Search found 842 matches

by jdilla1107
Thu Apr 25, 2019 12:45 pm
Forum: Personal Finance (Not Investing)
Topic: Premium Tax Credit for ACA
Replies: 8
Views: 681

Premium Tax Credit for ACA

I have been playing with tax software and am amazed at the cliff I have found involving the premium tax credit for ACA based health insurance. Family of 4: (Including all sorts of specific info in my tax software) Situation 1: A MAGI of $97k results in a tax credit of $7,439 Situation 2: A MAGI of $...
by jdilla1107
Wed Apr 17, 2019 3:09 pm
Forum: Investing - Theory, News & General
Topic: Loans from 401k -- back door investing?
Replies: 57
Views: 5245

Re: Loans from 401k -- back door investing?

I think we agree, except that I would call this double taxation of the loan interest. I would also call the end result of a investing in a taxable account double taxation, or investing in a Traditional IRA with non-deductible contributions double taxation. Doesn't a non-deductible IRA allow you to ...
by jdilla1107
Wed Apr 17, 2019 1:52 pm
Forum: Investing - Theory, News & General
Topic: Loans from 401k -- back door investing?
Replies: 57
Views: 5245

Re: Loans from 401k -- back door investing?

If you think that the loan interest isn't taxed, then please make the case why borrowing $50K from a Traditional 401k to pay back $100K in one year could be a good idea. It's exactly like a non-deductible IRA contribution which is sometimes a good idea and sometimes not. It is a good idea if you ar...
by jdilla1107
Wed Apr 17, 2019 12:52 pm
Forum: Investing - Theory, News & General
Topic: Loans from 401k -- back door investing?
Replies: 57
Views: 5245

Re: Loans from 401k -- back door investing?

The extra 10k is paid with post tax money, so if you have a 25% tax rate, it cost you 13,373 of pre-tax money to add $10k to your 401k. However, it will be treated as pre-tax money at withdrawal and taxed again. You are better off investing in an after-tax 401k, or sticking to the normal channel wh...
by jdilla1107
Sun Apr 14, 2019 7:46 pm
Forum: Personal Finance (Not Investing)
Topic: Late K1
Replies: 9
Views: 1064

Late K1

I received a small K1 today (Apr 14th) that I wasn't expecting for 2018. I already filed my taxes. I am looking at the 1040 amendment process and it looks painful. I estimate that I only owe about $200 more. I read that the negligence penalty is 20% of the amount owed and a $40 penalty seems great f...
by jdilla1107
Fri Apr 12, 2019 2:10 pm
Forum: Investing - Theory, News & General
Topic: Holding LT Treasury bonds in high equity portfolio with flat yield curve
Replies: 36
Views: 3189

Re: Holding LT Treasury bonds in high equity portfolio with flat yield curve

Funny, I thought the exact opposite. With a flat yield curve, I thought I should go longer so I don't end up holding bonds paying paltry rates in a couple years when rates fall again. Realize half the people in the market see it one way and half the people see it the other way for prices to be where...
by jdilla1107
Fri Apr 12, 2019 1:52 pm
Forum: Investing - Theory, News & General
Topic: Indexing on leverage?
Replies: 31
Views: 2259

Re: Indexing on leverage?

50% leverage means that the smallest downturn will result in a margin call. You responded to my comment with "The idea is to not maximize your leverage". 50% is maximizing your leverage. Everyone on this forum talks about leverage as an academic concept. It's the actual real-world mechanics that ma...
by jdilla1107
Fri Apr 12, 2019 11:16 am
Forum: Investing - Theory, News & General
Topic: Indexing on leverage?
Replies: 31
Views: 2259

Re: Indexing on leverage?

People on this forum give all sorts of nuanced answers to this question and miss the absolutely critical point. Equity margin is callable. This means if stocks drop, you will have to put up more cash immediately. Where will this cash come from? If you don't have the cash, your position is immediate...
by jdilla1107
Fri Apr 12, 2019 10:45 am
Forum: Investing - Theory, News & General
Topic: Indexing on leverage?
Replies: 31
Views: 2259

Re: Indexing on leverage?

