Bogleheads.org

Yes, I fully understand that when I am working my company insurance premiums are tax-free. But how about when one is retired and not getting a W2. Is a company's retiree insurance premiums taxable? is Cobra taxable? That is what my initial question was about. It's not clear what you a asking about. Are you talking about health insurance that your company continues to provide for you free after retirement. In that case the premiums that your company pays are tax free. If you also have to pay a portion of the premium, do you write them a check or does it come out of your pension? If you are purchasing health insurance from your company via COBRA, then it is like any other private health insurance. It is paid with after-tax money. You can ded...

Most thinking here is rational and based on theories and calculations. I invite you to get crazy and guess the average inflation rate over the next 30 years. Explain your reasoning if you'd like. Here are random historical averages: % avg. From this year until 2/21/2023 3.80. 1960 2.61. 1993 2.69. 2003 2.98. 2013 3.51. 2015 4.12. 2017 5.11. 2019 7.25. 2021 The Federal Bank of Cleveland on 2/14/2023 projected 2.29% based on these criteria: The Federal Reserve Bank of Cleveland estimates the expected rate of inflation over the next 30 years along with the inflation risk premium, the real risk premium, and the real interest rate. Their estimates are calculated with a model that uses Treasury yields, inflation data, inflation swaps, and survey...

Most thinking here is rational and based on theories and calculations. I invite you to get crazy and guess the average inflation rate over the next 30 years. Explain your reasoning if you'd like. Here are random historical averages: % avg. From this year until 2/21/2023 3.80. 1960 2.61. 1993 2.69. 2003 2.98. 2013 3.51. 2015 4.12. 2017 5.11. 2019 7.25. 2021 The Federal Bank of Cleveland on 2/14/2023 projected 2.29% based on these criteria: The Federal Reserve Bank of Cleveland estimates the expected rate of inflation over the next 30 years along with the inflation risk premium, the real risk premium, and the real interest rate. Their estimates are calculated with a model that uses Treasury yields, inflation data, inflation swaps, and survey...

markcoop wrote: ↑Wed Feb 22, 2023 8:44 am I'm still not totally following. Is the part I bolded up above part of the employer health insurance tax exclusion? Would I need to itemize and exceed 7.5% of AGI to get such tax-free treatment for my premiums in retirement? If the answer is yes, then that needs to be factored into any discussion of comparing it to ACA subsidies.

Yes, both the employer and employee share of premiums is tax free. This applies to Section 125 qualified plans, so-called cafeteria plans, which is true for most employer health insurance plans. So these pre-tax health insurance payments amount to a subsidy of thousands of dollars a year for employee health insurance.

Assuming that you are getting your health insurance through your employer, every year you are receiving $5,000 to $8,000 of "charity" from the government as untaxed income. And the strange thing about it that the higher your income, the higher the benefit. I am still working, so excuse my ignorance here. When I retire I have 3 options for insurance. Cobra for 18 months, my company insurance plan or ACA. From what I read here, it sounds like Cobra and/or company insurance plans are tax deductible. I currently don't itemize. Doesn't one need to itemize for something like that to be true? And even if I itemize, I thought medical expenses in general need to exceed 7.5% of AGI. Under the employer health insurance tax exclusion, you pa...

Dude2 wrote: ↑Thu Feb 16, 2023 3:20 am With respect, it couldn't be more opposite. Not taking charity from the government isn't a tax.

Assuming that you are getting your health insurance through your employer, every year you are receiving $5,000 to $8,000 of "charity" from the government as untaxed income. And the strange thing about it that the higher your income, the higher the benefit.

It's funny the way some people think tax benefits on one part of their tax return are their due while tax benefits on another part of their tax return are welfare.

That all sounds like a lot of gobbledygook dodging the very simple question -- do any of these hypothetical ETF cost savings end up in investors' pockets as higher returns? The best we can tell, the answer is no. Well, the exp ratio is difference is not hypothetical. Quick mental math shows me that Im saving about .02% on average across my funds in expense ratios. That's about $600 per year for our portfolio at the cost of logging into Vanguard to hit purchase once a month. Yes, but expense ratio isn't everything and it does not translate in higher returns. There have been lots of comparisons of ETFs and their equivalent regular mutual funds and they do not demonstrate measurably higher returns even if the expense ratios are lower. So in a...

