Search found 23557 matches

by grabiner
Tue Apr 23, 2019 5:04 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Deficiency NJ/NY
Replies: 2
Views: 342

Re: Tax Deficiency NJ/NY

In most states, you can amend your state tax to take a credit based on a tax change in another state, as an exception to the normal statute of limitations. Thus, if you are a NY resident, and you owe extra NJ tax, you can probably amend your NY tax returns to claim credit for the NJ tax. Check the i...
by grabiner
Tue Apr 23, 2019 4:44 pm
Forum: Investing - Theory, News & General
Topic: Can a fund/ETF increase its ER?
Replies: 8
Views: 402

Re: Can a fund/ETF increase its ER?

Many funds report in their prospectus that a temporary fee waiver is in effect. If that fee waiver is actually temporary (as might happen if the fund company waives fees to attract money), the expense ratio will go up. Avoid such funds in a taxable account, as if the fee increases, you will have a t...
by grabiner
Tue Apr 23, 2019 1:28 pm
Forum: Personal Investments
Topic: One time deposit to HSA
Replies: 13
Views: 958

Re: One time deposit to HSA

So if I'm looking at that worksheet correctly, it's basically prorated per month you are eligible? So if July 1 is the start date for a new job (and thus new health plan), then that's six months of an HSA. Totaling $3500 in contributions for 2019 for a family HSA? Yes. However, there is the last-mo...
by grabiner
Tue Apr 23, 2019 8:45 am
Forum: Investing - Theory, News & General
Topic: Principles of Tax-Efficient Fund Placement
Replies: 12
Views: 1919

Re: Principles_of_Tax-Efficient_Fund_Placement

Also note 8 says: "It is usually possible to go from bonds in taxable to bonds in tax-advantaged with little, no, or negative tax cost. This is usually not the case with stocks--once you build up gains on holdings in taxable accounts, you're stuck unless you want a large tax bill. (An assumption be...
by grabiner
Tue Apr 23, 2019 8:10 am
Forum: Personal Investments
Topic: 100% stocks, looking to lock-in gains and maybe introduce bonds
Replies: 9
Views: 1441

Re: 100% stocks, looking to lock-in gains and maybe introduce bonds

If the idea is that you have 100% stocks in a tax deferred account that has done well, and you thing you are at or near the top of market, then just sell all of it and put it in cash. Determine your ideal asset allocation and then dollar cost average into it from the cash position over the next 1-2...
by grabiner
Mon Apr 22, 2019 5:59 pm
Forum: Personal Finance (Not Investing)
Topic: Roth 401k loan as a way to contribute?
Replies: 6
Views: 418

Re: Roth 401k loan as a way to contribute?

Welcome to the forum! This strategy doesn't work unless you have a very high-cost 401(k) If you take out a loan from your 401(k), this reduces the balance, so you earn less in the 401(k). You can take the loan entirely out of a bond fund so that you keep similar risk; in that case, you lose the ret...
by grabiner
Mon Apr 22, 2019 3:09 pm
Forum: Personal Finance (Not Investing)
Topic: At a crossroads on how much to put down towards new home
Replies: 32
Views: 2171

Re: At a crossroads on how much to put down towards new home

Whether the home is a declining asset or not is not really relevant here; if the home declines in value by $50K, your net worth drops by $50K regardless of the amount of your mortgage. It's also not bad to increase your monthly payment, as long as you have the assets available to make the extra paym...
by grabiner
Mon Apr 22, 2019 2:48 pm
Forum: Personal Finance (Not Investing)
Topic: [2018 tax return - How does it compare to previous years?]
Replies: 436
Views: 29701

Re: How did you feel about your 2018 tax returns?

There were two things that impacted us: 1. The child credit increase. This is a step in the right direction to helping offset the very high cost of child care. Unless you became newly eligible (over the old limit but under the new one), this was a wash; the old credit plus the (now-gone) personal e...
by grabiner
Mon Apr 22, 2019 1:11 pm
Forum: Personal Finance (Not Investing)
Topic: Roth 401k loan as a way to contribute?
Replies: 6
Views: 418

Re: Roth 401k loan as a way to contribute?

