Search found 158 matches

by marbat
Wed Aug 17, 2022 4:07 pm
Forum: Investing - Theory, News & General
Topic: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge
Replies: 90
Views: 15601

Re: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge

Thanks for posting these comparisons, very interesting. As an alternative, right now 1-month treasuries are 2.2%, so they seem a much better deal. Even if the rates go up by 1%, the loss would be about 1/12% for a 1-month treasuries if you need to sell, thus making it a better deal. This assumes that you will buy an individual treasury with a 1 month maturity, then on maturity roll it up to another 1-month Yes, which is why my preferred MMFs are the ones that fully sweep. There, you’re getting the benefit of earning decent (but not 4-week treasury bill) interest without lifting a finger. With t-bills, you have to set up the rolling buy, sell them if you want to use the money, and have very slightly more complicated taxes if you sell prior ...
by marbat
Mon Aug 15, 2022 11:15 pm
Forum: Investing - Theory, News & General
Topic: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge
Replies: 90
Views: 15601

Re: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge

I really don't understand why Vanguard has both VMFXX and VMRXX, as they are essentially identical with the exception that VMRXX has more agency, and VMFXX has more treasury. VMRXX is the former Vanguard Prime Money Market fund - Admiral Shares. Many of the Prime Money Market funds disappeared following Money Market Reform. It appears that VMFXX is already disqualified under the 50% rule which has to be met at the end of each quarter for CA, NY, and CT. I posted earlier the percentages from the Vanguard site for the quarter ending June 30. The percentage of income from US Government obligations in VMFXX has been over 70% for the last four tax years. The portfolio appears to be quite a bit different in 2022 with a higher percentage in repur...
by marbat
Mon Aug 15, 2022 1:58 pm
Forum: Investing - Theory, News & General
Topic: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge
Replies: 90
Views: 15601

Re: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge

silvergga wrote: Mon Aug 15, 2022 1:21 pm
anon_investor wrote: Fri Aug 12, 2022 1:50 pm
mkc wrote: Fri Aug 12, 2022 1:37 pm Very timely as I am helping someone research this for a family member's Merrill Edge account :beer
I use TOIXX for Merrill Edge.
Does Merrill Edge charge fees when buying/selling TOIXX?

I also have ME and have found their default sweep option to give nearly no interest at all.
No
by marbat
Sun Aug 14, 2022 7:15 pm
Forum: Investing - Theory, News & General
Topic: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge
Replies: 90
Views: 15601

Re: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge

Percentage of assets matters, because that is how NY, CA, CT, (50%) and NJ (80%) determine if you can pass-through any pro-ration for state tax exempt income. VMFXX does not appear to have met the minimum requirements for any state tax exemption this year in CA, NY, and CT. Vanguard reported the following information on their site for the month ended 6-30-22. Repurchase Agreements 63.20%, U.S. Govt. Obligations 20.20%, U.S. Treasury Bills 16.60% U.S. Government obligations (including Treasury securities) need to be at least 50% of fund assets at the end of each quarter for the fund to qualify for any state tax exemption in NY, CA, and CT. VMRXX may be a better choice for investors holding the fund in a taxable account. VMRXX has maintained...
by marbat
Sun Aug 14, 2022 2:18 pm
Forum: Investing - Theory, News & General
Topic: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge
Replies: 90
Views: 15601

Re: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge

I have money in Schwab's SWVXX just because it had the highest yield. Why is it not recommend? It says on that chart something about it not being gate free? What does that mean? When I attempt to sell it doesn't say anything about redemption fees or anything like that. Should I transfer the money over to Schwab's SNOXX fund? The gates will likely only come into play during a 2008 global financial crisis type situation. It never became an issue even in March 2020. Correct. Exceedingly unlikely that gates/redemption fees would come into play, but prime MMFs have "melted down" before (in 2008 ). "Prime" means that the fund invests in non-government assets, like commercial paper. Worth noting that even in this worst-case me...
by marbat
Sun Aug 14, 2022 1:49 pm
Forum: Investing - Theory, News & General
Topic: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge
Replies: 90
Views: 15601

Re: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge

@OP, Thank you for doing this. I wonder if your opinion/calculations change for those in a state without an income tax, or can temporarily place themselves into the prime funds requiring higher amounts (at least initially). These would include amounts of $25K, $50K, $100K, etc. I moved to a no income tax state and found between rising rates and my lack of state income tax, that VUSXX and other treasury funds weren't worth the lower rate. The table assumes 38.8% marginal federal rate and no state/local income tax, with breakevens listed in the comments for the state/local income rates at which point the treasury-based options would yield higher. The treasury based options won’t be worth it for you based on yield. Theoretically, they are saf...
by marbat
Sat Aug 13, 2022 1:20 pm
Forum: Investing - Theory, News & General
Topic: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge
Replies: 90
Views: 15601