People on this forum give all sorts of nuanced answers to this question and miss the absolutely critical point. Equity margin is callable. This means if stocks drop, you will have to put up more cash immediately. Where will this cash come from? If you don't have the cash, your position is immediate...
by jdilla1107
Thu Apr 11, 2019 7:38 pm
Forum: Investing - Theory, News & General
Topic: Indexing on leverage?
Replies: 31
Views: 2259

Re: Indexing on leverage?

People on this forum give all sorts of nuanced answers to this question and miss the absolutely critical point. Equity margin is callable. This means if stocks drop, you will have to put up more cash immediately. Where will this cash come from? If you don't have the cash, your position is immediatel...
by jdilla1107
Mon Apr 08, 2019 3:44 pm
Forum: Investing - Theory, News & General
Topic: Tax Credentials?
Replies: 3
Views: 479

Re: Tax Credentials?

The answer is a CPA. You want one who advises clients on tax avoidance and retirement planning.

Or do it yourself with this forum and the internet.
by jdilla1107
Mon Apr 08, 2019 3:37 pm
Forum: Investing - Theory, News & General
Topic: Should I place bonds in my IRA or Roth IRA
Replies: 25
Views: 2512

Re: Should I place bonds in my IRA or Roth IRA

There is a wiki article all about this if you want detailed info:

https://www.bogleheads.org/wiki/Tax-eff ... _placement
by jdilla1107
Mon Apr 08, 2019 2:37 pm
Forum: Personal Finance (Not Investing)
Topic: best card bonus for $500 in spend in 3 months
Replies: 23
Views: 2227

Re: best card bonus for $500 in spend in 3 months

Here are all of the $500 bonus cards I have done in the last 18 months or so: (i have not checked if they stll offer the bonus) Chase Saphire Barclay Arrival Capital One Venture Rewards Citi Thank you Premier Capital One Savor I was actually looking for a card that offered a large bonus for $500 in...
by jdilla1107
Sun Apr 07, 2019 7:52 pm
Forum: Personal Finance (Not Investing)
Topic: best card bonus for $500 in spend in 3 months
Replies: 23
Views: 2227

Re: best card bonus for $500 in spend in 3 months

Here are all of the $500 bonus cards I have done in the last 18 months or so: (i have not checked if they stll offer the bonus)

Chase Saphire
Barclay Arrival
Capital One Venture Rewards
Citi Thank you Premier
Capital One Savor
by jdilla1107
Sun Apr 07, 2019 1:10 pm
Forum: Personal Finance (Not Investing)
Topic: best card bonus for $500 in spend in 3 months
Replies: 23
Views: 2227

Re: best card bonus for $500 in spend in 3 months

Capital one savor is giving $500 for $3k in spend over 3 months. This is the one I am doing now.
by jdilla1107
Sun Apr 07, 2019 8:23 am
Forum: Investing - Theory, News & General
Topic: FIDO Zero Funds losing to Vanguard?
Replies: 58
Views: 7743

Re: FIDO Zero Funds losing to Vanguard?

Vanguard is just another brokerage at end of day. Fidelity too. Not really. Vanguard is fundamentally different than Fidelity and other brokerages: https://about.vanguard.com/what-sets-vanguard-apart/why-ownership-matters/ Fidelity has a profit motive and could raise their fees to drive increased p...
by jdilla1107
Sat Apr 06, 2019 10:42 pm
Forum: Investing - Theory, News & General
Topic: FIDO Zero Funds losing to Vanguard?
Replies: 58
Views: 7743

Re: FIDO Zero Funds losing to Vanguard?

