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money:taxes [2020/01/07 09:26]
admin
money:taxes [2020/07/04 12:54] (current)
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 {{:everyday:pasted:20171125-101113.png?600}} {{:everyday:pasted:20171125-101113.png?600}}
 +
 +===== RIPC to Roth IRA Conversion =====
 +Doing a manual conversion June 23 of 8K. Should be no tax consequences.
 +
 +Need to write down Roth IRA number in memo field on check when you get it.
 +
 +Unsure about how the contributions will get tracked. Might need to do that manually, or just keep updating the spreadsheet with details.
 +
 +===== 0% APR Credit Cards and Floating Your Tax Payment =====
 +Noodled around on this one back and forth. Most cards have a promotional APR of 0% for 15 months. It's what Warren Buffett / insurance companies do!
 +
 +^ Scenario ^ Outcome ^ Dealbreaker? ^
 +| Normal month | Pay 1% of balance, auto-transfer | I feel like no |
 +| $10K in 0% debt, normal scenario | Make average of 8% on it, so $800 in taxable income a year | Too little money for my sanity |
 +| $50K in 0% debt, normal scenario | Make average of 8% on it, so $4000 in taxable income a year \\ Monthly min payment of $500 | Now we're talking :-D \\ So easily I am swayed... \\ //Yet the amount of work/headache is X 5. Hmm...// |
 +| Lose job with $10K of debt coming due in next 3 months | Sell stocks to cover balance after unemployment | Not so bad with savings |
  
 ===== Solo 401k ===== ===== Solo 401k =====
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 ===== ESPP & RSU Taxes ===== ===== ESPP & RSU Taxes =====
 It's uhh...complicated. Basic reason to care is that for some strange reason, the "income" for these benefits that you receive from your company is counted in your W2 as income, but is **not** reported as an adjusted basis in your official 1099-B documents. So you're double-taxed on that money, first on the W2 income and then on that income as short/long-term capital gains unless you do something about it!  It's uhh...complicated. Basic reason to care is that for some strange reason, the "income" for these benefits that you receive from your company is counted in your W2 as income, but is **not** reported as an adjusted basis in your official 1099-B documents. So you're double-taxed on that money, first on the W2 income and then on that income as short/long-term capital gains unless you do something about it! 
 +  * Interestingly, it seems it's federal law to do it this way m( "Looks like since 2014, brokers are prohibited by IRS (T.D. 9616) from adding the compensation component to the employee cost" https://www.thetaxadviser.com/issues/2016/apr/change-in-cost-basis-reporting-can-result-in-double-counting-of-income.html
  
 It's weird, because on e-trade it knows about the adjusted basis! But for some reason, they don't report it that way on 1099-B!  It's weird, because on e-trade it knows about the adjusted basis! But for some reason, they don't report it that way on 1099-B! 
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   * https://wealthyaccountant.com/2018/11/05/micro-business-and-side-gig-tax-guide/   * https://wealthyaccountant.com/2018/11/05/micro-business-and-side-gig-tax-guide/
   * https://wealthyaccountant.com/2017/04/12/it-pays-to-have-a-hobby/   * https://wealthyaccountant.com/2017/04/12/it-pays-to-have-a-hobby/
 +  * 2018 Tax Cuts and Jobs Act made **hobby** expenses non-deductible. That changes a lot...spend away!
 +<blockquote>Are you a Hobby or business? It makes a difference. A hobby is by far the easiest way to report income. But no expenses are allowed while SE tax is avoided.</blockquote>
 ===== Trust and stuff ===== ===== Trust and stuff =====
 Living Trust lets you avoid probate fees. Need a piece of paper, with community property agreement. Living Trust lets you avoid probate fees. Need a piece of paper, with community property agreement.
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 ===== Messing with Tax Payment Timing ===== ===== Messing with Tax Payment Timing =====
  