Re: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge

Vanguard has the best "set it and forget it option" if you are willing to deal with their brokerage platform (which is far behind Fidelity and Schwab) I would need to trade 10-20x more often than I do before the differences in the platforms would even start to matter. I'd need to have at least 30-40x more in cash than I do, before the differences in money market yields would even start to matter. I've not quantified it because rates have either been zero or changing steadily but something similar is true for us. I agree with you guys (on the yield point), but there's something odd about my personality that even with a mid 7-figure portfolio, I can't help but optimize yield on small cash balances. I view it as a behavioral adaptat...
by marbat
Sat Aug 13, 2022 9:58 am
Forum: Investing - Theory, News & General
Topic: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge
Replies: 90
Views: 15601

Re: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge

At Fidelity FDRXX is lower cost/higher yielding than SPAXX. I set FDRXX as the core default sweep in both my IRAs and regular brokerage account. In the IRA's it was a simple change to do myself online, for the brokerage account I had to call to get it switched, but it was done and saves a few basis points for a MM fund that's equivalent to SPAXX. I may have asked you this before, but are you able to do this because you have some special status at Fidelity? (e.g. Private Client, etc.) I couldn't change to FDRXX in the non-IRA account either even after calling in. I wish the CMA allowed for a different core position. Though I am immediately moving funds to SPRXX anyway. I wonder what is the point of Fidelity having both SPAXX and FDRXX, they...
by marbat
Fri Aug 12, 2022 9:13 pm
Forum: Investing - Theory, News & General
Topic: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge
Replies: 90
Views: 15601

Re: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge

At Fidelity FDRXX is lower cost/higher yielding than SPAXX. I set FDRXX as the core default sweep in both my IRAs and regular brokerage account. In the IRA's it was a simple change to do myself online, for the brokerage account I had to call to get it switched, but it was done and saves a few basis points for a MM fund that's equivalent to SPAXX. That's pretty cool! Did not know you could do that. I'll update the chart and the original post. Vanguard has the best "set it and forget it option" if you are willing to deal with their brokerage platform (which is far behind Fidelity and Schwab) I would need to trade 10-20x more often than I do before the differences in the platforms would even start to matter. Fair enough! If it ain't...
by marbat
Fri Aug 12, 2022 3:55 pm
Forum: Investing - Theory, News & General
Topic: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge
Replies: 90
Views: 15601

Re: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge

If someone wants to expand the list for funds available at other brokerages, please feel free to do so and append to this thread! I only did Vanguard, Schwab, Fidelity, and Merrill because I've never had a reason to consider Chase, TD, Wells, E-Trade, etc. FYI I just researched this for Schwab. Their U.S. Government Obligations funds' income is not completely exempt from state and local taxes. SNSXX is the best, with 84% of fund income considered to be from "U.S. Government Obligations." The ratios for 2021 were: SNSXX 84% SNOXX: 69% SNVXX: 37% Correct - SNOXX and SNVXX have too many repos to be fully state tax exempt. I believe the cutoff is 80%+ pure government obligations (not repos) to be considered fully state tax exempt. See...
by marbat
Fri Aug 12, 2022 1:59 pm
Forum: Investing - Theory, News & General
Topic: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge
Replies: 90
Views: 15601

Re: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge

BarbK wrote: Fri Aug 12, 2022 1:48 pm Thanks for the chart / comparison. What am I missing with "Schwab has the best MMF" - looks to me that VGs has the best yield.

What does gatefree mean?
Schwab has the best muni MMF (in my view) because it is AMT free. Vanguard's is not. AMT is a massive headache, and I already have AMT issues from past ISO exercises. For someone that is nowhere near AMT thresholds, Vanguard's is better. For me (or someone in my position), likely not worth the hassle.

Certain funds impose liquidity fees and temporarily suspend withdrawals (known as gates) in certain circumstances (i.e. liquidity crunches). Very uncommon, but since this is a cash equivalent, worth calling out.
by marbat
Fri Aug 12, 2022 1:31 pm
Forum: Investing - Theory, News & General
Topic: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge
Replies: 90
Views: 15601

Re: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge

ShaftoesSpreadsheet wrote: Fri Aug 12, 2022 1:29 pm Cool thanks.

