income. But then at the end, it takes the total income from the federal form. It also doesn't give me an option to...
by grabiner
Mon Mar 02, 2015 10:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: TurboTax question (Vanguard/Two states)
Replies: 3
Views: 296

Re: Went back to TaxACT, OK but a few problems (2014 update)

Bustoff wrote:Thanks David. So does TaxAct import from my computer or from TurboTax?
Where did you find the carryover amount?


TaxACT imports data from the PDF produced by TurboTax; it doesn't read the TurboTax file.

The carryover amount is on your Schedule D from last year.
by grabiner
Mon Mar 02, 2015 10:52 pm
 
Forum: Personal Finance (Not Investing)
Topic: Went back to TaxACT, OK but a few problems (2014 update)
Replies: 11
Views: 1492

Re: Went back to TaxACT, OK but a few problems (2014 update)

TaxACT will import last year's data from a PDF produced by other tax software, but only on a PDF produced for filing. In 2012, I used TurboTax to print only a PDF for my records, with all the supporting schedules, and TaxACT couldn't read it, so I had to re-enter my personal information and capital...
by grabiner
Mon Mar 02, 2015 11:13 am
 
Forum: Personal Finance (Not Investing)
Topic: Went back to TaxACT, OK but a few problems (2014 update)
Replies: 11
Views: 1492

Re: TurboTax question (Vanguard/Two states)

Disclaimer: The last time I used TurboTax for a part-year return was 2001; I used TaxACT the last two times I moved between states, although I have used TurboTax in some other years. Thus, while I know how things should work, I don't know how they actually do work. If you moved to another state, tel...
by grabiner
Mon Mar 02, 2015 11:10 am
 
Forum: Personal Finance (Not Investing)
Topic: TurboTax question (Vanguard/Two states)
Replies: 3
Views: 296

Re: Taxable Investing at Vanguard - For extra cash?

In the 15% tax bracket, you don't want to hold munis; Total Bond Market makes more sense if you need bonds in your taxable account. (But stock funds may still be better; you will pay no federal tax on qualified dividends, and may even have a negative tax cost on an international index fund because y...
by grabiner
Sun Mar 01, 2015 10:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Taxable Investing at Vanguard - For extra cash?
Replies: 5
Views: 1318

Re: Should pre-tax accounts still be prioritized here?

Consider this scenario: Through one's employer, someone has a 403(b) AND a 457(b) available -- they can contribute 18k to each account (a 457 is pretty much identical to a 403b/401k except there is no early withdrawal penalty). Fund options are horrible for the 403b and 457 with high expense ratios...
by grabiner
Sun Mar 01, 2015 10:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Should pre-tax accounts still be prioritized here?
Replies: 11
Views: 832

Re: ROTH IRA and Taxable Account question

If you have the money for the Roth IRA, you might as well invest it as soon as possible, so that any gains are tax-free. This need not be an investment decision, as you can invest the money in the same funds whether they are inside or outside the Roth IRA. If you have taxable stock, you might as wel...
by grabiner
Sun Mar 01, 2015 10:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: ROTH IRA and Taxable Account question
Replies: 3
Views: 331

Re: Taxation of NSF REU undergraduate research stipend

So far so good. Only problem is, Turbotax also treats this income as unearned income for purposes of the kiddy tax! She already has $2000 in unearned investment income, this means her total unearned income on form 8615 line 1 (Tax for certain children with unearned income) is now $7525. Are taxable...
by grabiner
Sun Mar 01, 2015 10:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: Taxation of NSF REU undergraduate research stipend
Replies: 12
Views: 887

Re: NYC Taxes (NYC-208) credit for Real Prop. Tax Credit

OP here. I followed the link above and it seemed like property taxes were paid on the property (most likely they were paid if you are living in a residential building, from my understanding). I had to input my address, total rent paid for the year and then indicate if it included gas, electric, wat...
by grabiner
Sun Mar 01, 2015 8:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: NYC Taxes (NYC-208) credit for Real Prop. Tax Credit
Replies: 9
Views: 714

Re: Why Isn't Pension Distribution Taxable? (1099-R, Code G)

Also strange that were you are vested in a pension plan where you did not contribute and had a year of service credit. At least 5 years and usually 10 years was the norm back in 1980 The other possibility is that he did contribute, and thus was not vested in the plan benefits but was entitled to a ...
by grabiner
Sun Mar 01, 2015 6:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: Why Isn't Pension Distribution Taxable? (1099-R, Code G)`
Replies: 14
Views: 1509

Re: Math on TSP Loan for house

You can take your loan from only the G fund by reallocating the TSP money to keep your balances in the other funds constant. This is a fair comparison because you did not change your risk; if you take your loan with money from a stock fund, you may miss out on stock-market returns, but you also avoi...
by grabiner
Sun Mar 01, 2015 1:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: Math on TSP Loan for house
Replies: 7
Views: 460

Re: Do you consider mortgage payments as savings?

