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If our AGI was too high in 2019/2020 but will be below 150k in 2021 - will we get the third tax stimulus as a credit next year when we file our return?
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Mar 15, 2021 15:52
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laxbro posted:If our AGI was too high in 2019/2020 but will be below 150k in 2021 - will we get the third tax stimulus as a credit next year when we file our return? No, welcome to the inanity of the covid stimulus checks
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Mar 15, 2021 16:12
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laxbro posted:If our AGI was too high in 2019/2020 but will be below 150k in 2021 - will we get the third tax stimulus as a credit next year when we file our return? You'll get the extra child tax credit if your income was to high in 2020, but lower in 2021, though.
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Mar 15, 2021 16:17
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I'm surprised the COVID stimulus happened at all, honestly.
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Mar 15, 2021 16:19
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Pollyanna posted:I'm surprised the COVID stimulus happened at all, honestly. So are Republicans
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Mar 15, 2021 16:40
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Pollyanna posted:wait what https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2021 Only way to hit a 37% rate is to be above $523k if you are single, or $628k married filing jointly.
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Mar 16, 2021 01:50
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Pollyanna posted:Checking the numbers and yeah no, the math is right AFAICT. I did make a six-figure profit off of RSUs and options last year that's getting taxed 37%. If it was all paid out in a lump sum (or several large sums) they withheld from it as if you were making that year-round and you'll get a solid bit of that back as a refund
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Mar 16, 2021 02:53
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The mistake I made really was forgetting that it's not taxed until April of the following year.
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Not a Children posted:If it was all paid out in a lump sum (or several large sums) they withheld from it as if you were making that year-round and you'll get a solid bit of that back as a refund This is not your plan but as I understand it stock plans are withheld at a flat 22%. https://workplaceservices.fidelity.com/bin-public/070_NB_SPS_Pages/documents/dcl/shared/StockPlanServices/SPS_Tax_Withholding.pdf
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Mar 16, 2021 03:04
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Pollyanna posted:Prepare to make a lot of money off my stupid questions then cause my dude there’s a lot of stupid to mine here. I've been thoroughly impressed at your growth in the thread over the last year or so. I mostly lurk, but I remember you needing to be talked down from some rather questionable ideas and almost driven out of the thread. But you stuck around and learned. You're like the anti-Zaurg.
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Mar 16, 2021 03:24
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ROJO posted:https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2021 The 37% tax is on the money I got from liquidating my ISOs and RSUs, sorry. I made $115k in 2020 via salary, but beginning of last year I started selling off the ISOs and RSUs I had and putting it all in a balanced account in Vanguard. So I could diversify, you know. This, uh, may not have been the smartest move. I think it was enough to trigger AMT, but we’ll see what the CPA says.
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Mar 16, 2021 04:22
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Pollyanna posted:The 37% tax is on the money I got from liquidating my ISOs and RSUs, sorry. I made $115k in 2020 via salary, but beginning of last year I started selling off the ISOs and RSUs I had and putting it all in a balanced account in Vanguard. So I could diversify, you know. This, uh, may not have been the smartest move. Right, but income is income (unless you hold long enough to make long-term capital gains). You shouldn't be hitting 37% marginal rate at all unless your salary + realized short-term gains hit >$523k, etc.
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Mar 16, 2021 04:44
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ISO's are only income on the amt worksheet if you do not dispose (sell) them the same tax year you exercise them.
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Mar 16, 2021 05:18
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Yeah when I said 37% that wasn’t marginal 🙇♀️
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Mar 16, 2021 05:19
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Pollyanna posted:Yeah when I said 37% that wasn’t marginal 🙇♀️ I am so curious about how much your CPA saves you and where your own calculations went sideways.
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Mar 16, 2021 06:52
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If they ever respond to my email, sure 
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Mar 16, 2021 13:10
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Same. I'm curious if there's a standardized way on how taxes are handled on option sales like this. Presumably it's just on you to figure out, right? And presumably there are CPAs whose job is to counsel you lucky guys on things like basis/tax brackets/long term versus short term/optimal strategies to minimize your tax burdens?
