Search found 7133 matches

by Bob's not my name
Sat Feb 13, 2016 5:03 am
Forum: Investing - Theory, News & General
Topic: Roth IRA vs 401k Asset Allocation
Replies: 5
Views: 330

Re: Roth IRA vs 401k Asset Allocation

We're conflating two separate questions here: 1) Is Roth or Traditional better? 2) If I have both, what should I hold in each? The answers are: 1) It depends on a huge range of factors. 2) It doesn't matter. The wiki addresses the second question: suppose you have $4,000 in a 401(k) and $3,000 in a ...
by Bob's not my name
Tue Feb 09, 2016 8:10 am
Forum: Personal Finance (Not Investing)
Topic: Preparing for marriage (taxes)
Replies: 16
Views: 1251

Re: Preparing for marriage (taxes)

Your title is "taxes" but your thread is all about withholding. To provide advice on tax mitigation, we'll need to know your gross income, her gross income, her employer retirement plan (if any), and what state you're in. From your prior posts, I gather the answers to three of these questi...
by Bob's not my name
Mon Feb 08, 2016 4:50 am
Forum: Investing - Help with Personal Investments
Topic: 403b / 457b / Roth IRA - What order?
Replies: 7
Views: 708

Re: 403b / 457b / Roth IRA - What order?

The child tax credit phaseout adds 5% to your marginal rate, so your marginal rate is 25% + 5% + 5.3% (assuming you itemize) = 35%. You have it right that this is a high marginal rate. Two $5,500 Roth IRA contributions consume $17,000 of income and throw away $6,000 to taxes, so you could make a $17...
by Bob's not my name
Fri Feb 05, 2016 4:07 am
Forum: Personal Finance (Not Investing)
Topic: Taxation of fellowship
Replies: 37
Views: 1521

Re: Taxation of fellowship

A long time ago I held a post-doc research fellowship. It was my first real salary post-grad school. I clearly remember it was not considered income subject to Social Security/Medicare tax. But I did have to pay income tax on it. I had to write SCH next to it on the interest and other income line, ...
by Bob's not my name
Thu Feb 04, 2016 9:04 pm
Forum: Personal Finance (Not Investing)
Topic: Taxation of fellowship
Replies: 37
Views: 1521

Re: Taxation of fellowship

Bob's not my name wrote:There are helpful instructions on the form regarding how to treat this if you are a fisherman
The Wizard wrote:I don't see how they are on the hook
I apologize for overlooking this horrible joke on the first read. Well played, sir.
by Bob's not my name
Thu Feb 04, 2016 4:17 am
Forum: Personal Finance (Not Investing)
Topic: Taxation of fellowship
Replies: 37
Views: 1521

Re: Taxation of fellowship

Thanks for the excellent commentary. I suspect you are right. The standard deduction, personal exemption, and AOTC (if needed) can easily wipe out 10k of income. Personal exemption and AOTC of course don't apply for a dependent. As discussed above, there is other income, but I think there will still...
by Bob's not my name
Wed Feb 03, 2016 2:08 pm
Forum: Personal Finance (Not Investing)
Topic: Taxation of fellowship
Replies: 37
Views: 1521

Re: Taxation of fellowship

It's a fellowship grant. I believe the 1099-MISC is an error by the University, because "Do not use Form 1099-MISC to report scholarship or fellowship grants." is pretty clear. I believe the grant is not taxable per U.S. Code Sec 117. I think we will (1) ask University B to nullify the 109...
by Bob's not my name
Wed Feb 03, 2016 1:30 pm
Forum: Personal Finance (Not Investing)
Topic: Taxation of fellowship
Replies: 37
Views: 1521

Re: Taxation of fellowship

convince University B simply to nullify that 1099-misc. True scholarship and fellowship payments need not be reported to the IRS on any form... I'm pretty certain I'll fail to convince University B of anything, but I feel you're right. Do not use Form 1099-MISC to report scholarship or fellowship g...
by Bob's not my name
Wed Feb 03, 2016 1:10 pm
Forum: Personal Finance (Not Investing)
Topic: Tax on Inherited EE Bond
Replies: 7
Views: 600

Re: Tax on Inherited EE Bond

Decedent who postponed reporting interest. If the transferred bonds were owned by a decedent who had used the cash method and had not chosen to report the interest each year, and who had bought the bonds entirely with his or her own funds, all interest earned before death must be reported in one of...
by Bob's not my name
Wed Feb 03, 2016 12:09 pm
Forum: Personal Finance (Not Investing)
Topic: Taxation of fellowship
Replies: 37
Views: 1521

