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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: 1
Views: 96

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: 6
Views: 438

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: 9
Views: 673

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: 408

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: 127
Views: 4780

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: 524

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: 9
Views: 673

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: 4380

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: 12
Views: 1238

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: 83
Views: 2741

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: 911

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: 83
Views: 2741

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: 450

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: 6
Views: 961

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: 8
Views: 1051

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: 832

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: 7141

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: 832

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: 832

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: 847

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: 481

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: 832

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: 558

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: 832

Re: Thoughts on adding Vanguard STAR to my portfolio

I don't see the point in adding STAR itself to your portfolio, because STAR isn't one fund; it is a diversified portfolio of a large number of different funds. LifeStrategy Moderate Growth is the same; it is a diversified portfolio of index funds. Either fund is intended to be a full portfolio on it...
by grabiner
Fri Feb 27, 2015 10:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thoughts on adding Vanguard STAR to my portfolio
Replies: 5
Views: 698

Re: Worth switching from Ameritrade to Vanguard?

Welcome to the forum! If you like TD Ameritrade and prefer to hold your funds as ETFs, there is no particular reason to switch to Vanguard; you can hold the same assets at either firm. If you want to hold Vanguard mutual funds, or if you prefer Vanguard over Ameritrade as a brokerage, then you shoul...
by grabiner
Fri Feb 27, 2015 10:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: Worth switching from Ameritrade to Vanguard?
Replies: 13
Views: 944

Re: Asset allocation and student loans

I agree with your strategy, but I would calculate the asset allocation differently. If you have $400K in stock, $100K in bonds, and $100K in loans, then 100% of your net worth is in stock; the loans are negative bonds. If you sell your bonds to pay off the loans, you have not taken any more risk, bu...
by grabiner
Fri Feb 27, 2015 10:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: Asset allocation and student loans
Replies: 1
Views: 186

Re: Foreign Tax Credit and State Taxes

How are others handling the case where you pay a portion of 2014 state income taxes in 2015? That portion would not be included in 2014 Federal Itemized Deductions, but it typically would be related to 2014 Foreign Source Income. The 2014 state taxes paid in 2015 are not deducted on your 2014 retur...
by grabiner
Fri Feb 27, 2015 10:14 pm
 
Forum: Personal Finance (Not Investing)
Topic: Foreign Tax Credit and State Taxes
Replies: 7
Views: 690

Re: Long Bond ETF Tax

While a general bond fund is OK in a taxable account at current yields, an extra-long-term fund such as TLT is still very tax-inefficient. The long-term bonds have higher yields than most bonds, resulting in more taxable income. In addition, if rates fall, the fund will have a capital gain as it sel...
by grabiner
Thu Feb 26, 2015 9:54 pm
 
Forum: Investing - Theory, News & General
Topic: Long Bond ETF Tax
Replies: 10
Views: 690

Re: Holding bond funds to average duration

If you hold a bond fund to its average duration, regardless of rate changes, you should at least break even on your initial investment (correct?) Break-even is actually not the correct measure. If you hold to the duration, you are indifferent to rate changes today . For example, if you hold a fund ...
by grabiner
Thu Feb 26, 2015 9:48 pm
 
Forum: Investing - Theory, News & General
Topic: Holding bond funds to average duration
Replies: 20
Views: 1419

Re: Estimate capital gains

The tax owed is based on your capital gain, which is the difference between what you paid and what you received. If you have held the shares for more than a year, the gain is usually taxed at 15% federal (0% in the 10% and 15% federal tax brackets, 20% in the 39.6% federal bracket); it is also taxed...
by grabiner
Thu Feb 26, 2015 9:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: Estimate capital gains
Replies: 4
Views: 273

Re: Need advice on placement in Tax Deferred Assets

For similar reasons, while 60% stock is aggressive for investors over 70, it may be right for you because it isn't all your money. If half the money is for your own retirement and you want that money to be 40% stock, and the other half is for your 40-year-old children and you want that money to be ...
by grabiner
Thu Feb 26, 2015 9:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Need advice on placement in Tax Deferred Assets
Replies: 4
Views: 440

