Wow! Thank you everyone for the words of advice here. Lots to follow-up on, tons of homework to do.
Capital Gain: Yes, 23.8% for all $200K. You could use the "what if?" worksheets of TurboTax, TaxAct, etc., the personal finance toolbox spreadsheet, or whatever other favorite tax estimation program for 2018 planning.
These are awesome tools. I was trying this with paper and it was nearly impossible. Thank you!
401k/IRA: Yes, unless there is something contradictory due to a planned repatriation, that ticking sensation in your nose is due to the sand surrounding your head.
See Investment Order and links therein for more on this.
No planned repatriation, maybe, maybe not - we have no idea. I did the math and it works out to about 10K per year of tax savings and employer contributions for a fully funded 401k. That a lot of money to set aside because we're indecisive. Ok so we should totally do the 401k.
Looking at the IRAs, we lose out on the tax deduction due to our income level and access to a 401k from the employer. Any reason to still contribute to an IRA? I suppose that growth would be tax-sheltered, so slight edge there above a basic brokerage account...
LLC: Yes, a Solo 401(k) plan is likely a good idea. At your income, tax-advantaged plans are very valuable.
Ok I'll dig into this more, thanks.
529s: Other than "fund your own retirement before funding a 529" (that's an opinion, not a rule), no obvious gotchas here.
Ok sounds like we're on the right track here too, thank you.
Professional help: Maybe. Does the employer offer deferred compensation plans? If so, a fee-only advisor outside the company but experienced with its plans might be worth a visit. Otherwise, CPAs are usually more valuable for business situations than W-2 income.
No deferred compensation plans available, nope. From the sounds of other posters below, I really need to find someone familiar with cross-border tax planning. Sounds pricey!
You might look at the funds generating high dividends to see about selling them. You could buy municipal bonds which have no federal taxes instead of holding taxable bonds. High taxes from dividends or capital gains when you didn't sell anything is not ideal.
Good call out. Anyone using VTEB (Vanguard's municipal bond ETF) instead of BND? Is there a better tax-free ETF out there? Running the math, if I swap out BND for VTEB I end up with a 2K / year tax savings. Not huge, but I'll take it.
The US rarely if ever recognises non-US (and non-pension) tax-sheltered accounts -- if it does, I cannot bring to mind a single example -- meaning these are usually fully taxable annually for US residents and US citizens. Examples include UK ISAs and Canadian TFSAs. What assets do you hold in here?
Yes, unfortunately these are Canadian TFSAs holding Canadian stocks listed on the TSE. Reading now, I'm realizing there appears to be a very complicated reporting requirement for these (3520 and 3520A forms). Shoot! This also looks complicated.
And one final thought... do you intend to retire in the US, or outside? If you think you may move again in future, this wiki page on navigating US tax traps might be worth a look.
We are undecided. Looking at that wiki though, seems like there are some things we can do to avoid a tax bill later if we do decide to leave. Thank you for the heads up here, more to consider going forward.
Having said that ... with the changes to AMT starting 2018, and given your income levels, I think the large cap gains are probably unlikely to trigger AMT in 2018. But, as I said, AMT is non-intuitive to me, so I could easily be wrong. You'll probably want to do some or all of the following before before selling the stock: -read the individual (not corporation) AMT related changes for 2018 in this article:
https://www.kitces.com/blog/final-gop-t ... trategies/
That was a great article. Went through every detail of the 2018 tax changes, I read the whole thing. Based on my initial pass, I agree with your assessment - the AMT buffer is so wide in 2018 that we might not be caught in it. I'll play around with a simulator to confirm.
With your level of income and assets you should really get professional advice. A competent CPA can help you leverage the new tax law, and a wealth manager can help you diversify your portfolio beyond stocks/bonds.
What should we have beyond stocks and bonds?
What does this entail? What are your annual expenses?
Our annual expenses for a family of 4 in a HCOL area is 65K per year. That includes mortgage, property tax, insurance, food, Peppa Pig concert tickets - the whole bit. We invest the remainder (~80% of after-tax income).
