Search found 7169 matches

by Bob's not my name
Mon May 02, 2016 4:21 am
Forum: Investing - Help with Personal Investments
Topic: Student Loans vs. Retirement
Replies: 9
Views: 920

Re: Student Loans vs. Retirement

Gaff74 wrote:If you are below the cut-off and can still take a deduction on student loan interest, that needs to be a consideration.
At 6.5% only interest on the bottom half of the debt is deductible even if the OP is below the phaseout (which seems unlikely).
by Bob's not my name
Wed Apr 13, 2016 3:43 am
Forum: Personal Finance (Not Investing)
Topic: TSP Loan to payoff student loans
Replies: 10
Views: 1086

Re: TSP Loan to payoff student loans

I'm trying to keep my taxable income below 80k this year in order to be able to deduct student loan interest on my taxes. The deduction is limited based on AGI, not taxable income. The phaseout starts at $65,000 AGI for single filers. At $80,000 you are completely phased out. Given your interest ra...
by Bob's not my name
Sun Apr 03, 2016 7:43 pm
Forum: Personal Finance (Not Investing)
Topic: Help me reduce my 2015 AGI!
Replies: 22
Views: 3910

Re: Help me reduce my 2015 AGI!

TropikThunder wrote:the phase out limit of $181k you mention is correct
The 2015 phaseout is $183,000 - $193,000.
by Bob's not my name
Tue Mar 15, 2016 5:18 am
Forum: Investing - Help with Personal Investments
Topic: Traditional 401k + Taxable vs Roth 401k and Taxable
Replies: 4
Views: 534

Re: Traditional 401k + Taxable vs Roth 401k and Taxable

Illinois doesn't tax Roth conversions. If you retire early (<70, maybe <75 under future rules), you'll have the opportunity to convert pre-tax savings to Roth without paying state tax, and presumably paying no more than the top federal rate, which is your rate now (you must also be subject to the AT...
by Bob's not my name
Thu Mar 10, 2016 7:15 pm
Forum: Investing - Help with Personal Investments
Topic: Is Roth IRA superior to Traditional IRA if you cannot deduct tIRA on state taxes? (NJ)
Replies: 31
Views: 2069

Re: Is Roth IRA superior to Traditional IRA if you cannot deduct tIRA on state taxes? (NJ)

OK so after 24 posts we're getting close to addressing the question. Your gross income will be $150k so your AGI will be about $110k assuming two maxed 401k's and some pre-tax insurance premiums withheld from your pay, which puts you well into the TIRA deduction phaseout, which starts at $98k. Your ...
by Bob's not my name
Wed Mar 09, 2016 8:30 pm
Forum: Investing - Help with Personal Investments
Topic: Is Roth IRA superior to Traditional IRA if you cannot deduct tIRA on state taxes? (NJ)
Replies: 31
Views: 2069

Re: Is Roth IRA superior to Traditional IRA if you cannot deduct tIRA on state taxes? (NJ)

401k contributions are better, because they are deductible in NJ. How would you be eligible for deductible TIRA contributions in the 28% bracket? Your prior posts indicate you expect to max two 401k's this year. You may need to do backdoor Roth IRAs, because the 28% bracket and Roth phaseout are at ...
by Bob's not my name
Tue Mar 08, 2016 3:45 am
Forum: Personal Finance (Not Investing)
Topic: Graduate School - Use IRA to pay for it?
Replies: 17
Views: 1265

Re: Graduate School - Use IRA to pay for it?

nyknicks wrote:I just take the 11k+ I would be putting towards the loan and reallocate that to my 401k.
Cool. Just remember that $11k of loan repayment uses the same gross salary as about $14,700 of 401k contributions (assuming no state tax, no credit phaseout, and a 25% federal marginal rate in 2017).
by Bob's not my name
Mon Mar 07, 2016 7:57 pm
Forum: Personal Finance (Not Investing)
Topic: Holding RSU/ESPP for ≥ 1 year
Replies: 13
Views: 974

Re: Holding RSU/ESPP for ≥ 1 year

See tfb's article on why you shouldn't hold ESPP for the illusion of a tax benefit. http://thefinancebuff.com/employee-stoc ... pp-is.html
by Bob's not my name
Mon Mar 07, 2016 9:25 am
Forum: Personal Finance (Not Investing)
Topic: Graduate School - Use IRA to pay for it?
Replies: 17
Views: 1265

Re: Graduate School - Use IRA to pay for it?

