Search found 97 matches

by goGators
Wed Oct 18, 2023 7:10 am
Forum: Personal Finance (Not Investing)
Topic: with 5.5% CDs are Ibonds worth it?
Replies: 50
Views: 7518

Re: with 5.5% CDs are Ibonds worth it?

SnowBog wrote: Tue Oct 17, 2023 2:25 pm If a simple example helps, think of it this way.

If $100 buys you 20 hamburgers today, a "real" investment like I Bonds will in theory maintain it's ability to buy 20 hamburgers - regardless of inflation or market changes - at any point from 1 - 30 years.

$100 in TIPS would in theory accomplish the same thing, if held to maturity. But between purchase and maturity, it might be worth more - or less - based on changes to the inflation and the markets reaction at that point in time. (One would argue the > 1% rate difference in TIPS right now is enough to offset that risk.)
I really like your examples SnowBog. I find IBonds and TIPS difficult to understand but your examples make them easy to swallow. Thank you!
by goGators
Wed Nov 16, 2022 9:11 am
Forum: Personal Finance (Not Investing)
Topic: Roth conversion, withhold tax or pay after conversion?
Replies: 27
Views: 2879

Re: Roth conversion, withhold tax or pay after conversion?

sycamore wrote: Wed Nov 16, 2022 5:02 am
Lee_WSP wrote: Tue Nov 15, 2022 7:56 pm
Not sure. I couldn’t find anything via Google. Probably best to just call your broker for a definitive answer.
One reason is for Backup Withholding. Not common.

But anyway best to ask your broker about how to withhold taxes for a taxable account.
Called Fidelity and confirmed that they could NOT withhold taxes from NON-retirement accounts. I asked about Boxes 4 and 16 on the 1099B and the answer was backup withholding as pointed out by sycamore. Thanks.
by goGators
Tue Nov 15, 2022 6:51 pm
Forum: Personal Finance (Not Investing)
Topic: Roth conversion, withhold tax or pay after conversion?
Replies: 27
Views: 2879

Re: Roth conversion, withhold tax or pay after conversion?

But with an "after tax" account, I'm not sure how you would be planning to "withhold" taxes. Making a "tax payment" is not the same as withholding taxes. Perhaps I'm not understanding what you are suggesting doing. Could you explain more what procedure you are considering? I don’t believe you are able to withhold in a taxable account. I’ve never been presented with the option. In Form 1099-B, Box 4 is Federal Income Tax Withheld and Box 16 State Tax Withheld. So it seems to me that one could withhold taxes when selling investments in an after-tax account. I don't know if it is possible but the boxes are there for a reason. Any ideas? Also, another possibility I don't know about: Because the procedure I describ...
by goGators
Tue Nov 15, 2022 5:08 pm
Forum: Personal Finance (Not Investing)
Topic: Roth conversion, withhold tax or pay after conversion?
Replies: 27
Views: 2879

Re: Roth conversion, withhold tax or pay after conversion?

ResearchMed wrote: Tue Nov 15, 2022 10:55 am
...As a "once per year" possibility, again, for someone old enough to avoid penalties, one could remove money from an IRA, and withhold most/all of it to satisfy the withholding needs. Then, within 60 days (DON'T miss that deadline), put that amount of money, from any source, back into the IRA. NOTE: This can only be done once per year (any 12-month period, not a calendar year) per person.

RM
Instead of an IRA, could I do the same maneuver in an after-tax account? If yes then I don't need to worry about the 60 day deadline since I'm less than 59.5 yo. If no please explain why. Thanks.
by goGators
Tue Nov 15, 2022 9:56 am
Forum: Personal Finance (Not Investing)
Topic: Roth conversion, withhold tax or pay after conversion?
Replies: 27
Views: 2879

Re: Roth conversion, withhold tax or pay after conversion?

