Bogleheads.org

kaneohe

Ndop wrote: ↑Fri Jan 01, 2021 3:41 pm PayUSAtax is still 1.96%

thanks for info on pay 1040 increased fees . KInda reluctant to change vendors due to similar names. One residual benefit (if timing of cc pymnt is correct) is that you get 2-3 wk float on payment.

kaneohe

https://www.mortgagecalculator.org/calc ... ulator.php

try using this calculator .......results much closer .to what you expect. I thought I was using the 2018 version but somehow ended with 2020. try toggling to get right yr

kaneohe

Thanks all for the inputs.............seems I made the whole thing up tho it sure seemed for real at the time that there would be a 3K refundable 2020 tax credit.

kaneohe

all yr I've had a copy 0f a 2020 1040 on my mac showing what I thought was going to be a $3k refundable tax credit independent of any Child tax credits. educational credits , etc. Just a plain old independent credit. and not the 2400 credit. I don't remember the name of the credit, whether it was re...

kaneohe

alexcr wrote: ↑Tue Dec 22, 2020 12:16 pm Thanks everyone for clearing this up for me, and for the very helpful resources, articles, and visuals shared.

Happy to say this all makes sense now.

thanks for providing feedback about how sunlight is overcoming the darkness

kaneohe

https://www.bogleheads.org/forum/viewtopic.php?t=86849 see the stacked bar cHart by tfb 12/11/11. the QD /LTCG are stacked on top of the other ordinary income. The deductions come out of the bottom of the stack (ordinary income). note since the tax laws changed, numbers have changed but basic idea ...

kaneohe

https://www.bogleheads.org/forum/viewtopic.php?t=86849 see the stacked bar cHart by tfb 12/11/11. the QD /LTCG are stacked on top of the other ordinary income. The deductions come out of the bottom of the stack (ordinary income). note since the tax laws changed, numbers have changed but basic idea ...

kaneohe

https://www.irs.gov/pub/irs-pdf/f1099div.pdf a 1099-div.............note that box 1a is total ordinary dividends; box 1b is qualified dividends which is a subset of 1a. 1a can be 1k and 1b can be 1k which means all dividends are qualified. You can also have 1a be 1k and 1b =0 which means no qual di...

kaneohe

https://www.bogleheads.org/forum/viewtopic.php?t=86849 see the stacked bar cHart by tfb 12/11/11. the QD /LTCG are stacked on top of the other ordinary income. The deductions come out of the bottom of the stack (ordinary income). note since the tax laws changed, numbers have changed but basic idea ...

kaneohe

it might be useful to input your info into a calculator like this https://www.mortgagecalculator.org/calc ... ulator.php

to compare your terminology with std

kaneohe

Apologies for the basic tax questions here. Let's say you're retired and have the following income streams... • Short-term capital gains • Long-term capital gains • Non-qualified dividends • Qualified dividends • Taxable bond interest • Tax-exempt bond interest (AMT-exempt, as well) • Traditional I...

kaneohe

The penalty calculation is the same as it is percentage of the underpayment and the percentage is not dependent on filing status. The answer to your last question, the safe-harbor amount based on the prior-year’s taxes, can be found in the instructions for Form 2210 and is the sum of both of your t...

kaneohe

2021 will be the first year I file taxes jointly with my spouse. Since a significant amount of my income comes from investments, I withhold an extra amount of money from my earnings so that I am not penalized at the end of the year. Does anyone know how this penalty is calculated when switching fro...

kaneohe

not sure but I would guess that you combine your incomes (for 2020) not your taxes so you create a picture of what it would have been like in 2020 if you were filing MFJ.

kaneohe

much easier to pay by withholding

kaneohe

assume 10K in a non-deductible contribution IRA vs taxable account 1)in IRA, value doubles in N yrs to 20K . When withdrawn from IRA the 10K gain is taxed at ordinary rates e.g. 22% so ending value is 17.8K 2)in taxable account, value also doubles in N yrs to 20K. When withdrawn you pay CG taxes per...

