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Re: Last Minute Help with Foreign Tax Paid and 1099R

Not knowing how much foreign tax was withheld from your distributions, I am going to punt and suggest completing form 1116. It looks scary but for passive investments in funds (RIC) it is really quite simple. The foreign tax $ listed in the Foreign Tax Paid form is small: $163.55 for one fund and $...
by grabiner
Tue Apr 15, 2014 1:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: Last Minute Help with Foreign Tax Paid and 1099R
Replies: 12
Views: 291

Re: HSA cost benefit analysis

Have you, yet, personally encountered a situation where you actually had to pay the full deductible? Based on other postings in the forum, I get the impression that people judge, quite correctly, that an economic analysis favors the high deductible plan--they can afford the risk and it is beneficia...
by grabiner
Tue Apr 15, 2014 12:50 pm
 
Forum: Personal Finance (Not Investing)
Topic: HSA cost benefit analysis
Replies: 22
Views: 1419

Re: Last Minute Help with Foreign Tax Paid and 1099R

Not knowing how much foreign tax was withheld from your distributions, I am going to punt and suggest completing form 1116. It looks scary but for passive investments in funds (RIC) it is really quite simple. The foreign tax $ listed in the Foreign Tax Paid form is small: $163.55 for one fund and $...
by grabiner
Tue Apr 15, 2014 12:45 pm
 
Forum: Personal Finance (Not Investing)
Topic: Last Minute Help with Foreign Tax Paid and 1099R
Replies: 12
Views: 291

Re: Tax Treatment of HSA in California

I understand that they are handed similar to a brokerage account, however, there's a few specific points that I am not completely clear on as it relates to California. Are the maintenance fees somehow tax deductible in California? Are capital losses on the HSA account deductible in California? Are ...
by grabiner
Tue Apr 15, 2014 12:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax Treatment of HSA in California
Replies: 9
Views: 460

Re: Asset location question

Vanguard International Value is an actively managed fund, and is thus much more likely to distribute capital gains than any of your tax-managed and index funds. It should go in an IRA. Of the index funds you hold, Value Index is probably the least tax-efficient, because value funds have higher divid...
by grabiner
Tue Apr 15, 2014 12:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: Asset location question
Replies: 4
Views: 178

Re: Roth IRA vs Traditional

You can use a deductible IRA regardless of whether you have the Roth, as long as you meet the eligibility requirements. Contributing to a Roth now (whether frontdoor or backdoor) is the best way for you to get tax deferral if you are ineligible for a deductible IRA. The problem occurs in the other d...
by grabiner
Mon Apr 14, 2014 10:59 am
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA vs Traditional
Replies: 3
Views: 329

Re: Asset allocation vs. pooling for admiral shares

My own philosophy is that I am willing to deviate from my target allocation within my rebalancing limits without rebalancing, so I should also be willing to make the same deviation to save a few dollars in expenses. Thus, my Investment Policy Statement says that I will deviate within the rebalancing...
by grabiner
Mon Apr 14, 2014 10:57 am
 
Forum: Investing - Help with Personal Investments
Topic: Asset allocation vs. pooling for admiral shares
Replies: 9
Views: 779

Re: Use brokerage window for REITS and TIPS?

Despite the reported expense, TIAA Real Estate is an excellent investment. It holds the real estate directly, rather than holding an index of REITs. Therefore, the expense ratio includes the management costs, while the expense ratio of a REIT fund does not include the costs that the REITs themselves...
by grabiner
Mon Apr 14, 2014 10:45 am
 
Forum: Investing - Help with Personal Investments
Topic: Use brokerage window for REITS and TIPS?
Replies: 7
Views: 462

Re: Taxes and SEP IRA fund choice

Taxes don't matter in a tax-deferred account; if you invest in the wrong fund, you can switch without penalty. If your entire portfolio is tax-deferred (excluding cash in bank accounts and emergency funds), you can put any fund in any account for the same tax cost, so your investments should be dete...
by grabiner
Mon Apr 14, 2014 10:32 am
 
Forum: Investing - Help with Personal Investments
Topic: Taxes and SEP IRA fund choice
Replies: 6
Views: 369

Re: TaxAct HSA Question

I have the same situation. My premium pass-through (paid by the health plan, not the employer) is not reported with code W, but I have to tell TaxAct that it is code W so that it goes in the right place on the Form 8889, as a contribution which I cannot deduct but which reduces my deductible limit. ...
by grabiner
Fri Apr 11, 2014 10:47 pm
 
Forum: Personal Finance (Not Investing)
Topic: TaxAct HSA Question
Replies: 8
Views: 457

Re: Corporate Bond in Tax-deferred vs Muni Bonds in Taxable

So for tax-deferred accounts you'd hold treasuries and/or corporate. But what got me thinking is when you do have to pay taxes on withdraws, what will be the after tax return be? Will it be better to just hold munis in taxable? The after-tax rate of return is the same as the pre-tax return. If you ...
by grabiner
Fri Apr 11, 2014 10:38 pm
 
Forum: Investing - Theory, News & General
Topic: Corporate Bond in Tax-deferred vs Muni Bonds in Taxable
Replies: 8
Views: 752

Re: Paying a load fee for a lower expense ratio?