I would consider an extra mortgage payment as an investment, because it serves the same purpose. If you have a 4% mortgage with ten years left on it, and you pay $1000 extra towards your mortgage today, you have eliminated a $1480 payment you would have to make ten years from now. This is just as go...
by grabiner
Sun Mar 01, 2015 1:06 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 307
Views: 12214

Re: Debt Snowball with Variable Rates

The fair comparison between a fixed-rate and variable-rate loan is the difference between short-term rates and a long-term rate which lasts as long as you expect the loan to last. For example, if a bank offers a 30-year fixed mortgage at 4% interest, and a 1-year ARM at 3% interest, then the bank co...
by grabiner
Sun Mar 01, 2015 12:59 pm
 
Forum: Personal Finance (Not Investing)
Topic: Debt Snowball with Variable Rates
Replies: 6
Views: 625

Re: Why Isn't Pension Distribution Taxable? (1099-R, Code G)

Did you make a contribution of your own money to the plan? If you did, the money you contributed has already been taxed, so if the distribution is less than you contributed, the taxable amount is zero.
by grabiner
Sun Mar 01, 2015 12:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: Why Isn't Pension Distribution Taxable? (1099-R, Code G)`
Replies: 14
Views: 1509

Re: Not "Staying the Course"

The only time I didn't "stay the course" and follow this format during that whole period was in 2008 when I converted from a stock fund to a cash fund for a period to harvest some tax losses. For me, that is the major reason to not stay the course, tax implications. You can "stay the...
by grabiner
Sun Mar 01, 2015 12:42 pm
 
Forum: Investing - Theory, News & General
Topic: Not "Staying the Course"
Replies: 40
Views: 4683

Re: Portfolio Help and Tax Shelter

Should I sell of some or all of the mutual fund shares of the REIT account... ? Currently I am at a slight loss, but It's historical performance is very good, but from feedback I have received it's not a great position for me. Besides past performance not being an indication of future results, it i...
by grabiner
Sun Mar 01, 2015 12:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: REIT Allocation and Bond Fund Types Help !
Replies: 14
Views: 1617

Re: Does a Roth IRA make sense if you live in a high COL pla

How will I know when I am no longer able to contribute to the Roth IRA? As in, how does Vanguard know my salary? But for now, though, I should be fine? No tax penalties or anything weird like that? (I've already contributed $5500 for 2015) You should be OK as long as you expect to be within the lim...
by grabiner
Sun Mar 01, 2015 12:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Does a Roth IRA make sense if you live in a high COL place?
Replies: 85
Views: 3130

Re: Lifestrategy moderat growth vs Total stock MKT index fun

This would be her money but she will likely need access to it in the future ( before she turns 59 1/2) so the IRA does not appear to be a viable option. She is in a low tax bracket at this time. Contributions to a Roth IRA can be withdrawn tax-free and penalty-free at any time; only after the contr...
by grabiner
Sun Mar 01, 2015 12:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: Lifestrategy moderat growth vs Total stock MKT index fund
Replies: 8
Views: 977

Re: Does a Roth IRA make sense if you live in a high COL pla

I am also a little confused. How will I know when I am no longer able to contribute to the Roth IRA? As in, how does Vanguard know my salary? Vanguard doesn't know and has to trust you, but the IRS does. If you contribute to a Roth IRA and your Form 1040 income says that you are ineligible, you wil...
by grabiner
Sun Mar 01, 2015 12:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Does a Roth IRA make sense if you live in a high COL place?
Replies: 85
Views: 3130

Re: Taxes and the safe harbor

Also, is it "legal" to lie on a W4? Let's say that I increase my withholding such that by July I've withheld as much for 2015 as I owed in 2014. Could I then refile W4 and claim I am exempt from withholding, so that I do not have any additional taxes withheld? The W4 does say 'under penal...
by grabiner
Sun Mar 01, 2015 12:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: Taxes and the safe harbor
Replies: 7
Views: 506

2014 update

Several of my previously reported issues have been fixed in 2014. The HSA interview now asks whether you have payroll deductions not reported on your W-2, and fills out the form correctly. It is no longer necessary to override to adjust for the NJ treatment of HSA dividends and interest; you can edi...
by grabiner
Sun Mar 01, 2015 11:10 am
 
Forum: Personal Finance (Not Investing)
Topic: Went back to TaxACT, OK but a few problems (2014 update)
Replies: 11
Views: 1492

Re: Please help me understand Bond ETFs...