Re: Taxation of fellowship

itstoomuch wrote:If no 1099 or W2. Don't ask for one.
Bob's not my name wrote: we received a 1099-MISC with $4,000 in Box 7
by Bob's not my name
Wed Feb 03, 2016 12:08 pm
Forum: Personal Finance (Not Investing)
Topic: Taxation of fellowship
Replies: 37
Views: 1521

Re: Taxation of fellowship

Not Bob, The following is my interpretation of the tax treatment for your daughter's situation. Based on what you indicated in prior posts, the fellowship qualifies as tax-exempt because all requirements were met and no past, present or future services were required. However, she received a 1099-MI...
by Bob's not my name
Wed Feb 03, 2016 12:03 pm
Forum: Personal Finance (Not Investing)
Topic: Taxation of fellowship
Replies: 37
Views: 1521

Re: Taxation of fellowship

leonard wrote:"It's OK and worth it to go to a tax expert for complex tax issues."
Definitely not worth it. We're talking a few hundred dollars here.
by Bob's not my name
Wed Feb 03, 2016 11:53 am
Forum: Personal Finance (Not Investing)
Topic: Taxation of fellowship
Replies: 37
Views: 1521

Re: Taxation of fellowship

don't ask non-tax pros for tax advice That's exactly what I'm doing in this thread :D Seriously, though, my kid wasn't asking for tax advice. My kid was asking the payor how the payor was going to classify the $4,000. Put more directly, my kid asked "Are you going to issue a 1099 or W2 or what...
by Bob's not my name
Wed Feb 03, 2016 11:44 am
Forum: Personal Finance (Not Investing)
Topic: Taxation of fellowship
Replies: 37
Views: 1521

Re: Taxation of fellowship

OK, I understand your point, but I don't think that's the case. All (or almost all) of the fellowship recipients are students at other universities. And University B is not making a statement that it's taxable income -- quite the opposite, as far as I can tell.
by Bob's not my name
Wed Feb 03, 2016 11:18 am
Forum: Personal Finance (Not Investing)
Topic: Taxation of fellowship
Replies: 37
Views: 1521

Re: Taxation of fellowship

The Wizard wrote:Seems like the kid was not a candidate for degree at University B, correct?
I don't see how they are on the hook for presuming he's a candidate at some other institution...
They didn't presume. It was a criterion for award.
by Bob's not my name
Wed Feb 03, 2016 10:53 am
Forum: Personal Finance (Not Investing)
Topic: Taxation of fellowship
Replies: 37
Views: 1521

Taxation of fellowship

I read several prior threads on similar topics, none of which clarified this matter for me. So if this thread also lacks clarity I will rate it Average :D My kid, an undergraduate student at University A paying around $40,000 in tuition (relevant later), received a $4,000 fellowship grant from Unive...
by Bob's not my name
Tue Feb 02, 2016 10:42 am
Forum: Investing - Help with Personal Investments
Topic: Should my Roth contain 100% stocks?
Replies: 32
Views: 3038

Re: Should my Roth contain 100% stocks?

suppose you have $4,000 in a 401(k) and $3,000 in a Roth IRA, and you will be in a 25% tax bracket when you retire. You might choose to invest the entire 401(k) in stock and the entire Roth in bonds. If you do this, and the stock market gains 10% while the bond market gains 5%, your 401(k) would be...
by Bob's not my name
Sun Jan 31, 2016 3:30 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Strategy
Replies: 33
Views: 3578

Re: Tax Strategy

Since the company you work for offers no retirement 401k plan in 2015 - it's very difficult to reduce anything. Except for the $5,500 tIRA contribution, which apparently he's already done, but I'm not sure about that -- if he hasn't, then of course he can still do it for 2015. I think the OP has di...
by Bob's not my name
Sun Jan 31, 2016 12:39 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Strategy
Replies: 33
Views: 3578

Re: Tax Strategy

According to the software, our income is $162,xxx. After the standard deduction and tIRA deductions, wife public school pension ect it comes down to $135,xxx is taxable income. My income was $112,xxx. Total withheld $11,200 federal $7,000 SS $1,300 medicare Wife $48,xxx. $3,900 federal $0 SS $800 m...
by Bob's not my name
Sun Jan 31, 2016 9:58 am
Forum: Investing - Help with Personal Investments
Topic: Should my Roth contain 100% stocks?
Replies: 32
Views: 3038

Re: Should my Roth contain 100% stocks?