What is the significance of the sweep option?
Cash from deposits/sales is automatically swept into the MMF with no action required from you. Additionally, when you withdraw/buy, cash is automatically swept out of the MMF. Basically, transparent automation for those that don't want to micromanage their cash position for a few extra bps.
by marbat
Fri Aug 12, 2022 1:22 pm
Forum: Investing - Theory, News & General
Topic: Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge
Replies: 90
Views: 15601

Money Market assessment for Vanguard, Schwab, Fidelity, and Merrill Edge

With yields increasing, I just finished researching available MMF options at the main Boglehead-preferred brokerages, and thought I would share in case anyone else finds this useful. Was a bit of a pain to compile, so hoping to save you all the trouble of redoing work! [edit]: I've updated the graphic, since I few people commented offline it would be more useful to sort by options within a given brokerage vs. all together. A few takeaways as of 8/12/22: Vanguard has the best "set it and forget it option" if you are willing to deal with their brokerage platform (which is far behind Fidelity and Schwab) Merrill has very good options (including the best state/local tax free option) if you are willing to buy/sell manually (primarily b...
by marbat
Wed Apr 06, 2022 11:36 pm
Forum: Investing - Theory, News & General
Topic: Does anyone have experience with ISO”s?” (Incentive Stock Options)
Replies: 14
Views: 2863

Re: Does anyone have experience with ISO”s?” (Incentive Stock Options)

I have a significant portion of my NW tied up in illiquid ISOs, and have been around the block on all of the tax and financial planning considerations. If you have a specific question, please feel free to shoot me a PM or post it here. If your question is around early exercise, have a look at my post history - I recently laid out some things to consider in another thread.
by marbat
Wed May 26, 2021 8:16 pm
Forum: Personal Finance (Not Investing)
Topic: Anything I can do to minimize future stock option tax liability?
Replies: 5
Views: 861

Re: Anything I can do to minimize future stock option tax liability?

There is another factor here which is critically important outside of tax implications. If you do not exercise early/83b, you become "trapped" if the company does well but is not planning an exit or tender that aligns with your timelines. This can end up very bad for mental health if you do want to move on vs. stick around and wait. Typically even vested ISOs expire unless exercised 90 days after you leave the company. If you consider ~$300,000 expensive, imagine if the value of that stock in 3 years balloons to ~$3,000,000. At that point, if you want to leave or are forced out, you'll either need to put down ~$300,000 (strike price * number of options) + ~$750,000 (spread * applicable AMT rate) or let your options expire, losing ...
by marbat
Fri Mar 24, 2017 9:33 am
Forum: Personal Finance (Not Investing)
Topic: Questions about itemizing state income taxes and about foreign tax credit carry forward
Replies: 7
Views: 841

Re: Questions about itemizing state income taxes and about foreign tax credit carry forward

I'd prefer to use sales tax to avoid doing the wksht. Looks pretty simple. Actually, this worksheet is a bit more comprehensive and does all the calculations for you. http://cotaxaide.org/tools/Refund%20Calculator.html I haven't checked my current version of HRBlock but some software has a worksheet build in - you just enter any data that hasn't been provided in a carryover from a prior year return. According to this worksheet, if I take a state income tax deduction, my state refund will be taxable next year. It looks like I'm better off taking the state sales tax deduction using the IRS table. Are there any drawbacks to doing so? I don't expect to receive any sales tax refunds for 2016 in 2017... Also, does anyone have any tips for the FT...
by marbat
Thu Mar 23, 2017 11:35 pm
Forum: Personal Finance (Not Investing)
Topic: Questions about itemizing state income taxes and about foreign tax credit carry forward
Replies: 7
Views: 841

Re: Questions about itemizing state income taxes and about foreign tax credit carry forward

dbltrbl wrote:If you used itemized deductions this year you will pay income tax on tax refund next year. If you use standard deduction you will not pay any tax on refund.
What if I itemize but don't actually deduct/count state taxes withheld? I have enough other itemized deductions to ensure I pay 0 tax this year anyway.
by marbat
Thu Mar 23, 2017 3:24 pm
Forum: Personal Finance (Not Investing)
Topic: Questions about itemizing state income taxes and about foreign tax credit carry forward
Replies: 7
Views: 841

Questions about itemizing state income taxes and about foreign tax credit carry forward

Two quick questions about 2016 taxes before I submit them and move on with my life! :sharebeer

1. I could add state income tax withholdings to my itemized deductions, but even without them, I already won't be paying any tax this year. Am I correct that it would be better to not declare a deduction for state income tax withholdings so that my state refunds are not taxable next year?

2. I paid foreign taxes (via VTIAX), but because I took a net loss from foreign passive activities (VTIAX dividends + rental apartment) in 2016, I am not eligible to take a foreign tax credit. Can I carry forward this credit to next year (when I will likely no longer be taking a loss on the rental apartment)?

