Taxes How to Avoid Underpayment of Tax Penalties Pay at least as much as last year's tax, pay at least 90% of this year's tax, pay within $1000 of liability via withholding, don't have liability in the previous year, or your total taxes is less than $1000
Taxes Unsure About Your Income? There's No Need to Delay Your IRA Contribution You can recharacterize a Roth IRA contribution to a traditional and vice versa--as if you originally contributed to the other account in the first place. It only requires one attachment
Taxes You Can Always File Federal Taxes Online for Free The IRS offers Free File, which is free for everyone regardless of income. But you may not be able to use it if you want to file your state taxes for free, depending on your state
HSA How to Document HSA Qualified Expenses EOBs from your insurance company, and credit card statements alone are insufficient documentation of HSA eligible medical expenses; need to prove actual amounts paid, and who received which services on which date
Taxes (Non) Refundable Tax Credits Have Nothing to Do With Your Refund, and May Require Planning Eligibility of a nonrefundable tax credit is determined by your tax liability, not the size of your tax refund; use tIRA -> Roth IRA conversions if you can't maximize your nonrefundable credit
Taxes ETFs are Generally More Tax Efficient than Mutual Funds, but Vanguard is Special ETFs in general are more tax efficient that mutual funds, but Vanguard funds that have ETF shares are just as efficient as an ETF
Investing Retirement Account Contribution Limits tIRA contributions can't always be deducted, Roth IRAs are subject to income limits, 401k and 403b share the same employee contribution space, 457b is completely separate
Investing Retirement Account Contribution Limit Increases are Not a Cause for Celebration These contribution limits only increase with inflation. Congratulations, you can contribute more to retirement accounts...because you need more to retire
Investing 401(k)/403(b): Rule of 55 (50 for Public Safety Employees) If you leave your employer at 55 years of age or later, you can make penalty free withdrawals (50 for public safety employees)
Taxes What Is Modified Adjusted Gross Income (MAGI)? It Depends MAGI is context dependent; you can't use in context A the MAGI from context B
Finance Roth Five Year Rules 5 year rule for making distributions qualified, not all non qualified distributions are subject to the 10% penalty, typical backdoor Roth IRA "contributions" aren't subject to a 5 year rule, 401(k)/403(b)/457(b) rollovers are also subject to a 5 year rule
Taxes The Other Way to Withdraw from Retirement Accounts Early: 72(t)/SEPP SEPP, once started, must continue until 59.5 or five years, whichever is LATER, has massive penalties if you mess up, interest rates dictate your maximum SEPP, can solve a potential problem of the Roth Conversion Pipeline
HSA HSA Inheritance Laws are Highly Disadvantageous HSA inheritance by spouses is mostly ok, though it is doubtful that previously incurred expenses can get reimbursed, HSA inheritance by non spouses lose all tax advantages, use HSA expenses before Roth
HSA HSAs are Amazing Retirement Accounts ... Unless You Live in NJ or CA HSAs are pre income and FICA tax, tax free for medical expenses (including some procedures typically not covered by insurance), can defer reimbursements, penalty free non medical withdrawals post 65...but HSAs are taxed in CA and NJ
Taxes Tax Loss Harvesting and Its Subtleties TLH gives you an interest free loan and tax rate arbitrage, beware of wash sales from retirement accounts, spouses, automatic dividend reinvestment, and Betterment, but wash sales aren't usually that bad
Taxes Gift Taxes and Why You Might Have to File Them Despite Never Paying Any What is a gift, gift tax annual exclusion limit, estate taxes, and the lifetime exemption
Taxes Going Back to School (Particularly Med School)? Taking a Gap Year? You Might Want to Convert Your tIRA Low to zero income years = opportunity for IRA conversion. If going to school, use up that Lifetime Learning Credit for more conversion room.
Taxes How to Avoid Capital Gains Tax Keep your income low and stay in the 0% LTCG bracket, donate securities, or leave securities to your heirs
Taxes How Paycheck Withholding Works Overtime and bonuses are not taxed at a higher rate, though they are often withheld at a higher rate