Welcome to the forum! This strategy doesn't work unless you have a very high-cost 401(k) If you take out a loan from your 401(k), this reduces the balance, so you earn less in the 401(k). You can take the loan entirely out of a bond fund so that you keep similar risk; in that case, you lose the retu...
by grabiner
Mon Apr 22, 2019 12:53 pm
Forum: Personal Investments
Topic: One time deposit to HSA
Replies: 13
Views: 958

Re: One time deposit to HSA

So if I'm looking at that worksheet correctly, it's basically prorated per month you are eligible? So if July 1 is the start date for a new job (and thus new health plan), then that's six months of an HSA. Totaling $3500 in contributions for 2019 for a family HSA? Yes. However, there is the last-mo...
by grabiner
Mon Apr 22, 2019 12:49 pm
Forum: Personal Investments
Topic: Rebalancing - Asset Allocation Strategies?
Replies: 9
Views: 1026

Re: Rebalancing - Asset Allocation Strategies?

Seeing that Taylor has spoken on this situation, I would second all the motions previous. VTMFX Vanguard Tax-Managed Balanced Fund Admiral Shares seems to be an all-in-one tax efficient fund that might fit your bill. This fund is only appropriate if you are in at least a 24% tax bracket; in a lower...
by grabiner
Mon Apr 22, 2019 12:44 pm
Forum: Personal Investments
Topic: 100% stocks, looking to lock-in gains and maybe introduce bonds
Replies: 9
Views: 1441

Re: 100% stocks, looking to lock-in gains and maybe introduce bonds

Since you have the TSP, you probably want to hold all your bonds in the G fund, as this gives you better risk reduction for the same bond holding. Thus, it makes sense to leave your IRA all stock, and move money from the C, S, and I funds to the G fund.
by grabiner
Mon Apr 22, 2019 12:40 pm
Forum: Personal Investments
Topic: Best cost basis if simplicity is desired!
Replies: 1
Views: 203

Re: Best cost basis if simplicity is desired!

Welcome to the forum! The dividend and capital gain distributions are always reported on 1099s, and with rare exceptions, you can copy the data from the 1099 to your tax form. (An example of an exception is that if you sell a share which you held for less that 61 days, any dividend it paid out becom...
by grabiner
Mon Apr 22, 2019 12:23 pm
Forum: Personal Investments
Topic: domicile brokerage and retirement accounts
Replies: 4
Views: 287

Re: domicile brokerage and retirement accounts

In addition, many US states will question your intention to change domicile if you move to another state and then quickly move to a foreign country; they may consider you still to be a resident for taxes. Check the rules of your home state. Some states continue to tax you until you change your domic...
by grabiner
Sun Apr 21, 2019 3:53 pm
Forum: Personal Investments
Topic: Taxable Brokerage Fund Question
Replies: 22
Views: 1448

Re: Taxable Brokerage Fund Question

Are you expecting to have a much higher salary when you leave the military? I would normally recommend traditional over Roth TSP in a 31.3% combined federal and state tax bracket, because you are likely to retire at a lower tax rate. While I often recommend CA munis for a taxable account for someone...
by grabiner
Sun Apr 21, 2019 2:47 pm
Forum: Personal Investments
Topic: Muni Bond Fund Help (FHIGX)
Replies: 17
Views: 1402

Re: Muni Bond Fund Help (FHIGX)

I am concerned about whether it is too risky. If you invest 100K in FHIGX instead of Vang.'s Intermed Bond (VWIUX), you will pay Fidelity about $400 more in expenses. That's $400 in your pocket every year. VWIUX is safer than FHIGX. Consider comparing the expense ratio, SEC Yields, the distribution...
by grabiner
Sun Apr 21, 2019 2:31 pm
Forum: Investing - Theory, News & General
Topic: Principles of Tax-Efficient Fund Placement
Replies: 12
Views: 1919

Re: Principles_of_Tax-Efficient_Fund_Placement

Also note 8 says: "It is usually possible to go from bonds in taxable to bonds in tax-advantaged with little, no, or negative tax cost. This is usually not the case with stocks--once you build up gains on holdings in taxable accounts, you're stuck unless you want a large tax bill. (An assumption be...
by grabiner
Sun Apr 21, 2019 2:29 pm
Forum: Investing - Theory, News & General
Topic: State Tax basis in IRA, Roth, HSA and 403B
Replies: 3
Views: 371

