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flowinprose posted:You have to be careful the way you do your taxes if you plan to open an IRA and you are exclusively earning income internationally. You can take the foreign tax credit if you are paying foreign taxes, and still be able to contribute to a Roth IRA, but if you are taking the foreign income exclusion you will deduct income that will then no longer be considered eligible for Roth contributions (excluded income is not 'earned" income, per the IRS). http://www.irs.gov/Individuals/International-Taxpayers/Individual-Retirement-Arrangements 
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Jan 19, 2015 03:41
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etalian posted:http://www.irs.gov/Individuals/International-Taxpayers/Individual-Retirement-Arrangements You add back the income for the purposes of determining whether you are over the income limits for MAXIMUM contribution. However, you must have income ABOVE the exclusion in order for it to be considered earned income for the purposes of the MINIMUM contribution.
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Jan 19, 2015 03:43
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Some people also go for the foreign tax credit instead of exclusion route as a way to stay eligible for a Roth IRA. As usually some times you just need to talk to accountant since working overseas always adds some extra tax complexity.
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Jan 19, 2015 04:09
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flowinprose posted:You have to be careful the way you do your taxes if you plan to open an IRA and you are exclusively earning income internationally. You can take the foreign tax credit if you are paying foreign taxes, and still be able to contribute to a Roth IRA, but if you are taking the foreign income exclusion you will deduct income that will then no longer be considered eligible for Roth contributions (excluded income is not 'earned" income, per the IRS). The US and Japan have a tax treaty (exempt from Japanese income tax the first two years, IIRC... my employer also covered my third year of Japanese income and local taxes), was a bit of a bummer. OTOH I needed that money for the grad school I'm starting next month and probably wouldn't have contributed anyways  Since the third year thing wasn't covered by the treaty I wonder if I could have claimed the tax my employer paid (I think they deposited the amount I would have owed to my account and then withdrew it) as my own and contributed to a Roth, but again, that's purely academic in this case. I'd mention it to friends still there but that deal doesn't really exist anymore anyhow. Since we're sort of on the subject I'll take one more stab at it before I start trying to send emails to government agencies: anyone have a clue if Roth withdrawals be subject to Australian income tax (American eventually living in Australia with dual citizenship)? Trying to determine whether it's worth it to keep funding my Roth or if that should all just be going into super. Or if it's even worth it to keep the Roth, I suppose I could withdraw it for education expenses and then funnel that money into a more Australia-oriented retirement vehicle, dunno. Pompous Rhombus fucked around with this message at 04:16 on Jan 19, 2015 |
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Jan 19, 2015 04:10
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etalian posted:The other option is to open a taxable account once you have built up a decent sized emergency fund and also maxed out your retirement contributions for the year. I don't know how it is in Japan, but depending on your country of residence, it could a bad idea to have a taxable account. If you do it in your country of residence, then you might have issues with the way America will tax you on it and if you have the account in America, your country of residence might have laws that make holding American funds prohibitively expensive. Pompous Rhombus posted:Since we're sort of on the subject I'll take one more stab at it before I start trying to send emails to government agencies: anyone have a clue if Roth withdrawals be subject to Australian income tax (American eventually living in Australia with dual citizenship)? Trying to determine whether it's worth it to keep funding my Roth or if that should all just be going into super. Or if it's even worth it to keep the Roth, I suppose I could withdraw it for education expenses and then funnel that money into a more Australia-oriented retirement vehicle, dunno. There was a thread on the Bogelheads forum about this Total Confusion fucked around with this message at 11:24 on Jan 20, 2015 |
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Jan 19, 2015 10:46
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Gold and a Pager posted:I don't know how it is in Japan, but depending on your country of residence, it could a bad idea to have a taxable account. If you do it in your country of residence, then you might have issues with the way America will tax your it and if you have the account in America, your country of residence might have laws that make holding American funds prohibitively expensive. It does have complications mainly because all those new laws make opening a account a US brokerage while you reside overseas much harder. http://www.footprintsrecruiting.com/teacher-community/news/5-ways-effectively-invest-your-money-when-living-abroad http://www.wsj.com/articles/fidelity-bans-overseas-investors-from-buying-mutual-funds-1404246385 Foreign brokerages also are avoiding US customers due to the recent US push to hunt down overseas slush funds and tax evaders. etalian fucked around with this message at 04:29 on Jan 20, 2015 |
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Jan 20, 2015 00:27
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What do retirement savings options do I have if my employer doesn't offer a 401(k) or 403(b) program? Is the only tax-advantaged savings avenue the $5500 you can put in an IRA? That seems terrible.
