Bogleheads.org

Fair enough.
Thanks.

Galawdag

I agree that the federal code is not ambiguous. I think it could be argued that maintaining the apt for example is a work expense. Since work expenses are deductible per pa code, one could conceive of trying to write it off on state and city taxes. I see the PA code as ambiguous, or open to interpretation, not the federal code.

I agree with your bottom line with respect to how I should proceed.

Fyre

Good analysis. I was a little tongue in cheek about celebrities, but you are right.

I think there is enough ambiguity with respect to work expenses and travel to work that one could interpret the terms liberally and consider writing off the apt expense, or travel, etc. but the intent is probably more in line with the federal guidelines. It is not a usual situation and probably a red flag for an audit in the best case scenario. At the risk of leaving money on the table, I will probably raise the question with my accountant and choose not to write off those expenses unless he can provide further validation, such as through direct communication with dept of revenue or tax lawyer.

I have a full time job in another city in the state of PA where I spend 50% of my time and receive all of my income. The other 50% I spend at home in a separate county where my children go to school, a separate permanent residence. My understanding of federal rules is that the tax home is where I work and I can not write off travel going to another residence and back. However I have been paying the higher city taxes where my permanent residence is and do not write off the considerable travel expenses, food on the road, apartment expense where I work. Worst of both worlds. Pay the city tax as if it’s my residence, can’t write off expenses because it is not my tax home. I felt I was being cheated on one end or the other. My accountant told me...

mcraepat9 wrote: ↑Thu Jan 26, 2023 8:10 pm

catchup wrote: ↑Thu Jan 26, 2023 6:36 am This will probably be deleted, but maybe I should ask Mehmet Oz what he did. Is he on this forum?

One important difference between you and Oz: Oz didn’t get the gig.

True, but he worked away from his “home” address in Montgomery County Pennsylvania.

Smiley Face, Thank you for your reply. I do not feel cheated or entitled. I am simply seeking to understand how travel to a different work location affects my taxes— what is considered a work related tax deduction. If there were not nuances, the tax codes would not use clarifying examples. There are other questions I could ask as well. Would changing my primary residence to my place of work obviate the need to pay city taxes? Would establishing a part time residence change things? I am not an independent contractor, but would an apt or hotel be a work related expense in that case? And how does the W2 really change the facts of the situation. I’m not being cheated if I’m following the rules. That is why I brought the question to the forum. T...

I guess the bottom line is that if bogleheads find it questionable, an auditor would also.
The money for living, transportation, and quarterly taxes is already spent anyway. No new major hits to absorb…

I do think that these grey areas are where savvy people without integrity probably get away with paying less than the rest of us in taxes.

This will probably be deleted, but maybe I should ask Mehmet Oz what he did. Is he on this forum?

Thanks for your replies.
The argument for writing off expenses is that it is a work expense necessary for my job. Whereas the federal govt considers the locality of my employment my tax home, the de facto city/ state tax home is my residence away from my job. I feel I should not be paying the taxes for my home locality if I can’t write off work expenses. But whereas it is spelled out in the federal code, it is not spelled out in pa code. They do allow deduction for work expenses.

I agree, it does resemble a what the hell I’ll write it off anyway scenario.

Not thrilled about searching for a new accountant but it is probably time.

Thanks.

I have a full time job in another city in the state of PA where I spend 50% of my time and receive all of my income. The other 50% I spend at home in a separate county where my children go to school, a separate permanent residence. My understanding of federal rules is that the tax home is where I work and I can not write off travel going to another residence and back. However I have been paying the higher city taxes where my permanent residence is and do not write off the considerable travel expenses, food on the road, apartment expense where I work. Worst of both worlds. Pay the city tax as if it’s my residence, can’t write off expenses because it is not my tax home. I felt I was being cheated on one end or the other. My accountant told me...

I have a first world problem. We have been saving for college in 529s for our three kids for 16 years. I have created my own glide path and have moved money incrementally toward cash for the older two kids gradually since they turned 8, 10 years out from college. Per IRS limits, I have done this reallocation twice a year around the end of June and the end of December. Per my formula, I would be moving about a half years tuition at current rates to cash for each of them, plus some extra money to account for any tuition increases that have occurred since last rebalancing. I use current tuition at a specific private college as a ballpark. I have slept well at night with this strategy. Since the purpose of having more cash as you get closer to ...