Let's consider two scenarios, assuming a 6% state tax: Scenario 1: Withdraw from TIRA If you withdraw $6,000 this year, you'll likely pay no federal tax if you have an education credit, and less than $500 in state taxes, so you'll net $5,500. Let's say you still need to borrow the same amount, becau...
by Bob's not my name
Mon Mar 07, 2016 5:36 am
Forum: Personal Finance (Not Investing)
Topic: Graduate School - Use IRA to pay for it?
Replies: 17
Views: 1265

Re: Graduate School - Use IRA to pay for it?

celia wrote:Convert the tIRA to Roth this year. It may be the only time in your life you can convert and not owe any taxes.
Again, he would owe taxes, but likely less than 20%.
by Bob's not my name
Mon Mar 07, 2016 4:52 am
Forum: Personal Finance (Not Investing)
Topic: Graduate School - Use IRA to pay for it?
Replies: 17
Views: 1265

Re: Graduate School - Use IRA to pay for it?

You probably want to do Roth conversions on any of the IRA funds that can be converted in the zero bracket, perhaps 10% bracket as well during the tax year you will start a job.. The OP's marginal rate (federal + state + possibly education credit phaseout) in his graduation year is likely to be 30-...
by Bob's not my name
Mon Mar 07, 2016 4:32 am
Forum: Personal Finance (Not Investing)
Topic: Graduate School - Use IRA to pay for it?
Replies: 17
Views: 1265

Re: Graduate School - Use IRA to pay for it?

To help you figure your lifetime learning credit, the student may receive Form 1098-T ... An institution may choose to report either payments received (box 1), or amounts billed (box 2), for qualified education expenses. However, the amounts on Form 1098-T, boxes 1 and 2, might be different from wh...
by Bob's not my name
Sun Mar 06, 2016 5:49 pm
Forum: Personal Finance (Not Investing)
Topic: Graduate School - Use IRA to pay for it?
Replies: 17
Views: 1265

Re: Graduate School - Use IRA to pay for it?

gbru316 wrote:What if you can't find a job for a few years?
This is an argument for withdrawing instead of taking on debt.
by Bob's not my name
Sun Mar 06, 2016 5:48 pm
Forum: Personal Finance (Not Investing)
Topic: Graduate School - Use IRA to pay for it?
Replies: 17
Views: 1265

Re: Graduate School - Use IRA to pay for it?

-Currently have 30k in student loans. -Need to finance an additional 25k in student loans for next year. Interest will be around 6%. -Have about 11k in a traditional IRA with Vanguard. -Recently found out from a classmate I can utilize IRA funds for college expenses and avoid the 10% early withdraw...
by Bob's not my name
Wed Mar 02, 2016 11:27 am
Forum: Investing - Help with Personal Investments
Topic: Maxed out 401k, young high-income earner--what to do next?
Replies: 14
Views: 1675

Re: Maxed out 401k, young high-income earner--what to do next?

old employer's 401k (with Vanguard). I'm strongly considering rolling over the old 401k into a Vanguard IRA for the far better investment options and lower fees. If you elaborated on why your Vanguard 401k is so much worse than a Vanguard IRA we might be able to offer additional advice. Often a Van...
by Bob's not my name
Wed Mar 02, 2016 11:25 am
Forum: Investing - Help with Personal Investments
Topic: Maxed out 401k, young high-income earner--what to do next?
Replies: 14
Views: 1675

Re: Maxed out 401k, young high-income earner--what to do next?

--I contribute 6% to my 403b (my employer matches 50 cents on the dollar up to 6%) where should I go from here? Could you elaborate on your question (you may want to start your own thread)? If your salary is $300,000, then 6% maxes your 403b. You appear to be implying that, but it's not clear. We'r...
by Bob's not my name
Wed Mar 02, 2016 6:00 am
Forum: Investing - Help with Personal Investments
Topic: Maxed out 401k, young high-income earner--what to do next?
Replies: 14
Views: 1675

Re: Maxed out 401k, young high-income earner--what to do next?

Long-time lurker I'm strongly considering rolling over the old 401k into a Vanguard IRA for the far better investment options and lower fees. If I do that, does that open up any other possibilities with regard to question #1? No, the opposite. It closes off a possibility. As a long-time lurker, you...
by Bob's not my name
Wed Feb 24, 2016 8:46 pm
Forum: Investing - Help with Personal Investments
Topic: Roth, Traditional, and the 15% Tax Bracket
Replies: 70
Views: 5873

Re: Roth, Traditional, and the 15% Tax Bracket

Ybsybs wrote:Income - Standard Deduction (MFJ) - Five Personal Exemptions = Approx. AGI - Top of 15% Bracket = Amount Taxed at 25%
Personal exemptions and the standard deduction do not affect AGI. They happen on Page 2. AGI is at the bottom of Page 1.
by Bob's not my name
Wed Feb 24, 2016 9:24 am
Forum: Investing - Help with Personal Investments
Topic: 27, ROTH contribution or pay down debt (39% of payments to interest this past year)?
Replies: 32
Views: 2299

Re: 27, ROTH contribution or pay down debt (39% of payments to interest this past year)?