Every time we have one of these threads the advocates for holding stocks in Roth never give us a math example of how they come out ahead doing that. Disproving the wiki would be a very valuable contribution to the forum. Furthermore, to disprove an assertion you merely have to give an example, you d...
by Bob's not my name
Sat Jan 30, 2016 8:41 pm
Forum: Investing - Help with Personal Investments
Topic: Should my Roth contain 100% stocks?
Replies: 32
Views: 3038

Re: Should my Roth contain 100% stocks?

It makes no difference where you hold stocks, Roth vs. traditional. If you think it makes a difference the illusion is caused by an increase in risk by changing your asset allocation (that is, you are ignoring tax-adjustment). This is explained on the wiki. Whether it's better to hold stocks in Roth...
by Bob's not my name
Thu Jan 28, 2016 1:45 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio Review - help appreciated
Replies: 5
Views: 532

Re: Portfolio Review - help appreciated

Maybe a lot less federal tax too. If the OP is saturating all tax-advantaged space (401k + IRA), Roth has the advantage of more effective space (because you take a massive tax haircut before contributing), but that space is had at a pretty high cost, especially if the alternative is long term stock ...
by Bob's not my name
Thu Jan 28, 2016 5:59 am
Forum: Investing - Help with Personal Investments
Topic: Portfolio Review - help appreciated
Replies: 5
Views: 532

Re: Portfolio Review - help appreciated

2. Are there any particular asset types or funds better suited to put in my 401k Roth vs the 401k? No. It doesn't make any difference which you hold where. Since you are in the 28% federal bracket and in a state that favors traditional over Roth, you should think carefully before voluntarily paying...
by Bob's not my name
Thu Jan 21, 2016 11:01 am
Forum: Personal Finance (Not Investing)
Topic: Grandparents gifting $14k, grandparent 529 alternative due to their age?
Replies: 19
Views: 1442

Re: Grandparents gifting $14k, grandparent 529 alternative due to their age?

Is $14k a random number or are the grandparents unaware that they can gift $28k ($14k each) to one recipient without reporting the gift? This is only true if each $14K comes from separate funds. If the $28K comes from joint funds, a Form 709 must be completed even though the gift still qualifies fo...
by Bob's not my name
Wed Jan 20, 2016 3:12 pm
Forum: Personal Finance (Not Investing)
Topic: Grandparents gifting $14k, grandparent 529 alternative due to their age?
Replies: 19
Views: 1442

Re: Grandparents gifting $14k, grandparent 529 alternative due to their age?

Is $14k a random number or are the grandparents unaware that they can gift $28k ($14k each) to one recipient without reporting the gift? This is only true if each $14K comes from separate funds. If the $28K comes from joint funds, a Form 709 must be completed even though the gift still qualifies fo...
by Bob's not my name
Wed Jan 20, 2016 3:03 pm
Forum: Personal Finance (Not Investing)
Topic: Grandparents gifting $14k, grandparent 529 alternative due to their age?
Replies: 19
Views: 1442

Re: Grandparents gifting $14k, grandparent 529 alternative due to their age?

Unscientific observation: seems like we get a lot of gifting questions in early January. I can't figure out why that would be the case, since at this time gifters have just forfeited an opportunity to give double annual exclusion gifts in a short window.
by Bob's not my name
Wed Jan 20, 2016 3:01 pm
Forum: Investing - Help with Personal Investments
Topic: Company stock purchase plan
Replies: 14
Views: 936

Re: Company stock purchase plan

jasc15 wrote:The stock is down since December 31, but less than 15%.
17.6% is your break-even (before fees).
by Bob's not my name
Wed Jan 20, 2016 7:20 am
Forum: Investing - Help with Personal Investments
Topic: Company stock purchase plan
Replies: 14
Views: 936

Re: Company stock purchase plan

So does that mean you can't sell your shares bought on the 5th until the 25th? So a 20-day holding period? So money you could have on, say, the 1st, is committed to a stock purchase on the 5th, liquidated on the 25th, and actually in your bank account around the 31st. So your average return should b...
by Bob's not my name
Wed Jan 20, 2016 5:51 am
Forum: Personal Finance (Not Investing)
Topic: Grandparents gifting $14k, grandparent 529 alternative due to their age?
Replies: 19
Views: 1442

Re: Grandparents gifting $14k, grandparent 529 alternative due to their age?

