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i don't understand how these people have such an unclear understanding of where the money goes like oops i forgot about a $400/mo recurring expense in my budget tee hee, what the gently caress??
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Nov 27, 2017 15:38
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https://www.reddit.com/r/personalfinance/comments/7fp0od/parents_purchase_1000_in_new_childrens_clothing/quote:Ever since retiring, parents have been buying a lot of things brand new only to donate. This month is $1,000 in warm jackets for children. Last month was $1,200 in new hardcover best seller books. Before that was $2,500 new couches, delivered straight to Salvation Army. They claim it’s not just to feel good about helping the poor, but that they need as many tax write offs as possible. I don’t understand how spending that much money for that little write off makes any financial sense. Can someone elaborate the benefits, or provide a sensible explanation to curb this behavior if it is as wasteful as I think it is? Later: quote:Do your parents think that this donation will bring them into a lower tax bracket? Is it possible that they think that the 25% tax bracket pays 25% taxes on ALL of their income and not just the amount in that bracket? op posted:Yes. Goal is lower tax bracket. OctaviusBeaver fucked around with this message at 16:02 on Nov 27, 2017 |
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Nov 27, 2017 16:00
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God drat I love when people misunderstand how tax bracketing works.
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Nov 27, 2017 16:33
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I think at this point no amount of explaining would get it through to them, because it would be utterly humiliating to tally up how much money they wasted trying to squirrel their earnings away from the government. Also, the biggest difference between the brackets at any substantial level of earnings is 5% (unless they're trying to get below $38k from the 25% to 15% brackets, in which case I'd find it hard to believe they could afford thousands a month in charitable expenses). I wonder what % of their take-home goes toward those deductions...
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Nov 27, 2017 16:40
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They may not understand tax brackets, but of all the bad financial decisions ITT, donating "too much" to charity is probably one of the least bad.
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Nov 27, 2017 16:47
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Virigoth posted:This is a gift that keeps on giving: He also forgot to include his weed budget.
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Nov 27, 2017 16:56
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Craptacular posted:They may not understand tax brackets, but of all the bad financial decisions ITT, donating "too much" to charity is probably one of the least bad. Buying brand new clothes to give to Goodwill is probably the most BWM donation of all time. They would spend $50 on a shirt and Goodwill sells it for $5 to somebody who will hawk it on ebay. Would be much better off just giving $1000 to a charity.
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Nov 27, 2017 17:00
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OctaviusBeaver posted:and Goodwill sells it for $5 to somebody who will hawk it on ebay. Is Goodwill's secondary market for better clothes that efficient?
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Nov 27, 2017 17:04
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Do they not realize that you can just donate money? Like that is easier at tax time to have a nice receipt for $X instead of the list of things donated.
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Nov 27, 2017 17:19
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60k isn't exactly rolling in it, but I have no loving clue how that guy is spending it all.
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Nov 27, 2017 17:20
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For large donations in kind to charities you can get a receipt, but it’s a pain to get the valuation sorted.therobit posted:60k isn't exactly rolling in it WHAT HAVE YOU DONE AUGH
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Nov 27, 2017 17:20
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They're probably buying poo poo so they can get credit card points / cash back, since that's tax free*. *because nobody declares them.
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Nov 27, 2017 17:22
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Subjunctive posted:WHAT HAVE YOU DONE AUGH furthermore, when accounting for differences in COL 
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Nov 27, 2017 17:23
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FrozenVent posted:They're probably buying poo poo so they can get credit card points / cash back, since that's tax free*. Interesting. Should the credit card companies be issuing tax paperwork? I didn’t think it was counted as income, like bogo items aren’t, or a negotiated-down price.