As always, thank you for your help, Bogleheads.
by marbat
Sat Feb 25, 2017 1:18 pm
Forum: Personal Finance (Not Investing)
Topic: CapEx for rental property - where to declare/depreciate?
Replies: 7
Views: 945

Re: CapEx for rental property - where to declare/depreciate?

I believe they should be capitalized, not expensed. You probably should read the following: https://www.irs.gov/businesses/small-businesses-self-employed/tips-on-rental-real-estate-income-deductions-and-recordkeeping https://www.irs.gov/pub/irs-pdf/p527.pdf I meant to say the reverse: these expenditures should be expensed, not capitalized. But read those linked IRS sources. Thank you, understood. It looks like whenever you capitalize something, you must file a Form 4562 and put the capital improvement on its own depreciation schedule. Complicated, since you have to decide on a schedule for everything and it isn't clear where this comes from. At the same time, Pub 527 says that title-related legal expenses increase the cost basis of a prope...
by marbat
Fri Feb 24, 2017 8:47 pm
Forum: Personal Finance (Not Investing)
Topic: CapEx for rental property - where to declare/depreciate?
Replies: 7
Views: 945

Re: CapEx for rental property - where to declare/depreciate?

gkaplan wrote:I believe they should be capitalized, not expensed. You probably should read the following:


https://www.irs.gov/businesses/small-bu ... ordkeeping

https://www.irs.gov/pub/irs-pdf/p527.pdf
I believe that you're right - in fact, it would be more beneficial for me to capitalize anyway since my income was very low in 2016 as a grad student.

I've read Pub 527 (at least the parts I thought were relevant), but I still didn't see any explicit instructions on which IRS form and which depreciation schedule to use for these types of capital improvements. Hopefully it's in your other link! I'll take a look when I get home, thank you.
by marbat
Fri Feb 24, 2017 4:42 pm
Forum: Personal Finance (Not Investing)
Topic: CapEx for rental property - where to declare/depreciate?
Replies: 7
Views: 945

Re: CapEx for rental property - where to declare/depreciate?

curmudgeon wrote:I would lean towards expensing these. Legal expenses would generally be just expensed, though if in conjuction with a refi it might be more fuzzy. Depending on the amount, I think there is a "De Minimis" level of $2500 where the IRS says you can just expense regardless.

In general, if you have additional CapEx after the original purchase, it gets set up with it's own depreciation schedule (and may have a different lifetime). If it is tied to the land, rather than the improvement/building, it may not be depreciable, in which case it will just be added to the basis.
Unfortunately, the first expense is about $4,000 and the second is about $600. Total rent income is about $5,300 so maybe too aggressive to expense?
by marbat
Fri Feb 24, 2017 2:10 pm
Forum: Personal Finance (Not Investing)
Topic: CapEx for rental property - where to declare/depreciate?
Replies: 7
Views: 945

CapEx for rental property - where to declare/depreciate?

I had two expenses in 2016 that I believe need to be capitalized. These are for a rental property that I've had for several years now:

- Legal fees associated with getting a title document re-issued
- Legal fees for a renewed appraisal of the apartment

Two questions:

- Am I correct that I cannot simply expense these?
- If I need to capitalize them, which IRS form is needed? I did some Googling, but can't seem to find specific instructions; everything just says to capitalize certain expenses, but nothing seems to actually say how... Or is this as simple as adding capitalizable expenses to the depreciated basis of the rental property when selling it?

Your help is much appreciated!
by marbat
Tue Feb 07, 2017 12:59 am
Forum: Personal Finance (Not Investing)
Topic: Minimum earned income for Roth IRA contribution
Replies: 2
Views: 759

Minimum earned income for Roth IRA contribution

Quick question about minimum earned income for a Roth IRA contribution:

If somebody has $5,000 in earned income as their only source of income, can they contribute $5,000 to a Roth IRA? Or does the earned income have to be in excess of deductions (taxable income)?

The question arose because someone with such low income will obviously not pay any taxes based on a standard deduction and personal exemption.
by marbat
Thu Dec 29, 2016 3:23 pm
Forum: Personal Investments
Topic: Wash sale clarification
Replies: 8
Views: 747

Re: Wash sale clarification

livesoft wrote:
marbat wrote:And why is it surprising that my ESPP feeds into a taxable brokerage account?
Sorry, I am not surprised by that, since I see that restrictions apply. In any event, your broker should track wash sales for you, so that should help ameliorate the annoyance.
Gotcha :sharebeer

Hah, my ESPP broker (Schwab) can't even get ESPP cost basis right! That'll be the day when they can do something more complicated than that...
by marbat
Thu Dec 29, 2016 3:09 pm
Forum: Personal Investments
Topic: Wash sale clarification
Replies: 8
Views: 747