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Mar 16, 2021 13:45
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RSUs are generally taxed through your W2 up front, so it's entirely possible Polyanna doesn't really owe as much as he thinks. ISOs can be complicated just because you have to meet two parts to get the LTCG rate- two years from grant and one year from exercise. If they actually were qualified, the LTCG rate would be 20% max, and if they weren't qualified then they're not going to matter for AMT. So either way he's probably not as hosed. If on the other hand, these were already exercised and put into a brokerage and he's just selling everything to diversify, then we hope they were long term gains and not all stuff he got less than a year ago. mystockoptions.com is a good site to read up on tax treatment for this kind of thing.
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Mar 16, 2021 14:51
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Residency Evil posted:Same. I'm curious if there's a standardized way on how taxes are handled on option sales like this. Presumably it's just on you to figure out, right? And presumably there are CPAs whose job is to counsel you lucky guys on things like basis/tax brackets/long term versus short term/optimal strategies to minimize your tax burdens? Everyone I know who has hit the start up lottery hired a really good tax accountant to figure out what to do and minimize their tax burden. Pollyanna posted:If they ever respond to my email, sure It is March 16th and all. probably a bit busy with current clients at the moment.
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Mar 16, 2021 15:07
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moana posted:RSUs are generally taxed through your W2 up front, so it's entirely possible Polyanna doesn't really owe as much as he thinks. ISOs can be complicated just because you have to meet two parts to get the LTCG rate- two years from grant and one year from exercise. If they actually were qualified, the LTCG rate would be 20% max, and if they weren't qualified then they're not going to matter for AMT. So either way he's probably not as hosed. Always assume I have no idea what I’m talking about, so I’ll default to my CPA on the details. quote:
 quote:mystockoptions.com is a good site to read up on tax treatment for this kind of thing. Going on the list! spwrozek posted:It is March 16th and all. probably a bit busy with current clients at the moment.  why did i wait
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Mar 16, 2021 15:29
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Pollyanna posted:
I would follow up ASAP, maybe mentioning that you're a referral from a long time client. My tax guys stop taking new clients in January every year.
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Mar 16, 2021 15:41
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I am learning so much this year 
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Mar 16, 2021 15:46
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My mom received a letter in the mail a few days ago notifying her that her IRA account is subject to escheatment if she does not notify them of any activity. She had no idea that she owns this account and I made sure she was not being scammed by calling the public number of the asset management firm that I found online. Anyway, I need to help her move the funds from this account to her regular bank account. From speaking with the company, they said there will be no penalties to withdrawal the amount but there is a section of the distribution form that states "If this section is not completed, federal income tax will be withheld at a rate of 10% from all distributions from a Traditional IRA" with two options: 1) I wish to have federal tax withheld from this distribution at the automatic withholding rate of 10% 2) I wish to specify the withholding rate, or I wish to have no tax withheld from this distribution. (If this option has been selected, a completed IRS form W-4P must be submitted with this distribution form) I found this link here but I really don't understand this - https://finance.zacks.com/tax-withholding-rate-ira-7712.html My mom is old and retired, has no income, and my understanding is that there are no early withdrawal penalties for the IRA. Will there be an additional penalty from moving it from an IRA to a normal banking account?
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Mar 16, 2021 16:57
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Busy Bee posted:My mom received a letter in the mail a few days ago notifying her that her IRA account is subject to escheatment if she does not notify them of any activity. She had no idea that she owns this account and I made sure she was not being scammed by calling the public number of the asset management firm that I found online. If you want more time than you have to research this, just roll it over to a real brokerage like Vanguard or Fidelity. She is 72 right? If so, no penalties. Otherwise, if she sells and withdraws her money it will be "ordinary income" on her taxes. If you want to be optimal and she doesn't need the money "right now" she can play games with her taxes to minimize the cost. You can calculate it so she's in minimum brackets. If you want to throw out some real numbers, we can help with the math.