CAsage wrote: Sat Apr 09, 2022 4:26 pm ...However, withholding done either by increasing your payroll taxes or by doing an IRA withdrawal (and putting 99% to be withheld) is not calendarized. It's odd, but there we are. So, I withdraw funds end of the year to pay Uncle Sam and the Governor, and it's all good.
Instead of an IRA withdrawal, could one withhold 100% tax liability at the end of the year in an after-tax (for example taxable brokerage) account to avoid paying quarterly estimated taxes? For example, if my 2022 tax bill is $100K, could I just sell $100K worth of investments in December and withhold 100% for tax?
by goGators
Fri May 13, 2022 8:04 pm
Forum: Personal Finance (Not Investing)
Topic: Advice Needed - Estate Planning
Replies: 11
Views: 1383

Re: Advice Needed - Estate Planning

Lee_WSP wrote: Fri May 13, 2022 12:26 pm ...Will your children live and die in Massachussetts? If not, you don't really need to do anything other than children's trusts for your children. Bypass trusts for each other.

The Roth can go into the children's trust as there are no tax complications there.
Thanks Lee for your advice. Our children might not live in Mass when they grow up. I'm confused about the "Bypass trusts for each other.". Are they for state or federal estate tax exemption? Is SLAT, as suggested by @ Joey Jo Jo Jr above a type of bypass trust? Also, to put Roth into the children's trust then the trust should be see-thru, correct?
by goGators
Fri May 13, 2022 10:05 am
Forum: Personal Finance (Not Investing)
Topic: Advice Needed - Estate Planning
Replies: 11
Views: 1383

Re: Advice Needed - Estate Planning

One, there is no point to funding a bypass trust at the second spouse’s death Thank you! I removed the unnecessary bypass trust in my original post. Is there a chance you could move to a state that doesn’t have an estate tax? Yes, that's a possibility. New Hampshire is just 1 hour drive away. Alternately, you might consider setting up a SLAT for benefit of a spouse and make crummey and perhaps even reportable gifts to that. Does not require a 1041 until spouse dies under Fed law, and I would assume Mass law. Note dual SLATs is tricky due to reciprocal trust doctrine. This is an excellent suggestion. However, a significant (60%+) portion of our estate is expected to be in the Roth accounts, we will need to weight between the 16% MA estate t...
by goGators
Thu May 12, 2022 10:18 pm
Forum: Personal Finance (Not Investing)
Topic: Advice Needed - Estate Planning
Replies: 11
Views: 1383

Advice Needed - Estate Planning

Hi all, I would like to get your advice on our estate planning ideas before we meet with an estate lawyer. In the diagrams below, ACC = Accumulation trust, BP = By Pass/Credit Shelter trust, CRUM = Crummey trust, IRA = tax deferred account, ROTH = Roth IRA account, and TAX = Taxable account (brokerage/bank). We have 2 daughters and live in Massachusetts which has a $1M estate tax exemption. While we are both living , we would like to put the Annual Gift Tax Exclusion amount to Crummey trusts as shown below. We assume this will help to reduce our state estate tax. https://i.postimg.cc/nhBxh4ZQ/Capture.jpg When one of us dies , the deceased person's IRA and Roth will be rolled over to the accounts of the surviving spouse. $1M from the decease...
by goGators
Mon Apr 11, 2022 9:04 am
Forum: Personal Finance (Not Investing)
Topic: Annual cost of Medicare - Planning assumption
Replies: 24
Views: 3024

Re: Annual cost of Medicare - Planning assumption

Jack FFR1846 wrote: Mon Apr 11, 2022 8:07 am Boy.....you really need to NOT click anything in there. I made the mistake of doing so some time ago and now my spam has increased from a couple a week to 50 daily.
Really sorry about that. I deleted the link. You might want to do the same. I have ad-blockers on my browser so I'm not sure what happened. Next time I will be more careful. I guess it's more beneficial that I stay in lurker mode.
by goGators
Sun Apr 10, 2022 8:25 pm
Forum: Personal Investments
Topic: "Best" software for "tax torpedo?"
Replies: 29
Views: 5157

Re: "Best" software for "tax torpedo?"