Re: Wash sale clarification

My Vanguard funds throw off dividends in my brokerage account, my IRA, and my 401k. My understanding is that I'm not able to sell the dividend lots in the IRA/401k to avoid the wash sale in the taxable account. While true, I bet I could work around those problems if you named the funds in question by using slightly different funds. Very true. But, still annoying :) Separately, my ESPP has a holding requirement, so I'm not able to sell newly purchased lots. This is not in a tax-advantaged account, no. Not a problem since you just add the disallowed loss to your newly purchased lots then. Since this is not in a tax-advantaged account, you do not lose the loss permanently. But your company allows you to trade company stock in your taxable acc...
by marbat
Thu Dec 29, 2016 2:31 pm
Forum: Personal Investments
Topic: Wash sale clarification
Replies: 8
Views: 747

Re: Wash sale clarification

I understand why wash sale rules are in place, but boy are they annoying! Quarterly reinvested dividends and monthly ESPP purchases make it a huge pain to take advantage of losses. The lots from quarterly reinvested dividends can simply be sold, too, so that gets rid of that pain. Furthermore, wash sales only temporarily disallow losses except if the purchase was in an IRA. Presumably, you are not buying company stock in an IRA, are you? I mixed two different pains. Apologies for being unclear. My Vanguard funds throw off dividends in my brokerage account, my IRA, and my 401k. My understanding is that I'm not able to sell the dividend lots in the IRA/401k to avoid the wash sale in the taxable account. Seperately, my ESPP has a holding requ...
by marbat
Thu Dec 29, 2016 2:19 pm
Forum: Personal Investments
Topic: Wash sale clarification
Replies: 8
Views: 747

Re: Wash sale clarification

FactualFran wrote:According to the Wash Sale section of IRS Publication 550, Investment Income and Expenses: "Loss from a wash sale of one block of stock or securities cannot be used to reduce any gains on identical blocks sold the same day."
Understood, thank you. So in my example, the gain would be $20.

I understand why wash sale rules are in place, but boy are they annoying! Quarterly reinvested dividends and monthly ESPP purchases make it a huge pain to take advantage of losses.
by marbat
Thu Dec 29, 2016 12:50 pm
Forum: Personal Investments
Topic: Wash sale clarification
Replies: 8
Views: 747

Wash sale clarification

Quick question about if the wash sale rule works in aggregate or on a per-lot basis...

Let's say I bought some stock a week ago. Today, I want to sell two lots of that same stock - neither of which are the lot that I bought a week ago. The first lot has a $10 loss. The second lot has a $20 gain.

Is the overall gain here $10, or does the wash sale rule apply to the lot with the $10 loss, making the overall gain $20 (with basis added to the shares purchased a week ago)?

Thank you!
by marbat
Mon Jun 27, 2016 1:29 am
Forum: Non-US Investing
Topic: Relative moving back to Russia, maintaining US account
Replies: 4
Views: 1035

Re: Relative moving back to Russia, maintaining US account

You don't mention why she needs a Russian account. Will she be working locally and drawing a salary? If so, her employer will likely choose the bank for her (different system over there - the employer chooses the direct deposit account and sets it up). If she doesn't "need" one, just use Schwab or Fidelity (no ATM, annual, or FX fees) for debit/ATM, and something like Capital One Quicksilver for credit (no FX or annual fees, 1.5% cash back). Almost everywhere accepts card at this point, and if not, take money out of an ATM. No need to move everything to Russia, and I would absolutely recommend against doing so. I've personally had accounts with Raiffeisen in Russia, and they are the best of the worst. They crush you on internation...
by marbat
Sun Apr 24, 2016 10:12 pm
Forum: Personal Finance (Not Investing)
Topic: Is this person a dependent relative?
Replies: 3
Views: 742

Re: Is this person a dependent relative?

earlyout wrote:Page 34 of Publication 17 where it defines gross income for qualifying relative states: "Gross receipts from rental property are gross income. Do not deduct taxes, repairs, or other expenses to determine the gross income from rental property".
Short, to the point, and with a source. Thank you, this answers my question.
by marbat
Sun Apr 24, 2016 9:35 pm
Forum: Personal Finance (Not Investing)
Topic: Is this person a dependent relative?
Replies: 3
Views: 742

Is this person a dependent relative?

Quick question about how to think about the income restriction for dependent relatives: how is "less than $4,000 of gross income" defined? In the example below, let's assume that the person in question meets all of the other requirements for being a dependent relative.

