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money:taxes [2019/06/07 14:36]
admin [2019]
money:taxes [2019/09/21 15:32] (current)
admin
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 ===== Tax Rates ===== ===== Tax Rates =====
-Wow, excellent example. Up to $75K is TAX-FREE from investment income. ​+Wow, excellent example. Up to $75K is TAX-FREE from investment income
 + 
 +Note: Data is for **joint** taxpayers.
  
 {{:​everyday:​pasted:​20171125-101113.png?​600}} {{:​everyday:​pasted:​20171125-101113.png?​600}}
  
 +===== ESPP & RSU Taxes =====
 +It's uhh...complicated. Basic reason to care is that for some strange reason, the "​income"​ for these benefits that you receive from your company is counted in your W2 as income, but is **not** reported as an adjusted basis in your official 1099-B documents. So you're double-taxed on that money, first on the W2 income and then on that income as short/​long-term capital gains unless you do something about it! 
 +
 +It's weird, because on e-trade it knows about the adjusted basis! But for some reason, they don't report it that way on 1099-B! ​
 +  * https://​us.etrade.com/​etx/​sp/​stockplan/#/​myAccount/​gainsLosses:​ {{:​money:​pasted:​20190920-202637.png?​400}}
 +    * Has specific transaction details / prices underneath "View Confirmation of Release"​
 +  * However, it's also printed out the same way on the Stock Plan Transactions Supplement. Doesn'​t include the exact details on how taxes were taken out like the above link, but maybe it's good enough for tax season? //Mr. Domes thinks so//
 +
 +
 +The complicated rules for ESPP and RSU taxation are summarized by Intel on internal un-printable pages here: 
 +== RSU ==
 +{{ :​money:​rsu_tax_full.pdf |}}
 +  * Intel grants say 65 shares, sells ~1/3 of them for you to cover income taxes on the 65 shares, then gifts the rest to you. The whole amount (65 shares) is counted as W2 income when they vest, but when you sell you need to adjust your basis as they'​re put as 0 on the 1099B instead of ~37*vest price.
 +
 +== ESPP ==
 +{{ :​money:​spp_tax_full.pdf |}}
 +  * Disqualified:​ ESPP sold before 2 years get taxed as income based on the diff between Purchase Date Value and Purchase Price
 +  * Qualified: ESPP sold after 2 years get the lower of 15% of grant date value or the difference between the sales price and the purchase price taxed as income **in that year**. Weird.
 +
 +There are more complicated cases where the stock price is below the sale price, changing the tax. But if you do Quicksale you avoid all that!
 +
 +
 +
 +===== Foreign Income Tax Credit =====
 +Don't double pay income tax on foreign investments! (I don't have a lot though).
 +
 +https://​www.irs.gov/​individuals/​international-taxpayers/​foreign-tax-credit-choosing-to-take-credit-or-deduction
 +===== Small business =====
 +  * https://​wealthyaccountant.com/​2018/​11/​05/​micro-business-and-side-gig-tax-guide/​
 +  * https://​wealthyaccountant.com/​2017/​04/​12/​it-pays-to-have-a-hobby/​
 ===== Trust and stuff ===== ===== Trust and stuff =====
 Living Trust lets you avoid probate fees. Need a piece of paper, with community property agreement. Living Trust lets you avoid probate fees. Need a piece of paper, with community property agreement.
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 As a way to shield your investments from taxes? Probably not as much? IDK As a way to shield your investments from taxes? Probably not as much? IDK
  