Re: State Tax basis in IRA, Roth, HSA and 403B

Thanks. I had no idea about the HSA and keeping track of that. I was mote thinking about if I move from NJ to another state with State Tax. For example PA which is 3.5% across the board. Do I get credit for the difference already paid to NJ? That was why I wondered if I needed to track the basis an...
by grabiner
Sat Apr 20, 2019 4:13 pm
Forum: Personal Investments
Topic: Help Clean Up Retirement Savings - Half one stock
Replies: 10
Views: 1199

Re: Help Clean Up Retirement Savings - Half one stock

It appears that she is in the 12% bracket as a single filer, it is quite possible that the cap gains tax rate is 0%. I am not exactly sure about the machanics, I think you need to sell just enough stock so that her SS + pension + cap gains will still keep her in the 12% bracket to enjoy the 0% gain...
by grabiner
Sat Apr 20, 2019 4:05 pm
Forum: Personal Investments
Topic: Invest 529 or taxable account?
Replies: 55
Views: 3338

Re: Invest 529 or taxable account?

There is a lot of misinformation provided by well meaning folks. I've heard similar advice from a wealth advisor at my work. He was advising me to put less money in my children's Vanguard 529 plans and put more in his employer's (Fidelity's) Roth 401K and 401K. His reason was similar. "People save ...
by grabiner
Sat Apr 20, 2019 3:59 pm
Forum: Personal Investments
Topic: Taxable vs. tax-deferred savings
Replies: 6
Views: 862

Re: Taxable vs. tax-deferred savings

There are also procedures for taking Substantially Equal Periodic Payments from an IRA, which allow you to withdraw money free of penalty before age 59-1/2 (but still subject to ordinary income tax).
by grabiner
Sat Apr 20, 2019 3:57 pm
Forum: Personal Investments
Topic: Muni Bond Fund Help (FHIGX)
Replies: 17
Views: 1402

Re: Muni Bond Fund Help (FHIGX)

I'm looking to get some insight as to whether Fidelity Municipal Income Fund (FHIGX) is a reasonable fund for the bond portion of my taxable account. I am in the 22% tax bracket, but FHIGX seems to outperform taxable funds, even before calculating tax equivalent yield. You are looking at past perfo...
by grabiner
Sat Apr 20, 2019 3:46 pm
Forum: Personal Investments
Topic: How does an international mutual fund pay foreign income tax
Replies: 6
Views: 602

Re: How does an international mutual fund pay foreign income tax

You "receive" the dividend less the foreign tax taken out. Your 1099-DIV (if you get one) for such a situation will show the full dividend without the foreign tax paid taken out as your income from that fund. You will have to figure out how to get a tax credit for the foreign taxes you paid. The fo...
by grabiner
Sat Apr 20, 2019 3:43 pm
Forum: Personal Investments
Topic: TIPS in HSA
Replies: 4
Views: 450

Re: TIPS in HSA

If you live in CA or NJ, TIPS are especially good for an HSA, as these states do not recognize HSAs and tax income from anything except Treasury bonds in them. But even if you don't live in CA or NJ, if you hold TIPS, an HSA is often a good place to put them. The reason is that an HSA has a tax risk...
by grabiner
Sat Apr 20, 2019 3:36 pm
Forum: Personal Investments
Topic: Should I repatriate my cash?
Replies: 19
Views: 1717

Re: Should I repatriate my cash?

Are there U.S.-domiciled, but euro-denominated, funds for a U.S. resident investor to consider in anticipation of a significant portion of future spending being in euros? The denomination doesn't matter, only the underlying holdings. For example, if you buy a US stock fund for $11K when the euro is...
by grabiner
Sat Apr 20, 2019 3:28 pm
Forum: Personal Investments
Topic: Fire my financial advisor now or later? (recent windfall help needed)
Replies: 48
Views: 3990

Re: Fire my financial advisor now or later? (recent windfall help needed)

I don’t think anyone has discussed the Vbtlx yet. I like having some bonds in taxable. Wci also thinks it is fine, though many here don’t agree. https://www.whitecoatinvestor.com/asset-location-bonds-go-in-taxable/ The question is, should you be in taxable bonds or muni bonds. I think munis come ou...
by grabiner
Fri Apr 19, 2019 4:12 pm
Forum: Personal Investments
Topic: What should I know before selling a mutual fund for the first time?
Replies: 17
Views: 1162

Re: What should I know before selling a mutual fund for the first time?

