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FrugalProfessor

To close the loop on this thread: * In December of 2019 I got a CP2000 for tax year 2017 claiming I owed $495 in taxes + $47 in interest. * On December 18 2019 I faxed them a response. I used one of those sketchy looking scan + fax services online for a buck. * A month later (mid Jan 2020) the IRS m...

FrugalProfessor

If you dont have in-state tax advantage, California ScholarShare 529 is down to 0.06% all-inclusive ER for their total stock market fund. I actually moved from Vanguard Nevada, which otherwise used to be one of the best funds, because 0.15% to 0.06% for the same fund made it a no-brainer for me. +1...

FrugalProfessor

In no particular order: * You don't need a minivan because you have one child (or three). * Marketers will want you to believe that if you don't buy a $2k stroller or a $100 outfit for your infant that you don't love them. Hogwash. Free stuff is best. After raising 5 kids, there is nothing that give...

FrugalProfessor

Coming out of my phd program at the age of 34 almost four years ago, there was a 6 month period before I got my first paycheck as a professor. Our balance sheet at the time looked like this: Cash: 0k Rollover trad IRA (from previous job): 90k Roth IRAs: 160k Debt: 0k Net Worth: 250k With 5 kids, I h...

FrugalProfessor

* Fidelity brokerage/cma combo as main checking/savings account. Love fast ACH transfers, free ATM, ulimited transactions (as opposed to 6 with Ally), earn decent interest rate in default sweep account (1.21% for SPAXX as of today or 1.44% for SPRXX as of today if you manually purchase), automatic l...

FrugalProfessor

The first graphic in this article seems relevant: https://www.wsj.com/articles/is-it-fair ... 1580639400

FrugalProfessor

Thanks for sharing. I guess this is a benefit of account aggregators (Mint, Personal Capital, etc.), which would serve to log in on a daily-ish basis to otherwise inactive investment accounts. Despite the security concerns (e.g. all PW stored in 1 location), I continue to think these aggregators mak...

FrugalProfessor

https://www.frugalprofessor.com/best-cr ... 9-edition/

5.25% on most purchases (including Costco), 2.625% on all else (property taxes, doctors). Not too shabby.

FrugalProfessor

We are looking to travel in about 5 months and are looking solely for a credit card or cards that is best for redeem airline tickets. It is all about the signup bonus. +1 https://www.doctorofcredit.com/best-current-credit-card-sign-bonuses/ If you're old and haggard like me then the BoA 5.25% cash ...

FrugalProfessor

Nevermind, actually looks like it will allow conversion if I select partial account balance. If I select entire account balance it shows message that there are no shares available to be converted. I always have this same issue with Fidelity. I choose partial conversion then convert the whole amount...

FrugalProfessor

Nevermind, actually looks like it will allow conversion if I select partial account balance. If I select entire account balance it shows message that there are no shares available to be converted. I always have this same issue with Fidelity. I choose partial conversion then convert the whole amount...

FrugalProfessor

How much are other folks paying for $1 million of umbrella? I'm paying $1,000/year which I thought was fair; however, now I'm seeing the OP was paying was paying $200-$300. This has me concerned/ :oops: $147 for $1M @ Geico. I have dirt cheap high deductible car insurance with them too. Very cheap ...

FrugalProfessor

* We took too high a deduction for my wife's $5,500 Trad IRA contribution. We claimed a $2,490 deduction for my wife's TIRA contribution. The IRS says we should have only claimed a $1,120 deduction (a difference of $1,370)... Random rant: * I'm remain unsure how I screwed up the original filing. I ...

FrugalProfessor

Please make sure there is not a different problem. I am concerned that you do not understand why the amount of the IRA deduction was reduced. This implies to me that you also had additional income that you have not accounted for. When multiple items are changed, sometimes the core problem is obscur...

FrugalProfessor

* What is the easiest way to resolve this? I just spent an hour on hold with the IRS only to talk to an unhelpful agent for five minutes who was unable to provide much guidance. She advised sending in an updated 8606. * I'm remain unsure how I screwed up the original filing. I used both TurboTax an...

FrugalProfessor

+1 to retiredjg’s response Consider including a cover letter that summarizes your response that you owe no additional tax as the reduced tIRA deduction is offset by reduced taxable conversion to Roth IRA. The cover letter can also include a table - rows would be the 1040 lines affected, AGI and TI ...

FrugalProfessor

I believe that an amendment is done on a 1040x, not on the original form you used. So you'll have to document what lines change. In this case, you would change your deduction to $0 and then find the line where your 8606 income enters the 1040 and change that line too. In addition to doing a new 860...