kaneohe

https://www.mortgagecalculator.org/calc ... ulator.php

The QDCG wksht is hard to understand. you might be better off using the calculator.

kaneohe

bogletay wrote: ↑Sat Dec 12, 2020 5:05 pm Thanks all! I'll just plan to convert the full amount come January.

you will have fill out an f8606 for 2020 w/ a yr end balance of 1 cent. might be cleaner if you converted it this yr

kaneohe

One thing to keep in mind is your effective tax rate vs. your marginal one. If you're in the 22% bracket (I think you're higher than that, by the way, based on the income you told us), your effective rate is probably lower than that (depending on deductions). You only need to pay THAT percentage ta...

kaneohe

jumpy wrote: ↑Tue Dec 01, 2020 12:49 pm

If I cash one this month (December 2020),

when does this mature? if you cash in early, you could lose 6 mos of interest

kaneohe

Yes, sorry, you are correct increment. The purchase price was $5,000, so the interest is $15,000 of the $20,000 redemption. Thanks for pointing that out! you might want to double check this............at one time bonds were sold at 50% of face value so possibly the purchase price is 2.5K https://fi...

kaneohe

https://www.treasurydirect.gov/BC/SBCPrice if you have paper bonds , you can use this tool to estimate value at maturity of amount to be taxed (from the denomination).....be sure you don't cash in before maturity .......you might lose some interest. you should study the safe harbor rules and be com...

kaneohe

JoMoney wrote: ↑Sun Dec 06, 2020 6:16 pm ..................................................

Maybe I was just testing you guys

Thanks

Hey, you forgot to add in the extra float time when you pay by cc......could be nearly a month at 0.6% and if your cc cycle is optimized you might get another few wks

kaneohe

Go ahead and do the estimated payment now if you like, but you can also do a 2020 tax payment via CC just before you file in 2021. It's not necessary to do estimated payments all year in your scenario. Timing of tax payments is only a factor if you underpay in our pay as you go system. There are qu...

kaneohe

........................... I'm considering just going to https://www.pay1040.com/ , submitting their 1040-ES form , and paying the $5,000 with my 2% cash back credit card. They service fee for the payment is 1.87%, so I might net $3.50 right off the top. .................... try doing that calcula...

kaneohe

The amount of SS taxed depends on the amount of SS and other income. Roughly it sounds like there is 19.2K of SS and 8.8K of other income. Take 1/2 of SS =9.6 and add to 8.8K other income = 18.4K. No SS is taxed until that 18.4K gets to 25K for a single.

kaneohe

your IRA and wife's IRA are completely separate for this calculation. Perhaps take a look at filling out
F8606 to see how this works.

kaneohe

If you have AVB on some funds, it is possible that some of those funds will have to remain at AVB and only after you select to switch spec ID , future purchases will then be spec ID basis.

kaneohe

1. In January (as with every year) I contribute the max($6K) to non deductible IRA and convert it into ROTH immediately. This is the usual backdoor roth process. This is with Fidelity. At this point my tIRA balance is 0. 2. I switched jobs in January and moved my pretax and post tax monies from my ...

kaneohe

Thanks! So, as a first step, if I am looking at the Vanguard site, I am looking at unrealized long term and short term gains and both of these figures count? The tax calculator posted is great! Thank you; I had been looking for one for 2020. It looks like QBI is not calculated in, but it allows me ...

kaneohe

This does not only make me pay double tax on this year's 6K but also prevents me from making this backdoor roth ira again next year. Your current tax rate may be high, but you won't be paying "double" tax. The $6K contribution that you made after tax this year will never be taxed again, p...

kaneohe

decide which transactions you will sell............then you will know the tax consequences depending on whether they are ST or LT.

this calculator may help https://www.mortgagecalculator.org/calc ... ulator.php

kaneohe

called VG this AM ........was offered call back in 9-13min and took it. Call back was exactly as advertised to I was pleased by response.