The tough thing about a summer trip (well besides the heat) through the Grand Canyon is there just aren't enough days for full day hikes. Shoulder season and even Winter are much better in that respect. You're just allowed to spend so many more days in canyon on a through trip (21 on shoulder season and 28 in Winter). That sort of reminds me of one of the reasons I went on a dory versus raft. The dory season got started two weeks earlier in the spring, so not only did it beat the heat, but it beat the crowds too. The entire trip, I only say a handful of private groups. I'm not sure if that is still the case all these years later but I would highly recommend an April trip versus during the traditional summer peak times. It's actually the op...

What evidence that does exist suggests that there is no cost advantage in returns to investors. If there were you would see it in the big S&P 500 funds and ETFs from the largest brokerages. But you don't see tracking errors. You don't see compound growth differences over many years. If there are differences, they are so small as to be of indifference to investors. But you do. You need to go down to the bps. You need to do multifactor analysis. The structure matters. Size matters - both of the fund and the sponsor. Trading matters (internal passive trading verse prime broker verse algo trading). The loads on these various factors vary over time. That all sounds like a lot of gobbledygook dodging the very simple question -- do any of the...

Except there is no empirical evidence to support this. If there is a difference, it is so tiny as to be invisible in investor returns. There is empirical evidence. I have walked a mutual fund trading floor, I have calculated the expenses involved. Heck, I have even done the implied stuff like quality of execution. That there are massive error bars around it does not make it less real. It is a good solid 1 to 3 bps of drag. Or maybe you mean something else by empirical evidence, because you are tracking different funds doing different things and don't see any massive ragging differences. Fair enough. Not everybody has a heap of of datasets and had the leisure of teasing out this information. I have used this analogy before - the difference ...

alex_686 wrote: ↑Mon Feb 20, 2023 2:13 pm You are correct that the Authorized Participants (AP) bear the trading costs if the fund. So there is a one time indirect trading expense.

On the other hand, mutual funds have ongoing trading expenses which are not reflected in their expenses ratio. Everyday, every time someone buys and sells the mutual fund the fund has to wade out into the market and trades. This is continuous.

So after a few months the ETF holders comes out ahead.

Except there is no empirical evidence to support this. If there is a difference, it is so tiny as to be invisible in investor returns.

What they really need is a right turn on red monitor. As a pedestrian, there have been many times I've been close to clipped by drivers who are so intent on traffic coming from the left so they can dart out that they drive right over pedestrians on the right. After a couple of close calls, I've come to discipline myself to check both ways twice before turning on red.

I've heard that some cities are considering eliminating right turn on red, at least at some high risk locations.

I agree with others that buying a $50K commuter car makes no sense if you are trying to save money.

Get another LEAF (they are generally very reliable) or a Bolt.

If you really think you need an SUV, I would be more inclined to go for a hybrid than an overpriced Tesla. The hybrid will come out ahead of the Tesla for total cost of ownership.

Jax wrote: ↑Sat Feb 18, 2023 12:28 am Oh, and I just found this about a week ago. It'll give you a good idea of what that Canyon can be like.

Bob Foote - Canoeing in the Grand Canyon.

https://www.youtube.com/watch?v=7L0WZg8tB5Y

Water levels like that haven't been seen for years. However, it is still big stuff.

There's a nice vid of Horn Rapid in it... @ ~2:38. That'll be your first major after you get past the Pipe Creek Rapids (mostly swirlies).

Other rapids shown are Granite, Hermit, Crystal, Lava (I think).

Jax

That wasn't Horn at 2:38. That's Crystal. You can see Slate Creek coming in on the left part way through.

Others are Granite at 0:47

Deubendorff at 6:38.

A bunch of runs at Hermit at 10:00.

Lava from 21:00 to the end.

