<p>^^We didn’t sell to lock in a capital gains rate, but put much of our 401K into money market funds in anticipation of an upcoming decline. Seems that many people would be selling like crazy before Dec 31st to lock in that cap gains rate.</p>
<p>Interesting on the solar heating or power generating equipment tax reduction (unless the installers have raised the prices accordingly). Sounds like something worth saving till next year, as taxes surely won’t be going down. Problem is, we have no dang sun here in the PNW, so I’m afraid solar heating would be pretty pathetic.</p>
<p>Tax breaks are a huge issue. Taxes are always a huge issue. </p>
<p>If the government wants to decrease the deficit 500 billion or so a year…</p>
<p>And the government increases capital gains tax rates to 20 percent and raises the top two income tax rates back to the Clinton tax rate level, you just raised 70 to 100 billion a year.</p>
<p>Then you eliminate the payroll tax cut…which hits the working poor, the middle class and the upper middle class, and you just saved another 100 billion a year. This is on paper because this tax cut is primarily spent and will slow down the economy.</p>
<p>Ignoring the effect on the economy…you only have 300 billion to go…instead of 500 billion.
P
And see… everyone is chipping in…</p>
<p>And when SS and medicare are adjusted, we can see who takes the hit. It is not going to be the wealthy that take that hit.</p>
<p>Hopefully, AAPLs chart from March 2009 to whenever will not replicate stock charts of Nokia (1998 to current date), Sony (1992 to current date) and Nintendo (2003 to current date). For our core positions, buy and hold is passé. Buy, monitor and an informed decision (as opposed to a knee-jerk reaction to someone making a speech) to either sell, buy or simply no action is a better stance to take.</p>
<p>Do we have to pay income tax on whatever we get from credit cards, like cash rebates, points, incentives for signing up, miles? I’m starting to get curious, since there have been all these posts about whether refunds on ATM fees are income and potentially taxed as well.</p>
<p>In the past the answer would have be no. However, last taxable year Citibank issued 1099 for the miles people got for opening new accounts. Their reasoning was that those miles were not earned through rebate on spending. </p>
<p>So in general, if whatever you earn is rebate for your spending, then you should not get 1099. However, if you get something for “free”, you might get 1099.</p>
<p>Since 2002 IRS’s position on this issue is that if you earn miles through business travel, then they are not taxable. </p>
<p>It’s quiet (or confusing) on other rebate program (so far). My advice is that if you don’t receive 1099, then you should not report rebates on taxes.</p>
<p>notrichenough–what program are you using that lets you do your taxes with the AMT patch? Does it figure them both ways?</p>
<p>Being that it’s Dec, lowering your taxes now is going to be harder but if you have a health savings account, max that out, max our your 401K at work if your company allows you to change withholdings. Those are 2 that are usually fairly easy to do. Donate a lot of money to a charity, keep your documentation though. You can donate stocks so if some are going to put you in the bullseye for the AMT, donate those.</p>
<p>This is something I never understand. If you donate, you have net outflow, don’t you? If you get to deduct, it will be a smaller outflow but an outflow nonetheless. Is there anyway to make it a net gain?</p>
<p>I ran the income tax on last year’s program. I figure it will fall within 10%. That’s good enough for me.</p>
<p>Iglooo–not sure what you are asking? The question was how to reduce taxable income. Having a net gain on a charitable donation would increase your income?? Besides the idea that giving to charity is about feeling the “loss” of the dollars…</p>
<p>Technically with the 401K contributions you are just deferring your taxes. With the HSA you are reducing your taxable income as there are no taxes on contributions, growth or qualified use of those dollars.</p>
<p>You could ask for a deferred compensation package at work as well. That would defer income to later years, like after your kids are done with college and you don’t have to fill out the FAFSA any more :D></p>
<p>If you want to donate to charity, and you are going to do this any way, it is better to donate stock where you have gains than cash. If you donate stock where you have gains, you don’t have to pay capital gains taxes on that stock. You come out ahead donating stock with gains instead of donating cash.</p>
<p>However, donating to charity may cut your taxes, but out of pocket, you are out more money donating to charity than just paying taxes. You may want to donate anyway, but it seems silly to donate just to save on taxes.</p>
<p>Notrichenough, why is part of your marginal tax rate 35 percent? Because your amt exclusion goes away? I am having trouble understanding your 35 percent rate. Are you double counting?</p>
<p>dstark–the question wasn’t about saving on taxes, it was how to reduce your taxable income, there is a difference there. Making up numbers but if you donate to a charity, say $1000, you have reduced your taxable income by that $1000, yes you see a slight reduction in how much tax you pay, but that isn’t the point, the point is your income shows you have $1000 less.</p>
<p>There is talk of raising the age where people can receive medicare.</p>
<p>This is a case where a spending cut costs individuals more money. I would rather pay more for medicare than have to wait a year or two to receive medicare, because