I use I-ORP, https://i-orp.com/Plans/index.html, to have some ideas how much Roth conversions/IRA withdrawals I should do each year.
I then plug those amounts into the Personal_finance_toolbox spreadsheet https://www.bogleheads.org/wiki/Tools_a ... ce_toolbox to make sure they don't fall into any tax humps.
To optimize SS withdrawals, I use Mike Piper's Open Social Security https://opensocialsecurity.com/
Finally, I take the results above and plug them in BigFoot48's Retiree Portfolio Model https://www.bogleheads.org/wiki/Retiree_Portfolio_Model. This spreadsheet allows me to do more adjustments to my plan.
by goGators
Fri Apr 08, 2022 8:19 pm
Forum: Personal Finance (Not Investing)
Topic: Retiree Portfolio Model
Replies: 1807
Views: 543871

Re: Retiree Portfolio Model

BigFoot48 wrote: Fri Apr 08, 2022 11:44 am I have updated 22.4a. Please download again, test and verify if it is fixed now.
Thank you so much. It works!
by goGators
Fri Apr 08, 2022 11:19 am
Forum: Personal Finance (Not Investing)
Topic: Retiree Portfolio Model
Replies: 1807
Views: 543871

Re: Retiree Portfolio Model

Hello,
I'm using v22.4 with Libre Office.
It seems that RPM counts my income twice and that my "State taxable income" (Details > B231) is doubled and causes the "State income taxes" (Details > B240) 2x larger than what it should be.

In Setup, my main income is a $300K Roth conversion (Conv_Start_Amt) + $15K LTCG. The calculated federal tax (setup > L281) is about $60K which I think is correct.
My state does tax IRA withdrawal. If I set "IRA withdrawals (less QCD) to include" (setup > IRA_State) to 100%. The 5% State tax amount (L282) is $31K which is incorrect. If I set IRA_State to 0% then the state tax amount is $16.5K which is about right.
Thank you.
by goGators
Mon Apr 04, 2022 9:21 am
Forum: Personal Finance (Not Investing)
Topic: Retiree Portfolio Model
Replies: 1807
Views: 543871

Re: Retiree Portfolio Model

Thanks for that report that a prior version actually worked in Excel 2003. Excel 2003 is not supported as changes in Excel since then are used in the model. Excel 2013 is used to create and maintain the model. Other spreadsheet programs also work which are noted on the Readme page. Thanks BigFoot. I did not know that Excel 2003 was no longer support. I guess the Readme page should be changed to reflect that. Below is what shown in the V22.4 Readme page "...Excel 2003-2019 - best program. If using v2003 the 2007 format xlsm will open and work with a warning. Must be saved in xls format...." From a security perspective, you shouldn't be using software from 2003. If you don't want to purchase Microsoft Office, then I can recommend t...
by goGators
Sun Apr 03, 2022 9:47 pm
Forum: Personal Finance (Not Investing)
Topic: Retiree Portfolio Model
Replies: 1807
Views: 543871

Re: Retiree Portfolio Model

It seems that v22.4 does not work with Excel 2003. When I press the 'clear entries button (cell O1), many #VALUE! errors show up in the worksheet. There is no such issue with v21.1a.
Thank you in advance for your help.
by goGators
Thu Mar 31, 2022 6:01 am
Forum: Personal Finance (Not Investing)
Topic: Taxes - Step Up in Basis
Replies: 26
Views: 2664

Re: Taxes - Step Up in Basis

See examples in "Maximizing The Step-Up In Basis By Gifting Assets Between Spouses"
https://www.kitces.com/blog/step-up-in- ... ty-states/
by goGators
Wed Mar 30, 2022 5:50 am
Forum: Personal Finance (Not Investing)
Topic: Underpayment Penalty Due To 4th Quarter Roth Conversion
Replies: 51
Views: 4994

Re: Underpayment Penalty Due To 4th Quarter Roth Conversion

twh wrote: Sun Mar 27, 2022 1:18 pm I just have the taxes withheld from the conversion and then it counts as all year. Then call up and have an indirect 60-day rollover from my cash position to the Roth for the tax withheld amount.
+1. See ‘Erase-And-Replace Strategy’ in Example 8 https://www.kitces.com/blog/estimated-t ... ributions/
by goGators
Mon Nov 29, 2021 10:22 am
Forum: Personal Finance (Not Investing)
Topic: Proper Crummey Trust Setup
Replies: 22
Views: 2466