Tip of the hat to Carl for explaining this. I suspected this might be the case but could not believe such predation is legal. Not only are they getting all the interest up front, denying you an early payoff benefit and ensuring the bulk of the debt remains with you, they're also denying you the prop...
by Bob's not my name
Wed Feb 24, 2016 4:30 am
Forum: Investing - Help with Personal Investments
Topic: 27, ROTH contribution or pay down debt (39% of payments to interest this past year)?
Replies: 32
Views: 2299

Re: 27, ROTH contribution or pay down debt (39% of payments to interest this past year)?

Sorry, I don't follow how they can be charging more interest than the loan rate. Is it because the interest accrued while you were in school was added to the loan?
by Bob's not my name
Wed Feb 24, 2016 4:18 am
Forum: Investing - Help with Personal Investments
Topic: Would you enroll in this ESPP? 6 months required holding period
Replies: 17
Views: 1355

Re: Would you enroll in this ESPP? 6 months required holding period

maybe the stock keeps dropping year after year Two factors are often overlooked by employees with an ESPP opportunity: 1. If your company's stock is going monotonically downward, you have a bigger issue than your little stock loss. You need a new job. 2. Your company's performance relative to the o...
by Bob's not my name
Tue Feb 23, 2016 6:51 pm
Forum: Investing - Help with Personal Investments
Topic: Would you enroll in this ESPP? 6 months required holding period
Replies: 17
Views: 1355

Re: Would you enroll in this ESPP? 6 months required holding period

danaht wrote:A couple years ago that 15% gain would have been taxed as a long term capital gain if held for more than 1 year.
I don't know if that was ever the case, but it wasn't the case 15 years ago.
by Bob's not my name
Tue Feb 23, 2016 6:50 pm
Forum: Investing - Help with Personal Investments
Topic: Would you enroll in this ESPP? 6 months required holding period
Replies: 17
Views: 1355

Re: Would you enroll in this ESPP? 6 months required holding period

17.6% return, not 15%. 15/85 = 17.6%. You are right that the six-month holding period makes it far less attractive, but still attractive, I'd say. If the stock is eternally flat, the annualized return with no holding period is 91%, but only 24% with the holding period (since a 3-month investment is ...
by Bob's not my name
Mon Feb 22, 2016 10:44 am
Forum: Investing - Help with Personal Investments
Topic: Maxing Out- Traditional or Roth 401K
Replies: 79
Views: 4849

Re: Maxing Out- Traditional or Roth 401K

The great part about saving for retirement is that you get to do it differently each year. So when you are 90% sure you won the game with a pension expected and high SS but don't feel like retiring early and doing Roth conversions, you can switch from trad 401k + Roth IRA to Roth 401k + Roth IRA. I...
by Bob's not my name
Mon Feb 22, 2016 4:16 am
Forum: Personal Finance (Not Investing)
Topic: Don't forget to claw back your ACA tax
Replies: 5
Views: 1490

Re: Don't forget to claw back your ACA tax on line 62

Are you talking about this or something else? If you are married filing jointly and either you or your spouse had wages or RRTA compensation of more than $200,000, your employer may have withheld Additional Medicare Tax even if you do not owe the tax. In that case, you may be able to get a refund o...
by Bob's not my name
Sun Feb 21, 2016 8:06 pm
Forum: Personal Finance (Not Investing)
Topic: Don't forget to claw back your ACA tax
Replies: 5
Views: 1490

Don't forget to claw back your ACA tax

I almost overlooked this, since it's the first year my "wages" (gross minus insurance premiums and FSA contributions) exceeded $200,000, and I'm embarrassed to say I didn't scrupulously read all 105 pages of the 1040 instructions, I just kinda followed last year's return since I thought no...
by Bob's not my name
Sat Feb 20, 2016 12:30 pm
Forum: Investing - Help with Personal Investments
Topic: Maxing Out- Traditional or Roth 401K
Replies: 79
Views: 4849

Re: Maxing Out- Traditional or Roth 401K

The example couple doesn't have the option of maxing out traditional accounts, since they are above the income limit for deductible traditional IRAs. Provided they max out traditional 401k's, however, they are eligible for direct Roth IRA contributions.
by Bob's not my name
Sat Feb 20, 2016 9:33 am
Forum: Investing - Help with Personal Investments
Topic: 27, ROTH contribution or pay down debt (39% of payments to interest this past year)?
Replies: 32
Views: 2299

Re: 27, ROTH contribution or pay down debt (7%)?