The longer you wait to sell, the larger the capital gain is expected to be, since the stock market tends to go up. (If the fund pays a dividend, that will reduce your capital gain, but you will get the taxable dividend instead, so it won't help with taxes.) If you bought a large amount less than a ...
by grabiner
Fri Apr 19, 2019 11:48 am
Forum: Personal Finance (Not Investing)
Topic: State Tax Question Concerning 401k to Roth IRA Rollover
Replies: 7
Views: 459

Re: State Tax Question Concerning 401k to Roth IRA Rollover

The rollover will be taxed by the state of residency at the time you rolled it over. Is it the actual day/month you do the rollover or where your residency was when you file taxes? It's the date of the rollover. Part-year resident tax forms always ask you to separate income earned while a resident ...
by grabiner
Fri Apr 19, 2019 11:31 am
Forum: Personal Finance (Not Investing)
Topic: dropping umbrella and increasing auto liability
Replies: 56
Views: 3151

Re: dropping umbrella and increasing auto liability

Your umbrella policy covers you if you co-sign an auto loan for someone else. This sounds like a misunderstanding. Your auto insurance, and umbrealla insurance, may cover you if you are liable in an auto accident, even if you are not the driver (for example, if the driver uses your car with your pe...
by grabiner
Fri Apr 19, 2019 11:10 am
Forum: Investing - Theory, News & General
Topic: Principles of Tax-Efficient Fund Placement
Replies: 12
Views: 1919

Re: Principles_of_Tax-Efficient_Fund_Placement

The second sentence makes no sense. What should I consider the long term continuence of -- the first statement in the first sentence, or the contradiction of the first statement in the first sentence? https://www.bogleheads.org/wiki/Principles_of_Tax-Efficient_Fund_Placement Criticisms of this tax ...
by grabiner
Fri Apr 19, 2019 11:08 am
Forum: Investing - Theory, News & General
Topic: State Tax basis in IRA, Roth, HSA and 403B
Replies: 3
Views: 371

Re: State Tax basis in IRA, Roth, HSA and 403B

You don't need to keep track of tax paid, only basis. As far as NJ is concerned, all of your 403(b) contributions were already taxed by NJ, even if you weren't a NJ resident when you made them, or were a NJ resident but deducted tax from another state. Therefore, when you withdraw from the 403(b), y...
by grabiner
Fri Apr 19, 2019 11:01 am
Forum: Investing - Theory, News & General
Topic: Alpha using rebalancing rules
Replies: 5
Views: 232

Re: Alpha using rebalancing rules

While this is twelve years of return, the excess return is primarily determined by one major decision: when was the allocation changed in 2008-2009? If the portfolio rode the market down without rebalancing, and then rebalanced into stocks in November 2008, it outperformed a portfolio which rebalanc...
by grabiner
Fri Apr 19, 2019 10:33 am
Forum: Personal Investments
Topic: What should I know before selling a mutual fund for the first time?
Replies: 17
Views: 1162

Re: What should I know before selling a mutual fund for the first time?

The longer you wait to sell, the larger the capital gain is expected to be, since the stock market tends to go up. (If the fund pays a dividend, that will reduce your capital gain, but you will get the taxable dividend instead, so it won't help with taxes.) If you bought a large amount less than a y...
by grabiner
Fri Apr 19, 2019 10:13 am
Forum: Personal Investments
Topic: Fire my financial advisor now or later? (recent windfall help needed)
Replies: 48
Views: 3990

Re: Fire my financial advisor now or later? (recent windfall help needed)