Is $14k a random number or are the grandparents unaware that they can gift $28k ($14k each) to one recipient without reporting the gift?
by Bob's not my name
Wed Jan 20, 2016 5:45 am
Forum: Investing - Help with Personal Investments
Topic: Company stock purchase plan
Replies: 14
Views: 936

Re: Company stock purchase plan

company will match the contribution by 40% and add 20 dollars on top. - This would mean for me putting around 450 dollars per month into this the stock would need to fall ca. 40% in order for me to lose. The math is unclear to me. There's no holding period, but what is the plan period? Most plans (...
by Bob's not my name
Mon Jan 11, 2016 8:42 pm
Forum: Investing - Theory, News & General
Topic: Portfolio allocation for elderly individual with daily and all foreseeable expenses covered
Replies: 12
Views: 575

Re: Portfolio allocation for elderly individual with daily and all foreseeable expenses covered

I still don't understand whether the extraordinary costs of assisted living or nursing home care are covered. Depending on where they live, this could cost $1M for a couple for five years. If they have well over that amount and there really is surplus to invest, I recommend nobody advise them to tak...
by Bob's not my name
Thu Jan 07, 2016 11:49 am
Forum: Investing - Help with Personal Investments
Topic: Decisions: Eliminate PMI, Max 401k, or Pay Student Loans?
Replies: 14
Views: 1264

Re: Decisions: Eliminate PMI, Max 401k, or Pay Student Loans?

Is the 50% marginal rate just the sum of 25 federal + 5 state + 20 in LLC phaseout? That is brutal. Yes. If you itemize, the 5% state is effectively 3.75% at the margin, so your total marginal rate is "only" 48.75%. Students, including full-time students in their graduation year, pay some...
by Bob's not my name
Wed Jan 06, 2016 8:52 pm
Forum: Investing - Help with Personal Investments
Topic: Decisions: Eliminate PMI, Max 401k, or Pay Student Loans?
Replies: 14
Views: 1264

Re: Decisions: Eliminate PMI, Max 401k, or Pay Student Loans?

Tax filing status: Single Tax Rate: 25% federal, 5% state Income $71,000 At present, I’ve lowered my t401k contribution to 10% pretax, max HSA and rIRA for 2015/16 Has lowering your 401k contributions (while making post-tax Roth IRA contributions instead) put you in the Lifetime Learning Credit pha...
by Bob's not my name
Sun Jan 03, 2016 6:26 am
Forum: Personal Finance (Not Investing)
Topic: Investing advice for married couple with ~350k income
Replies: 11
Views: 2090

Re: Investing advice for married couple with ~350k income

At our income, we are phased out of many tax shelters like IRA and mortgage tax shelter. As DSInvestor pointed out, you should still be able to do backdoor Roth IRAs. As for deducting mortgage interest, you shouldn't be phased out. The phaseout doesn't even start until AGI $311,300. Your AGI could ...
by Bob's not my name
Fri Jan 01, 2016 3:07 pm
Forum: Investing - Theory, News & General
Topic: Munis no longer as good of a deal
Replies: 46
Views: 4569

Re: Munis no longer as good of a deal

Total Bond has a yield about 28% higher than the tax exempt fund, but only 75% of its interest is taxable at the state level while close to 100% of the muni fund interest is for me at least (this of course varies depending upon what state you live in). 1.28 * .75 = .96. For the approximations I was...
by Bob's not my name
Sun Dec 20, 2015 4:03 pm
Forum: Investing - Help with Personal Investments
Topic: Which Tax Exempt Fund?
Replies: 10
Views: 905

Re: Which Tax Exempt Fund?

I'm not recommending long term bonds. I'm recommending Admiral shares of Vanguard Intermediate Term Tax-Exempt Fund, unless you don't have enough invested for Admiral shares, in which case I'm recommending Investor shares of Vanguard Intermediate Term Tax-Exempt Fund. I'm also recommending (a) apple...
by Bob's not my name
Sun Dec 20, 2015 2:07 pm
Forum: Investing - Help with Personal Investments
Topic: Which Tax Exempt Fund?
Replies: 10
Views: 905

Re: Which Tax Exempt Fund?