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Jan 21, 2015 16:12
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Twerk from Home posted:What do retirement savings options do I have if my employer doesn't offer a 401(k) or 403(b) program? Is the only tax-advantaged savings avenue the $5500 you can put in an IRA? That seems terrible. If you have a High Deductible Health Plan (a plan with a minimum $1300/$2600 individual/family deductible and $6450/$12900 out-of-pocket maximum, 2015 limits) you can also invest up to $3350 or $6650 (individual/family, 2015 limits) into an HSA account which becomes effectively a traditional IRA at age 65 (no penalty for non-medical withdrawals, taxed as ordinary income). But yeah, otherwise your next best option is a taxable investment account. Read up on tax-efficient asset allocation.
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Jan 21, 2015 16:59
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Mr.Radar posted:If you have a High Deductible Health Plan (a plan with a minimum $1300/$2600 individual/family deductible and $6450/$12900 out-of-pocket maximum, 2015 limits) you can also invest up to $3350 or $6650 (individual/family, 2015 limits) into an HSA account which becomes effectively a traditional IRA at age 65 (no penalty for non-medical withdrawals, taxed as ordinary income). But yeah, otherwise your next best option is a taxable investment account. Read up on tax-efficient asset allocation. I've got some side hustles too that generate 1099s, is there any way that I could set up some sort of Solo 401(k) or SEP-IRA based on the 1099 income I have instead of my normal W2? I'm not thrilled about the idea of trying to keep a mixture of stocks and bonds in a taxable account. Thanks for suggesting the HSA, I'm going to check if my employer has an option to do a HDHP.
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Jan 21, 2015 17:02
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Twerk from Home posted:I've got some side hustles too that generate 1099s, is there any way that I could set up some sort of Solo 401(k) or SEP-IRA based on the 1099 income I have instead of my normal W2?
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Jan 21, 2015 18:19
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I've lurked the thread and could use a sanity check about my plans eventually, but to vent for a minute about our ESPP: At some point in the past, my (Fortune 20) employer went from offering a 15%-discounted semiannual ESPP with look-back to a 5% discount semiannual one with the stock purchase price based on the closing price for the period. The purchase periods are, of course, the days we close our Q2 and Q4, only the most predictably volatile times of the year. This happened before I joined, so I'm nowhere near as annoyed as those who had it taken away, but come on. It's as if they're actively trying to discourage employee ownership. In fact... That must be what's happening. I can't explain it any other way.
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Jan 21, 2015 22:36
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Trabant posted:I've lurked the thread and could use a sanity check about my plans eventually, but to vent for a minute about our ESPP: It's marginally possible your company was selling stock faster than anticipated and management didn't want to re authorize more shares sooner...maybe.
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Jan 21, 2015 22:47
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Twerk from Home posted:I've got some side hustles too that generate 1099s, is there any way that I could set up some sort of Solo 401(k) or SEP-IRA based on the 1099 income I have instead of my normal W2? I'm not thrilled about the idea of trying to keep a mixture of stocks and bonds in a taxable account. Thanks for suggesting the HSA, I'm going to check if my employer has an option to do a HDHP. Yeah if you any sort of taxed self-employment income it makes you eligible for a solo 401k, it can be used in addition to a normal 401k plan. Also helps to open up something like a LLC for your side money making business. http://www.irafinancialgroup.com/what-are-the-eligibility-requirements-for-a-solo-401k-plan.php Trabant posted:I've lurked the thread and could use a sanity check about my plans eventually, but to vent for a minute about our ESPP: 5% isn't enough to make a ESPP compelling, not to mention the lookback concept is the other way you can make big bucks on a good ESPP at minimal risk.
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Jan 22, 2015 02:20
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SiGmA_X posted:My company cut the ESPP from 15% to 5% discount in an effort to save operating costs. They refuse to increase it again either. My conspiracy theories aside, reducing expenses is probably the reason for us too. The company's been on a cost-cutting binge for much longer than I'd care to admit. But really, if you're doing that, just eliminate the ESPP altogether. It doesn't foster any goodwill or ownership with existing employees, it doesn't qualify as much of a carrot to attract new talent... why bother, other than to tick the "We have ESPP" box in the HR brochure? etalian posted:5% isn't enough to make a ESPP compelling, not to mention the lookback concept is the other way you can make big bucks on a good ESPP at minimal risk. Yup. Two of my previous employers did that, but this... So pointless.