One guy on our trip had a CPAP machine. The first year he tried to charge in camp and it didn't work. The next year he rigged his boat so that he had a 4x2 foot panel stretched across his ice cooler and could charge all day while rowing down the river. Had a cable running into a waterproof box holding the battery. That worked. CPAP is tough. Even a car battery may not make it down the Grand Canyon. I only know one person who goes to the wilderness with CPAP and we use a generator for him. Not sure that would fly on a Grand Canyon trip. They have some pretty efficient portable CPAP machines with lithium batteries. His system worked for more than 3 weeks with solar panel charging all day on his cooler. Thanks for sharing. I wonder how much w...

TN_Boy wrote: ↑Fri Feb 17, 2023 6:49 pm When I mentioned access to the camera, I meant not only where it is stashed out of the way, but also how is the camera attached to you or your gear when using it so that it is protected against dropping in the river.

Make sure all of your carabiners are locking type. They don't have to be screw lock. The auto-lock carabiners are okay and quick to use.

Non-locking carabiners can be an entrapment hazard. I know of at least two instances of a raft flipping and somehow some clothing strap or PFD strap getting caught in a non-locking carabiner hooked to a boat D-ring under the raft. Not a pleasant experience. Both were close calls before they could figure out what was happening.

White Coat Investor wrote: ↑Fri Feb 17, 2023 3:36 pm

billaster wrote: ↑Thu Feb 16, 2023 5:43 pm
One guy on our trip had a CPAP machine. The first year he tried to charge in camp and it didn't work. The next year he rigged his boat so that he had a 4x2 foot panel stretched across his ice cooler and could charge all day while rowing down the river. Had a cable running into a waterproof box holding the battery. That worked.

CPAP is tough. Even a car battery may not make it down the Grand Canyon. I only know one person who goes to the wilderness with CPAP and we use a generator for him. Not sure that would fly on a Grand Canyon trip.

They have some pretty efficient portable CPAP machines with lithium batteries. His system worked for more than 3 weeks with solar panel charging all day on his cooler.

In addition to the shower mat, get a shower stool and a handheld shower hose attachment. Much safer showering while sitting. For some, bending over and then standing upright can cause dizziness and a fall. Showering while sitting can prevent that.

grouponde2000 wrote: ↑Wed Feb 15, 2023 8:54 pm I drive a Nissan Versa (and have always driven Toyota/Hondas/Nissans). I want to buy a luxury car - relatively new with Apple Car Play, etc

You don't need a luxury car to get Apple CarPlay and a high end infotainment system these days. Even a Toyota Corolla has it. Seems like just about all new cars have that stuff now.

FWIW, small, fold-up solar panels are pretty cheap these days and work well, in case you do want to keep the phone going. I get the impulse to not take too many photos, but you are going to see some incredible stuff and it can be hard to get back to. Odds are good someone on your trip will have one, but it can also be nice to have your own. Totally disagree. Especially when you cannot leave them out in the middle of the day because you're on a raft going through rapids and then afterward you're deep in a canyon. I was VERY disappointed with the performance of a highly rated backcountry solar charger in the grand canyon. Save your money and a lot of hassle and just bring a big battery pack. Because of the high canyon walls you get limited d...

FunOnABudget wrote: ↑Thu Feb 16, 2023 7:34 am You don't really need either one.

I agree. No point in making things more complicated than necessary. There's nothing simpler than sole proprietor filing a Schedule C.

An S-corp would be a really bad idea for taxes with your big W-2. With an S-corp you would unnecessarily be paying the employers share of Social Security taxes, which would otherwise be eliminated on a Schedule C because you are over the maximum contribution threshold on your W-2.

Some models of Nissan LEAF has a small solar panel on the rear spoiler. It's to trickle charge the 12V battery, not the main battery.

The yields are after expenses, and you'll see the yields are competitive with similar funds at other brokers, so the expenses don't matter. The differences in the funds are mostly to do with your tax situation, as the interest will be taxable in your state or not depending on the fund. I would treat all of them as equally safe. Expenses don't matter? Of course they matter, especially for money market funds. The expenses are money skimmed right off the yield of the assets. Schwab (and Fidelity) yields are similar to Vanguard yields only because they hold riskier assets to make up for the extra interest they skim. They keep the extra interest and you keep the extra risk. You may decide the extra risk isn't important but you shouldn't pretend...