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Mar 16, 2021 17:22
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So I have some spare money after just not spending as much and getting a pretty good bonus. I already max my 401K, Roth IRA, and HSA and I earmark $500/mo into a brokerage account. Usually my budget make it pretty easy to just always follow through on submitting my buys at the beginning of each month (I always do my Roth buy Jan 2). I just rebalanced after my yearly 401k match last week. The money is just going to be more money for future retirement. I know all the math says dump it in and I know that I should just do that and DCA is not the way. For some reason I am struggling pulling the trigger on dumping ~$15K into the market (I mean I only have been thinking about it for like 3 days...but still). I should really just do it, I am 34, in 20 years it shouldn't matter. I am not really interested in the stress of individual stocks so it will all be indexed. Basically I think this is just me rambling to convince myself to just put the money all in the market. so maybe no question really... tell me to just buy. E: I took the first step though and just sent it over to my settlement account. spwrozek fucked around with this message at 17:45 on Mar 16, 2021 |
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Mar 16, 2021 17:38
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spwrozek posted:So I have some spare money after just not spending as much and getting a pretty good bonus. I already max my 401K, Roth IRA, and HSA and I earmark $500/mo into a brokerage account. Usually my budget make it pretty easy to just always follow through on submitting my buys at the beginning of each month (I always do my Roth buy Jan 2). I just rebalanced after my yearly 401k match last week. The money is just going to be more money for future retirement. I know all the math says dump it in and I know that I should just do that and DCA is not the way. For some reason I am struggling pulling the trigger on dumping ~$15K into the market (I mean I only have been thinking about it for like 3 days...but still). I should really just do it, I am 34, in 20 years it shouldn't matter. I am not really interested in the stress of individual stocks so it will all be indexed. Basically I think this is just me rambling to convince myself to just put the money all in the market. so maybe no question really... tell me to just buy. Dollar cost averaging is fine. Yes, you usually end up ahead if you lump sum, but that's "usually" and it's rarely a massive difference. Just make sure to set up a rule and follow it, like "$2500 per month for the next six months". The trouble comes from following your gut and fiddling with the amounts and timelines.
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Mar 16, 2021 18:06
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spwrozek posted:So I have some spare money after just not spending as much and getting a pretty good bonus. tell me to just buy. Buy buy buy.  I did that last week with a similar amount of money, and I'm going to do it next week with a much larger amount of money. Thanks stock plan. 
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Mar 16, 2021 18:27
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spwrozek posted:So I have some spare money after just not spending as much and getting a pretty good bonus. I already max my 401K, Roth IRA, and HSA and I earmark $500/mo into a brokerage account. Usually my budget make it pretty easy to just always follow through on submitting my buys at the beginning of each month (I always do my Roth buy Jan 2). I just rebalanced after my yearly 401k match last week. The money is just going to be more money for future retirement. I know all the math says dump it in and I know that I should just do that and DCA is not the way. For some reason I am struggling pulling the trigger on dumping ~$15K into the market (I mean I only have been thinking about it for like 3 days...but still). I should really just do it, I am 34, in 20 years it shouldn't matter. I am not really interested in the stress of individual stocks so it will all be indexed. Basically I think this is just me rambling to convince myself to just put the money all in the market. so maybe no question really... tell me to just buy. Pretend I posted the link to (Bob?) the World's Worst Market Timer or whatever.
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Mar 16, 2021 19:07
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Thanks. You are all correct. I will look at what I need to buy to keep my allocation balance and get it done.
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Mar 16, 2021 19:43
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Pollyanna posted:I am learning so much this year
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Mar 16, 2021 21:20
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Speaking of minor annoyances, Ally Bank does not post PDF's of their 1099-INT's for Trust accounts online, they only mail them.  I bring this up because if you have assets to be gifted after you die (such as our recent new rich person above) you probably need to be putting your non-retirement accounts, house, and similarly large assets into a Trust. Consult an estate planning attorney to get the whole package setup. (Trust, will, POA's if relevant, and advanced medical directive for example.)