She also pointed out that in a fund such as VTSAX there is internal turnover of ~3% per year for which I may owe substantial capital gains taxes on every year even if I am just holding the fund. Is this true? Even so, wouldn't this be true with the fund she is proposing also? VTSAX (Vanguard Total ...
by grabiner
Fri Apr 19, 2019 9:44 am
Forum: Investing - Theory, News & General
Topic: When to prefer low-rate bonds to stocks in taxable
Replies: 26
Views: 4009

Re: When to prefer low-rate bonds to stocks in taxable

The Boglehead conventional wisdom, as reflected in Principles of Tax-Efficient Fund Placement is to place stock index funds in your taxable account if you don't have enough room to hold your whole portfolio in a tax-deferred account. However, given how low bond fund yields are, that may no longer b...
by grabiner
Thu Apr 18, 2019 10:13 pm
Forum: Investing - Theory, News & General
Topic: When to prefer low-rate bonds to stocks in taxable
Replies: 26
Views: 4009

Re: When to prefer low-rate bonds to stocks in taxable

Goal is after-tax yield, not minimizing tax. Pre-tax yields are not the same. Ok, so are you saying that treasuries (intermediate term treasuries I assume, so as to compare with VWITX) will provide a better after tax yield, than Munis? VSIGX shows a 2.3 yield and VWITX shows a 2.02 yield. That does...
by grabiner
Thu Apr 18, 2019 12:13 am
Forum: Investing - Theory, News & General
Topic: When to prefer low-rate bonds to stocks in taxable
Replies: 26
Views: 4009

Re: When to prefer low-rate bonds to stocks in taxable

And given the 9% state tax, you might well be better off using Treasuries for your taxable bond allocation. TIPS maturing around the time you plan to retire early could be a particularly good deal. How is that? Maybe I missed something but I thought treasuries are federally taxed but not state taxe...
by grabiner
Wed Apr 17, 2019 10:50 pm
Forum: Investing - Theory, News & General
Topic: Is seeking tax shelter always right?
Replies: 25
Views: 2259

Re: Is seeking tax shelter always right?

I'm thinking of trying to calculate this. Here are my notes to set this up. I'd be grateful for any feedback/corrections/suggestions: Consider a ~$10k yearly investment made every year for 20 years. Two options: Option A: Sheltermax Elect pre-tax withholding of $10k/year, into a tax-deferred accoun...
by grabiner
Wed Apr 17, 2019 9:02 pm
Forum: Investing - Theory, News & General
Topic: Is seeking tax shelter always right?
Replies: 25
Views: 2259

Re: Is seeking tax shelter always right?

In extreme situations (doctors in residency is a common example), it can be reasonable to estimate withdrawal marginal rates based on expected future contributions (presumably made at much higher marginal rates) as well. It isn't necessary for situations to be extreme. If you are in a lower tax bra...
by grabiner
Wed Apr 17, 2019 8:58 pm
Forum: Investing - Theory, News & General
Topic: When to prefer low-rate bonds to stocks in taxable
Replies: 26
Views: 4009

Re: When to prefer low-rate bonds to stocks in taxable

Are you sure about VTCLX not being worth it in the 24% bracket? I'm in that bracket (although my effective tax rate will probably be a few percent below that for 2019). I compared the after tax between VTCLX and VSTAX over the last 10 years and the after-tax distributions leans in VTCLX's favor mor...
by grabiner
Tue Apr 16, 2019 9:50 pm
Forum: Personal Finance (Not Investing)
Topic: Loan options
Replies: 13
Views: 964

Re: Loan options

Thanks for the input. I just liked the idea of a tsp loan “paying me”. A TSP "loan" is not really a "loan" [same for 401k "loans]. When you take out a TSP "loan", that amount from your investments is actually "sold". That amount of investments, therefore, is not growing for you. Then, when you pay ...
by grabiner
Tue Apr 16, 2019 9:42 pm
Forum: Personal Finance (Not Investing)
Topic: "When Adding to Your Retirement Account is a Bad Idea"
Replies: 29
Views: 3811

Re: "When Adding to Your Retirement Account is a Bad Idea"

If you will withdraw the money in a higher tax bracket, then Roth may be better than traditional, but it is hard to have a situation in which taxable is better than traditional, except for a high-fee 401(k) or 403(b) plan. Suppose that you are in a 24% tax bracket now, and will be in a 32% tax brack...
by grabiner
Tue Apr 16, 2019 9:25 pm
Forum: Investing - Theory, News & General
Topic: Treasuries ETF for taxable account?
Replies: 6
Views: 856

Re: Treasuries ETF for taxable account?