NJ does treat Roths the same as the IRS does, so you could open a Roth IRA, which is probably a better deal than either a state-nondeductible IRA or an inferior 401(k).
by grabiner
Fri Apr 11, 2014 10:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: Paying a load fee for a lower expense ratio?
Replies: 6
Views: 737

Re: Bond Allocation with 6.8% Student Loans

You can't rebalance from your loan into equities when the market slumps, so I think that if you decide to save rather than put everything towards the loan, you should still hold some cash/bonds so that you have some 'dry powder' to make it possible to rebalance and buy stocks when they're 'on sale'...
by grabiner
Fri Apr 11, 2014 12:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bond Allocation with 6.8% Student Loans
Replies: 12
Views: 792

Re: I saw a "Boglehead" on my flight yesterday!

One of my co-workers sent an internal Email a few months ago about a computer program I wrote at work, and also asked, "Are you a Boglehead?" Presumably she recognized my last name, which is my username.
by grabiner
Wed Apr 09, 2014 11:49 pm
 
Forum: Local Chapters and Bogleheads Community
Topic: I saw a "Boglehead" on my flight yesterday!
Replies: 61
Views: 7042

Re: Always understand taxes do not trust software

2) By the time you get to something as complicated as the long form and Schedule D, simply entering data accurately and complete becomes a nontrivial job. dbltrbl, I'll bet a nickel your issues are with data entry errors, not software functions. And that's why I use tax software. The first time I f...
by grabiner
Wed Apr 09, 2014 11:46 pm
 
Forum: Personal Consumer Issues
Topic: Always understand taxes do not trust software
Replies: 33
Views: 2571

Re: Do Professional Active Investors have short-term incenti

I would say that professional active investors have a short-term incentive, and this is a significant disincentive for long-term investors to use them. You, as an investor, would prefer a fund which matches the market to one which is equally likely to outperform or underperform by 10%; the extra ris...
by grabiner
Wed Apr 09, 2014 11:16 pm
 
Forum: Investing - Theory, News & General
Topic: Do Professional Active Investors have short-term incentives?
Replies: 9
Views: 518

Re: Investing in foreign government bonds - theory and pract

Funny that you say "Living in a small (and economically insignificant) country, I don't have the luxury of thinking of my government treasuries as a riskless investment. For that reason I've decided to allocate at least 33% of my bond portion to US treasuries." That insignificant country ...
by grabiner
Wed Apr 09, 2014 10:45 pm
 
Forum: Investing - Theory, News & General
Topic: Investing in foreign government bonds - theory and practice
Replies: 19
Views: 1125

Re: Placement of Balanced Fund and Stock Funds in Roth Accou

There isn't a tax disadvantage. However, you might want to use something other than LifeStrategy Growth in your Roth IRA. Since you have individual funds elsewhere (and you need to do this, given your taxable account), LifeStrategy Growth doesn't make your portfolio any easier to manage; you still h...
by grabiner
Wed Apr 09, 2014 10:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Placement of Balanced Fund and Stock Funds in Roth Accounts
Replies: 2
Views: 251

Re: Bond Allocation with 6.8% Student Loans

I don't think I have ready anything that takes the amount of debt one owes into account when figuring your asset allocation. Dave Ramsey of course would tell you not to save anything at all until you paid this loan off. I disagree, and think that the sooner you start your retirement investing the b...
by grabiner
Wed Apr 09, 2014 10:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bond Allocation with 6.8% Student Loans
Replies: 12
Views: 792

Re: Finally! TIAA-CREF class action for delays

The lawsuit seems to say that the cause for action is not the delay, but the fact that TIAA-CREF did not pay investment gains during the delay. If you initiated a TIAA-CREF withdrawal in March, the withdrawal actually took place in May, and you were paid at the May value of the funds, you didn't los...
by grabiner
Wed Apr 09, 2014 10:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: Finally! TIAA-CREF class action for delays
Replies: 1
Views: 428

Re: Income Taxes v. Net Interest on Home Purchase?