-Side Note:  * You can also pay tax via withholdings at the end of the year and keep your money invested all year. It's considered equally spread out throughout the year, apparently! See https://wealthyaccountant.com/2017/03/22/stop-paying-your-quarterly-estimated-taxes/  +Side Note:   
 +  * You can also pay tax via withholdings at the end of the year and keep your money invested all year. It's considered equally spread out throughout the year, apparently! See https://wealthyaccountant.com/2017/03/22/stop-paying-your-quarterly-estimated-taxes/  
     * Withholdings spread out all year: https://www.irs.gov/instructions/i2210#idm140349202906368     * Withholdings spread out all year: https://www.irs.gov/instructions/i2210#idm140349202906368
 <blockquote>When figuring your payment dates and the amounts to enter on line 19 of each column, apply the following rules.  <blockquote>When figuring your payment dates and the amounts to enter on line 19 of each column, apply the following rules. 
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 "Cool spreadsheet man" "Cool spreadsheet man"
  
-2% max fee. Have to spread it out among vendorshttps://frequentmiler.boardingarea.com/2018/02/19/pay-taxes-via-credit-card-2018-edition/+2% max fee. **Can** spread it out among vendorshttps://frequentmiler.boardingarea.com/2018/02/19/pay-taxes-via-credit-card-2018-edition/ 
 + 
 +=== Debit Cards === 
 +Also an option. Flat ~$2.50 fee, and some cards give you 1% or more back. 
 + 
 +Buying debit gift cards probably not so much, since the limit is $500 and they have a $5 fee to open, etc. Unless you can buy them for 5% off at a grocery store. Not willing to do the work :)
  
 === Allowances === === Allowances ===
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   * IRS questions, based on https://money.stackexchange.com/questions/7714/how-can-i-make-four-equal-quarterly-tax-payments-when-i-dont-know-what-my-inc:   * IRS questions, based on https://money.stackexchange.com/questions/7714/how-can-i-make-four-equal-quarterly-tax-payments-when-i-dont-know-what-my-inc:
     * <del>Can I pre-pay the next quarter? Or do I have to do schedule AI, etc?</del> Don't worry about it! Just pay in March 15 and after April 15 (next quarter). Still counts for paying each month and fits in CC 3 month window. Done.      * <del>Can I pre-pay the next quarter? Or do I have to do schedule AI, etc?</del> Don't worry about it! Just pay in March 15 and after April 15 (next quarter). Still counts for paying each month and fits in CC 3 month window. Done. 
 +
 +=== Via Debit Card ===
 +For when you don't have a credit card bonus to use...Can pay Federal for $2.59 on a debit card, and some debit cards (M1 Finance in particular) give you 1% back! Awesome.
 +
 +Oregon says it's $2.59, but they charge you 1.8% or whatever, so can't do it that way.
  
 ===== Tax Loss Harvesting ===== ===== Tax Loss Harvesting =====
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 ===== 529 Plan ===== ===== 529 Plan =====
 Have to pay federal income tax, but don't have to pay Oregon income tax for up to $2330 of it. Have to pay federal income tax, but don't have to pay Oregon income tax for up to $2330 of it.
 +
 +Earnings grow tax-free when used for qualified educational expenses.
 +
 +=== 2020+ ===
 +$150 tax credit, reached when contributing $600 for my tax bracket. Just doing $1K.
  
 === 2018 === === 2018 ===
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 ==== Older stuff ==== ==== Older stuff ====
-Can do a Traditional to Roth IRA conversion "ladder". You pay taxes on the amount converted (low in a low-income situation) and you have to wait 5 years to touch the converted money, but then you can withdraw it early tax-free. +Can do a Traditional to Roth IRA conversion "ladder". You pay taxes on the amount converted (low in a low-income situation) and you have to wait 5 years to touch the converted money, but then you can withdraw the contributions early tax-free. 
-  * From: https://www.madfientist.com/how-to-access-retirement-funds-early/+  * From: https://www.kitces.com/blog/understanding-the-two-5-year-rules-for-roth-ira-contributions-and-conversions/ and https://www.madfientist.com/how-to-access-retirement-funds-early/
 +    * Kitces clarified, does *not* mean you can access Roth IRA earnings penalty free, as you still need to be over 59.5. 
  