Re: Proper Crummey Trust Setup

The typical way to make the trust intentionally defective is with a swap power. You would swap the low basis asset out for cash or a high basis asset before death so as to receive the step up in basis. As Bruce pointed out. Did you read the article? Gain harvesting hardly ever makes sense and I cannot come up with many plausible scenarios where you'd want to do it with a Crummey trust. I did try to read the article but there were things which I did not grasp completely. Similar to OP, I've just begun to learn about ways to minimize estate taxes. I find trust terminology is quite confusing and really hard to understand for a beginner like me. So I'm grateful for people like you who take the time to explain these stuffs to me. Thank you!
by goGators
Mon Nov 29, 2021 9:13 am
Forum: Personal Finance (Not Investing)
Topic: Proper Crummey Trust Setup
Replies: 22
Views: 2466

Re: Proper Crummey Trust Setup

You'd have to personally be in one of those zero cap gains rates brackets to benefit, but it gets the question of why you're gifting money away in the first place when you don't have much. I try not to hijack the thread so let's use OP's example. ... If we just buy BRK.B and it never pays a dividend, and there's no taxes - what do they kids do when they get the $93k basis BRK.B hypothetically worth $1M on our death? Do they pay taxes when they sell? Or is there a step up? ... Let's also assume that most (90%+) of my assets are in Roth accounts and generate $0 tax when withdrawn. Would it be then advisable to do gain harvesting each year to bring up the BRK.B basis? ...or on my death bed I could withdraw $1M from my Roths and do a swap as B...
by goGators
Sun Nov 28, 2021 8:09 pm
Forum: Personal Finance (Not Investing)
Topic: Proper Crummey Trust Setup
Replies: 22
Views: 2466

Re: Proper Crummey Trust Setup

Lee_WSP wrote: Sun Nov 28, 2021 7:15 pm Why would you want to gain harvest when it's taxed to yourself? There are very few situations where gain harvesting makes sense.
I incorrectly thought the tax brackets were not compressed for a grantor trust. However, would it be better to gain harvest over multiple years at lower tax brackets to minimize the large tax bill at the end?
by goGators
Sun Nov 28, 2021 7:54 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion Poll
Replies: 80
Views: 7481

Re: Roth Conversion Poll

First, I used https://i-orp.com/Plans/extended.html to give me ideas on how much I should convert.
I then used RPM and the Personal finance toolbox spreadsheet to verify and fine tune the amounts.
by goGators
Sun Nov 28, 2021 5:32 pm
Forum: Personal Finance (Not Investing)
Topic: Proper Crummey Trust Setup
Replies: 22
Views: 2466

Re: Proper Crummey Trust Setup

Lee_WSP wrote: Sun Nov 28, 2021 1:16 pm Trust cap gains and income tax brackets are severely compressed, there's no reason to do so past about five or ten grand.
So even it's a grantor trust and the grantor pays the taxes, s/he has to use the compressed tax brackets ?

Also,
NewMoneyMustBeSmart wrote: Sat Nov 27, 2021 3:16 pm If we just buy BRK.B and it nevers pays a dividend, and there's no taxes - what do they kids do when they get the $93k basis BRK.B hypothetically worth $1M on our death? Do they pay taxes when they sell? Or is there a step up?
I would like to know the answers to these questions too. Will there be taxes on the $907K capital gain or not? Please! Thank you.
by goGators
Sun Nov 28, 2021 10:12 am
Forum: Personal Finance (Not Investing)
Topic: Proper Crummey Trust Setup
Replies: 22
Views: 2466

Re: Proper Crummey Trust Setup

Could one do tax-gain harvesting with investments in a Crummey trust ? Thank you.
by goGators
Mon Nov 22, 2021 8:20 pm
Forum: Personal Investments
Topic: Large Roth Conversion
Replies: 19
Views: 4168

Re: Large Roth Conversion

JohnHace wrote: Sat Nov 13, 2021 3:43 pm I have put a lot of time into the RPM spreadsheet. No matter what numbers I use, it always calculates my Portfolio Ending Balances about 2% to 3% lower with the conversion.
This happened to me before, viewtopic.php?p=5778498#p5778498 . Did you specify asset allocation for "Roth Conversion" in row 96 or there about? If you did not, RPM assumed your "Roth Conversion" allocation = 100% Money Mkt .

