Am I the only one who doesn't fret about taxes too much?
- Thread starter dtbach
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Luck_Club
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Depends on the tax bracket
It only really makes sense to take the effort if you can keep below the break points:
Married under $78,950 in income
& Married under $321,500 in income. To optimize between those extremes doesn't bring much benefit. & if you are pushing $320K, there isn't much you can do to bring it down to $79K.
Running my own business for a number of years, I know there isn't much you can do beyond $20-40K income reduction, while still being financially prudent. So at best you will be saving $2-4K
It only really makes sense to take the effort if you can keep below the break points:
Married under $78,950 in income
& Married under $321,500 in income. To optimize between those extremes doesn't bring much benefit. & if you are pushing $320K, there isn't much you can do to bring it down to $79K.
Running my own business for a number of years, I know there isn't much you can do beyond $20-40K income reduction, while still being financially prudent. So at best you will be saving $2-4K
I'm fretting about taxes alot this year, due to my leaving megacorp and deferred compensation for RSUs, NSOs, and SARs that has been accrued across multi-states.
My tax bill is huge and it will be higher next year. I have to figure out how to pay quarterly taxes going forward.
Once it's all set up, I won't mind it as much, but this year it has been agonizing.
Federal taxes - done.
State one taxes - done
State two taxes - done
State three taxes - Need to figure out how to fill extra form.
Estimate cash to pay for all these extra payments - done
2020-21 tax planning estimates - preliminary
Setting up quarterly payments - to do
My tax bill is huge and it will be higher next year. I have to figure out how to pay quarterly taxes going forward.
Once it's all set up, I won't mind it as much, but this year it has been agonizing.
Federal taxes - done.
State one taxes - done
State two taxes - done
State three taxes - Need to figure out how to fill extra form.
Estimate cash to pay for all these extra payments - done
2020-21 tax planning estimates - preliminary
Setting up quarterly payments - to do
Sunset
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Well you can, but like everything it's a choice.
Move to Puerto Rico so your income tax is only 4% , and no tax on divs/interest earned in PR. Still in America.
https://www.forbes.com/sites/robert...-your-taxes-to-zero-not-exactly/#4beb3e591362
Sunset
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Identity thieves don't actually steal your refund. They make up a fake return and add in some children, extra withholding, and other deductions to get a giant refund.
It has nothing to do with your account, so even if you paid zero income tax all year, thieves would still get a big refund. Either way the IRS will reject the second tax return, and that's how you know it happened..
REWahoo
Give me a museum and I'll fill it. (Picasso) Give
And why you might want to file early rather than late...
audreyh1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Same here. Someone might steal my identity and mess up my taxes, but at least I won’t be sitting around waiting a long time for my refund.
rk911
Thinks s/he gets paid by the post
lololol
davebarnes
Thinks s/he gets paid by the post
I don't fret.
I do spend a lot of time reading about money. But, I am a nerd.
I do smile when the market goes up and frown when it goes down. Up is better.
I do spend a lot of time reading about money. But, I am a nerd.
I do smile when the market goes up and frown when it goes down. Up is better.
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
All that is needed to make online payments to IRS on your behalf is your name, SSN, and address used to file in a previous year. Although I have had not had this happen, I like to protect my information, just in case.
I also try to avoid being owed a refund. Even my checking account earns better interest than letting the IRS hold it.
I figure if my withholdings are about the same as I owe or even a tad less that someone filing a fradulent return and getting a refund is their problem, not mine. I'll pay them all that I owe them but if they pay money to some fraudster that is not my problem.
OTOH if they have much more than I owe and they pay some fraudster money, then I'll likely have trouble getting any refund back.
euro
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I'm with you. Unlike so many, who are willing to go to extraordinary lengths in order to avoid paying taxes, I do accept that the amazing array of services our various government entities provide (military, emergency services, roads, etc etc etc) actually comes at a cost, and that taxes are necessary. Yes, we could debate endlessly about how our politicians mismanage or misallocate the money and how much waste there might be, but truth be told, most system work pretty well and are worth paying taxes for.
Now, don't get me wrong, I do try to limit the amount of taxes I pay within the context of what is allowed by the law, but in the end, I'm fine paying my share.
ESRwannabe
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I keep my investments in my taxable account really simple. So, its still painful every April, but there is nothing I can do about it anyway.
I use Vanguard ETFs VYM and VYMI for Vanguard High Div Yield US/Ex-US. These two funds exclude REITs, so they are like 99% qualified dividends. I also don't need to sell anything to re-balance them (target AA is 50/50 split) as I have excess w-2 income every month still and both ETFs are designed to throw off "large" dividends (like 3% and 4% respectively). I simply re-balance with new money.
I've also got 18+ years and counting vested in a pension, a 401k and a Roth IRA. The 401k is in a global balanced fund and the Roth IRA is in Vanguard Managed Payout fund.
I live off about 50% of my w-2 income. So, taxes suck. I'm 43. If I retire early I will have a window of time where I have low taxes until I get to age 60+ and start using the pension. At that point my taxes will suck once more.
Well said. I have relatives that draw very generous federal pensions, receive great health care, enjoy the roads/military protection/emergency services you mention, etc., etc., and act as though they are getting screwed every time they pay a penny in taxes. I don’t get it.
Well said. I have relatives that draw very generous federal pensions, receive great health care, enjoy the roads/military protection/emergency services you mention, etc., etc., and act as though they are getting screwed every time they pay a penny in taxes. I don’t get it.
Offgrid Organic Farmer
Full time employment: Posting here.
I served 20+ years in the US Navy, I am retired from the Navy and I recieve a full military pension.
With the recent increase in Minimum-Wage, I am paid a bit less than if I were flipping burgers fulltime.
My wife working for a federal agency [DeCA] until she qualified for their pension. She gets $200/month.
Together our Gross income is not enough to begin to pay Income Taxes.
Our healthcare coverage is great, no problems there.
rk911
Thinks s/he gets paid by the post
i think the reason is that many (most?) people have come to take for granted the various services you mentioned that we all enjoy. they've always been there and always will. that is conflated with the absolute waste and corruption that seems to be pervasive in all levels of govt. of course corrupt politicians have been around ever since politicians were invented and every generation likely thinks that their corrupt politicians are the worst ever. plus griping is a time-honored American pastime.
Reach
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Good thread. I thought we were in the minority with not going the complete tax optimization route after hearing so much about it here. I learned a lot on this forum about Roth conversions, yet we decided not to do conversions. We do use ACA coverage. No kids.
I recently had this discussion with DH. He is 11 yrs and I'm 16 yrs to FRA (67). Our discussion was along the lines of paying taxes on untaxed earnings is expected, no surprises there, i.e., paying a deferred tax is "business as usual". Our retirement savings is about 44% taxable, 53% tax-deferred and 3% Roth.
We also discussed a desire not to "fret" the SS age and take the money when available at 62 while we can. We retired 12 years ago not taking SS into account (assumed it wasn't guaranteed by our retirement date). We treat it as "found" money, along with our pensions.
I recently had this discussion with DH. He is 11 yrs and I'm 16 yrs to FRA (67). Our discussion was along the lines of paying taxes on untaxed earnings is expected, no surprises there, i.e., paying a deferred tax is "business as usual". Our retirement savings is about 44% taxable, 53% tax-deferred and 3% Roth.
We also discussed a desire not to "fret" the SS age and take the money when available at 62 while we can. We retired 12 years ago not taking SS into account (assumed it wasn't guaranteed by our retirement date). We treat it as "found" money, along with our pensions.
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