Re: Vasgx vanguard life strategy growth - performance questi

ps I also believe Vanguard is ripe to open a Balanced Fund which can reside in a taxable account with optimal tax implications. Vanguard has one, Tax-Managed Balanced Fund. Part of the problem is that muni interest is taxable unless the fund has more than 50% of its holdings invested in munis. Thus...
by grabiner
Thu Feb 26, 2015 9:08 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vasgx vanguard life strategy growth - performance question
Replies: 11
Views: 1225

Re: Vasgx vanguard life strategy growth - performance questi

Where can I get reliable performance information for vanguard funds that: A) Includes dividend reinvestment B) Is longer term (something like 20 yrs) for funds that have been around C) is by calendar year not just 1 yr or 5 yrs from today Morningstar http://www.morningstar.com is the standard refer...
by grabiner
Wed Feb 25, 2015 10:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vasgx vanguard life strategy growth - performance question
Replies: 11
Views: 1225

Re: How T-C members & family get TREA outside of employer pl

can anyone explain why the TIAA-CREF Real Estate account is so attractive? The ER is 0.87%, which is high. The expense ratio of TIAA Real Estate doesn't have the same meaning as the expense ratios on other funds. If you buy a fund which holds REITs, you pay management fees to the fund, but the REIT...
by grabiner
Wed Feb 25, 2015 9:30 pm
 
Forum: Investing - Theory, News & General
Topic: How T-C members & family get TREA outside of employer plans
Replies: 20
Views: 1845

Re: If TIPS yield curve is flatter than nominal curve...

There is no particular reason that the liquidity premium should make the TIPS yield curve steeper. Treasuries are more liquid than TIPS, and thus TIPS do have some liquidity premium. However, long-term TIPS are not particularly illiquid, so there is no reason that they should command a higher liquid...
by grabiner
Wed Feb 25, 2015 9:15 pm
 
Forum: Investing - Theory, News & General
Topic: If TIPS yield curve is flatter than nominal curve...
Replies: 1
Views: 242

Re: Help me decide which asset class to sell

If you have a tax-deferred account, you don't need to change your asset allocation, regardless of what you sell in your taxable account. If you want to sell stock, you can sell the muni fund, and move an equal amount from stock to bonds in your IRA.
by grabiner
Wed Feb 25, 2015 8:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help me decide which asset class to sell
Replies: 9
Views: 481

Re: Need advice on placement in Tax Deferred Assets

If you have RMDs you don't need, you don't need to change your asset allocation; take the RMD from Total Stock Market in the IRA and add it to Total Stock Market in your taxable account. Putting stock indexes in a taxable account is a particularly good deal in your situation. Since you have RMDs you...
by grabiner
Wed Feb 25, 2015 8:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Need advice on placement in Tax Deferred Assets
Replies: 4
Views: 440

Re: Vanguard's New Index Fund of Municiples

What are your thoughts on this new index fund? I don't hold munis myself (my bonds are all in my employer plan), so I haven't thought that much about the funds. However, I would expect this fund to be a natural alternative to Long-Term Tax-Exempt. With both funds having about the same expenses and ...
by grabiner
Wed Feb 25, 2015 8:34 pm
 
Forum: Investing - Theory, News & General
Topic: New Vanguard AMT-free National Municipal Bond Fund
Replies: 79
Views: 7094

Re: 401k/Roth IRA and taxes

Actually, you want the fund with the lowest growth to be in a high-fee 401(k). The reason is that the expense ratio applies to the entire balance and not just new contributions. So if your 401(k) grows to $100K or even $500K, then the fees sucked out will be even larger if it only grew to $50K. OTO...
by grabiner
Tue Feb 24, 2015 11:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401k/Roth IRA and taxes
Replies: 6
Views: 339

Re: Tax Withholding Question

You're making it too complicated and hard to follow. Your payroll folks can tell you how much each withholding allowance changes your weekly paycheck. Adjust it to get around $150 more take home pay each week, hence $7800 less tax withheld over 52 weeks... It's actually a simple formula. One allowa...
by grabiner
Tue Feb 24, 2015 11:29 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax Withholding Question
Replies: 3
Views: 441