If someone has $2,000 of W-2 income and $1,900 of Schedule E rental income, it seems that they would qualify as a dependent relative (total gross income = $3,900). But, what if that $1,900 number from Schedule E was actually $4,000 rental income - $2,100 management fee expense? Does total gross income in this case become $6,000, thus disqualifying the person from dependent relative status?
by marbat
Sun Apr 17, 2016 8:23 pm
Forum: Personal Investments
Topic: Change IRA contribution year with Fidelity
Replies: 11
Views: 4379

Re: Change IRA contribution year with Fidelity

Just wanted to follow up with a resolution: Fidelity appears to have easily fixed this, although I guess I won't know until next year if it generated any tax forms/activity. Since a 2015 contribution is still timely up until 4/18/2016, they likely were able to change the applicable tax year for that contribution to 2015. 4/18 is also the cutoff date for Form 5498 preparation for reporting 2015 contributions. By the end of next month she should receive a 2015 5498 reporting the contribution for 2015. In the meantime she should check her on line account info to determine if this was processed as indicated. If there is no 5498 received next month showing the 2015 contribution, that is a definite indication that this did not get done. Note tha...
by marbat
Sun Apr 17, 2016 3:02 pm
Forum: Personal Finance (Not Investing)
Topic: Last minute tax questions about selling a home!
Replies: 3
Views: 601

Re: Last minute tax questions about selling a home!

A friend sold a home in NJ this year. She did not live in NJ at all in 2015 and made no gain on the sale of the of home, but still had to post two payments to the State of New Jersey: 1. A "Realty Transfer Fee" which is computed in the same way as a tax, but doesn't actually appear to be a tax. Since it is labeled as a "stamp tax" on her HUD-1, it doesn't look like it is deductible for Federal Schedule A purposes. I also can't find anything that says this fee is refundable for non-residents (just seniors, the disabled, blind people, and those selling low-income housing). Is this correct, or can she somehow get it refunded? 2. An estimated income tax withholding of 2% of the sale price of her home. This is obviously refu...
by marbat
Sun Apr 17, 2016 1:36 pm
Forum: Personal Finance (Not Investing)
Topic: Last minute tax questions about selling a home!
Replies: 3
Views: 601

Last minute tax questions about selling a home!

A friend sold a home in NJ this year. She did not live in NJ at all in 2015 and made no gain on the sale of the of home, but still had to post two payments to the State of New Jersey: 1. A "Realty Transfer Fee" which is computed in the same way as a tax, but doesn't actually appear to be a tax. Since it is labeled as a "stamp tax" on her HUD-1, it doesn't look like it is deductible for Federal Schedule A purposes. I also can't find anything that says this fee is refundable for non-residents (just seniors, the disabled, blind people, and those selling low-income housing). Is this correct, or can she somehow get it refunded? 2. An estimated income tax withholding of 2% of the sale price of her home. This is obviously refun...
by marbat
Sun Apr 17, 2016 1:29 pm
Forum: Personal Investments
Topic: Change IRA contribution year with Fidelity
Replies: 11
Views: 4379

Re: Change IRA contribution year with Fidelity

Just wanted to follow up with a resolution: Fidelity appears to have easily fixed this, although I guess I won't know until next year if it generated any tax forms/activity.
by marbat
Sun Mar 20, 2016 3:37 pm
Forum: Personal Investments
Topic: Change IRA contribution year with Fidelity
Replies: 11
Views: 4379

Re: Change IRA contribution year with Fidelity

Why not call up Fidelity? Because I trust Bogleheads' experience over Fidelity's customer service reps to fully understand what the end-results of such an operation might be. But suppose it is just a bookkeeping change within Fidelity's computer system and doesn't require any complicated recharacterization or any other effect that results in IRS paperwork? She just made a mistake in selecting which year to attribute the contribution and IRA contributions for 2015 are still open. Don't get me wrong - we will definitely call Fidelity, but I just wanted to know what to expect ahead of time. Hopefully it is just a bookkeeping change, especially since the contribution was due to Fidelity's automatic periodic investing setup contributing to 2016...
by marbat
Sat Mar 19, 2016 10:40 pm
Forum: Personal Investments
Topic: Change IRA contribution year with Fidelity
Replies: 11
Views: 4379

Re: Change IRA contribution year with Fidelity

Geologist wrote:Why not call up Fidelity?
Because I trust Bogleheads' experience over Fidelity's customer service reps to fully understand what the end-results of such an operation might be.
by marbat
Sat Mar 19, 2016 9:26 pm
Forum: Personal Investments
Topic: Change IRA contribution year with Fidelity
Replies: 11
Views: 4379