Vanguard is just another brokerage at end of day. Fidelity too. Not really. Vanguard is fundamentally different than Fidelity and other brokerages: https://about.vanguard.com/what-sets-vanguard-apart/why-ownership-matters/ Fidelity has a profit motive and could raise their fees to drive increased p...
by jdilla1107
Sun Mar 31, 2019 2:31 pm
Forum: Investing - Theory, News & General
Topic: I don't understand stock buybacks
Replies: 169
Views: 9715

Re: I don't understand stock buybacks

I'm also confused by what happened to these 10 extra houses worth $1m. If the sole remaining homeowner chooses to burn them down, that's his fault, not his accountant's for suggesting buying them in lieu of distributing a dividend. I would concede I am not very creative and am not sure what I would...
by jdilla1107
Sun Mar 31, 2019 2:19 pm
Forum: Investing - Theory, News & General
Topic: I don't understand stock buybacks
Replies: 169
Views: 9715

Re: I don't understand stock buybacks

I don't understand the allegory - Doesn't the sole HOA member now own 10 houses worth $1M at the end of the story? He started with 1 house and now owns 10 houses. Seems like a big win. The point of the allegory is that the business shut down immediately after all the shares were bought back. All th...
by jdilla1107
Sun Mar 31, 2019 2:13 pm
Forum: Investing - Theory, News & General
Topic: I don't understand stock buybacks
Replies: 169
Views: 9715

Re: I don't understand stock buybacks

I don't understand the allegory. Doesn't the sole HOA member now own 10 houses worth $1M at the end of the story? He started with 1 house and now owns 10 houses. Seems like a big win.

A stock buy back just reduces the number of shares. If you want the dividend instead, you just sell some shares.
by jdilla1107
Sat Mar 30, 2019 7:49 pm
Forum: Investing - Theory, News & General
Topic: I don't understand the case for EE bonds
Replies: 534
Views: 56819

Re: I don't understand the case for EE bonds

EE bonds are also tax deferred. The CD is not. This can be quite an advantage if you are in prime working years now and will have much lower income in retirement.
by jdilla1107
Tue Mar 26, 2019 2:50 pm
Forum: Investing - Theory, News & General
Topic: How does a treasury bond fund lose money?
Replies: 15
Views: 1585

Re: How does a treasury bond fund lose money?

The benefits of a fund far outweigh the illusion of annual consistently increasing returns. That's usually true, but the primary benefit of a fund, namely diversification, is not an issue when buying U.S. Treasuries, TIPS, savings bonds, etc. because they are all backed by the U.S. federal governme...
by jdilla1107
Tue Mar 26, 2019 9:43 am
Forum: Investing - Theory, News & General
Topic: How does a treasury bond fund lose money?
Replies: 15
Views: 1585

Re: How does a treasury bond fund lose money?

If you buy an intermediate treasury fund, that fund is always holding maturities of around 5-7 years. This means: - When a 10 year bond only has 2 years left, it is sold from the fund. - You are always holding bonds with around 5-7 years left to maturity, even when you sell the fund. - The returns o...
by jdilla1107
Wed Mar 06, 2019 5:23 pm
Forum: Investing - Theory, News & General
Topic: S&P 500 Dividend Yield Plus Buyback Yield for 2018 Was 5.96%
Replies: 32
Views: 4579

Re: S&P 500 Dividend Yield Plus Buyback Yield for 2018 Was 5.96%

Though, it doesn't seem to be a straightforward metric given that it's possible that shares are bought back at too high of a price, and actually diminishing shareholder wealth. You can counter this by just selling shares yourself. The idea is that the only difference between a dividend and a buybac...
by jdilla1107
Wed Mar 06, 2019 5:14 pm
Forum: Personal Finance (Not Investing)
Topic: Another Capital Gain Tax Avoidance - Swapping Returns
Replies: 22
Views: 2119

Re: Another Capital Gain Tax Avoidance - Swapping Returns

It seems to me that "Direct Indexing" or "Stock Level Tax Harvesting" would have the same results on a theoretical level. These are available to folks with as little as $100k (for a fee). I do not consider that high networth. As above posters have indicated, I find that wealthy people (qualified in...
by jdilla1107
Wed Mar 06, 2019 5:14 pm
Forum: Personal Finance (Not Investing)
Topic: Another Capital Gain Tax Avoidance - Swapping Returns
Replies: 22
Views: 2119