Re: Tax bill killing me on 401K to Roth in 2014

I am also in a similar situation. But what turned out to be the limiting factor of NOT be able to take a old 401K plan (with NO Roth contributions - only after tax). Was the "401K Plan Documents" do NOT allow a "rollover" into a ROTH IRA. The ONLY rollover allowed was into a &qu...
by grabiner
Tue Feb 24, 2015 11:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax bill killing me on 401K to Roth in 2014
Replies: 27
Views: 3355

Re: 529 Breakeven math; quick question

Some recent posts and a revisit of the Wiki have me thinking... Let's assume a high ER state plan that has a nice state tax deduction. When deciding whether to invest in this plan or the cheaper no state tax benefit alternative, shouldn't breakeven calculations grow the annual state tax savings? So...
by grabiner
Tue Feb 24, 2015 11:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: 529 Breakeven math; quick question
Replies: 4
Views: 677

Re: Foreign Tax Credit and State Taxes

These are the IRS instructions, and they don't always make sense, but it is best to follow them. (Usually, it won't make a difference; you'll get to deduct the full foreign tax.) In your example, since the state taxes less income than the US income taxed by the federal government, you can assume tha...
by grabiner
Tue Feb 24, 2015 11:03 pm
 
Forum: Personal Finance (Not Investing)
Topic: Foreign Tax Credit and State Taxes
Replies: 7
Views: 690

Re: Do most active managers outperform index before expense?

I believe it's possible for the average fund manager to beat the index by 0.12% because of the number of non-manager market players who can underperform by 0.12%. However, I highly doubt any fund manager can reduce fees for an active fund below 0.12% without simply becoming a closet index. Vanguard...
by grabiner
Tue Feb 24, 2015 10:36 pm
 
Forum: Investing - Theory, News & General
Topic: Active managers outperform the index by 0.12% before fees?
Replies: 22
Views: 1739

Re: Vanguard's New Index Fund of Municiples

This fund's portfolio (based on MUB, which tracks the same index), will be similar to VWLTX (long term), not VWITX (intermediate term). One advantage this fund will have is a lower threshold for low cost shares--Vanguard's current TE funds, because they're "active", have a $50K admiral mi...
by grabiner
Tue Feb 24, 2015 10:25 pm
 
Forum: Investing - Theory, News & General
Topic: New Vanguard AMT-free National Municipal Bond Fund
Replies: 79
Views: 7094

Re: Asset Location [3-Funds]

What is your tax bracket? If you have a taxable account, are in a 28% or higher bracket, and do need to hold bonds there, you probably wouldn't use Total Bond Market Index; muni funds are likely to provide better after-tax returns for the same risk level. It doesn't matter much what goes in the 401(...
by grabiner
Tue Feb 24, 2015 10:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: Asset Location [3-Funds]
Replies: 3
Views: 369

Re: Convert Etf to Index Fund

An alternative (in an IRA) would be to use mutual funds from the start, but build a more complex portfolio over time. With just $1000, you can invest in a Vanguard Target Retirement fund, choosing one which has the correct stock/bond allocation for your needs. When your portfolio is large enough, yo...
by grabiner
Tue Feb 24, 2015 10:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Convert Etf to Index Fund
Replies: 3
Views: 402

Re: Beginner Investor - Selling Mutual Fund to start Roth IR

1. Since I can't purchase all three of my desired indexes up front ( VTSMX, VGTSX, and VBMFX ), would VASGX (Vanguard LifeStrategy Growth Fund Investor Shares) be a good choice for my first funding until I can afford to have all three of the indexes I want at the proper AA? That is a great way to g...
by grabiner
Tue Feb 24, 2015 10:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: Beginner Investor - Selling Mutual Fund to start Roth IRA
Replies: 9
Views: 694

Re: 401k/Roth IRA and taxes

I cannot get passed the tax section of the Bogleheads book though. It seems to be suggesting that your tax deferred account should be the one with the greater percentage of bonds. It isn't entirely clear if this advice applies to the two types of retirement accounts or just when comparing tax advan...
by grabiner
Tue Feb 24, 2015 9:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401k/Roth IRA and taxes
Replies: 6
Views: 339
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