FrugalProfessor

I do not think the letter is about the Backdoor Roth. I think the letter is that somehow your deduction was wrong. It appears to them you deducted too much, therefore paying too little tax. So you got the letter. That's what you need to fix (the deduction) and to do that you need to amend your 1040...

FrugalProfessor

So I got the dreaded CP2000 letter. Any advice would be appreciated. Background info: * I filed jointly in 2017 * My wife is a stay at home mom * I have a W2 job * Both of our Trad IRA balances were $0 prior to doing the backdoor Roth. * We both contributed $5,500 to Trad IRAs. * Since we were in th...

FrugalProfessor

whodidntante wrote: ↑
Wed Nov 27, 2019 12:25 pm
I always initiate the transaction from an external account. There is no fee that way.

+1. I always initiate via Fidelity.

FrugalProfessor

I've modeled effective marginal rates vs labor income here: https://www.frugalprofessor.com/2019-tax-calculator/. The intent of the spreadsheet is to capture exactly what livesoft is mentioning. It should help people make more informed decisions on Roth vs Trad. I don't model social security taxatio...

FrugalProfessor

I finally got platinum honors status after 3 months. I now have the Premium Rewards Credit card and the red Cash Rewards credit card. I'd like at least 2 more cash rewards credit cards. BOA customer service is unsure and unhelpful trying to tell me if I can open these, or if I need to wait, or what...

FrugalProfessor

If you are getting thousands in "rewards," you are spending hundreds of thousands. Yes? You have a very high income. You are not in the category of person whose discipline needs to be like a Roman military square, so to speak, invulnerable on all sides and depending that all are doing their duty. I...

FrugalProfessor

I use the 2.625% premium card for property taxes; it's enough to cover the fees, but not much more. I primarily do so to get 60 days of interest-free float.

FrugalProfessor

Google Voice is free but it does cost $20 to port in your Verizon number. Once that process is complete just make sure your service with Verizon is canceled. https://support.google.com/voice/answer/1065667#xferin And does that $20 move this business phone number from Verizon to google voice so no o...

FrugalProfessor

If married, the best way to get $100k to ME is through a joint brokerage account. That way you and your spouse can qualify for platinum honors status without needing to put $200k there, as would be the case if you were to transfer IRAs there. Having both spouses qualify independently for platinum h...

FrugalProfessor

It's a great card but there is a $2,500 quarterly spending cap for the Cash Rewards card it you want the 5.25% and 3.5% CB. Once you exceed $2,500 inside of three months, the rewards drop to 1%. And you don't get 2.625% on the cash rewards card on everything else. You need to use their Travel Rewar...

FrugalProfessor

This is for 2019 (so far): Credit Cards Capital One Savor (me) $500 cash back Chase Southwest (wife) $1,100 estimated value (65k miles) Chase United (me) $620 estimated value (40k miles) B of A Premier Rewards (wife) $500 cash back US Bank Business Cash (me) $500 cash back US Bank Business Cash (wi...

FrugalProfessor

Years ago I signed my five kids up as authorized user on that card. The oldest was seven and the youngest was a newborn. I guess I'd be $200 richer had I done that now.

FrugalProfessor

BoA Premium Rewards+Platinum Honors will get you a flat 2.625%, and 3.5% on travel, dinner, and whiskey. I'm not a high roller but they did extend me a 77k credit line. That's spread across my cards with BoA, but they've been willing to move the limits freely from card to card once granted. Payment...

FrugalProfessor

I've written about the strategy here: https://www.frugalprofessor.com/best-credit-card-rewards-strategy-2019-edition/ I'm currently amassing cash rewards cards, but so far I only have two. How long do you recommend waiting between applications? I have two and my wife has two (plus I have the prefer...

FrugalProfessor

I'd do the BoA preferred rewards: https://www.bankofamerica.com/credit-cards/products/premium-rewards-credit-card/ No limit to the points you can earn and your points don't expire 3.5% on travel, 3.5% on dining, 2.625% on everything else. No nonsense card, though you need $100k at Merrill Edge to qu...

FrugalProfessor

My vote is to reduce your cell phone bill to almost zero instead of worrying about payment methods. I pay around $1/month through prepaid (Tello) + google voice. My wife pays ($5/month) through prepaid (RedPocket) + google voice. http://frugalprofessor.com/phones At $1/month (or $6/month) including ...

FrugalProfessor

I've posted this elsewhere on the forum, but platinum honors + multiple (I have 4) BoA Cash Rewards = the best cash back strategy on the planet. https://www.frugalprofessor.com/best-credit-card-rewards-strategy-2019-edition/ With 4 Cash Rewards cards, the Premium Rewards card (which I also own) is r...