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Nov 27, 2017 17:24
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Credit card points, etc. are not taxable. Sign-up bonuses, like $300 for opening this checking account or $500 for opening this credit card and spending $5000 on purchases in 3 months or whatever, are. Source: https://www.creditcards.com/credit-card-news/irs-taxable-income-credit-card-rewards-points-gift-1277.php
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Nov 27, 2017 17:40
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FrozenVent posted:They're probably buying poo poo so they can get credit card points / cash back, since that's tax free*. I believe some people were doing this by buying special coins or something from the Treasury. I swear I remember a story of people buying rolls of coins with their credit card to get the cashback, and then just taking the coins to the bank and depositing them. It was essentially a low cost way to get 1-2% earnings through your credit card. edit: https://www.creditcards.com/credit-card-news/mint-closes-loophole-ends-credit-card-coin-sales-frequent-flyer-flier-miles-1263.php
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Nov 27, 2017 17:42
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Subjunctive posted:For large donations in kind to charities you can get a receipt, but it’s a pain to get the valuation sorted. LOL Yeah 1k more than the US median household income is "rolling in it." I didn't use the magic number of 100k here! Seriously though looking at his listed expenses, 700/mo on cats? A pellet gun is a one time expense of 100 bucks.
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Nov 27, 2017 17:53
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He just wrote it stupidly by putting the parenthetical statement in the wrong place. It’s 100 for the cats, 600 for medical payments (which is sadly easily reached if somebody has a disability).
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Nov 27, 2017 17:57
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Clearly not knowing how to use Reddit's list markup format is BWM cuz that causes the worst fights.
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Nov 27, 2017 18:00
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22 Eargesplitten posted:He just wrote it stupidly by putting the parenthetical statement in the wrong place. It’s 100 for the cats, 600 for medical payments (which is sadly easily reached if somebody has a disability).
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Nov 27, 2017 18:09
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22 Eargesplitten posted:He just wrote it stupidly by putting the parenthetical statement in the wrong place. It’s 100 for the cats, 600 for medical payments (which is sadly easily reached if somebody has a disability). Wife is on SSDI, she should be eligible for Medicare? (ok, there's a 24 month waiting period, and we don't have those details - but it doesn't sound like the SSDI stuff is 'new')
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Nov 27, 2017 18:09
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Not a Children posted:I think at this point no amount of explaining would get it through to them, because it would be utterly humiliating to tally up how much money they wasted trying to squirrel their earnings away from the government. They might be misunderstanding bracketing, but there are definitely some perverse incentives out there that encourage people to keep their income under some threshold. For example, if you have a family of two and have $63,720 in modified AGI, you qualify for ACA tax credits. If you make $63,721, you don't. The value of those tax credits far exceeds the value of the additional dollar, so if you're at that threshold you'd definitely want to keep your AGI under it. SNAP, CHIP, a number of other things have hard cutoffs at given levels of income. Another big one is that if your MAGI rises above a certain level, you can no longer deduct IRA contributions or student loan interest, and again that's a case where the value of those deductions can be far higher than the additional marginal income. Granted, if they're trying to reduce MAGI by buying poo poo and then donating it to charity, they're still clueless.
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Nov 27, 2017 18:12
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22 Eargesplitten posted:He just wrote it stupidly by putting the parenthetical statement in the wrong place. It’s 100 for the cats, 600 for medical payments (which is sadly easily reached if somebody has a disability).
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Nov 27, 2017 18:20
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therobit posted:60k isn't exactly rolling in it, but I have no loving clue how that guy is spending it all. Seems like $15k to taxes, $10k to student loans, $10k to medical related things. Edit: and $13k to rent.
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Nov 27, 2017 18:32
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Cicero posted:I'm confused, if you're on SSDI doesn't the government cover your medical expenses? SSDI is supplemental income, not healthcare. If you're on SSDI you get *paid*, it's not a reimbursement for expenses you incur. You can be on SSDI and have no medical expenses at all; you can just be disabled and unable to work. If you're on SSDI for long enough, you become eligible for Medicare. It's possible she hasn't been on it long enough for that benefit to kick in, or those could be his medical expenses and not hers.
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Nov 27, 2017 18:32
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Phanatic posted:Another big one is that if your MAGI rises above a certain level, you can no longer deduct IRA contributions or student loan interest, and again that's a case where the value of those deductions can be far higher than the additional marginal income.