When is your trip planned? I'll be there next month for a 27 day trip rowing an 18-foot raft.

It's a waste of time trying to convince everyone that EVs work. EV manufacturers are already selling every EV they can make. Everyone who wants one already has to wait in line. By not buying one, you are doing someone else a favor.

Northern Flicker wrote: ↑Wed Feb 15, 2023 9:01 pm

Glockenspiel wrote: ↑Wed Feb 15, 2023 10:27 am How many times have you run out of gas on the highway? You'll get far more warnings in an EV, before you run out of charge, so you won't have to worry about it unless you're TRYING to run out of charge to prove a point on social media.

What happens if you get the warning in a location where all charging stations are beyond the remaining range?

That's like asking what happens if the yellow low fuel light goes on when you are miles away from the nearest gas station.

At that point it is clear that you did poor planning.

The Department of Transportation released their final rules for the establishment of the National Electric Vehicle Infrastructure (NEVI) program. They have settled on the CCS Type 1 connector as the national standard. Qualifying Tesla charging ports must also have a CCS connector in addition to their own proprietary connector. This would be similar to Europe where version 2 Tesla charging stations have two cables, the Tesla cable and the CCS cable while version three Tesla charges are CCS only. All Teslas sold in the EU since 2019 have CCS connectors instead of their proprietary connector. I'm guessing that all new Tesla charging stations will have dual cable charging ports. The question is whether Tesla will retrofit their old charging por...

Most people just use their phone and carry a USB battery pack to recharge it. You can get a little 6 inch USB cable.
https://www.amazon.com/usb-battery-pack ... ttery+pack

You can get a waterproof phone pouch. They say you can operate the camera when in the pouch but probably easier just to put it in the pouch when going through rapids.
https://www.amazon.com/s?k=waterproof+phone+pouch

I believe that if you want to have zero withholding from your W2 job, put your whole annual salary into box 4b. But your tax preparer might disagree with this approach. You tax preparer may disagree given box 5 "Under penalties of perjury, I declare that this certificate, to the best of my knowledge and belief, is true, correct, and complete." IRS: If an employee qualifies, he or she can also use Form W-4 to tell you [the employer] not to deduct any federal income tax from his or her wages. To qualify for this exempt status, the employee must have had no tax liability for the previous year and must expect to have no tax liability for the current year. The IRS wants your taxes on time with every paycheck unless you have a legitima...

There's a lot of interesting information in the 10-K and 10-Q reports. For example, you can see how much of Tesla's profits are due to government subsidies vs car revenue. Or how much they are losing on their solar and battery storage business. Schwab's reports are interesting because they show how much of their income, almost 50%, doesn't come from mutual fund fees, or advisor fees, or trading commissions. It comes from skimming interest off of their cash and money market accounts. $8 billion of interest skimming pays for a lot of telephone reps. I don't use this information for investment purposes necessarily, but instead to gain a better understanding of business operations and business models. It's always better to see the numbers with ...

harikaried wrote: ↑Mon Feb 13, 2023 2:17 pm

aquaman wrote: ↑Fri Feb 10, 2023 2:27 pm"To tap U.S. government billions, Tesla must unlock EV chargers

I'm not sure if that's a good thing or a bad thing, but sounds like the government is somewhat desperate in offering billions to Tesla because the Supercharger network is so vast and capable already even without these incentives.

I think you have that backwards. It is Musk that is begging the government for subsidies (as usual) and they have turned down his request unless he meets the federal requirements for eligibility in the program by using the open CCS standard. Proprietary charging stations are not eligible for subsidies.

And yet there is no evidence of this ever occurring in the context of individual investors tax loss harvesting mutual funds pairs. Not in the financial media and not in the 7 million posts and 354,000 topics posted on this board. And according to the Propublica article, billionaires are comfortable with TLH'ing between different classes of the same security (like Google Class A and Class C shares) and they could find no evidence of that practice ever being challenged by the IRS. Just remember that at one time everyone was absolutely convinced that there was no way that buying a security in an IRA could create a wash sale. It had never been challenged by the IRS. There were millions of posts on the Bogleheads forum saying it would never hap...