I can share my experience with a similar situation. I converted Traditional IRA contributions to Roth for several years, only to realize that I had failed to pay some taxes resulting from ownership of additional IRA’s. I had given my accountant statements that included IRAs that I owned, so in a sense they should have caught the mistake. I wanted to be honest so I had several years of tax returns redone. I was charged huge amounts of penalties and interest by state and federal government, around 15% for Maryland. My accountant charged me to redo my tax returns. Several years later, when I found I had overpaid local taxes for about 7 years, I was only allowed refunds for the prior 3 years. They took my money when I underpaid but wouldn’t giv...

It may help to consider financial well-being as a continuum rather than a point in time. Just a thought.

Good thoughts, thanks. I agree.
I also have fidelity treasury index in old 401k. Might be time to roll it over so I can keep one fund and one find only, as you suggest. That one is 5-10 yr duration so when rebalancing between asset classes my current situation is a bit muddled.

Thanks, Arctic pineapple.
I edited the post.
All of my bond funds are in tax advantaged accounts.

I recently discovered that VSIGX the intermediate treasury bond index exists. When I set up my Swensen like portfolio the fund was a government bond index, including mortgage backed securities, etc. it changed to a treasury index it looks like a few years ago. I totally missed it. Admiral share minimum is 10k instead of 50 k for VFITX, the active treasury bond fund, and expense ratio is .07 compared with .1 for investor shares of Vfitx, .2 for the admiral shares version of the active fund. I switched over about 25 k from Vfitx to Vsigx to capture the lower expense ratio. Is there any reason I shouldn’t switch my 125k of Vfitx to Vsigx. Same for about 35k Vfitx in my wife’s ira. Yield is slightly higher for Vsigx though it has performed a li...

Understand your frustration.
Join the exclusive club of those who have made significant mistakes. I think it’s close to 7 billion strong.

Be kind to yourself and forgive.

Ok but don’t forget to cash in on the early bird specials.

I’m surprised you had enough time to write a post. Fast Typer.

Yes. You can also get a colonoscopy. Actually, consider that an outdated joke. Age threshold has lowered by some guidelines since I turned 50.

I used this strategy:
70/30 total portfolio
70/30 529.

Money needed in short term (checking account, down payment, less than 2 years until needed: cash)

Same with 529 money:
Less than 2 years cash or income preservation equivalent.

Need in 4 years: 75% cash, 25% invested 70/30 stocks and bonds—Tips in Nevada 529, actually.

6 years: 50% cash, 50 % invested 70/30

8 years: 25% cash, 75% 70/30 investments

10 or greater: 100% equity weighted investments 70/30.

Assume 0% growth and 0% inflation for simplicity and adjust yearly based on current tuition costs.

Year 3:
12.5% equity weighted investments 70/30 in my own case.
87.5% cash like instruments.

Extrapolating further, since rebalancing can occur twice a year, you could go as low as 6.25% invested.

This example is so short term it is almost theoretical, however I have used this framework for kuds as they have approached 7,8,9,10 years out from college years 1,2,3,4 and so on, reserving appropriate amounts in income preservation fund (cash) and the rest invested 70/30.

I assume 0% growth and 0% interest for simplicity and adjust yearly based on current portfolio value and current tuition. It has worked out alright.

Take that back. As you said state tax deduction not much of an advantage.

If you get a state tax refund, you should take advantage of that. Money you need within 2 years should be in cash like instruments, either in or out of 529.

May be better off buying some I bonds at 7% and then using the money in 12 or more months.

I use Swensens recommendation: Money you will need in 4 years should be invested 75% according to your equity weighted asset allocation for investments, 25% cash, and so on.

Wouldn’t invest 529 money aggressively if using it soon.

So, my accountant seemed to think that if I put the money back into another ira, I could treat it as a rollover on the taxes despite the code listed on the 1099.

It is true that you can’t rollover earnings associated with an excess contribution withdrawal, but I did not make an excess contribution to begin with. The error therefore was made in labeling the withdrawal as an excess contribution withdrawal and was corrected in good faith.

We will see what the irs thinks.

Yes I am clear now that my 2020 contribution was made in 1/21, my 2021 contribution was made in February.

Vanguard says I can put back the 7000 but not the earnings because the 1099 states it is an excess contribution.

I was entertaining depositing the 7k and earnings and labeling it as a rollover in a separate account at Vanguard or Fidelity. The 5498 would prove I made no excess contribution to begin with but it doesn’t sound like that’s going to fly with the IRS due to the code on 1099.