Updated OP to include taxable income. $38,200, in 25% bracket. Will calculate whether contributing to 401k to get down to 15% bracket is advantageous. I assume that's your 2015 taxable income, which puts you less than $750 into the 25% bracket. Only that $750 is taxed at 25%. So in 2016 you'll prob...
by Bob's not my name
Sat Feb 20, 2016 8:24 am
Forum: Investing - Help with Personal Investments
Topic: Maxing Out- Traditional or Roth 401K
Replies: 79
Views: 4849

Re: Maxing Out- Traditional or Roth 401K

I read the article and I think it's very good, particularly its comments on how selective assumptions are often used to justify Roth, whereas examination of the range of possibilities reveals that Roth wins only in a minority of these. The article is rather dated now, most notably because top margin...
by Bob's not my name
Sat Feb 20, 2016 7:42 am
Forum: Investing - Help with Personal Investments
Topic: 27, ROTH contribution or pay down debt (39% of payments to interest this past year)?
Replies: 32
Views: 2299

Re: 27, ROTH contribution or pay down debt (7%)?

I have about $34,000 left. Interest rate averages out to 6%. Priorities are repaying the grad school loans first (you can deduct additional undergrad interest over $2500 for undergrad loans in MA) and getting the interest paid each year down to the $2500 Federal max tax deduction. Not following the...
by Bob's not my name
Sat Feb 20, 2016 7:13 am
Forum: Investing - Help with Personal Investments
Topic: 27, ROTH contribution or pay down debt (39% of payments to interest this past year)?
Replies: 32
Views: 2299

Re: 27, ROTH contribution or pay down debt (7%)?

You are perhaps $2000 into the 25% bracket. Putting $2000 into the 401k (if it still offers low cost options) or a traditional deductible IRA to avoid the 25% might be advantageous. Is your health insurance possibly offered as a pretax, or are FSA or HSA an option? Last time I looked, 401k contribu...
by Bob's not my name
Sat Feb 20, 2016 5:51 am
Forum: Investing - Help with Personal Investments
Topic: 27, ROTH contribution or pay down debt (39% of payments to interest this past year)?
Replies: 32
Views: 2299

Re: 27, ROTH contribution or pay down debt (7%)?

I have about $34,000 left. Interest rate averages out to 6%. Priorities are repaying the grad school loans first (you can deduct additional undergrad interest over $2500 for undergrad loans in MA) and getting the interest paid each year down to the $2500 Federal max tax deduction. Not following the...
by Bob's not my name
Fri Feb 19, 2016 4:09 pm
Forum: Investing - Help with Personal Investments
Topic: Maxing Out- Traditional or Roth 401K
Replies: 79
Views: 4849

Re: Maxing Out- Traditional or Roth 401K

Now people are going to think KlangFool is my other username :D
by Bob's not my name
Fri Feb 19, 2016 2:15 pm
Forum: Investing - Help with Personal Investments
Topic: Maxing Out- Traditional or Roth 401K
Replies: 79
Views: 4849

Re: Maxing Out- Traditional or Roth 401K

KlangFool wrote: You are paying 32.63% tax on your 6k of Roth 401K ~ 2K. So, that 6K of Roth 401K contribution costs you 6K +2K = 8K of take home pay.
You did the math upside down.
Bob's not my name wrote:$5,500 of Roth IRA ... is effectively applying $8,000 of gross income.
$6K at a 32.63% tax rate would consume $8,906 of gross income.
by Bob's not my name
Wed Feb 17, 2016 5:10 am
Forum: Investing - Help with Personal Investments
Topic: Maxing Out- Traditional or Roth 401K
Replies: 79
Views: 4849

Re: Maxing Out- Traditional or Roth 401K

The tax advantages of traditional will depend on whether you retire early (<70) or have a stretch of not working, since in either case you will have the opportunity to convert to Roth at a very low tax rate. This is particularly true in Colorado, which exempts $20,000 of IRA withdrawals and other pe...
by Bob's not my name
Sun Feb 14, 2016 2:47 am
Forum: Investing - Theory, News & General
Topic: Roth IRA vs 401k Asset Allocation
Replies: 9
Views: 925

Re: Roth IRA vs 401k Asset Allocation

ACA penalties SS taxation bracket creep medicare copays These are all part of your marginal rate and wash out in the comparison. If you believe these will be an issue for your situation you include them in the math and asset placement makes no difference. no RMDs This is a true difference under the...
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: 9
Views: 925

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: 1358

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: 762

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: 1755

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: 1755

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: 1755

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: 1755

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: 1755

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: 643

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: 1755

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: 1755

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: 1755

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: 1755

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: 1755

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.

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