FrugalProfessor

Long-time Fidelity customer (as well as Vanguard) and just consolidated paycheck direct deposit, billpay, checking, etc. at Fidelity so I could make some interest. I've never actually used the ATM/Debit card, only electronic transactions. Today someone withdrew about $500 from an ATM 300 miles away...

FrugalProfessor

Is there potential for an unintended Roth IRA interaction here? I'm under the impression that you can't make Roth contributions directly from a taxable brokerage- but instead have to withdraw it (From the taxable brokerage account) to a banking institution then fund the Roth through that (though in...

FrugalProfessor

Ok, this makes more sense now: ATM card for the perpetually $0 balance CMA, and the checkwriting, direct deposit, and billpay connected to the brokerage SPAXX. Check if you have enough assets to qualify for free ATMs in the brokerage account. If you do qualify, then you have no need for a CMA accou...

FrugalProfessor

So after taking care of a mid-life transition, and getting ready for a possible job change/underemployment, I started the process of converting my diverse set of financial instituions to be almost completely Fidelity. My 401k has been there for 20+ years, I'm getting close to 59.5, the rates, proce...

FrugalProfessor

[merged into existing thread - moderator prudent] I don't travel (other than day trips by car) and thus credit card travel rewards never interested me. My credit card strategy has been pretty simple. Run everything I can through my credit cards. I use the Amazon prime card for everything, except th...

FrugalProfessor

https://www.frugalprofessor.com/best-cr ... 9-edition/.

5.25% cash back on most purchases (including Costco). 2.625% cash back on all others. Zero-ish annual fee. Pretty good system.

FrugalProfessor

I'm sorry, but 7.25% cash back at Costco (5.25% base + 2% executive) + 5.25% on gas + 5.25% on travel + 5.25% on dining + 5.25% on online purchases + 2.625% on all else is as the best I've got for you right now. All for essentially no annual fee. If forum members come up with a better strategy, I'm...

FrugalProfessor

I have 4 BoA cash rewards cards (2 myself + 2 my wife), so we can do 4 categories per month. BoA premium rewards has 0% foreign transaction fee. It's a phenomenal card. The BoA platinum honors credit card strategy is unambiguously the best for cash rewards. Isn't Cash Rewards + Travel rewards combi...

FrugalProfessor

But you can only spend in one category each month! You are right it has no annual fee (I was confused), but it has foreign transaction fee and I use it quite a lot outside the US. AAA Visa Signature works better for me. I have 4 BoA cash rewards cards (2 myself + 2 my wife), so we can do 4 categori...

FrugalProfessor

I'm sorry, but 7.25% cash back at Costco (5.25% base + 2% executive) + 5.25% on gas + 5.25% on travel + 5.25% on dining + 5.25% on online purchases + 2.625% on all else is as the best I've got for you right now. All for essentially no annual fee. If forum members come up with a better strategy, I'm ...

FrugalProfessor

BoA cash rewards earns 5.25%. https://www.frugalprofessor.com/one-month-review-of-updated-boa-cash-rewards-card/ https://www.frugalprofessor.com/best-credit-card-rewards-strategy-2018-edition/ Ok.. I guess this is because you use most online purchases. Groceries must be a big part. Costco Cash Card...

FrugalProfessor

BoA Cards - I typically average 4% cash-back for all categories BoA Cards - I typically average 4% cash-back for all categories With PR Platinium Honors? Which card gives you 4% for grocery? And gas? BoA cash rewards earns 5.25%. https://www.frugalprofessor.com/one-month-review-of-updated-boa-cash-...

FrugalProfessor

I've written pretty extensively on the BoA Premium & BoA Cash Rewards here: https://www.frugalprofessor.com/one-month-review-of-updated-boa-cash-rewards-card/ https://www.frugalprofessor.com/best-credit-card-rewards-strategy-2018-edition/ I think it's the best combination of cards available right now.

FrugalProfessor

With 5 kids (ages 5-12), our annual spend for the past 12 months is broken down as follows: *Housing: $20k *Food & clothing: $17k *Auto:$2.3k *Other:$18k *Healthcare: $17k *Total Excluding Healthcare: $57.4k *Total Including Healthcare: $74.6k We've had a rough stretch with medical expenses this pas...

FrugalProfessor

Do you get 5.25 for the Costco cash card online purchase from Costco.com when you set your BoA cash rewards category to 'Online Shopping' ? If yes, then, I'm bummed for all these months not taking advantage of this, please let us know FrugalProfessor ! Corrected, Groceries from 5.25 to 3.5 Note: Bo...

FrugalProfessor

Do you get 5.25 for the Costco cash card online purchase from Costco.com when you set your BoA cash rewards category to 'Online Shopping' ? If yes, then, I'm bummed for all these months not taking advantage of this, please let us know FrugalProfessor ! It's documented in the professor's first link....

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