Re: Change IRA contribution year with Fidelity

FiveK wrote:Will she have $1000 available to contribute to the 2015 Roth prior to April 18, 2016? If so, just use that to fill the 2015 bucket and return to the 2016 bucket later this year.
The issue is that she won't be eligible to contribute to a Roth for 2016, so we want to remove the $1,000 contribution in a way that won't complicate a 2016 Backdoor Roth.
by marbat
Sat Mar 19, 2016 9:06 pm
Forum: Personal Investments
Topic: Change IRA contribution year with Fidelity
Replies: 11
Views: 4379

Change IRA contribution year with Fidelity

A friend of mine accidentally contributed $1,000 to her Roth IRA for 2016. Does anyone have any experience with getting Fidelity to treat this as a 2015 contribution instead? My friend has $1,000 of Roth space for 2015.

My questions are mainly:

1. Is this type of recharacterization mechanically possible?
2. If so, will this type of recharacterization generate any tax complications for 2016 (1099-R, 8606, or others), or will it just be as if the 2016 contribution never happened?
by marbat
Sat Jul 11, 2015 7:04 pm
Forum: Personal Investments
Topic: Roth IRA over-contribution
Replies: 6
Views: 951

Re: Roth IRA over-contribution

The IRS recommends keeping tax returns for 3 years. You should have shredded your 2009 return several years ago. Well, I don't actually have a 2009 return since I never filed. My understanding is that there is no statute of limitations for IRA over-contributions. Did you make less than a full contribution to IRA (including Roth) any of the following years that you were eligible? If so, it appears the excess can be absorbed into that (those) year (s). Unfortunately, no. I have maxed out the Roth IRA every year from 2010-2013, then did maxed out backdoors in 2014 and 2015. With respect to filing a 1040X with each year's 5329, the IRS 5329 Inst indirectly state that the 1040X is required. That said, a 5329 is technically a separate return, so...
by marbat
Sat Jul 11, 2015 8:02 am
Forum: Personal Investments
Topic: Roth IRA over-contribution
Replies: 6
Views: 951

Roth IRA over-contribution

I found Bogleheads in 2009, when I was entering my last year of undergraduate studies. The philosophy immediately clicked with me, and I was excited to start investing in Boglehead style. Unfortunately, I went ahead and opened a Roth IRA that year, without realizing that I needed to have earned income. This year, while doing a review of my taxes for another matter, I noticed this mistake and want to correct it. My understanding is that I will need to contact Vangurd and withdraw the over-contribution. I will then need to pay 6% of the over-contributed amount ($5,000) for each year that it was not removed. My questions are below: 1. I obviously need to pay $300 for 2009, 2010, 2011, 2012, 2013, and 2014. Do I also need to pay it for 2015 if ...
by marbat
Wed May 13, 2015 3:21 pm
Forum: Personal Finance (Not Investing)
Topic: Anyone went to top 10 business school? Got a 730 on GMAT. Thoughts?
Replies: 27
Views: 12641

Re: Anyone went to top 10 business school? Got a 730 on GMAT. Thoughts?

Good job on the GMAT, but at the same time I'm not sure it's all that exceptional either. It's a good, solid score, and you won't have trouble getting into most schools with your resume, but it's also not a 790 and a 3.95 either. We have very similar backgrounds and I went to a solid, public, in-state school on a part time basis. I got my employer to pick up most of the tab. I'm still making six figures and didn't have to foot the bill or miss a couple years of work. My experience has been that the graduate degree is only good for getting interviews, and once you're in it's all about what you can do and who you know. The elite schools fill the network part of that, but it's expensive and not the only option. Good luck in your decision maki...
by marbat
Fri Apr 10, 2015 6:26 am
Forum: Personal Finance (Not Investing)
Topic: Should I renege [on a] job offer?
Replies: 48
Views: 8934

Re: Should I renege [on a] job offer?

The answer is "it depends."

What city is the consulting offer in? What firm is it with? There is a big difference between PwC and Deloitte vs. Oliver Wyman and LEK. What group within the consulting firm? Oliver Wyman FS or GMC? Deloitte S&O, or Technology?

What bank is your IBD offer with? What group within the bank? Industry or product? Which industry/product? What do you want to do afterwards?

Money should not be the driver for this decision.

Feel free to PM me if you want to chat - I'm a former consultant at a tier 3 firm (which is actually where I would put Deloitte and PwC) that went on to corporate strategy/development at a household name F500 company and is now heading to a HSW b-school.
by marbat
Tue Mar 17, 2015 2:18 am
Forum: Personal Investments
Topic: Paying for graduate school
Replies: 9
Views: 1937

Re: Paying for graduate school

billfromct wrote:Don't forget about the Lifetime Learning Credit (LLC). I believe you can use this credit for grad school.