Yes, this is exactly my question - better to have a lower initial mortgage with a TIRA withdrawal or to convert TIRA to Roth? I'm not real savvy on bond funds or Treasuries, as I've been aggressive in the accumulation phase, so in my mind I'm comparing to historical returns (10 year) on something l...
by grabiner
Wed Apr 09, 2014 10:12 pm
 
Forum: Personal Finance (Not Investing)
Topic: Income Taxes v. Net Interest on Home Purchase?
Replies: 5
Views: 458

Re: (CA, USA) Recommendations for choosing between HSA Healt

Note that in California, none of your HSA contributions, your employer contributions, or the earnings in the HSA account are tax deductible (or exempt) from state income tax. Tracking your basis in the account over many years could be a pain, especially if you build up money in the account and then...
by grabiner
Wed Apr 09, 2014 10:07 pm
 
Forum: Personal Finance (Not Investing)
Topic: (CA, USA) Recommendations for choosing between HSA Health Pl
Replies: 3
Views: 206

Re: What's a good credit score?

Thanks. This is a big help. According to credit karma, my credit score is 738, due to my only debt being credit card related (paid off in full every month) and my lack of credit longevity - only a couple years or so. Credit Karma gives you two different credit scores, neither one FICO. The Trans Un...
by grabiner
Wed Apr 09, 2014 12:00 am
 
Forum: Personal Consumer Issues
Topic: What's a good credit score?
Replies: 25
Views: 2005

Re: (CA, USA) Recommendations for choosing between HSA Healt

You have slightly overestimated the costs of the low-deductible plans, because they provide some coverage before you meet your deductible. For example, a high-deductible plan might charge you the negotiated rate of $75 for your office visit, while a low-deductible plan would charge a $20 co-payment ...
by grabiner
Tue Apr 08, 2014 11:46 pm
 
Forum: Personal Finance (Not Investing)
Topic: (CA, USA) Recommendations for choosing between HSA Health Pl
Replies: 3
Views: 206

Re: Vanguard All world ETF or Vanguard region ETFs?

By deciding to reduce your presence in the US market, you are actually saying that you know something that the market does not. After all the allocation in the global index is not arbitrary. In essence you are drifting, however slightly, from the passive strategy that is the foundation of modern po...
by grabiner
Tue Apr 08, 2014 11:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard All world ETF or Vanguard region ETFs?
Replies: 17
Views: 807

Re: Family Entangled in Variable Annuities. Need help...

@JW: Yes, my family wants to get out of the investments, but they don't know how and are afraid of tax penalties so they keep putting it off. There is no tax penalty changing accounts in the IRAs, because you can buy and sell freely. If your grandparents and uncle are in a low tax bracket, it may b...
by grabiner
Tue Apr 08, 2014 11:24 pm
 
Forum: Investing - Help with Personal Investments
Topic: Family Entangled in Variable Annuities. Need help...
Replies: 6
Views: 764

Re: Hold/Invest Cash or Put Down on Mortgage?

The advantage of putting more money down at the start is that you reduce all of your mortgage payments. If you take out a 15-year mortgage, paying extra at the start gives you an annual benefit for 15 years, which has only a 7-year duration. Once you have already taken out the mortgage, paying off p...
by grabiner
Tue Apr 08, 2014 11:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: Hold/Invest Cash or Put Down on Mortgage?
Replies: 3
Views: 431

Re: Income Taxes v. Net Interest on Home Purchase?

This is a version of the usual decision whether to pay down a mortgage or invest, but with a twist: it is considerably more attractive to pay down a mortgage before you take it out than it is to pay down an existing mortgage. (The reason is that any payment made on an existing mortgage eliminates pa...
by grabiner
Tue Apr 08, 2014 12:07 am
 
Forum: Personal Finance (Not Investing)
Topic: Income Taxes v. Net Interest on Home Purchase?
Replies: 5
Views: 458

Re: Calculate effect of mortgage-interest deduction

It is better for most investors to contribute to a 401(k) or IRA rather than to pay down a mortgage, because of the long-term benefit of tax deferral. Most investors who do not have this choice (because they are maxing out their 401(k) and IRA) do itemize deductions. In order to max out a 401(k) and...
by grabiner
Mon Apr 07, 2014 11:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: Calculate effect of mortgage-interest deduction
Replies: 11
Views: 673

Re: Reporting Adjusted Gross Income on Individual State Tax

David - Thank you for your suggestions. I checked both CO and IN returns forms and they both have exclusive fields to indicate what portion of the income was earnt in that state. However, I still have the original question. Under the part where it says "Your income as reported on the Federal f...
by grabiner
Mon Apr 07, 2014 11:39 pm
 