It's interesting to hear people argue "No, man, these two funds are totally different" and in the next breath say "You should swap these two funds because they are so similar, you have no tracking risk."

It's quite clear that the intent of these swaps is to avoid changing your financial exposure, which is contrary to the law. If you haven't really sold out to change your financial position, you haven't really incurred a loss. However, I agree that the IRS has been very lax in trying to enforce this and thus far has shown no interest in doing so.

One solution would be to simply eliminate deduction of losses. There's no particular reason that the government should subsidize losses.

jeffyscott wrote: ↑Mon Feb 13, 2023 7:23 am

billaster wrote: ↑Sun Feb 12, 2023 8:47 pmThe $20 they paid back to you should be probably be treated as a brokerage bonus and is taxable.

It's just a refund of a $20 charge, why would you think that's taxable?

Thinking more about it, yes, just a refund, not a bonus and not taxable.

As Makefile said, the sales occurred and can't be undone. So you simply report the sales exactly as reported on the 1099-B and incur whatever gains or losses are involved in the transaction.

But there is worse news. The $20 they paid back to you should be probably be treated as a brokerage bonus and is taxable. They didn't give you a 1099-MISC because the amount was well below the $600 reporting minimum. But you should put the returned fees on Schedule 1 Line 8, the total on Line 10 and that gets transferred to Form 1040 Line 8.

So kind of a bummer. Yes they returned the fees but you don't avoid the tax on the sale and again the income from the refund. But better than a poke in the eye and losing the entire $20 for each fee.

Oh, and don't forget that heating due to internal battery resistance goes up with the square of the current. So if you charge the battery at 5 times the rate that you normally discharge it, you create 25 times the heat. It's not surprising that charging is when it is most likely that flaws show up.

Technical question. You see a lot of comments that imply the fires often occur when the battery is being charged. But the charger is supposed to shut off when the battery is fully charged. So what is happening? a) The charger fails, or b) Some failure in the battery causes the charger to be fooled into continuing to pump charge into it, when it shouldn't? Heat and stress on a battery are caused by current flowing into or out of a battery. Your phone for example probably charges at 5 times the current compared to when it discharges. You know this because you can charge it in one hour and then use it for 5 to 8 hours. So charging is the condition when heat and stress on the battery are highest -- many times higher. Much less heat when using ...

I still have the Vanguard mutual fund only account, so this may not apply to those with a brokerage account. When I read the Vanguard 1099-B today, I found the following footnote (at the bottom of the form): Please note: Each specific fund name, NOT simply Vanguard, must be reported along with the related tax information on Form 1040, Schedule D. This applied to Form 1099-B. This is totally contradictory to my understanding. I was planning to add all my trades up, and entering a summary figure into TurboTax. Now vanguard says each individual fund need to be entered separately?? What did I miss here? Is it safe to ignore this Vanguard note and go ahead to enter summary gain/loss (separated by short-term/long-term)? Do you have any wash sale...

chinchin wrote: ↑Sun Feb 12, 2023 11:03 am It does but it didn't work for me.

For document ID try all caps and no spaces. If that doesn't work, try all caps with spaces. One or the other should work.

Try it with all caps and no spaces. Or all caps and with spaces. One or the other should work.

What's in play is your account, which TD Ameritrade doesn't want to lose so is charging you a ridiculous fee to leave.

Vanguard does not charge either incoming or outgoing ACATS fees.

Does it have something to do with Vanguard converting me from a Mutual Fund account to a brokerage account in 2022? Yes, it does. The old mutual fund platform has separate accounts that each hold one mutual fund. The new brokerage account is a single account that holds all of your mutual funds. So the old 1099-DIV reports a separate dividend for each mutual fund account. The new brokerage platform has one account that combines all the dividends from all of the mutual funds into a single sum. So trust TurboTax if you import from Vanguard into Schedule B. TurboTax will list each mutual fund dividend on a separate line for the old 1099-DIV, using the fund name. TurboTax will make only one line entry for the brokerage account 1099-DIV, which i...