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Jan 22, 2015 02:26
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There was a year - I want to say 2003, but I'm not certain - when the IRS or Congress changed the rules for how companies had to account for ESPPs, and suddenly ESPPs got a lot less generous across the board. I remember it because I was in an ESPP at the time with fairly generous terms, and our CEO (it was a smallish post-IPO startup) got us all together to explain directly to us why they were having to nerf the ESPP (it was going to cost them a ton of cash in taxes if they didn't).
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Jan 22, 2015 20:33
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What contribution can you guys make to ESPP? Mine is a 15% discount, but we can only contribute 5% of our gross pay toward it. It was reduced from 10% probably 5 years ago, unfortunately.
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Jan 22, 2015 22:04
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Henrik Zetterberg posted:What contribution can you guys make to ESPP? Mine is a 15% discount, but we can only contribute 5% of our gross pay toward it. It was reduced from 10% probably 5 years ago, unfortunately. Sounds like we work in the same company.  Did you also get a large payout from ESPP this past round?
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Jan 22, 2015 22:42
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Henrik Zetterberg posted:What contribution can you guys make to ESPP? Mine is a 15% discount, but we can only contribute 5% of our gross pay toward it. It was reduced from 10% probably 5 years ago, unfortunately. I still have 15% discount, 10% gross pay and I was lucky enough to have a manager who told me to max it and forget I had it. Before I got frugal it like a min-bonus every six months, and now it's a no-thought way of investing 10%+ of my salary. I hold onto the options for long-term capital gains, but sell the ESPP immediately to invest in other stocks/funds.
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Jan 22, 2015 23:50
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ETB posted:Sounds like we work in the same company. The largest since I've been here! I am guessing you live in Arizona, California or Oregon...
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Jan 22, 2015 23:53
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Henrik Zetterberg posted:The largest since I've been here! I am guessing you live in Arizona, California or Oregon... Intellites spotted.
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Jan 23, 2015 00:11
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Trabant posted:Intellites spotted. Seek. Destroy.
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Jan 23, 2015 00:48
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The other downside of ESPP, is the government considers the stock discount to be a taxable benefit.
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Jan 23, 2015 02:35
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etalian posted:The other downside of ESPP, is the government considers the stock discount to be a taxable benefit. Still, best ROI on investments over time... assuming you don't sell at a loss.
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Jan 23, 2015 02:43
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Mine is super sweet. 15% discount on up to 15% gross, and it buys every 3 months at the lower of this quarter's closing price or last quarter's closing price. You get control of it with about 3 market days of the purchase to sell if you want. Now y'all have me paranoid it'll go away in the near future. I've been maxing it since I started out of college 7 years ago (and maxing 401k matching first 6 years, but hadn't contributed to a Roth IRA since college until last two years... Now I max the annual Roth IRA and 401k limits in addition to my ESPP to try and work toward FI).
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Jan 23, 2015 03:16
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ETB posted:Still, best ROI on investments over time... assuming you don't sell at a loss. Yeah it's basically a really good job benefit if you have fun to money to burn plus the good discount and lookback option to buy shares at the cheapest price..
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Jan 23, 2015 04:02
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Trabant posted:Intellites spotted. I bought heavy into you at $25 and a long-term dividend play, and you've made me very happy. Keep it up!
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Jan 23, 2015 06:10
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We get a 25% discount, up to $200/pay period. Its costs $40 for a sell order through Fidelity though, so we have to sell in bunches to avoid getting hosed by commissions. No look back either, which sucks, and the executor doesn't put in the stock purchase orders on a set schedule.
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Jan 23, 2015 17:54
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You know what my ESPP does? They send it to CompuShare to buy shares, and my company pays the fees. No discounting, no look back, notta.
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Jan 23, 2015 19:55
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So, I just transfered $5,000 into my Roth IRA with Vanguard. Is there a target fund or division of funds I should be looking at for maximum growth over the long term? I'm in my late 20's, so I assume a high risk portfolio is generally the way to go if I don't plan on touching the money for a while. Is there a specific vanguard fund that would be my go-to fund or division of funds in this situation? I was looking at going with the basic Vanguard Target Retirement 2055 Fund (VFFVX). Would this be a mistake? Leon Trotsky 2012 fucked around with this message at 21:21 on Jan 23, 2015 |
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Jan 23, 2015 21:18
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Sources say, "Reeeeeeeaaadddd the booooooks in the OOOOOO PPPPPP" In addition to what's mentioned there, Vanguard has some "LifeStrategy" funds that are easy portfolio-building tools. But target retirement 2055 is a good place to park it while you do some reading.