Forum: Personal Finance (Not Investing)
Topic: Reporting Adjusted Gross Income on Individual State Tax Form
Replies: 6
Views: 314

Re: 401k to pay off condo to make it a rental

Welcome to the forum! You should probably look at two decisions separately: Should you buy a new home? If you do buy a new home, should you sell or rent out your condo? Only you know whether a new home is worth the transaction costs and moving costs. If you want to move to a new area, or your curren...
by grabiner
Mon Apr 07, 2014 12:33 am
 
Forum: Personal Finance (Not Investing)
Topic: 401k to pay off condo to make it a rental
Replies: 7
Views: 561

Re: 15 year vs 30 year fixed

Well the 10 year arm has lower payments so you are not wasting as much money paying off your house instead of investing in productive assets:) The lower payments come at an increased risk. You pay a lower initial rate for the 10-year ARM than for the 30-year fixed mortgage, and in return, you take ...
by grabiner
Sun Apr 06, 2014 10:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: 15 year vs 30 year fixed
Replies: 48
Views: 4609

Re: Social Security benefits question

Thank you so very much for explaining this to me. Much appreciated. What, though, are 'bend points' and could you possibly explain why those zeroes could be advantageous? The Social Security page on calculating your Primary Insurance Amount explains how the bend points work. The benefit is 90% of y...
by grabiner
Sun Apr 06, 2014 9:06 pm
 
Forum: Personal Finance (Not Investing)
Topic: Social Security benefits question
Replies: 8
Views: 464

Re: Reporting Adjusted Gross Income on Individual State Tax

Since you are filing separately in CO, your wife's CO return should list only her income. (It shouldn't be the W-2 income, as CO wants taxable income, and thus it should already be adjusted for the standard or itemized deductions.) Check the state forms to see what number you are supposed to enter. ...
by grabiner
Sun Apr 06, 2014 9:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: Reporting Adjusted Gross Income on Individual State Tax Form
Replies: 6
Views: 314

Re: Graduate School Loans

kelpie007 wrote:My adjusted gross income last year was $27k. The Saver's Credit would go towards next year's tax return I assume?


Yes. See IRS Form 8880 for details; note that this is a link to the 2013 form, and the 2014 limits will be slightly higher.
by grabiner
Sun Apr 06, 2014 8:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Graduate School Loans
Replies: 13
Views: 793

Re: tearing my hair out with multiple state tax return

I live in Charlotte NC which is 10 miles up the road from the SC state line. So there are lots of married couples where one person works in one state and the other one works in the other state. Believe it or not, to get this correct they have to first do a dummy MFS federal return. I have heard it ...
by grabiner
Sun Apr 06, 2014 8:51 pm
 
Forum: Personal Finance (Not Investing)
Topic: tearing my hair out with multiple state tax return
Replies: 11
Views: 683

Re: Why pay off your house?

Everything not going to investment accounts is an expense. My goal is to make wise financial decisions and to look for ways to reduce expenses. Unless you are paying no interest on a mortgage, then to me that is an added expense that needs to be reduced or eliminated. A study was done that if you h...
by grabiner
Sun Apr 06, 2014 8:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why pay off your house?
Replies: 119
Views: 8379

Re: tearing my hair out with multiple state tax return

IN 2012 my spouse and I lived in California and worked in California and part of 2013. In the second half of 2013, I found a new job in the midwest and moved and started the job while the spouse stayed and continued to work in California. I checked and there is no reciprocal tax treaty between the ...
by grabiner
Sun Apr 06, 2014 7:47 pm
 
Forum: Personal Finance (Not Investing)
Topic: tearing my hair out with multiple state tax return
Replies: 11
Views: 683

Re: Why pay off your house?

There may be situations where freeing up the assets to do so would result in tax consequences making that not the lowest cost choice, there may be cases where the government tax subsidy would make it not the lowest cost choice, and there may be cases where broader money supply has shifted so your l...
by grabiner
Sun Apr 06, 2014 6:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why pay off your house?
Replies: 119
Views: 8379

Re: Why pay off your house?