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Mar 16, 2021 21:31
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moana posted:You can file to extend to October, give you some time to find a nonshitty CPA, but you will probably want to make an estimated payment asap to avoid a penalty. Yeah, if I don't get a response back soon from a CPA then I'm thinking I'll file an extension. Uggghhhh what a pain in the rear end 
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Mar 16, 2021 22:32
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CubicalSucrose posted:Pretend I posted the link to (Bob?) the World's Worst Market Timer or whatever. I hadn't read this before, so thanks for bringing it up https://prosperion.us/commentary/meet-bob-worlds-worst-market-timer/
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Mar 16, 2021 23:01
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DrPossum posted:I hadn't read this before, so thanks for bringing it up yeah the original is here https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/ in the comments, the author says: quote:As I showed, Bob would have been better off with a simple dollar cost average on a periodic basis (weekly, monthly, quarterly, etc.). He would have done better timing his purchases, but no one can really do that very well and since the general trend in the markets have been up over time, you are much better off emotionally making periodic contributions instead of trying to time your buys. It’s an impossible game to play when you constantly have to try to guess when it’s a good time to get invested. Your time horizon matters too, but psychologically, a simple DCA to your set asset allocation is the simplest way to get market exposure without losing sleep at night. if you do the math, that "worst timer" got about 9% annualized returns. of course, he worked for over 40 years. what if he really WAS the worst timer, and retired in march 2009, after only ~37 years? he would have only ~$442k (actually less after getting rid of 4 years of dividends), for about 5% annualized returns. he would probably have been better off leaving his money in CDs given the rates over the years he was investing. he'd be not so far ahead of inflation. in short, $1.1m sounds like a lot! but then you start looking at the time horizon, bond yields and inflation over those years... and holy gently caress, Bob's really in a bad spot compared to all his contemporaries who invested normally. Don't be Bob. Warren Buffett also recommends DCA to plain folks.
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Mar 16, 2021 23:29
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pmchem posted:Warren Buffett also recommends DCA to plain folks. I took his advice and have my retirement invested 90% S&P 500 and 10% bonds. It works for me.
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Mar 16, 2021 23:49
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Pollyanna posted:Yeah when I said 37% that wasn’t marginal 🙇♀️ Pollyanna's plot arc is definitely the best one in this thread  (And I mean this sincerely, not as an insult)
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Mar 17, 2021 01:29
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Pollyanna posted:Yeah when I said 37% that wasn’t marginal 🙇♀️ Still confused by this. 37% is the highest it could be?
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Mar 17, 2021 01:46
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STCG is 37% I believe.Kylaer posted:Pollyanna's plot arc is definitely the best one in this thread Finally, success!
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Mar 17, 2021 04:36
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Pollyanna posted:STCG is 37% I believe. Short-term capital gains are treated as straight income.
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Mar 17, 2021 04:45
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Residency Evil posted:Still confused by this. 37% is the highest it could be? Yeah I'm still confused also. While withholdings may vary depending on setups and different income sources, at the end of the day, your end of year total tax liability is beholden to the tax brackets. And there is no way you can owe 37% tax on any part of your income to the feds unless your total AGI clears the income brackets posted. Pollyanna posted:STCG is 37% I believe. Nope. Yond Cassius posted:Short-term capital gains are treated as straight income. This. Any STCG get added to your other ordinary, taxable income and then weighed against the tax brackets (minus deductions). Pollyanna - I really don't think you are as hosed as you think you are - but still, talk to a CPA. ROJO fucked around with this message at 05:03 on Mar 17, 2021 |
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Mar 17, 2021 04:58
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H110Hawk posted:Buy buy buy. Purchase Completed.
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Mar 17, 2021 05:11
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