-===== Not-Quarterly Taxes with Credit Card =====+===== Messing with Tax Payment Timing ===== 
 + 
 +Side Note:  * You can also pay tax via withholdings at the end of the year and keep your money invested all year. It's considered equally spread out throughout the year, apparently! See https://​wealthyaccountant.com/​2017/​03/​22/​stop-paying-your-quarterly-estimated-taxes/ ​  
 +    * Withholdings spread out all year: https://​www.irs.gov/​instructions/​i2210#​idm140349202906368 
 +<​blockquote>​When figuring your payment dates and the amounts to enter on line 19 of each column, apply the following rules.  
 + 
 +For withheld federal income tax and excess social security or tier 1 railroad retirement tax (RRTA), you are considered to have paid one-fourth of these amounts on each payment due date unless you can show otherwise. </​blockquote>​ 
 +    * Thankfully overpayment of earlier quarters carries forward to next quarters. From form 2210:  
 + 
 +{{:​money:​pasted:​20190715-170516.png}} 
 + 
 +  * Also, if you don't have a large tax bill every 2 quarters and need a large amount of spending, you can make an extra payment for the 4th quarter of the previous year for **whatever amount you want**. File your taxes right away and ask for a direct deposit refund. Then you pay off the cards a few days later when you get your refund. Interesting. https://​wealthyaccountant.com/​2017/​05/​05/​the-ultimate-credit-card-rewards-hack/​ 
 +  * Personally I will probably continue with quarterly payments if I need to get credit card bonuses at that time. 
 + 
 +One more thing, you need records of this transaction. Pay1040.com makes it really annoying to get receipts after the fact (must enter credit card number), but thankfully the IRS keeps payment history. 
 + 
 +{{:​money:​pasted:​20190809-135534.png?​800}} 
 + 
 + 
 +==== Almost ​-Quarterly Taxes with Credit Card ==== 
 {{:​money:​pasted:​20180812-233142.png}} {{:​money:​pasted:​20180812-233142.png}}
   * **It's not every quarter!"​ Spring is 2 months and winter is 4 months. Odd **   * **It's not every quarter!"​ Spring is 2 months and winter is 4 months. Odd **
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 More to do here...what is the benefit of an IRA if you're just going to pay taxes on principal and interest later? ​ More to do here...what is the benefit of an IRA if you're just going to pay taxes on principal and interest later? ​
-^ ^  401K  ^  IRA  ^  Roth IRA  ^ Normal ^ +^ ^  401K  ^  IRA  ^  Roth IRA  ^ Normal ​^ Cash Balance ​
-| Features | Tax-deferred \\ Employer often matches | Tax-deferred \\ If employer non-matching,​ deductible? ​ | Pay taxes on principal only | Can tax-loss/​gain harvest \\ Ordinary dividends (held 90 days) and long-term gains are tax-free up to a joint income of 75K (as of 2017) | +| Features | Tax-deferred \\ Employer often matches | Tax-deferred \\ If employer non-matching,​ deductible? ​ | Pay taxes on principal only | Can tax-loss/​gain harvest \\ Ordinary dividends (held 90 days) and long-term gains are tax-free up to a joint income of 75K (as of 2017) | Can put a bunch of money into it 
-| Max Yearly Contribution |  $18,000 \\ [[https://​www.madfientist.com/​after-tax-contributions/​|~$60K with after-tax]] ​  ​| ​ $5,500 total  || | +| Max Yearly Contribution |  $18,000 \\ [[https://​www.madfientist.com/​after-tax-contributions/​|~$60K with after-tax]] ​  ​| ​ $5,500 total  || | Lots (>$100K per year) \\ **But has to be the same every year, despite downturns** ​
-| Early Withdrawal (particularly required minimum) | Can rollover to IRA when leaving company. So look at IRA rules. | 10% penalty on early withdrawal of principal and interest, on top of ordinary income tax. Have to do RMD | Can withdraw principal at any time with no penalty. No RMD's, cool!| Can take out at any time. |  +| Early Withdrawal (particularly required minimum) | Can rollover to IRA when leaving company. So look at IRA rules. | 10% penalty on early withdrawal of principal and interest, on top of ordinary income tax. Have to do RMD | Can withdraw principal at any time with no penalty. No RMD's, cool!| Can take out at any time. | Not sure|  
-| Retirement Withdrawal | | Everything taxed as ordinary income | No taxes on everything | | +| Retirement Withdrawal | | Everything taxed as ordinary income | No taxes on everything | | Not sure 
-| On death | | Unless your spouse is alive, you can't directly gift an IRA. However, it looks like you can do a trustee-to-trustee transfer that you maintain for the deceased and you can pull from it. https://​www.irs.gov/​publications/​p590b#​en_US_2016_publink1000230542. Weird! Also, stuff about withdrawing over a lifetime. Ehh, I'll get to it later. ​ || | +| On death | | Unless your spouse is alive, you can't directly gift an IRA. However, it looks like you can do a trustee-to-trustee transfer that you maintain for the deceased and you can pull from it. https://​www.irs.gov/​publications/​p590b#​en_US_2016_publink1000230542. Weird! Also, stuff about withdrawing over a lifetime. Ehh, I'll get to it later. ​ || | Not sure 
-| Can loan money from | Yes, up to 50K | No || |+| Can loan money from | Yes, up to 50K | No || | |
  
 Go curry cracker on how roth burns your money... :-) https://​gocurrycracker.com/​roth-sucks/​ Go curry cracker on how roth burns your money... :-) https://​gocurrycracker.com/​roth-sucks/​
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 === Donations === === Donations ===
 +Look under "​benevity"​ under email for receipts.
 +
 $200 to Liberty Robotics, matched $200 by Intel. $200 to Liberty Robotics, matched $200 by Intel.
  
-$750 to Liberty Robotics for payments for Houston robotics trip. I will attempt to work the whole time.+$750 to Liberty Robotics for payments for Houston robotics trip. I will attempt to volunteer the whole time. 
 + 
 +$200 to Elevate Oregon for Chromebook. +300 for general donation. 
 + 
 +$300 for Liberty Robotics Santa Clara trip. Volunteering ​the whole time.
  
  
 === Estimated Payments === === Estimated Payments ===
 ^ ^ Federal ^ Oregon ^ ^ ^ Federal ^ Oregon ^
-| Total 2018 | $15000 | $7000 |+| Total 2018 | $15000 | <del>$7000</​del>,​ $7644? ​|
 | Quarterly | $3750 | $1750 |  | Quarterly | $3750 | $1750 | 
 | Mar. 27 | Done (Pay1040)| Done | | Mar. 27 | Done (Pay1040)| Done |
 | Jun 15 | Done (Pay1040) 1.87% | Done June 7 | | Jun 15 | Done (Pay1040) 1.87% | Done June 7 |
-| Sep 15 | | |  +| Sep 15 | 696 out of $3750 Jul 8. \\ Paid 4418 on Aug. 6 \\ for travel expenses ​Done Jul 8. 1792 total.|  
-| Jan 15 | | |+| Jan 15 | $1364 / $3750 already paid | |
  
  
money/taxes.1559943364.txt.gz · Last modified: 2019/06/07 14:36 by admin