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Nov 27, 2017 18:42
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Phanatic posted:SSDI is supplemental income, not healthcare. If you're on SSDI you get *paid*, it's not a reimbursement for expenses you incur. You can be on SSDI and have no medical expenses at all; you can just be disabled and unable to work. My Mom's on SSDI and she qualified for Medicare as soon as her disability was approved.
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Nov 27, 2017 18:43
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quote:I don't "qualify" for any assistance it seems, but we are months away from being homeless As a sidenote, ffffffuck anyone who doesn't recognize the tremendous amount of privilege it takes to be "months away from being homeless" in the first place, and that a sizable segment of the population will live their entire lives without knowing that kind of security
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Nov 27, 2017 18:47
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Looks like Medicare still has a 20% coinsurance and a $134/mo premium (unless I misread the page I looked at real quick while at work). And that assumes all of your doctors even take insurance. Not sure what out of network coverage is for Medicare. I know most mental health practitioners don’t take insurance around here, and they can charge $125-150 per visit. I don’t know what it’s like in CT.
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Nov 27, 2017 18:48
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https://www.ssa.gov/planners/disability/dapproval4.htmlquote:We automatically enroll you in Medicare after you get disability benefits for two years. The two parts of Medicare we enroll you in are hospital insurance and medical insurance. It's possible she had some other source of eligibility for Medicare, like if she's old enough or has ALS.
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Nov 27, 2017 18:49
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22 Eargesplitten posted:Looks like Medicare still has a 20% coinsurance and a $134/mo premium (unless I misread the page I looked at real quick while at work). And that assumes all of your doctors even take insurance. Not sure what out of network coverage is for Medicare. I know most mental health practitioners don’t take insurance around here, and they can charge $125-150 per visit. I don’t know what it’s like in CT. re: coinsurance, it depends (20% is the part B copay, but not the part A. If they get on a part C, which combines A and B, plan, it would depend on that specific plan..) With Medicare, you can usually find local docs who accept it - it's popular with young docs in particular because it's a good way to get a baseline of patients. But there are also two variants of taking normal medicare as a doc which influence your payment amount. All hospitals accept it.
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Nov 27, 2017 19:00
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I thought the reason that everyone does "points" is so that you don't have to deal with the amount earned at tax time.
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Nov 27, 2017 19:33
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My student loan payments are killing me.... spends $600 a month on cats.
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Nov 27, 2017 19:33
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Foma posted:My student loan payments are killing me.... spends $600 a month on cats. Keep reading; you'll get there.
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Nov 27, 2017 19:37
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Bird in a Blender posted:I believe some people were doing this by buying special coins or something from the Treasury. I swear I remember a story of people buying rolls of coins with their credit card to get the cashback, and then just taking the coins to the bank and depositing them. It was essentially a low cost way to get 1-2% earnings through your credit card. JFC. Those reward points come out of the retailer fees, which can be as high as 2-3% of the transaction amount. Mint: OK, we'll eat the credit card fees for you so as to provide a public service. Assholes: Cha-ching! Free money! But wait, it gets worse... here's a story of someone actually doing it: https://www.riskology.co/the-day-i-bought-15000/ quote:It took about 2 weeks for the mint to fill my order and deliver the coins. During this time, I didn’t have to do anything except log in and track my order every few days. So the Mint was also eating the cost of shipping? What the gently caress does it cost to send 300lbs of metal in boxes across the country by UPS? I checked the UPS calculator, and it said $1,400. I'm sure the Mint gets some kind of business rate, but  And then the deposit to the bank: quote:She explained it was too late in the day to process the transaction, and my deposit was too big to fit in their safe overnight. I tried to do a little sweet talking, but she wasn’t having any of it. I was plain out of luck. I’d have to wait until the morning. The manager at my bank was making a big stink, so I called another nearby branch, explained my situation, and scheduled my deposit with the manager for the next morning. So now the bank needed to count 300lbs worth of coins, lug them in and out of their vault, and eat the cost of shipping them back to the Mint. OK, they probably do that using a cash transport service which they pay for anyway, but it's still a cost. At the end of this, it probably cost the bank at least $50 in wages and a lot more in shipping, the Mint at least $1000 worth of taxpayer's money, and himself a good day or so worth of effort, driving, gas, etc. This also doesn't account for all the squandered good faith: his bank then set daily limits on coin transactions (and almost certainly now hate him), while the Mint set daily limits on sales of coins (and later stopped them altogether). But it's OK, he "made" $300. quote:In the end though, what tends to happen is what you allow yourself to believe will happen. If you think everything will go wrong, it probably will. More importantly though, if you believe that things will go right, it probably will, also, because you’ll be willing to work hard enough to make sure it does. 