Thanks for all the great info guys. I guess I am still a little uneasy about investing in something like Vanguards bond ETFs. I mean if interest rates rise quickly, won't I be stuck with a fund that is loaded with low rate bonds? Would it maybe be better to hold off and buy individual bonds after i...
by grabiner
Sat Feb 28, 2015 11:57 pm
 
Forum: Investing - Theory, News & General
Topic: Please help me understand Bond ETFs...
Replies: 11
Views: 1247

Re: Family Member Investment Advice

They did mention that they would like about $10k to be pretty solid. They already have an emergency fund so I think this portion of their portfolio could be focused in some sort of tax-exempt short-medium term bond fund. What do you all think about the Limited Term Tax-Exempt fund for this part of ...
by grabiner
Sat Feb 28, 2015 5:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: Family Member Investment Advice
Replies: 7
Views: 884

Re: How much was your Tax Refund (or amount DUE)

I finally got to do my returns because I now have a brokerage statement from Vanguard, and it is useful that I did them, as I will need to adjust my withholding, claiming more federal and fewer MD allowances for next year. I have not actually filed the taxes yet, as I am waiting in case I get a corr...
by grabiner
Sat Feb 28, 2015 5:24 pm
 
Forum: Personal Finance (Not Investing)
Topic: How much was your Tax Refund (or amount DUE)
Replies: 110
Views: 7220

Re: Decide when to pay CG tax and switch investments/funds

Grabiner- Regarding the spreadsheet you mention, I've seen it in the Wiki, but is it supposed to be interactive, functional as is and allow me to enter my own numbers? The description reads like that's the case, but it doesn't allow me to do so. The spreadsheet is at http://remarque.org/~grabiner/s...
by grabiner
Sat Feb 28, 2015 10:40 am
 
Forum: Investing - Help with Personal Investments
Topic: Decide when to pay CG tax and switch investments/funds
Replies: 9
Views: 880

Re: Decide when to pay CG tax and switch investments/funds

The issue is that the two differ not just by expenses but also by style where the VTSAX inherently has less value components and no market timing as a total market index, while PRFDX differs, deliberately more value stock and active management. I certainly cannot market time or predict which will d...
by grabiner
Fri Feb 27, 2015 11:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Decide when to pay CG tax and switch investments/funds
Replies: 9
Views: 880

Re: Long-term gain (or loss) held less than a year?

Here's the likely explanation: Under IRC Sec 852(b)(4), if a shareholder purchases mutual fund shares, and receives a capital gain dividend (reinvested) and then sells the shares at a loss within six months after purchasing the shares, the loss is treated as a long-term loss to the extent of the ca...
by grabiner
Fri Feb 27, 2015 11:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: Long-term gain (or loss) held less than a year?
Replies: 17
Views: 871

Re: Minnesota Non-Resident tax return

I was a "non-resident" for all of last year (2014). I received a dividend from a Minnesota company. If I read it correctly, I do not need to file a non-resident tax return (for this dividend) if the income amounts' to less than 10 thousand. The dividend from a MN company would not even be...
by grabiner
Fri Feb 27, 2015 11:15 pm
 
Forum: Personal Finance (Not Investing)
Topic: Minnesota Non-Resident tax return
Replies: 6
Views: 503

Re: Decide when to pay CG tax and switch investments/funds

The right time to switch is either now or never; usually, it is now. See Paying a tax cost to switch funds on the wiki. This article links to a spreadsheet which computes the break-even point; it is earlier than you might expect, because switching will give you a higher cost basis and thus reduce th...
by grabiner
Fri Feb 27, 2015 10:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Decide when to pay CG tax and switch investments/funds
Replies: 9
Views: 880

Re: Contribute to deductible IRA or not

I'm thinking if I don't invest in deductible IRA I would invest the money in an index mutual fund and pay capital gains rates and hopefully qualified dividend rates at lower tax rates instead of total regular income rates from an IRA. Not sure if I'm looking at this correctly. What you miss is that...
by grabiner
Fri Feb 27, 2015 10:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Contribute to deductible IRA or not
Replies: 8
Views: 569

Re: Family Member Investment Advice

I myself use the tax-managed balanced fund in my taxable account but I wonder if it's too much volatility for my family member. The more I talk to them it looks like they should have over 50% of their portfolio in bonds. That makes me think either Wellesley Fund or LifeStrategy Conservative Growth....
by grabiner
Fri Feb 27, 2015 10:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Family Member Investment Advice
Replies: 7
Views: 884
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