kaneohe

Your case likely is not where your parents havbe space in the zero bracket, but they might be persuaded to consider the tax ramifications for their heirs. Yup -- no 0% space, but they're happy to use space in a much lower bracket than the alternative (me). seems clear that parents can pay all the t...

kaneohe

That is good news, thanks a lot for answering so quickly. Would it be best to just sell off $5500 out of one of my funds and hold it in money market for the conversion to Roth? Then re-buy once it is in the Roth account? yes........otherwise the value could decrease and you would be guilty of sendi...

kaneohe

sounds like there can be ambiguity as to who owns what. I would guess tho that there is no ambiguity between the 2 parties as to who owns what (but known only to the parties.

kaneohe

1) When you do a conversion,it can be of deductible contributions into TIRA. You did a tax deduction for that contribution so the conversion is fully taxable. That is a taxable conversion. You can also file F8606 to declare a non-deductible (or after tax contribution). And use F8606 to show the conv...

kaneohe

see table below by kawill: you need to know the ordering rules........contributions come out first, then conversions oldest first (and within each conversion. the taxable part comes first; then finally earnings. The table is written to reflect these rules. Here is the table version of the Roth Conve...

kaneohe

you need to do some calculations......since your AGI >150K, the safe harbor based on last yr is 110% of last yr taxes. The safe harbor based on this yr is 90% of this yr taxes. If you didn't change anything this yr, last yr safe harbor won't help you. This yr safe harbor may or may not depending on ...

kaneohe

In one day your health can change from great to problematic. if you get some LARGE medical bills, 20% of a large number can still be a large number.

kaneohe

https://www.irs.gov/pub/irs-pdf/p4012.pdf see p.C1 note that the dependent chart is in 2 parts: 1)left side = qualifying child 2) right side = qualifying relative It is almost always more beneficial to be a qualifying child. Note that there no earnings restrictions for qualifying child. The earning...

kaneohe

https://www.irs.gov/publications/p550#en_US_2019_publink100010061 hopefully this gets you to the nominee section of IRS pub 550 Nominee distributions. If you received a Form 1099-INT that includes an amount you received as a nominee for the real owner, report the full amount shown as interest on th...

kaneohe

Thank you so much Katie and Alan! I really appreciate your help Here's my plan: 1. I'll ask Fidelity to roll my TIRA into my workplace 401k ( I'm assuming they will automatically only roll the pre-tax amounts and not after tax contributions) 2. Once I verify that these funds are deposited, I will c...

kaneohe

IRS doesn't care who pays........as long as somebody does. If you cash them in, the bank will probably get your SSN and you will get the 1099-INT and be responsible for paying. Are you sharing the proceeds w/ parent.....would they be willing to pay their share of the taxes? You could put the full am...

kaneohe

did you have any other prior contributions to Roth?

kaneohe

It is likely that the short term yld equivalent will be near the distribution yld 2.18% (annualized) for the short term but for the longer term it is likely to decrease. You can already see that in the medium term history........so be ready to bail (or adjust your expectations).

kaneohe

You have the numbers so you know better but seems like Istone19's suggestion for using regular method but using w/h when done would be best of both worlds................your front loaded income gets spread out more evenly during the yr but you get credit for the w/h when actually paid......... so i...

kaneohe

doesn't feel like the short method applies to you......... Short Method You may use the short method only if you are a calendar year taxpayer and either one of the following apply: You made no estimated tax payments or your only payments were California income tax withheld. You paid estimated tax on...

kaneohe

If California is like Federal (and my state of Illinois), unequal withholding is handled independently of annualizing income. If so, then with your case of lots of both income and withholding in the 1st quarter, you can report the withholding in the actual quarter it was withheld (rather than equal...

kaneohe

https://www.ftb.ca.gov/forms/2019/2019-5805.pdf 6 Required annual payment. Enter the smaller of line 2 or line 5. (If your California AGI is equal to or greater than $1,000,000/$500,000 for married/RDP filing a separate return, use line 2) . possibly you are suffering from CA's modified rules if yo...

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