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Nov 27, 2017 19:45
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Yea, I found it odd that the mint we ever accept a credit card to pay for legal tender, what is the incentive here? In my search for that article I found this too https://millionmilesecrets.com/2015/08/28/us-mint-deal-is-back/ Where he debates buying coins from a bar coin machine with his credit card. He does decide at the end it isn't worth it, but the whole thing makes me wonder how much time these people put into getting 1-2% cash back on their credit cards. There is almost no way it really pays out enough to make it worthwhile.
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Nov 27, 2017 19:54
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Lead out in cuffs posted:JFC. Those reward points come out of the retailer fees, which can be as high as 2-3% of the transaction amount. To put this in context: - The U.S. Mint was required by Congress to start producing $1 coins as of legislation passed in 2005. - Noone loving wanted $1 coins in practice, so they produced a bunch of $1 coins that no banks would stock. - To get them out in circulation, the mint started eating costs for processing fees and shipping hoping to get people to start holding some of this $1 coin stock. - Of course, because noone wanted them, the only people buying them were doing it for churning. - It's not like the U.S. mint accepts deposits of coins from banks. This is a way for the U.S. Mint to use legal structure to force banks to start stocking the $1 coins noone wanted. - What is that structure? Any entity that denominates a debt in U.S. dollars must accept ANY legal tender as repayment of that debt. Failure to accept absolves the debtor of their obligation. So, banks don't have to accept arbitrary deposits in coins, but you can sure as hell force them to accept payments on loans in coins. And probably end up on some registry of assholes who use coins too much, similar to check kiters.
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Nov 27, 2017 19:57
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During the golden age of churn there were definitely people making an unbelievable amount of money doing this, but as with all things with huge upside and relatively little work, the well's dried up and they've (mostly - the smart ones anyway) moved on to their next hustle.
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Nov 27, 2017 19:58
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Lead out in cuffs posted:But it's OK, he "made" $300. It's not like the US Mint chose to do this of its own accord. This was the result of legislation passed by Congress to first mint dollar coins that nobody wanted to use, and then once they realized "oh, nobody wants to use these" to then convince people to use them and put them into circulation. So yes, the Mint sold the coins for face value and paid for the shipping. And you could make *way* more than $300. The money people could make was utterly secondary to where the real benefit was: credit card rewards. With the right credit card, every dollar you spent could generate *more* than one frequent flier mile. There are cards that give you a shitload of miles just to sign up, with the caveat that you need to use the card for $x in purchases over the next year. Buying coins at face value and paying the credit card bill with the coins worked for all values of $x. Some people bought *millions* of frequent flier miles this way. Getting pretty much a lifetime of free travel all over the world for the gas it takes you to drive a shitload of coins down to your bank is pretty GWM. Congress, on the other hand, is pretty much the apotheosis of BWM. This dumbassery passed by a unanimous voice vote and still nobody wants to use dollar coins...because they keep printing dollar bills.
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Nov 27, 2017 20:02
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Most of the credit cards with cash back have a certain cap on how much you get back in a year- for Costco for example the limit is like $750.i suppose you could rotate different cards to get around this. My mom is one of those people that minmaxes credit card benefits. She's gotten a lot of free incentives but it does take a lot of time/planning (she uses excel spreadsheets and poo poo to keep track of all of it).
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Nov 27, 2017 20:05
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