It's 20% of the first $10k of tuition & required fees up to a maximum of $2k per year.

You would qualify if modified adjusted gross income (MAGI) is under $52k (or something like that) if single. The LLC starts to phase out with MAGI over $52k & totally phases out if MAGI is over $62k. This is from the IRS website, but the update is from 2014, so this may be 2014 figures.

Check "the google" for the details.

bill
More great advice. Thank you, I had forgotten about this. I never bothered with any of the tax credits as an undergrad because I was on scholarship and did not have qualifying expenses.
by marbat
Sun Mar 15, 2015 6:51 am
Forum: Personal Investments
Topic: Paying for graduate school
Replies: 9
Views: 1937

Re: Paying for graduate school

Did you max out your tax advantaged accounts for 2015? If not, you should definitely do that. That will give you a instant tax savings. Next, you should pay from your taxable account for your education. If the need arises, you also can pull from your traditional for education expenses without paying fees. I did max my Roth IRA (backdoor), and I will have my Traditional 401K maxed by the time I stop working in July (contributing over time to ensure I get the full match). At this point, it doesn't seem like I will need to dip into my tax-advantaged accounts. Another thing you might want to consider in the years when your income is low is to convert some of your 401k assets into Roth. Absolutely. I believe this is what Louis Winthorpe III was...
by marbat
Sat Mar 14, 2015 11:56 am
Forum: Personal Investments
Topic: Paying for graduate school
Replies: 9
Views: 1937

Re: Paying for graduate school

On the topic of time horizon, do any of the 529 plans offer a stable value fund or some other safe investment (short-term CDs?) with better returns than an online savings account (~1% pre-tax)? Definitely worth looking into, but whatever earnings you take out of a 529 plan will be taxable I believe. A little confused... I thought the whole point of 529 plans was that the earnings would not be taxable on a Federal level if used for education purposes? I did some research on low-risk investments within 529s and found the below options: Colorado: Stable value fund. 3.09% for 2015, net of fees. Guaranteed by MetLife. Rate is reset each year in December, but is guaranteed to not go below 1.29% net of fees. Has not returned below 2.5% since befo...
by marbat
Sat Mar 14, 2015 10:16 am
Forum: Personal Investments
Topic: Paying for graduate school
Replies: 9
Views: 1937

Re: Paying for graduate school

Louis Winthorpe III wrote:Your time horizon is too short for you to be investing. Your money belongs in an online savings account.

As for selling your current holdings, you'll have very little income during calendar year 2016, so I would try to maximize the benefit of the 0% capital gains bracket.
Great point. I should be in the 15% marginal Federal bracket for 2016, so I will "save" my capital gains for that year. I will also convert Traditional 401K/IRA assets to Roth in 2016 until the 15% bracket is full.

On the topic of time horizon, do any of the 529 plans offer a stable value fund or some other safe investment (short-term CDs?) with better returns than an online savings account (~1% pre-tax)?
by marbat
Sat Mar 14, 2015 9:02 am
Forum: Personal Investments
Topic: Paying for graduate school
Replies: 9
Views: 1937

Paying for graduate school

Snip.
by marbat
Mon Jun 09, 2014 1:35 pm
Forum: Personal Finance (Not Investing)
Topic: Pin and Chip Cards coming to the US
Replies: 71
Views: 10566

Re: Pin and Chip Cards coming to the US

We don't need security, it's the bank's problem, not the consumer. Then banks will decide when investing in new technology is warranted by the cost of fraud. October 2015 the liability is switching from the credit card processor / bank to the party with the least secure transaction method. In other words the liability for fraudulent transactions will shift from the bank to the retailer who did not upgrade their credit card processing machine. The retailer will pass that onto consumers much like the banks have today. The next question comes when all the retailers switch over to chip and pin who does the liability shift to then? I suspect like many places in Europe it will shift to the consumer. Also keep in mind until every retailer stops a...
by marbat
Mon Apr 21, 2014 1:57 am
Forum: Personal Finance (Not Investing)
Topic: payWave cards
Replies: 15
Views: 1831

Re: payWave cards

If someone really wants to kill the chip, all you need is a ball-point pen. Lay the card on a paper writing pad to give it a little bit of flex underneath it (I'd call it a tablet, but someone might be thinking iPad). If you destroy the chip, then in October 2015 you will be unable to buy stuff in the US. That's when all banks and merchants are switching to the chip card system. Just another tidbit of industry insider trivia: contact chip and contactless are two separate things. If you destroy the visible chip, you are destroying the contact chip. If you destroy the antenna for the contactless chip (usually around the edge of the card, invisible when you look at a card), then you are destroying the contactless functionality. The industry s...