 === Backdoor Roth IRA === === Backdoor Roth IRA ===
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 === Notes from Inside Blue === === Notes from Inside Blue ===
 +<blockquote>After-tax contributions will be stopped at the IRS annual additions limit ($57,000, or $63,500 if age 50+ for 2020) if the sum of your year-to-date pre-tax/Roth contributions, the year-to-date pay-period 401(k) match, and your year-to-date after-tax contributions reach that limit during the plan year.  Your pre-tax/Roth 401(k) contributions and the applicable pay-period 401(k) match will continue until you have reached IRS limits for those items ($19,500, or $26,000 if age 50+ for 2020 for your pre-tax/Roth 401(k) contributions).  </blockquote>
 +
 +
 https://intel.usretirementchanges.com/1-learn-about-the-changes/401k-after-tax-contributions-and-roth-in-plan-conversion https://intel.usretirementchanges.com/1-learn-about-the-changes/401k-after-tax-contributions-and-roth-in-plan-conversion
  
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 To estimate your potential after-tax contribution maximum, you need to start with the IRS annual additions limit (above) and subtract your anticipated pre-tax/after tax contributions (max $19,000, or $25,000 if age 50+ for 2019), estimated match (maximum 2:1 on pre-tax/Roth contributions up to 5% of eligible pay). What is left is your estimated potential after-tax contribution. Because your regular pay and/or bonus exact amounts are not known in advance, your after-tax deferral election for regular pay and/or bonus requires you to make your best estimate.  If you have a financial advisor, consider engaging them to help with your estimate.</blockquote> To estimate your potential after-tax contribution maximum, you need to start with the IRS annual additions limit (above) and subtract your anticipated pre-tax/after tax contributions (max $19,000, or $25,000 if age 50+ for 2019), estimated match (maximum 2:1 on pre-tax/Roth contributions up to 5% of eligible pay). What is left is your estimated potential after-tax contribution. Because your regular pay and/or bonus exact amounts are not known in advance, your after-tax deferral election for regular pay and/or bonus requires you to make your best estimate.  If you have a financial advisor, consider engaging them to help with your estimate.</blockquote>
 === Notes from Fidelity RIPC setup === === Notes from Fidelity RIPC setup ===
 +
 +
 +
  
  
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 Make a calendar reminder to recompute in the summer after you contributed to 401k. Make a calendar reminder to recompute in the summer after you contributed to 401k.
 +==== 2020 ====
 +=== Estimated Payments ===
 +
 +
 +**Payment + Fee = Minimum Spend** --> **Spend/1.02 = Payment (includes fee)**
 +
 +**Should deduct expected W2 tax withholdings too...**. Was over Federal 2019 return by $5K and Oregon by $4k.
 +^ ^ Federal ^ Oregon ^
 +| Total 2019 | $15000 | <del>$7000</del>, $7644? |
 +| Quarterly | $3750 | <del>$1750</del> $1911 guess | 
 +| Apr 15 \\ Need to pay $2678 w/ cash, rest w/ CC' | $250 w/ Delta Amex on Pay1040 \\ Due July 15 [[https://www.irs.gov/newsroom/payment-deadline-extended-to-july-15-2020|here]] | 62 paid already using alliant CC \\ $171 with work bonus debit \\ 979 on PNC CC, 699 on BBVA CC \\ [[https://www.oregon.gov/newsroom/Pages/NewsDetail.aspx?newsid=36265|Oregon is not extended]]|
 +| Jun/Jul 15 | [[https://www.irs.gov/newsroom/irs-extends-more-tax-deadlines-to-cover-individuals-trusts-estates-corporations-and-others|Extended to July 15]] \\ Paid $142.50 from Wirecard June 18 on PayUSATax website \\ $2000 off of Sofi Debit on Pay1040 on June 22 \\ $2997.42 via Pay1040 and Discover Card \\ 2850 via PayUSATax and Discover on July 2 | Paid $2000 via checking on June 9 |
 +| Sep 15 | | | 
 +| Jan 15 | | |
 +
 +<del>Pay on PNC</del> (2% fee). Rather get a new card, do auto-transfer of minimum payments and get 0% APR? \\ $10K credit limit, 0% until July 2021
 +
 +=== Donations ===
 +$50 Feb 4 for West Valley trip
 +$785 Mar 28 for Kickstart.
 +
 +=== TLH ===
 +Sold $18K of VOO ($3K of short term losses) for VTI on April 6. Will increase VTI allocation to ensure incoming money doesn't go into VOO.
 +
 +Turned off auto invest for Roth IRA and taxable account, just in case. Only need to worry about wash sale for VOO.
 +
 +Did a number of stock sales on Robinhood in June in anticipation of buying car and finishing LTCG.
  