Ohio Long Term Tax Exempt: SEC yield 2.28% Ave duration 6.3 years National Long Term Tax Exempt: SEC yield 2.28% Ave duration 6.3 years Ohio tax rate 4.7% deductible against federal (unless you're in the AMT) so National Fund after taxes yields about 2.2%. Looks like the National has slightly higher...
by Bob's not my name
Fri Nov 27, 2015 6:21 pm
Forum: Investing - Help with Personal Investments
Topic: IRA/Roth conversion for wife who stays at home?
Replies: 30
Views: 2209

Re: IRA/Roth conversion for wife who stays at home?

mtritt2 wrote:I'm in Chicago so the state income tax is somewhere around 3%.
Illinois doesn't tax Roth conversions.
by Bob's not my name
Thu Nov 05, 2015 7:39 pm
Forum: Personal Finance (Not Investing)
Topic: Potential liabilities adding adult child on family auto insurance
Replies: 6
Views: 715

Re: Potential liabilities adding adult child on family auto insurance

Brace yourself for a tidal wave of parenting advice from bogleheads who will want you to disown your daughter, move to another city, and never speak to her again. As for me, I've kept my grown, carless kids on my insurance because it costs a pittance to do so (they're over 25). We live in different ...
by Bob's not my name
Thu Nov 05, 2015 6:16 am
Forum: Investing - Help with Personal Investments
Topic: Questions about Roth IRA
Replies: 10
Views: 776

Re: Questions about Roth IRA

INTRESIS wrote:I got that quote from http://www.rothira.com/roth-ira-rules

Maybe that info is wrong.
Here's another great quote from that site:
When it comes to a Roth IRA, “rules” is a subjective term.
The site contains other errors. Don't use it.
by Bob's not my name
Mon Nov 02, 2015 3:30 am
Forum: Personal Finance (Not Investing)
Topic: Strategies for minimizing tax hit from IRA withdrawals?
Replies: 34
Views: 2913

Re: Strategies for minimizing tax hit from IRA withdrawals?

I'm not an expert on SS taxation but it appears the OP would be above the range and in a 25% marginal rate (+5% state) when making withdrawals. Converting at 0%, 10%, and 15% (+5% state) now seems prudent. Bearing in mind that the brackets are inflation-adjusted, you can look at the problem in today...
by Bob's not my name
Sun Nov 01, 2015 6:57 am
Forum: Personal Finance (Not Investing)
Topic: Strategies for minimizing tax hit from IRA withdrawals?
Replies: 34
Views: 2913

Re: Strategies for minimizing tax hit from IRA withdrawals?

If your medical condition makes it likely you'll be in assisted living at end of life, you'll probably be in the 0% bracket then, so your IRA withdrawals to pay for assisted living may be tax-free.
by Bob's not my name
Fri Oct 30, 2015 11:52 am
Forum: Investing - Help with Personal Investments
Topic: Employer now offering their discounted stock purchase plan?
Replies: 31
Views: 2447

Re: Employer now offering their discounted stock purchase plan?

Pretty sure the discount is ordinary income no matter what. The hold-it-forever-to-dilute-the-huge-bargain-factor approach only changes taxation of any additional gain. Happy to be corrected, with citations.
by Bob's not my name
Fri Oct 30, 2015 10:49 am
Forum: Investing - Help with Personal Investments
Topic: Employer now offering their discounted stock purchase plan?
Replies: 31
Views: 2447

Re: Employer now offering their discounted stock purchase plan?

Yo, isn't the discount always taxed as ordinary income?
by Bob's not my name
Fri Oct 30, 2015 3:03 am
Forum: Investing - Help with Personal Investments
Topic: Employer now offering their discounted stock purchase plan?
Replies: 31
Views: 2447

Re: Employer now offering their discounted stock purchase plan?

Again, read tfb's article, linked above. He explains very clearly why you should max this out and sell immediately and why the tax issue is a red herring.
by Bob's not my name
Thu Oct 29, 2015 12:04 pm
Forum: Personal Finance (Not Investing)
Topic: Married Filing Jointly Question
Replies: 20
Views: 1666

Re: Married Filing Jointly Question

For IL taxpayers who are eligible (the case here), traditional IRAs make more sense than Roth IRAs, even if you immediately convert to Roth, because IL taxes neither TIRA contributions nor conversions. This is unbelievable! Can someone else confirm not-Bob's statement? I crowdsourced this issue for...
by Bob's not my name
Thu Oct 29, 2015 5:20 am
Forum: Personal Finance (Not Investing)
Topic: Married Filing Jointly Question
Replies: 20
Views: 1666

Re: Married Filing Jointly Question

For IL taxpayers who are eligible (the case here), traditional IRAs make more sense than Roth IRAs, even if you immediately convert to Roth, because IL taxes neither TIRA contributions nor conversions.

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