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Jan 23, 2015 21:23
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Leon Trotsky 2012 posted:So, I just transfered $5,000 into my Roth IRA with Vanguard. Is there a target fund or division of funds I should be looking at for maximum growth over the long term? I'm in my late 20's, so I assume a high risk portfolio is generally the way to go if I don't plan on touching the money for a while. Is there a specific vanguard fund that would be my go-to fund or division of funds in this situation? Vanguard target funds are the best no-taxable account lazy option for the new investor and also are fairly low expense ratio compared to the competition. It's also fairly fire and forget since things like dividend reinvestment and also fund rebalancing get handled by vanguard. etalian fucked around with this message at 00:31 on Jan 24, 2015 |
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Jan 24, 2015 00:26
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etalian posted:Vanguard target funds are the best no-taxable account lazy option for the new investor and also are fairly low expense ratio compared to the competition. I agree with you that Vanguard Target Retirement funds are a great option but just a minor point: Dividend reinvestment is handled the same way with Target Retirement funds as with all other mutual funds; the user must select the option to reinvest.
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Jan 24, 2015 02:59
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This is a great thread. I had a dumb question regarding Vanguard LifeStrategy Funds. I see these are a mix of stocks and bonds, how does it work if you want to close your account and get the value of your fund? Like if I invested 10k in a LifeStrategy Moderate Growth Fund, then two years from now wanted to withdraw from the fund? Can I do that or would there be a huge penalty or tax? I clicked around the Vanguard site but I didn't see an obvious answer. Thanks.
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Jan 24, 2015 18:36
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Mojo Threepwood posted:This is a great thread. I had a dumb question regarding Vanguard LifeStrategy Funds. I see these are a mix of stocks and bonds, how does it work if you want to close your account and get the value of your fund? Like if I invested 10k in a LifeStrategy Moderate Growth Fund, then two years from now wanted to withdraw from the fund? Can I do that or would there be a huge penalty or tax? I clicked around the Vanguard site but I didn't see an obvious answer. Thanks. Because it depends. Just like any other mutual fund, you can just sell it and get the money - or if it's in a tax-protected account like an IRA, you have to follow that account's rules. It could be worth more or less than it was when you bought it, possibly by a lot. If it's worth less, you have a capital loss, if more a capital gain. You declare those on your taxes. Net capital gains get taxed different amounts depending on your income and how long you held the fund. Don't use stock and bond funds for money that you're going to withdraw in two years, because the risk of losing money in them over that short a period is quite high.
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Jan 24, 2015 18:50
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The main tax "penalty" for selling before a year, is the sale gets taxed as ordinary income instead of the lower long term capital gain tax rate.
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Jan 25, 2015 03:46
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Does anyone have any links to some good form/"standard" wills and living wills? Kind of like basic rental agreements you can download and say "good enough" to after a read-through? I have my beneficiaries all designated in my retirement accounts and for insurance (brother primary, parents secondary), and I've discussed my wishes with my family to not be artificially kept alive, to be cremated at death, and to serve as an organ donor if possible (all things that we all want for ourselves, actually). But to have it all in writing and notarized so I can give my family copies would give me some peace of mind. I don't have a spouse or kids of my own, so it should be a pretty simple set of circumstances I imagine. And I don't want to crowd up the will/estate thread going on in BFC right now since it doesn't really fit with the discussion going on in that thread.
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Jan 26, 2015 02:25
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Do you have access to a legal plan at work? I have a legal plan that covers simple things like that for next to nothing.
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Jan 26, 2015 02:35
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Ropes4u posted:Do you have access to a legal plan at work? I have a legal plan that covers simple things like that for next to nothing. I did, but since I had no need for most of their services, I opted out during my 2015 benefits election in November. Should've gotten them to do it last year. 
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Jan 26, 2015 04:32
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Have you asked HR? I got my will document template through work and I don't think I needed to be a benefits subscriber to do so.
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Jan 26, 2015 04:51
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Thanks for that--I hadn't thought to look. Unfortunately, it looks like HR has nothing on their internal site as far as legal docs go (just W-4 updates, beneficiary updates, things like that). Those items entirely managed by the Group Legal firm they've hired out, which only gives you anything if you have a valid/unexpired login and whatnot. Oh well, I'll Google around for something I can use for free. Thanks, anyway.
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Jan 26, 2015 05:50
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