I could earn 3.10% after tax if I invested the money in Long-Term Tax-Exempt, and that's good compensation for the slight credit risk. Bonds and bond funds have credit and interest rate risk. Agreed not necessarily lose your shirt risk. Paying off a mortgage has no risk. Why not take out more loan ...
by grabiner
Sun Apr 06, 2014 6:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why pay off your house?
Replies: 119
Views: 8379

Re: Graduate School Loans

Great advice guys! Thanks! But actually, in December I put down 20k towards that 65k to get it to where it is now. I have 20k in the bank now, and I want that as a buffer for everything in life. I don't have a savings account, per say, but I have that 20k to work from. At the moment, I'm afraid to ...
by grabiner
Sun Apr 06, 2014 6:24 pm
 
Forum: Personal Finance (Not Investing)
Topic: Graduate School Loans
Replies: 13
Views: 793

Re: Graduate School Loans

Welcome to the forum! I'm pretty new to controlling my personal finances. I graduated last June from grad school and I've been working constantly ever since. I like the idea of trying to save now and gathering some of that compounding interest, but with a large chunk of loans like 65k at 7.25%, I'm ...
by grabiner
Sun Apr 06, 2014 2:32 pm
 
Forum: Personal Finance (Not Investing)
Topic: Graduate School Loans
Replies: 13
Views: 793

Re: Job chg, IRA to 401k, already made contribution, now wha

If she doesn't want a Roth IRA, can she reverse the contribution as if it had never been made? The account is at Vanguard. Also, her 2014 contribution is commingled with her prior year deductible contributions, so I'm not sure how you could calculate the income on the $6500. The mutual fund company...
by grabiner
Sun Apr 06, 2014 1:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: Job chg, IRA to 401k, already made contribution, now what?
Replies: 5
Views: 177

Re: Target Retirement Expense Ratio?

Would it make sense to convert my wife's IRA into a Roth IRA? I would contribute 5.5k for 2013, 5.5k for 2014 for a total of 36k. I believe we could easily continue to contribute to her account for the next 12-15 years that I plan on working and still make contributions to my traditional IRA and ta...
by grabiner
Sun Apr 06, 2014 1:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Target Retirement Expense Ratio?
Replies: 11
Views: 1109

Re: individual stock: minimizing capital gain on shares sold

Thanks very much for the quick responses. I was not aware that capital gains within the 15% bracket are taxed at 0%. In fact, I wasn't aware that there were multiple brackets for capital gains. My understanding was that all capital gains, no matter how high, were taxed at 15%. It's good to know bef...
by grabiner
Sun Apr 06, 2014 1:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: individual stock: minimizing capital gain on shares sold
Replies: 6
Views: 274

Re: Job chg, IRA to 401k, already made contribution, now wha

The maximum IRA contribution is your total earned income for the year; it doesn't depend on which employers paid this income, or whether they have a retirement plan. However, if you are covered by a retirement plan and are over the income limit, the contribution becomes non-deductible. Thus, as long...
by grabiner
Sun Apr 06, 2014 1:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: Job chg, IRA to 401k, already made contribution, now what?
Replies: 5
Views: 177

Re: 15 year vs 30 year fixed

Student loans = $72,000 @ 6.8% 19,000 @ 4.85% 32,000@ 4.75% 33,000@ 2.875% ----------------------------- This is an incentive to take the longer-term mortgage. With your income, those student loans aren't deductible, so with lower mortgage payments, you can pay down the student loans faster, for a ...
by grabiner
Sun Apr 06, 2014 1:13 pm
 
Forum: Personal Finance (Not Investing)
Topic: 15 year vs 30 year fixed
Replies: 48
Views: 4609

Re: What to put in Roth or taxable account?

Taxable Account SCHB (Schwab US Broad Market) 1.7% dividend 4% turnover SCHA (Schwab US Small Cap) 1.3% dividend 22% turnover SCHX (Schwab US Large Cap) 1.8% 5% turnover VPL (Vanguard Asia/Pacific)- 2.6% dividend 22% turnover VGK (Vanguard Europe stock index)- 3.8% dividend 10% turnover (corrected ...
by grabiner
Sun Apr 06, 2014 12:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: What to put in Roth or taxable account?
Replies: 6
Views: 438

Re: individual stock: minimizing capital gain on shares sold

Welcome to the forum! I was employed with IBM for several years, and I was a participant in a program where I invested 6% of my income in IBM stock every pay period. Because I bought shares every two weeks over a period of more than five years, the cost basis for my shares ranges from significantly ...
by grabiner
Sun Apr 06, 2014 12:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: individual stock: minimizing capital gain on shares sold
Replies: 6
Views: 274

Re: Why pay off your house?

What avalpert says is what I believe - it comes down to what you would otherwise do with the same money. Assume a 4% mortgage. If your choice is prepaying the mortgage or going on a shopping spree, prepay the mortgage. If your alternative is parking the money in a savings account or CD at today's r...
by grabiner
Sun Apr 06, 2014 12:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why pay off your house?
Replies: 119
Views: 8379
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