Also, have you tried https://i-orp.com/Plans/extended.html ?
I really like RPM but I think I-ORP is easier to use.
by goGators
Sun Jan 31, 2021 9:10 pm
Forum: Personal Investments
Topic: RPM tool suggests no Roth Conversion is better?
Replies: 16
Views: 1938

Re: RPM tool suggests no Roth Conversion is better?

MathWizard wrote: Sun Jan 31, 2021 8:57 pm ...
I don't have an explanation. By converting more, your total portfolio would be worth less, because
more of it would be in Roth which has already had the taxes taken out. I don't see how it would be
such a large change as you show.

I typically just one type of change at a time, and make small changes to see whether the effect of the change is positive or negative.
Sorry operator error. see my update above
by goGators
Sun Jan 31, 2021 8:16 pm
Forum: Personal Investments
Topic: RPM tool suggests no Roth Conversion is better?
Replies: 16
Views: 1938

Re: RPM tool suggests no Roth Conversion is better?

Your SS may be getting taxed more heavily when you are making Roth Conversions after you take SS. Redo the exercise and only convert up to top of 12% and before you take SS. .... In my original scenario, I take SS at 67 and 10K/yr roth conversion from 2021 (55yo) to 2037 (71 yo). The 10K/year conversion only fills a few % of the 10% bracket. Follow your suggestions, I entered the following conversion amounts to fill up the 12% bracket: Year - Age Conversions 2021 - 55 77,000 2022 - 56 81,000 2023 - 57 84,000 2024 - 58 88,000 2025 - 59 92,000 2026 - 60 96,000 2027 - 61 101,000 2028 - 62 106,000 2029 - 63 110,000 2030 - 64 116,000 2031 - 65 124,000 2032 - 66 130,000 The final numbers are Base case, tIRA ~ $2.7M Portfolio ~ $7.6M Roth Conv ca...
by goGators
Sun Jan 31, 2021 7:45 pm
Forum: Personal Investments
Topic: RPM tool suggests no Roth Conversion is better?
Replies: 16
Views: 1938

Re: RPM tool suggests no Roth Conversion is better?

smitcat wrote: Sun Jan 31, 2021 7:27 pm ...
When one passes the taxes and RMD's become more problematic.
What if in our tIRAs, we both designate our kids to be the primary beneficiaries? What are the drawbacks?
by goGators
Sun Jan 31, 2021 5:12 pm
Forum: Personal Investments
Topic: RPM tool suggests no Roth Conversion is better?
Replies: 16
Views: 1938

Re: RPM tool suggests no Roth Conversion is better?

... E.g., paying 12% tax to move from traditional to Roth now must be better than leaving money in traditional if your heirs will pay 22% to withdraw it later. There could be a big difference in the "correct" strategy between those who plan to leave their entire estate to a) charity (and thus it will incur 0% tax), vs. b) their children who are all in the highest federal and state brackets (and thus it will incur ~50% tax). You've brought up great points here FiveK. Thank you. Assume that we plan to leave all of our money to the kids. I think I should use 2 RPM spreadsheets, 1 for the parents (RPM1) and 1 for the kids (RPM2), to optimize the Roth conversion strategy. I would use the final results from RPM1 and feed that into RPM2...
by goGators
Sun Jan 31, 2021 2:34 pm
Forum: Personal Investments
Topic: RPM tool suggests no Roth Conversion is better?
Replies: 16
Views: 1938

Re: RPM tool suggests no Roth Conversion is better?