With the bond allocation ending up at 70%, That could eventually be a concern. Maybe or maybe not. Presumably by that time you are retired and living off some dividends anyway. I don't disagree in general, but when given a choice, I'd rather pay 0% or 15% tax on stock dividends instead of 12% or 22% or higher on bond dividends. Bond dividends are costly, tax wise, when compared to stock dividends. And actually getting into retirement with an increasing bond allocation in taxable is not optimal. Certainly agree for the tiny percentage of investors with the interest, aptitude and discipline to do self-directed investing, they can squeeze out a slightly better after-tax return -- assuming they make no mistakes. But for the vast majority of in...

I makes absolutely no difference which fund you withdraw from. Regardless which fund you withdraw from, you can the next day exchange between funds to get your desired allocation. This is a tax free exchange. Let's say that you have $40K of short term and $60K of intermediate term funds. You need to take out $20K. You want to end up with 50% of each left in your account. So you could withdraw $20K from intermediate term and you are left with $40K of each. Great! Or you could withdraw $20K from short term and you are left with $20K short term and $60K intermediate term. So the next day you exchange $20K from intermediate term to short term and are left with $40K of each. Great! So you see, it doesn't matter which fund you withdraw from becau...

retiredjg wrote: ↑Sat Feb 11, 2023 3:06 pm With the bond allocation ending up at 70%, That could eventually be a concern.

Maybe or maybe not. Presumably by that time you are retired and living off some dividends anyway.

Hard to believe that just three years ago people were arguing over whether it made more sense to hold bonds in taxable or tax-deferred because of the low interest rates. Could happen again.

I don't think the answer is so clear cut for those who are not high income and don't have very large taxable accounts.

LongRoad wrote: ↑Sat Feb 11, 2023 1:23 pm Isn’t the tax concern with target funds, even more than the presence of bonds, the eventual glide path where the fund forces the sale of stocks (and uncontrollable recognition of cap gains), often during the peak earning years?

Long term capital gains are taxed at 15%. Capital gain distributions even towards the retirement date are typically a fraction of a percent. The evidence suggests this concern is more theoretical than real.

The more obvious issue is non-qualified bond dividends.

what is my current risk of facing another huge tax bill? And what steps could I take avoid to paying extra taxes beyond what's necessary? I have no privileged insight into Vanguard, but I think what happened in 2021 was a one-time event. Your risk of another such event is rather low in my opinion. I agree that it is a one-time event. Vanguard has already paid millions in penalties to customers in Massachusetts and are currently in the midst of a lawsuit for many millions more across the country. It was a blunder driven by the marketing department and I doubt they will be so stupid as to repeat that mistake costing them millions. That one-time event had nothing to do with the structure of the Target Retirement fund. It had everything to do ...

boomer_techie wrote: ↑Fri Feb 10, 2023 10:41 pm Your approach will likely require filing Form 2210 Schedule AI. Be prepared to do so. Some people find Schedule AI intimidating.

To make Schedule AI easy, prepare three or four temporary tax returns: One with all data from the first 3 months, another with the first 5 months, another with the first 8 months, and the full year return.

And this is why many who have the ability to use RMDs for withholding use that method in December. No quarterly estimated tax payments and no Form 2210 required.

Your decision shouldn't be what fund you want to withdraw from. Your decision should be what fund allocation you want to maintain in your retirement account. Then, if necessary, exchange funds in your retirement account until you have the allocation you want. These exchanges in your retirement account have no tax implications. Set the allocation once and you are done. Then just use the default RMD withdrawal, which is pro-rata. Your custodian will withdraw from your funds in the same percentages as the current allocation so that your allocation never changes. So you don't have to make any decisions on what to withdraw. You just set your desired allocation in your retirement account and your pro-rata withdrawals maintain that allocation auto...

RMD withholding is considered like wage withholding as distributed throughout the year. So you could wait until December to take your RMD and withhold one lump sum to cover your estimated taxes. Then you do not have to do any quarterly estimated taxes.

This assumes that your RMD is large enough that up to 100% withholding would cover your other taxes.

A variation on that is to withhold enough from your RMD so that all of your withholding combined is 100% (or 110%) of last year's taxes to meet the safe harbor.