Doesn’t sound like vanguard will change the code.
I’ll see if my accountant or any others support rolling the entire amount over.

After misreading my IRA contribution summary online and double checking with vanguard by phone, I filled out an excess contribution and withdrew the second of two 7000 dollar contributions made early in the year. I later realized this was a mistake. The first contribution was for 2020; the second for 2021. I would like to redeposit the 7000 plus 1500 or so of earnings into a rollover to avoid taxes. I realize you can not rollover an excess contribution but I didn’t truly make an excess contribution and therefore the money withdrawn could not have been an excess contribution withdrawal. The problem is my 1099 will be labeled with that code. I just can’t accept paying those extra taxes. What should I do? Awaiting response from my accountant. ...

Made my first purchase!
Only 23 years late to the party.

Thanks everyone.

Thank you Snowbog.

Up until now I’ve kept my cash bucket separate from my investment bucket which is 70/30 stocks and bonds.

Will need to decide on a system that works best. I think we can decrease our cash reserves safely with this alternative bond investment, however I will need to manually update it and perhaps substitute a fake bond fund ticker if I want a vanguard portfolio analysis with percent breakdown of asset classes. A little bit of a deterrent, but perhaps worth it.

Thank you, Mel for your reply!
Makes sense.

Best to you as well.

Thank you. I am inspired.
Do investors here consider i bonds to be part of there bond allocation or a cash equivalent.
I have 15% treasuries, 15% Tips. Should I include i bonds with tips, or as a separate asset class.
Is there a ticker symbol that can be plugged in to Vanguard app for purposes of portfolio tracker analysis?

Thanks! Good place to start, once I have my bill in hand, I’ve narrowed it down to about 53 renewable energy companies. Seriously, this is very helpful.

I am in the Pittsburgh area and I’m interested in making a shift to a renewable energy company for our residential power supply. Currently have Duquesne light. I don’t mind spending a little extra to try to do my part to fight climate change. Does anyone know about comparative shopping methods for selecting a power company. Is there a bogleheads type forum for renewable energy? Has anyone made such a switch in their respective home towns, or better yet, in Pittsburgh? Thanks for any advice in advance. This is not a political post. Everyone is entitled to their opinions about the issue. Asking from the consumer finance perspective.

Thanks! Looks like I just need to wait until Feb 18.
Hopefully they will provide a nice foreign tax paid statement like they usually do.

Boy, people are hard on Vanguard over this issue.

I am so grateful the amazing technology and opportunities to invest that Vanguard continues to provide.

[Merged into the ongoing discussion -- moderator oldcomputerguy]

Hi. I am looking at my 1099-div form. I don’t see emerging markets listed and can’t figure out how. Also, I don’t see a foreign tax credit form this year. Not sure why. Any insights?

Thanks in advance.

jello_nailer wrote: ↑Sat Aug 29, 2020 11:12 pm A 12 year old string??? About tuxedo pants?

I have my favorite buggy whip that needs the handle wrapped. What do I do?

It's like my favorite cherished family heirloom ax, Abe Lincoln once owned it - head has been replaced twice and the handle has been replaced 3 times.

Not sure I’m picking up what you’re laying down, but it seems as if I’m being mocked.

It was a big purchase then, with a lot of sentimental value, and I had a serious question about the most sensible way forward with respect to spending a bunch of money to replace the item or wasting a bunch of money by never using the jacket again. Needed some practical input.

If I’m fortunate enough to have that blessing of seeing my kids get married, this will all seem trivial whether I wear the same tux or not.

I’m a little bit thinner than at my wedding. Now running marathons. Good point though.

Yes, you are probably right.

Yes, it’s traditional black.
I think you’re probably right.
I’ll either replace the pants now or wait another 10 or 20 years until my children get married.

Thanks.

Hi. I’m packing up our house to move out, and sadly I can’t find the pants I wore with my Brooks Brothers tuxedo I bought 15 years ago for my wedding. A victim of multiple moves, etc.

Does anyone know if tuxedos are purchased as a single matching suit, or are the pants sold separately, like grey pants and a sport jacket?

In other words, can they be replaced, or is the jacket and cummerbund useless without the matching pants. Would Brooks Brothers be able to find the pants that go with that jacket.

Anyone ever lost something like that of sentimental value?

Thanks.