FiveK wrote: Sun Jan 31, 2021 11:43 am In your final balances, how much is still in traditional and what tax rate do you expect will apply to withdrawals by your heirs?
Excellent questions!
Base case, tIRA ~ $2.7M
Roth Conv case, tIRA ~ $2.4M

I don't know the answer for the tax rate. Since the difference between the 2 cases is relatively small, I guess the tax rates would be similar?
by goGators
Sun Jan 31, 2021 1:56 pm
Forum: Personal Finance (Not Investing)
Topic: Retiree Portfolio Model
Replies: 1807
Views: 543871

Re: Retiree Portfolio Model

Thanks for the plot. Trying to understand it, but not quite sure how to interpret or what conclusions to draw. Is the cost % the tax rate? The cost line is always above the ACA line. Does that mean (in your situation) it never pays to do a Roth conversion because the ACA subsidy always exceeds the benefit of the conversion? Thanks for any guidance you can offer in understanding the plot. Thanks for your interest in the plot. Unfortunately, the numbers used to generate this plot are incorrect-I will try to delete that post. You should use the personal finance toolbox spreadsheet as suggested by FiveK to get better results. S/he also pointed out to use a blog by The Finance Buff (aka Harry Sit, aka tfb on this forum) Tax Calculator With ACA ...
by goGators
Sun Jan 31, 2021 10:48 am
Forum: Personal Investments
Topic: RPM tool suggests no Roth Conversion is better?
Replies: 16
Views: 1938

RPM tool suggests no Roth Conversion is better?

Hi folks, I'm using the Retiree Portfolio Model v21.0. I always thought converting up to 12% tax bracket or so would result in a higher final portfolio value. However, for the following inputs: 1. Ages and Year Factors Ages and Years - First Year 2021 Final Year 2056 Years To Forecast 36 Your Age 55 Your RMD Change Age - Your Ending Age 90 Spouse's Age 52 Spouse RMD Change Age - Spouse's Ending Age 87 IRA 1 RMD Start Age 72 Owner y 2. Portfolio Balances Taxable 500,000 IRA 1 1,000,000 3. Allocation and Earnings Rates Use asset classes for earnings forecast c Asset Earnings and Allocation Stock 6.0% Bond 3.0% Tax Exempt 0.0% MM/Other 1.0% Taxable 100.0% IRA 1 100.0% Social Security Benefits Your Social Security Benefits 30,000 Start Age 67 S...
by goGators
Wed Jan 27, 2021 8:38 pm
Forum: Personal Finance (Not Investing)
Topic: Retiree Portfolio Model
Replies: 1807
Views: 543871

Re: Retiree Portfolio Model

FiveK wrote: Wed Jan 27, 2021 12:24 pm Appears the yellow line is the nominal bracket rate. The actual marginal tax rate is likely different.
Hmm, I used the RPM (v21.0) formula in Details!F204 to generate the yellow line. The row was labeled "Marginal rate". Is "nominal bracket rate" the same as "Effective Tax Rate"?
The marginal rate effect of premium tax credits can look very different, depending on whether one has received credits during the year or not.
I'm totally lost....Could you give an example or a link? Thank you.
by goGators
Wed Jan 27, 2021 7:59 am
Forum: Personal Finance (Not Investing)
Topic: Retiree Portfolio Model
Replies: 1807
Views: 543871

Re: Retiree Portfolio Model

deleted
by goGators
Sat Jan 23, 2021 9:44 am
Forum: Personal Finance (Not Investing)
Topic: Retiree Portfolio Model
Replies: 1807
Views: 543871

Re: Retiree Portfolio Model

Another option, perhaps more suited for "optimization" (with all the caveats about how things can change during a year), is the personal finance toolbox spreadsheet. See the Roth IRA conversion wiki for some examples. Or BigFoot48 could include all the nuances of the tax code in each year's tax calculation column. And yes, I realize that's likely an outlandish suggestion. ;) The multiple year "pretty good" tax calculation done in RPM is pretty darn good indeed. There's no formula within RPM that can do that or be added to do it, so following FiveK's suggestions might provide an estimate that could be manually entered in the Federal AGI manual yearly adjustment field on the Detail page. But precisely adding such a factor...
by goGators
Fri Jan 22, 2021 8:37 pm
Forum: Personal Finance (Not Investing)
Topic: Retiree Portfolio Model
Replies: 1807
Views: 543871

Re: Retiree Portfolio Model

Hi,
I'm trying to determine the optimum amount which I could make each year for Roth conversion. In the RPM, with a given income (AGI/Roth Conversion), I would like to calculate the ACA Premium Tax Credits (PTC) for family of 4 with 2 dependents. Are there formulas which allow me to do that? I'm aware of online calculators such as https://www.kff.org/interactive/subsidy ... ator-2020/ but they require manual entries each time I change the the AGI/Roth Conversion amount.