 ==== 2019 ==== ==== 2019 ====
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 Get W2 box 1 and box 5 breakdown from Workday. Workday -> Pay -> My W2 Breakdown. Also helpful is printing out the last payslip to make sure Oregon withholdings are correct (Oregon WBF and Transit Tax). Get W2 box 1 and box 5 breakdown from Workday. Workday -> Pay -> My W2 Breakdown. Also helpful is printing out the last payslip to make sure Oregon withholdings are correct (Oregon WBF and Transit Tax).
 +
 +Make sure that the 1099's from the banks match what you expected for signup bonus income.
 +
 +=== 1099's ===
 +
 +Bonuses:
 +
 +^ Expected ^ Received ^
 +| Chase checking/savings and brokerage | X, brokerage X |
 +| SoFi Invest (probably under apex) | |
 +| ETrade | X |
 +| Ally Bank Trading | X |
 +| PNC | |
 +| HSBC (200) | X |
 +| US Bank (250) | X |
 +| Wells Fargo ($400) | X |
 +| Capital One Savings | X |
 +| Discover Savings (<del>$200?</del> $150) | X |
 +What about small interest? :-( -> :-) (less than $10 interest is not reported to IRS!)
 +| Bank of the West | |
 +| Homestreet Bank | |
 +| Columbia Bank | |
 +| KeyBank | |
 +| Citi | |
 +| Charles Schwab | |
 +| NW Priority? | |
 +| Alliant | N/A |
 +| First Tech | N/A |
 +
 +Normal:
 +^ Expected ^ Received ^
 +| Vanguard | X |
 +| M1 Finance | X |
 +| Robinhood | X |
 +| ETrade | X |
 +
 +
 +
  
 === Donations === === Donations ===
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 | Jun 15 | Done (Pay1040) 1.87% | Done June 7 | | Jun 15 | Done (Pay1040) 1.87% | Done June 7 |
 | Sep 15 | 696 out of $3750 Jul 8. \\ Paid 4418 on Aug. 6 \\ for travel expenses | Done Jul 8. 1792 total.|  | Sep 15 | 696 out of $3750 Jul 8. \\ Paid 4418 on Aug. 6 \\ for travel expenses | Done Jul 8. 1792 total.| 
-| Jan 15 | $1354 / $3750 already paid \\ $1261 on Wells Fargo\\ Need to add $1446 (LTCG) + $300 (income) for signup bonuses \\ $2881 required. \\ $2881 paid + $53 fee on Alliant CC  | $1750 + $954 (LTCG) + $75 (income) \\ Paid $879 on Fidelity. \\ $1900 even remaining |+| Jan 15 | $1354 / $3750 already paid \\ $1261 on Wells Fargo\\ Need to add $1446 (LTCG) + $300 (income) for signup bonuses \\ $2881 required. \\ $2881 paid + $53 fee on Alliant CC  | $1750 + $954 (LTCG) + $75 (income) \\ Paid $879 on Fidelity. \\ $1900 even remaining \\ Paid with checking transfer |
  
 === Nov 2019 Capital Gain and Interest Calculation === === Nov 2019 Capital Gain and Interest Calculation ===
money/taxes.1578417983.txt.gz · Last modified: 2020/01/07 09:26 by admin