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$95000 no taxes
Old 12-04-2015, 03:14 PM   #1
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$95000 no taxes

The Go Curry Cracker 2014 Taxes - Go Curry Cracker!Go Curry Cracker!

I don't have access to my tax returns for a week or so and this is driving me nuts.

Is this possible? Off the top of my head my return looks very very very very (did I say very) similar. Married jointly no kids. Did a Roth Conversion for $40k, $10k in Dividends cap gains etc.... but paid about $13K fed and $5k state.

Do I need a new accountant? Anyone in similar situation achieving anything close? I am trying to get ACA subsidies on exchange by 12/15 and no access to returns is killing me.....

I'm in South Carolina...

Thx

Wally
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Old 12-04-2015, 03:21 PM   #2
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This is easily possible. Lots of members of this forum have higher incomes and pay zero taxes. One needs to use tax software to see how it all shakes out and also to plan ahead.

Here is another discussion on paying ZERO income taxes:
https://www.bogleheads.org/forum/viewtopic.php?t=87471

You suggest that you have no access to your tax returns, so you must be on vacationi or travelling for work. Accountant? You should probably think about being your own accountant.
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Old 12-04-2015, 03:33 PM   #3
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Is more of your income from w*rk rather than capital gains? Such income is not taxed as favorably.
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Old 12-04-2015, 03:39 PM   #4
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Quote:
Originally Posted by wallygator69 View Post
The Go Curry Cracker 2014 Taxes - Go Curry Cracker!Go Curry Cracker!

I don't have access to my tax returns for a week or so and this is driving me nuts.

Is this possible? Off the top of my head my return looks very very very very (did I say very) similar. Married jointly no kids. Did a Roth Conversion for $40k, $10k in Dividends cap gains etc.... but paid about $13K fed and $5k state.

Do I need a new accountant? Anyone in similar situation achieving anything close? I am trying to get ACA subsidies on exchange by 12/15 and no access to returns is killing me.....

I'm in South Carolina...

Thx

Wally
The difference is in the Roth conversion amount:

"We also had imaginary income of $52,469, as a result of a Roth IRA Conversion of $5,744 and harvesting long term capital gains of $46,725"

Their long term capital gain: $46,725 is not taxed if the tax rate is 15% or below.
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Old 12-04-2015, 03:45 PM   #5
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Originally Posted by wallygator69 View Post
I don't have access to my tax returns for a week or so and this is driving me nuts.

Is this possible? Off the top of my head my return looks very very very very (did I say very) similar. Married jointly no kids. Did a Roth Conversion for $40k, $10k in Dividends cap gains etc.... but paid about $13K fed and $5k state.

Do I need a new accountant? Anyone in similar situation achieving anything close? I am trying to get ACA subsidies on exchange by 12/15 and no access to returns is killing me.....
Dunno about a new accountant but better tax planning for sure. For MFJ, you'd need around $100,000 in ordinary income to get to $13K federal income tax (standard deduction). If you wish to receive ACA subsidies, you might want to reduce or stop the Roth conversions.

The reason they barely pay any income is because of the type of income source. In 2015, for MFJ with standard deduction and exemption, you can have up to $20.6K ($12,600+$8,000) in ordinary income (taxed at 0%) and $74.9K in qualified dividends and long term capital gains and your federal income tax will be $0. More if you have foreign tax credit to offset the income tax or itemize deductions to reduce taxable income.
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Old 12-04-2015, 03:52 PM   #6
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Your situation is quite different. He has $77k of tax preferenced income ($30k qualified dividends and $47k of long term capital gains) which has a zero tax rate. You only have $10k. Big difference.

But if your only income is $10k of qualified dividends and $40k Roth conversion then $13k in federal tax is way too much... it should be about $2k... there must be something else that you are not remembering.
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Old 12-04-2015, 03:59 PM   #7
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thx called a neighbor and he is fedexing me my tax return and should have monday.

thx for the quick response.
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Old 12-04-2015, 04:11 PM   #8
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If you did a Roth conversion in 2015 that was too much, then you can recharacterize it (undo it).
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Old 12-04-2015, 04:14 PM   #9
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Does ACA MAGI count qualified dividends and long term capital gains as income? So if you want ACA subsidies, you need to keep all your income below approximately $63,000 or 400% of the federal poverty level for 2 people, right?

Racing for the FIRE finish line, but I don't know where it is.
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Old 12-04-2015, 04:24 PM   #10
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Does ACA MAGI count qualified dividends and long term capital gains as income? So if you want ACA subsidies, you need to keep all your income below approximately $63,000 or 400% of the federal poverty level for 2 people, right?

Racing for the FIRE finish line, but I don't know where it is.
Yes. Also see http://laborcenter.berkeley.edu/pdf/..._summary13.pdf
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Old 12-04-2015, 05:07 PM   #11
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Quote:
Originally Posted by wallygator69 View Post
The Go Curry Cracker 2014 Taxes - Go Curry Cracker!Go Curry Cracker!

I don't have access to my tax returns for a week or so and this is driving me nuts.

Is this possible? Off the top of my head my return looks very very very very (did I say very) similar. Married jointly no kids. Did a Roth Conversion for $40k, $10k in Dividends cap gains etc.... but paid about $13K fed and $5k state.

Do I need a new accountant? Anyone in similar situation achieving anything close? I am trying to get ACA subsidies on exchange by 12/15 and no access to returns is killing me.....

Wally
They way he did it was having over $77k in non-taxed income when below the top of the 15% bracket (LTCG, QDivies, and tax free interest (munis)). You note last year you did a $40k Roth conversion -- likely mostly taxable.
Now if you are really shooting for a ACA subsidy.. you may have a better shot at dropping your tax rate, but maybe not a huge Roth conversion.

I would look at where your income is coming from. This is very important if you want to minimize taxes. If you want a subsidy, your limit will be much lower than the top of the 15% bracket (at least for two people). Muni income will count toward ACA MAGI.
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