Re: Another Capital Gain Tax Avoidance - Swapping Returns

What was disqualified in the 90s? Certain option positions that were essentially equivalent to stock? I think plenty of option strategies are still available. You are missing the point. The IRS does not care what options strategies you execute. They care about what you report for capital gains/loss...
by jdilla1107
Sun Mar 03, 2019 11:30 am
Forum: Personal Finance (Not Investing)
Topic: Another Capital Gain Tax Avoidance - Swapping Returns
Replies: 22
Views: 2119

Re: Another Capital Gain Tax Avoidance - Swapping Returns

I don't think the things you are discussing avoid capital gains taxes (anymore). You can achieve the same thing by: - Shorting the stocks you own - Buying options against your own position And these things were specifically disqualified by the IRS for cap gains avoidance purposes in the 90s. It's po...
by jdilla1107
Sat Feb 09, 2019 12:22 pm
Forum: Personal Finance (Not Investing)
Topic: How The New QBI Deduction-Reduction Ruins The Value Of Pre-Tax Retirement Plans For Small Business Owners
Replies: 57
Views: 5056

Re: How The New QBI Deduction-Reduction Ruins The Value Of Pre-Tax Retirement Plans For Small Business Owners

vtomar wrote: Thu Feb 07, 2019 10:33 am I have done my taxes using Turbo Tax and turbo tax hasn't taken into account my solo 401k contributions while calculation QBI.
This is also true for HR Block software right now. But, I have a message that says an update is coming realating to this...
by jdilla1107
Tue Jan 29, 2019 8:16 pm
Forum: Investing - Theory, News & General
Topic: Why do companies rarely issue new stock?
Replies: 45
Views: 3112

Re: Why do companies rarely issue new stock?

It's because the debt markets are very attractive for large public companies. Large public companies can borrow at rates close to government debt rates. So, a large company can borrow at 4% and make a return of 10-20%. If you believe in your growth prospects, then debt makes more sense than equity. ...
by jdilla1107
Sun Jan 27, 2019 7:09 pm
Forum: Personal Finance (Not Investing)
Topic: Turbo Tax vs. H&R Block
Replies: 50
Views: 3956

Re: Turbo Tax vs. H&R Block

I used TurboTax for many years and then switched to HR Block ago after TurboTax raised their prices. My opinion is that they are essentially equivalent.

Both programs can handle federal and state.
by jdilla1107
Sun Jan 27, 2019 6:05 pm
Forum: Personal Finance (Not Investing)
Topic: $158k Income and 0 federal income tax
Replies: 40
Views: 7413

Re: $158k Income and 0 federal income tax

What did you think a refundable credit meant? My assumption was that it would always be $2k per child. 1) It's only partially refundable. (Max $1,400 per child) 2) You need to owe at least the value of the credit to get the full credit amount. For two children, it's optimal for me to owe $4k, befor...
by jdilla1107
Sat Jan 26, 2019 3:20 pm
Forum: Personal Finance (Not Investing)
Topic: $158k Income and 0 federal income tax
Replies: 40
Views: 7413

Re: $158k Income and 0 federal income tax

KlangFool wrote: Sat Jan 26, 2019 12:22 pm
JoeJohnson wrote: Sat Jan 26, 2019 12:12 pm $4k is not refundable. It's capped at $1.4k per child.
You are right.

KlangFool
This credit seems complicated based on this and seeing it get reduced based on the amount that I owe.