Treasury income from an ETF or mutual fund is also tax-free at the state level. However, each year you'll need to look up how much of the dividend from the fund came from state-exempt, US Government obligations. For example, the 2018 Vanguard list is here: https://personal.vanguard.com/pdf/USGO_012...
by grabiner
Tue Apr 16, 2019 9:19 pm
Forum: Investing - Theory, News & General
Topic: Home equity as % of AA
Replies: 41
Views: 2884

Re: Home equity as % of AA

A home works more like an annuity than a conventional asset; it provides a place to live for much less than the market rent. Thus a home, like a pension, increases your ability to take risk even if it is not counted in your asset allocation. Conversely, the mortgage you used to buy the home is a neg...
by grabiner
Tue Apr 16, 2019 8:47 pm
Forum: Investing - Theory, News & General
Topic: When to prefer low-rate bonds to stocks in taxable
Replies: 26
Views: 4009

Re: When to prefer low-rate bonds to stocks in taxable

Since I refer to this thread frequently, I should mention that this no longer applies, and the effective tax rate is now 25%. If you live in a high-tax state and are considering buying munis, you probably hit the $10K SALT limit, so the additional state tax on state-taxable investments no longer in...
by grabiner
Mon Apr 15, 2019 10:39 pm
Forum: Investing - Theory, News & General
Topic: Is seeking tax shelter always right?
Replies: 25
Views: 2259

Re: Is seeking tax shelter always right?

One simple thought experiment: hold the same bond fund for 20 years in a tax-deferred vs. taxable account. E.g. for a 3% yield, and a marginal tax rate of 24%, the principal grows by (1 + 3% * (1-24%))^20=1.57x, whereas the tax-deferred account grows to (1 + 3%)^20=1.81x, and is subsequently taxed ...
by grabiner
Mon Apr 15, 2019 8:19 pm
Forum: Personal Finance (Not Investing)
Topic: Please help, foreign tax credit
Replies: 24
Views: 1135

Re: Please help, foreign tax credit

Thanks for the reply. We've paid high five figures in fed taxes, same as other years, so I don't think a pro rata thing is the issue. Guess we better figure out how to see the forms quick! Thanks again. High five figures in federal taxes paid implies that you are in the 32% bracket (> 315k of taxab...
by grabiner
Mon Apr 15, 2019 7:57 pm
Forum: Personal Finance (Not Investing)
Topic: Is it a no brainier to donate appreciated shares to a charity?
Replies: 13
Views: 1448

Re: Is it a no brainier to donate appreciated shares to a charity?

Even if you never plan to sell the shares, you are better off making the donation with the stock fund. Suppose that you donate $10,000 worth of stock with a $5000 basis to the charity, and then spend $10,000 from your money-market fund to buy more stock. If you eventually sell those shares, you save...
by grabiner
Mon Apr 15, 2019 7:50 pm
Forum: Personal Investments
Topic: Allocating new contributions/rebalancing across accounts (need help from people mathematically smarter than me! :)
Replies: 16
Views: 1221

Re: Allocating new contributions/rebalancing across accounts (need help from people mathematically smarter than me! :)

A newbie question: Do you do convert all fund dollars to a common tax status when doing an asset allocation? This makes a bit of difference when the accounts are partitioned across different tax categories. For example, a 60/40 portfolio with all equities in Roth and all bonds in traditional 401, c...
by grabiner
Mon Apr 15, 2019 7:40 pm
Forum: Investing - Theory, News & General
Topic: Is seeking tax shelter always right?
Replies: 25
Views: 2259

Re: Is seeking tax shelter always right?

If your tax rate in retirement will be higher than now you may be overdoing it. But in that case, you can use a Roth account instead; convert traditional IRAs to Roth IRAs now, or after you retire. A Roth account clearly dominates a taxable account, since the tax on a Roth account is zero. The one ...