If such formulas exist I could use them to automatically adjust my expense in the Details tab.
Thanks.
GG
by goGators
Wed Jan 20, 2021 4:35 pm
Forum: Personal Finance (Not Investing)
Topic: H&R Block Recovery Rebate Credit claim for 2nd stimulus checks?
Replies: 28
Views: 2532

Re: H&R Block Recovery Rebate Credit claim for 2nd stimulus checks?

snowman wrote: Wed Jan 20, 2021 4:27 pm Adult dependents are not eligible to receive the credit. Software will calculate correct credit based on date of birth of your dependents. Generally speaking, if you receive child tax credit, you will also receive stimulus payment for your dependent child. College kids that are still claimed as dependents by their parents tax return are excluded from stimulus payment. The only way around that is not to claim your child, and have them file their own tax return. However, I know that IRS has some pretty hard rules about dependency, so it's not that straightforward and may not even be possible.
Yes thank you. You are fast. I just found that out myself.
by goGators
Wed Jan 20, 2021 4:31 pm
Forum: Personal Finance (Not Investing)
Topic: H&R Block Recovery Rebate Credit claim for 2nd stimulus checks?
Replies: 28
Views: 2532

Re: H&R Block Recovery Rebate Credit claim for 2nd stimulus checks?

I don't think my 19yo qualified for the 2nd stimulus check :(
https://www.savingtoinvest.com/500-stim ... d-payment/
"...college students and high school kids who are older than 17, but are still being claimed as a dependent by their parents or relative on their federal tax return, who will continue to be ineligible for the additional $600 payment...
by goGators
Wed Jan 20, 2021 4:00 pm
Forum: Personal Finance (Not Investing)
Topic: H&R Block Recovery Rebate Credit claim for 2nd stimulus checks?
Replies: 28
Views: 2532

Re: H&R Block Recovery Rebate Credit claim for 2nd stimulus checks?

snowman wrote: Wed Jan 20, 2021 11:31 am It's been updated in today's release, as expected.
Thank you Snowman. I downloaded today's updates and was able to claim the $600 credit for my young child. However, for my adult(19 yo) child who I claimed as a dependent, the form did not include her. Line j in the Recovery Rebate Credit worksheet only showed $600 (1 child).

Should I overwrite line J with $1200 for 2 children?
by goGators
Tue Jan 19, 2021 9:28 am
Forum: Personal Finance (Not Investing)
Topic: H&R Block Recovery Rebate Credit claim for 2nd stimulus checks?
Replies: 28
Views: 2532

Re: H&R Block Recovery Rebate Credit claim for 2nd stimulus checks?

jharkin wrote: Mon Jan 18, 2021 6:25 pm I'm actually going though the H&R Block 2020 desktop forms right now and I cant find any recovery rebate form... what there is (in my copy) is a "mini-worksheet for line 30" on page 2 of the 1040. It only has information for the first round of stimulus.
Same here. Like others have mentioned, we will need to wait for software updates.
by goGators
Mon Jan 18, 2021 10:25 am
Forum: Personal Finance (Not Investing)
Topic: H&R Block Recovery Rebate Credit claim for 2nd stimulus checks?
Replies: 28
Views: 2532

H&R Block Recovery Rebate Credit claim for 2nd stimulus checks?