I think I'm back to not being interested into how any of this works and just running what-if scenarios. :-)
by jdilla1107
Sat Jan 26, 2019 11:30 am
Forum: Personal Finance (Not Investing)
Topic: $158k Income and 0 federal income tax
Replies: 40
Views: 7413

Re: $158k Income and 0 federal income tax

jdilla1107, The point here is if you reduce the tax owed to $0, you collect the whole $4,000 refund. So, it may be worthwhile for you to do that. KlangFool That is odd. It appears there is a strong incentive to not owe anywhere between 0-$4000 in federal tax before the credit is applied. For exampl...
by jdilla1107
Sat Jan 26, 2019 11:16 am
Forum: Personal Finance (Not Investing)
Topic: $158k Income and 0 federal income tax
Replies: 40
Views: 7413

Re: $158k Income and 0 federal income tax

OP, Please explain why this is a problem? It is a refundable tax credit. So, the government pays you even if your tax bill is zero. <<Total Tax Owed - $1,537 ( I could optimize this to 0 with some employee 401k deductions, but if i do too much, I will hit the 0% marginal tax rate from child tax cre...
by jdilla1107
Fri Jan 25, 2019 4:26 pm
Forum: Personal Finance (Not Investing)
Topic: $158k Income and 0 federal income tax
Replies: 40
Views: 7413

Re: $158k Income and 0 federal income tax

caffeperfavore wrote: Fri Jan 25, 2019 2:11 pm You can also set up an S Corp to trim down your FICA and income on earnings. Doing 50/50% in payroll and deduction is, as I understand, pretty standard. There's also business expenses you can deduct.
I did not realize this. Thanks for the tip.
by jdilla1107
Fri Jan 25, 2019 10:37 am
Forum: Personal Finance (Not Investing)
Topic: $158k Income and 0 federal income tax
Replies: 40
Views: 7413

Re: $158k Income and 0 federal income tax

Welcome to the club. While income tax is low, the OP still paid $16,000+ in FICA/medicare tax. Previous discussions on pay low/no taxes: Taxes on a family with $200,000 gross income How to pay ZERO taxes in retirement with 6-figure expenses And over $1300/month for health insurance.... I'm focusing...
by jdilla1107
Fri Jan 25, 2019 10:34 am
Forum: Personal Finance (Not Investing)
Topic: $158k Income and 0 federal income tax
Replies: 40
Views: 7413

Re: $158k Income and 0 federal income tax

OP, Please explain why this is a problem? It is a refundable tax credit. So, the government pays you even if your tax bill is zero. <<Total Tax Owed - $1,537 ( I could optimize this to 0 with some employee 401k deductions, but if i do too much, I will hit the 0% marginal tax rate from child tax cre...
by jdilla1107
Fri Jan 25, 2019 10:32 am
Forum: Personal Finance (Not Investing)
Topic: $158k Income and 0 federal income tax
Replies: 40
Views: 7413

Re: $158k Income and 0 federal income tax

jdilla1107, <<Deductions: Std Deduction - 24k Solo 401k employer contribution - 20k>> You are missing Solo 401K employee contribution of 18K. You should check out saver's credit too. https://www.bogleheads.org/wiki/Saver%27s_credit KlangFool When I added this in, my taxes went down by only $500 on ...
by jdilla1107
Fri Jan 25, 2019 10:28 am
Forum: Personal Finance (Not Investing)
Topic: $158k Income and 0 federal income tax
Replies: 40
Views: 7413

Re: $158k Income and 0 federal income tax

TheTimeLord wrote: Fri Jan 25, 2019 10:01 am Okay, I need some help here. I see $8,907 plus 22% of the amount over $77,400 as your tax basis on $81,000. What am I missing that makes it $5,537?
I think it's that the amount over 77k is qualified dividends.
by jdilla1107
Fri Jan 25, 2019 9:44 am
Forum: Personal Finance (Not Investing)
Topic: $158k Income and 0 federal income tax
Replies: 40
Views: 7413

$158k Income and 0 federal income tax

I am a high net worth individual who sold a business and decided to slow down and do part time consulting. I am playing with tax software and am amazed at how much you can make and pay no federal income tax with an effective a 0% marginal tax rate. (because of credits.) Here is a rough example I jus...
by jdilla1107
Fri Jan 25, 2019 9:28 am
Forum: Personal Finance (Not Investing)
Topic: Implementing a wealth tax
Replies: 64
Views: 3748

Re: Implementing a wealth tax

Rob54keep wrote: Fri Jan 25, 2019 9:14 am The problem is often on how one defines "wealth" for tax purposes.
However, it's not like defining income is any easier. Business taxes are insane at figuring out what taxable income means.
by jdilla1107
Sun Dec 30, 2018 8:27 pm
Forum: Personal Finance (Not Investing)
Topic: Retiree Health Insurance Premium Tax Deductible?
Replies: 17
Views: 2122

Re: Retiree Health Insurance Premium Tax Deductible?