100% stocks isn’t bad if you don’t have much invested and therefore don’t have much to lose. If you see your life savings plummeting and have a family to look out for, it doesn’t take long to see that such an investment strategy can be painful if not irresponsible.

I think it makes sense to diversify, build an allocation that you can stick with for the long term. Then, think in terms of total return for your portfolio rather than how your 1 bond fund is doing.

By diversifying, you generally get more return for the same amount of risk, and less risk for the same return.

One consideration if rolling over to another state 529 every year: If you put 5000 in and remove 5000 during the same calendar year, say 2020, it may turn out to be a net 0 contribution to your 529. If you wait until the next calendar year 2021 to roll over the 5000, you may need up contribute 10,000 that year to net 5000 in contributions. We are moving out of Maryland this year, will contribute by rolling into our MD 529s for 3 kids. We will wait at least 12 months and then roll out of Maryland into Nevada (Vanguard). Maryland won’t claw back the tax refunds. But this is different than rolling out of Maryland during the same calendar year that you are contributing. You may get away with it, but it Would smell fishy, at the very least.

Swensen portfolio has served me well.
Has become more conventional as index funds have caught on more.

I would read David Swensen Unconventional Success. That, Bogleheads guide, and this forum was enough for me to put together a 6 asset class well diversified portfolio and address questions as they come up. I would continue to max out tax advantages options, 457. You can afford the nice house, but need to be prepared for worst case scenarios, things like housing market crashes, burnout etc. Continue to have a live within your means attitude. Agree you can do anything you want but not everything. It’s amazing how a nice comfortable salary can still leave you wondering how to pay for everything... Big house equals big expenses. Big salary equals big taxes. Furnishing, painting, new roof, can all add up in a big house. 30k travel. Private schoo...

Here’s how I have done it. It may help you as well. Think of your 529s as one bucket. Dont use age based portfolios. Money that you will need in less than 2 years should be in cash, short term bonds. Cash like instruments. Money that you will need in greater than 10 years should be invested according to your preferred investment allocations, such as 70% equities/ 30% bonds, broadly diversified. Money needed in 6 years: 50 % cash/ 50 % diversified investment allocation. 4 years: 75% cash, 25% investment portfolio. 8 years: 75% investment portfolio, 25% cash. This is what David Swensen recommends with respect to general investment strategy, approaching retirement age, etc. we have applied it to 529s as well. I assume 0% growth and 0% tuition ...

Good perspective, thanks.
I don’t think it’s deliberate malfeasance. More likely due to fragmentation between marketing department and others. Marketing will say what you want to hear. People at the branch don’t set up the deals. I’ll give them a chance to Respond in writing, go in to the branch with the offers, let them know I may send out a few letters and address the issue on certain public forums, and then drop it and move in.

While shopping for mortgages and relocating this Spring, I decided to open a checking account at Dollar Bank and do my mortgage with Dollar. Among the incentives offered, in addition to a decent mortgage rate, were the following: $200 off mortgage fees for having a qualifying checking account: received. $400 of promotions associated with opening the checking account: receiving, with last 100 coming on 1 year anniversary. And: Refer a friend, with 25 dollars going to my wife for referring me and 100 to me upon opening the account -- DENIED. Before I opened the account online and went through these promotions and was assured I would be eligible for receiving them. It did not matter that the referring friend was my wife, I was assured. I was t...

Thanks for all of the replies. My wife and I have been working together to get the house in order and stay financially prepared, and avoid living beyond our means. We've linked all of our checking accounts so we now have access to our funds, it was just a matter of going through the logistics, and I was a little more anxious to do so right away than she was. Not a big deal. The construction has dragged on. I am now getting regular biweekly paychecks, the IRS sent my $14,000 refund, and we have a little extra time before having to pay movers and final payments for needed repairs. So, no need to borrow from retirement...yet...I just needed to understand my options for short term cash needs. I am glad that we are able to keep it simple as well...

Looks like you have received a lot of good advice. I agree with not doing anything rash. If counseling was helpful, would try to resume even if online. With a young kid, your wife's chronic health conditions, stressors at work, and burnout, may I suggest working especially hard to take care of yourself? Do you exercise? Have you been active in sports? Training for a marathon, triathlon, joining a running group, soccer club, outdoor yoga class, or taking up some other hobby or passion outside of work, may go a long way toward clearing your head and attaining a sense of well-being. Sometimes it's not that easy, I get that, but it's just a thought. Exercise has helped me tremendously through difficult circumstances, even if it is not a cure-al...