I would save money. Not only would it cost individuals more by delaying the time a person can receive medicare, by increasing age requirements, we are transferring wealth from the individual to the insurance company and others that profits from private health care. No thanks. I don’t really want to give more to insurance companies than I would have to give to the government.</p>
<p>On a related note, yesterday, I received a letter from Anthem-Blue Cross. Anthem wants to increase my family’s premium 23 percent next year. 23 percent. Hmmmm. How generous of Anthem…</p>
<p>Interesting point about MediCare. If it is a better plan than ObamaCare, it would make more sense to keep the age low to get people out of ObamaCare as soon as they can. In my narrow experience, they could certainly tighten SS benefit. They could look into file and delay. And childcare portion.</p>
<p>dstark–because of a pesky form called the FAFSA and because of the potential implications of the AMT not being fixed. It is very much a concern for a lot of people this year which is what we were discussing not how to save taxes. Also, for Medicare, traditionally that is how the government has saved this and social security, buy raising the eligible age. Not sure how you worked out that it will cost you more to wait to take Medicare unless you retire early given that your SS checks will be a heck of a lot less than your paycheck. </p>
<p>Shop your insurance to see if you can get a lower rate then what you got (assuming you have individual plans). Use your insurance more responsibly to minimize increases. If you have a group plan, get your coworkers to do the same…</p>
<p>Iglooo–“Obamacare” is NOT a medical plan, it is legislation that changes what all insurance companies must cover or rather additions to the base plan coverages.</p>
<p>Ok…SteveMA, if a person is trying to save tuition money, I stand corrected.</p>
<p>As far as the insurance, I am not in a group plan. Individuals are screwed in Cal. One class action suit was settled with the insurance companies a couple of years ago. I don’t want to get into this discussion too much. I have communicated with the Insurance Commissioner of California several times. He knows. I Know. It is a racket.</p>
<p>I smile at your attitude. Use my insurance more what? I did not even use my insurance this year. My family spent about 1,000 bucks this year on health care outside of the insurance premiums. My premiums are going to increase more than the cost of my usage.</p>
<p>Over the last 4 years, I have spent under $1,000 total for myself. :)</p>
<p>You write about insurance quite a bit. What is your relationship with the health care industry or the financial industry? What do you do for a living? What does your spouse do?</p>
<p>You have some knowledge, and know you are trying to be helpful, and you are helpful to many posters, but…We have an oligopoly in the health insurance industry in Cal. Blue Shield is now being sued for exceesive charges. I guess you havw a hard time believing this, but individual policy holders have been and are being gouged.</p>
<p>I am assuming people ask that to have as high net income as possible not just to reduce taxable income. I was just saying giving it to charity won’t increase net income. Donating appreciated assets to avoid CG will not work, either, would it? If I had $100 CG and I pocket it, I get to keep $85. If I donate it and if I am at 35% marginal rate, I lose $100 but save $35 in tax net loss $65. Not to mention, it would only make sense if we make huge contributions. For us, it will be like half a share of Apple to xyz:).</p>
<p>I heard that if you exercise and sell vested incentive stock options (ISO) even on the same day, the company will usually include the money you receive from the transaction in your W2. But it will not withhold the tax (federal, state, employment tax, medicare, social security, etc.) for you. Is this true? If this is true, will the person who exercises ISO run the risk of not paying enough tax in each quarter of the year (and therefore may have to pay penalty and accrued interests) when he files the tax return on/before April 15 coming year?</p>
<p>" Max our your 401K at work if your company allows you to change withholdings. Those are 2 that are usually fairly easy to do."</p>
<p>Stevema, I was considering whether to do that. I actually still have time, as though I have maxxed out my 401K, this year apparently I am eligible to add an additional 5K for catchup contributions. It seems like a smart thing to do, but I’m starting to get paranoid about the rumors of confiscation of 401K’s…whereas they decide the govt is going to “manage” it for you, and give you a tiny return on your investment. The fact that this has happened in other countries and has been discussed here, does alarm me, though I’m not usually driven to paranoia. But as we have maxxed our 401Ks out and our company has contributed for 20 years, it is a big investment and even the thought of losing control of it is worrisome.</p>
<p>So I’m thinking that maybe I should just not add that extra money. Anybody here have any thoughts on the possibility of 401K confiscation? I’m sure the more likely scenario is just the loss of a tax break. Valid concerns or paranoia?</p>
<p>Busdriver11, I don’t know where you get your info, but the government is not going to confiscate your 401k. Tax policies may change. Where do you get your info?</p>
My premiums are going to increase more than the cost of my usage.</p>