Hi folks,
I don't know how to claim the 2nd stimulus credits with my 2020 H&R Block tax software. I looked at its Recovery Rebate Credit worksheet but did not see any entries for the 2nd checks. Could someone show me how to do it? BTW, I have no issue claiming the 1st checks. Thank you!
by goGators
Mon Feb 18, 2019 12:01 pm
Forum: Personal Finance (Not Investing)
Topic: When to take SS
Replies: 16
Views: 2184

Re: When to take SS

I don't know if Mike Piper's calculator could help
https://opensocialsecurity.com/

In his calculator's advanced options, there is an item
Do you receive (or will you receive) a pension from employment that was not covered by Social Security taxes? Yes/No
by goGators
Mon Feb 18, 2019 11:30 am
Forum: Personal Finance (Not Investing)
Topic: Is a Form W-2 required if there is no FICA, FUTA, and income tax owed?
Replies: 12
Views: 813

Re: Is a Form W-2 required if there is no FICA, FUTA, and income tax owed?

Spirit Rider wrote: Mon Feb 18, 2019 9:20 am There are many online services that will file a W-2 electronically to the IRS and mail a W-2 to the employee for about $5 -$10.
Thank you. I googled for online services and found
https://www.thebalancesmb.com/how-to-fi ... ine-397970
...You can e-file W-2 forms online at the SSA's Busines Services Online (BSO) website. It is free and secure...
by goGators
Mon Feb 18, 2019 8:45 am
Forum: Personal Finance (Not Investing)
Topic: Is a Form W-2 required if there is no FICA, FUTA, and income tax owed?
Replies: 12
Views: 813

Re: Is a Form W-2 required if there is no FICA, FUTA, and income tax owed?

I'm just curious about the $600 limit. If I were to pay my neighbor's kid more than $600 last year for doing yard works (mowing lawn, shoveling snow...) would I be required to give him a W-2 form?
by goGators
Mon Feb 18, 2019 8:31 am
Forum: Personal Finance (Not Investing)
Topic: Is a Form W-2 required if there is no FICA, FUTA, and income tax owed?
Replies: 12
Views: 813

Re: Is a Form W-2 required if there is no FICA, FUTA, and income tax owed?

nolesrule wrote: Mon Feb 18, 2019 8:16 am
From the final paragraph in the article you linked to...
Hiring your child can be a tax-smart idea. Remember, however, that the child’s wages must be reasonable for the work performed. So the hire-the-kid strategy works best with teenage children who can be assigned meaningful tasks. Keep the same records as for any other employee to substantiate hours worked and duties performed (e.g., timesheets and job descriptions), and issue your child an annual Form W-2 just like any other employee.
Thank you for pointing that out. I saw that too but was not 100% sure in the case with no income tax owed but SRenaeP pointed out the $600 limit above.
by goGators
Mon Feb 18, 2019 8:09 am
Forum: Personal Finance (Not Investing)
Topic: Is a Form W-2 required if there is no FICA, FUTA, and income tax owed?
Replies: 12
Views: 813

Re: Is a Form W-2 required if there is no FICA, FUTA, and income tax owed?

SRenaeP wrote: Mon Feb 18, 2019 7:59 am ... What you didn't mention that is also important, is your friend's son actually an employee or a contractor to his father? ...
The son is an employee but also a minor (less than 18 of age). Based on the link I posted above, there is no FICA or FUTA required. He also made less than $12k/ year and therefore will not owe any federal income tax. Given those conditions, is a Form W-2 necessary?

So I think it's a yes, according to this requirement
SRenaeP wrote: Mon Feb 18, 2019 7:59 am ...
• You paid $600 or more in wages even if you did not withhold any income, social security, or Medicare tax.
...
by goGators
Mon Feb 18, 2019 8:01 am
Forum: Personal Finance (Not Investing)
Topic: Is a Form W-2 required if there is no FICA, FUTA, and income tax owed?
Replies: 12
Views: 813

Re: Is a Form W-2 required if there is no FICA, FUTA, and income tax owed?

...
That means you can hire your under-age-18 child (as a legitimate employee) and his or her wages will be exempt from Social Security tax, Medicare tax, and federal unemployment (FUTA) tax. In fact, the FUTA tax exemption lasts until your employee-child reaches age 21.
...
https://www.marketwatch.com/story/the-n ... 2018-06-04