Tax rate for the retired or semi-retired with Roth

[pb4uski]

Quote:

Originally Posted by workburnout ..... Most of what I have is long term index fund investments, with a few stocks I hold long term. I have some I trade buying and selling every few months, which I consider a gamble, though I am pretty good at it. That is always less than 5-10 percent of my entire Roth and non-Roth portfolios.

If these long-term index funds are equities (all or most of dividends are qualified dividends... you can tell by looking at the 1099s or page 1 of your Form 1040 then they will be tax-free if you keep your taxable income under $38,600 (in 2018... increases for inflation). If from bond funds then the dividends will not be tax-free. All LTCG will be tax-free regardless of whether from equity or bond funds as long as taxable income is less than $38,600.

See https://www.kitces.com/blog/understa...p-up-in-basis/

[cathy63]

Quote:

Originally Posted by Qs Laptop I don't understand how a reduction in the tax rate tables will cause your tax rate to go up. What business deductions can an employee take in 2017 that they can't take in 2018?

All the deductions that were subject to the 2% AGI floor are gone. In addition to tax prep and investment expenses, that includes home office expenses, dues for unions and other professional associations, journal subscriptions, business and malpractice insurance, uniforms, tools and supplies, unreimbursed travel and entertainment and vehicle expenses, etc.

OP says he is a single person who is making $100K and taking $30K in deductions plus $4K in exemptions for 2017. Unless he has large medical expenses, he's now limited to the $12K standard deduction and no exemption, so his taxable income has increased by $22K.

2017 tax = $13,240
2018 tax = $15,410

[pb4uski]

So the OP would be best to approach his employer and renegotiate his comp where he gets paid less but also gets expense reimbursement for certain business expenses or have them provided by the employer.... the net impact on the employer can be neutral ($100k expense that is fully deductible but say, $70 as comp and $30k as reimbursed employee business expenses) but the OP will have less taxable income... effectively sidestepping the change in deductibility of those items.

IIRC, some employers are considering such changes for W-2 "statutory" employees.

[kgtest]

Quote:

Originally Posted by workburnout Employees can no longer deduct mileage, promotional items (such as logoed advertisement items given to clients), home office deductions (even if employer requires that we work from home) and things like that. Not married. Do not plan to fully retire. Plan to scale back slowly as mentioned in original post.

This one really hurts DW...and in turn the family. Social worker who offices out of her home helping the absolute neediest of people. Now she won't be able to help as much and certainly wont be driving as much.

[pb4uski]

Her employer doesn't reimburse for mileage?