MP123 wrote: Sun Dec 30, 2018 8:18 pm ETA: the previous employer is presumably deducting the cost of the benefits which would be sort of a double dip, right?
Interesting point of view. But, I don't think the employer would be allowed to deduct payments made by someone else.
by jdilla1107
Sun Dec 30, 2018 8:05 pm
Forum: Personal Finance (Not Investing)
Topic: Retiree Health Insurance Premium Tax Deductible?
Replies: 17
Views: 2122

Re: Retiree Health Insurance Premium Tax Deductible?

As long as no part of the retiree health insurance premium is subsidized or deducted pre-tax from a pension, you are eligible to take the self-employed health insurance deduction. Doesn't the health insurance also have to be "established" by the self-employed business? Retiree health insurance is b...
by jdilla1107
Sun Dec 23, 2018 10:13 am
Forum: Investing - Theory, News & General
Topic: All the "should I be 100% stocks" threads over the last year.
Replies: 185
Views: 16910

Re: All the "should I be 100% stocks" threads over the last year.

I think discussions of one’s % of equity exposure is meaningless if it doesn’t include at least Age and wealth measured in units of current income. H This is so true. I have long thought that this board is full of 25 year olds with a net worth of $50k arguing with 65 year olds with a couple million...
by jdilla1107
Tue Dec 11, 2018 9:03 pm
Forum: Personal Finance (Not Investing)
Topic: Uber Cash Discount
Replies: 4
Views: 1289

Re: Uber Cash Discount

You only get 5% for $100. $25 is 2%. From:

https://www.uber.com/blog/uber-cash/

If you use Uber somewhat regularly buying in $100 chunks seems to make sense.
by jdilla1107
Sun Dec 02, 2018 8:32 pm
Forum: Personal Finance (Not Investing)
Topic: The new tax law and charitable giving
Replies: 15
Views: 1690

Re: The new tax law and charitable giving

Consider bunching donations to a donor advised fund. For example, instead of donating $5k a year, donate $30k to a donor advised fund and then payout to the charities over 6 years. There is really downside to doing this besides needing to having the money available. Also, donate appreciated stock to...
by jdilla1107
Sun Nov 04, 2018 5:05 pm
Forum: Personal Consumer Issues
Topic: Thoughts on the New Macbook Air?
Replies: 70
Views: 4808

Re: Thoughts on the New Macbook Air?

The 2018 macbook air and the 2017 macbook pro are almost the same machine in terms of CPU performance. Here are some benchmarks showing this: https://9to5mac.com/2018/11/01/macbook-air-geekbench-results/ You would not be able to perceive these differences. The 2017 macbook pro is slightly better per...
by jdilla1107
Mon Oct 15, 2018 3:07 pm
Forum: Investing - Theory, News & General
Topic: Should I sell Microsoft Bond
Replies: 19
Views: 1580

Re: Should I sell Microsoft Bond

A 7 year bond that you have held for 3 years, is now a 4 year bond. Taking a 2% loss to trade a 4 year bond for a 2 year bond at the interest rate doesn't make any sense to me.

The interest rate market is just as hard to predict as any other market. Stay the course.
by jdilla1107
Wed Oct 10, 2018 6:41 pm
Forum: Investing - Theory, News & General
Topic: When will you backup the truck on stocks
Replies: 102
Views: 10569

Re: When will you backup the truck on stocks

A 10% drop would seem to put us around levels seen in March of this year. Yawn.