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Thread: Money

  1. #821
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    Things I think I know that I think you are missing:
    • Rollovers into Roth IRAs are treated as Contributions after a 5-year seasoning period. I think these Mega Backdoor rollovers can fall into that category. (Roth IRAs allow tax and penalty free withdrawals of Contributions)
    • There are "ways" to contribute more than $19,000 to your 401(k) annually. $19,000 is the employee elective deferral limit. There are other, higher, limits ($56,000 sticks in my head), but my company doesn't offer Roth 401(k) so I haven't explored them in detail.
    • 401(k)s often have shit-tier fund options, and rolling out into an IRA can get you access to better funds. Though I think it's dubious that a shit-tier 401(k) would also offer Roth and in-service rollouts...

  2. #822
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    Quote Originally Posted by liuv View Post
    • Rollovers into Roth IRAs are treated as Contributions after a 5-year seasoning period. I think these Mega Backdoor rollovers can fall into that category. (Roth IRAs allow tax and penalty free withdrawals of Contributions)
    Okay, an interesting wrinkle... though hopefully 401k and IRA funds can remain untouched until withdrawals would be un-penalized anyway... hopefully brokerage/other savings would cover you during early retirement... otherwise, are you really ready for early retirement?

    Quote Originally Posted by liuv View Post
    • There are "ways" to contribute more than $19,000 to your 401(k) annually. $19,000 is the employee elective deferral limit. There are other, higher, limits ($56,000 sticks in my head), but my company doesn't offer Roth 401(k) so I haven't explored them in detail.
    Yeah, same. I'm aware of the 56k limit, but I don't really understand it. Can I put $19k pre-tax into my traditional 401(k) and then another 37k after-tax into my Roth 401(k)? That would make sense from the same perspective a Roth IRA makes sense: the money's already taxed, might as well maximize untaxed growth whenever possible.

    If it works that way, and if you have so much money flying around that you can max out your traditional 401(k), plus do the normal backdoor Roth, and still pull this maneuver on top of it... I mean, I'd definitely take $37k in a Roth IRA rather than a brokerage.

    Quote Originally Posted by liuv View Post
    • 401(k)s often have shit-tier fund options, and rolling out into an IRA can get you access to better funds. Though I think it's dubious that a shit-tier 401(k) would also offer Roth and in-service rollouts...
    You might be able to get better funds in an IRA, but that just means your 401k sucks. Institutional funds can be way better, if available.

  3. #823
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    Quote Originally Posted by Macheath View Post
    The Equifax data breach settlement claim page is up.
    Quote Originally Posted by Macheath View Post
    Great job on anticipating the response and appropriately sizing the settlement, FTC. :eyeroll:
    Well, it happened: I got an email offering me the opportunity to switch over to the "free credit monitoring" option. And I might do it, given that the "cash payout" option is likely to amount to a few cents.

  4. #824
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    With our company being bought and all that we are switching 401k administrators. We're going to Empower which is arguably much better than our former. Anyway I have new funds to review, can anyone offer tools for evaluating funds and such? I've looked them up on Morningstar. Should I just make a spreadsheet to compare options?

  5. #825
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    Yes.

  6. #826
    Darth Small Macheath's Avatar
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    I remember having trouble finding some Empower funds on Morningstar, but I did get all the expense ratios and such in the end. I made a spreadsheet.

  7. #827
    Tiny Dancer Drewbie's Avatar
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    Just wrapped up my taxes for my first full year divorced. Gonna have to tweak some things cause I got a $6,000 rebate between state and federal. I'd much rather have the $500 a month, but then again, the big check does tend to allow for something big I didn't really do a good job of planning for. New driveway, here I come!

  8. #828
    Darth Small Macheath's Avatar
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    I'm getting absolutely rawdogged by taxes again this year. I don't mind paying my fair share, but I wish it came out of my paycheck instead of being a $25,000 surprise.

  9. #829
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    What the fuck did you do this year? Even if I didn't get the child tax credit, I would only be on the hook for $9K in federal taxes.

  10. #830
    Darth Small Macheath's Avatar
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    Quote Originally Posted by Gnorlin View Post
    What the fuck did you do this year? Even if I didn't get the child tax credit, I would only be on the hook for $9K in federal taxes.
    Great question, I'm still picking through the rubble to try and figure that out.

    Every time I enter info from a new form the numbers get worse, until I eventually give up and delete everything. So now I'm just trying to reason my way through it with a spreadsheet and simple math.

    The first component is that my tax situation keeps changing every year, and I have no idea what my withholding should be.

    2015 2016 2017 2018 2019
    Job change
    Promotion
    Got married
    Got divorced
    Tax code rewritten

    So with that acknowledged, what went wrong in 2019?

    1. Still no babies. Might as well say it, the new tax code was not written with childless people (or big mortgages) in mind. Property tax and mortgage interest deductions were erased, the child tax credit was doubled.

    2. I made money on an RSU sale. Shares vested on 1 Dec 2018 and were (for once) not sold immediately. Taxes are paid when shares vest, so if you sell quickly afterward, you only owe taxes on any earnings between the vesting and the sale. However, the market was in the midst of a nosedive in December, so I'd lost money by the time the shares settled and were ready to be sold. So I held. INTU's "blackout period" (no selling allowed for employees) went into effect on 3 Jan 2019 and ended on 25 Feb, and the market recovered significantly during that period.

    Quote Originally Posted by Macheath View Post
    If you fuck up (like me) and don't manage to sell ESPP/RSU shares immediately, converting them to cold hard cash for investment elsewhere, then at least you should get lucky (like me) and watch your locked-up shares go on a tear while you're not allowed to touch them.
    When I finally sold on 25 Feb, INTU had gone up 30% and I'd made a good chunk of change. That profit was realized during the 2019 tax year, and no taxes have been paid yet. In retrospect, having fucked it up, I should have continued to hold and gotten the capital gains rate after 2 years.

    3. Vanguard paid out dividends in my taxable brokerage. I swear, this didn't used to be a taxable event, because the dividends are automatically reinvested in the same fund. There's no sale, no cash. The tax man would come for me eventually (i.e. when the funds are sold), but I don't remember it happening during the year. Maybe something changed, and these are no longer "qualified" dividends or something, I'm not sure. But I appear to owe taxes on this money. Needs more research.

    4. Intuit is just as confused about what to withhold as I am. It happened last year (the first year of Trumpcode) too:

    Quote Originally Posted by Macheath View Post
    I think I'm just about done here, and things have not really improved. Every calculation I do points to the same answer: Intuit under-withheld by almost 5% for federal taxes in 2018.

    I'mma owe a shitloading buttfuckload of money.
    I did indeed owe a shitloading buttfuckload of money for tax year 2018, and the situation is even worse for tax year 2019. Intuit didn't under-withhold by "almost 5 percent" this time, they under-withheld by considerably more than 5 percent.

    All told, the numbers are coming together, and yup. I'm going to owe a fortune. Bathrooms won't be getting their remodel this year.

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