Taxes 2016

If we end up owing can we still put money in an IRA to lessen, assuming we haven't met contribution limits?

TJT said:

Well let's start a taxes thread to avoid/become aware of maybe not so obvious ways we can benefit or fuck it up.

I paid like $10k last year so I am trying to avoid that this year. Forms are rolling out that I need so we'll see what happens. I think I engineered it enough to avoid paying a huge sum this time around.

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Do you mean you paid an ADDITIONAL $10K after your withholding or quarterly estimates? How? Did you sell a shitload of stock/options or something?

TJT said:

Paid. Dividends fucking kill me dog.

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If you are making enough off dividends to need to pay an additional $10K on top of your withhold

a) you should be paying quarterly estimates
b) you should invite me over for the next 'mountain of blow' party you will inevitably host

Picasso3 said:

If we end up owing can we still put money in an IRA to lessen, assuming we haven't met contribution limits?

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Yes, you have until April 15th to contribute for the previous tax year (2016).

Isn't there an income limit to get that tax write-off for an IRA contribution? I've never done it.

Yep:

2016 IRA Contribution and Deduction Limits - Effect of Modified AGI on Deductible Contributions If You ARE Covered by a Retirement Plan at Work

Jysin said:

Isn't there an income limit to get that tax write-off for an IRA contribution? I've never done it.

Yep:

2016 IRA Contribution and Deduction Limits - Effect of Modified AGI on Deductible Contributions If You ARE Covered by a Retirement Plan at Work

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Well fuck

Pretty sure HSAs are the most tax advantaged and, assuming medical costs will exist, should be the priority.

Money goes in before taxes, and as long as you use the money for medical reasons, can be withdrawn without being taxed. There is also no time limit on reimbursing yourself for medical costs, so long as they began after the HSA was begun. So if in 20 years you need 2,000 bucks and you have 2,000 worth of medical bill receipts that you paid for out of pocket, you can reimburse yourself for those medical costs and spend the 2,000 on anything you like. This could change before you get 20 years down the road mind you, but it's likely you'll have plenty of medical costs as a senior in any case.

Jysin said:

Isn't there an income limit to get that tax write-off for an IRA contribution? I've never done it.

Yep:

2016 IRA Contribution and Deduction Limits - Effect of Modified AGI on Deductible Contributions If You ARE Covered by a Retirement Plan at Work

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Is there any advantage to a traditional IRA vs. a Roth IRA once your income has reached this point?

And I guess before you have hit this point.

I did my taxes yesterday and this year will be by far the biggest return I've ever had. I work from home a considerable amount of time - and more so now since I'm in sales and need to travel to the airport so much - so I'm able to write off a portion of my rent and such. And we all know SF rent prices. Obviously doesn't completely offset the cost of living here but I can end up getting back about 20% of my total annual rent.

Agraza said:

Is there any advantage to a traditional IRA vs. a Roth IRA once your income has reached this point?

And I guess before you have hit this point.

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It's the same logic you need to consider when choosing a traditional 401k vs a Roth 401k. The simplest answer is, if you think you are in a higher tax bracket while earning and a lower bracket in retirement, a traditional IRA or 401k is usually better. (Greater tax savings now vs later in retirement). If you think you think you will be taxed higher in retirement, a Roth IRA or Roth 401k could be beneficial.

There's a myriad of scenarios that could tip the decision one way or the other, but that's the simplest way to reason it.

We bought a house in 2015. I was excited about being able to take all the itemizations that come with owning a home (and I think realtors actually specifically know to point this out).

2015 we got back quite a bit of money (between buying points, interest, etc). I did some quick math after doing 2015's taxes and was about 50/50 on whether we'd be able to itemize again. I came to the conclusion that if we were able to itemize in 2016, it'd be the last time.

Well, it turns out that 2015 will likely be the only year we ever itemize. It's kind of shitty, but I guess at the same time I shouldn't complain that our interest rate is so low that it can't even catch up to the standard deduction.

Same boat I've been in Gravel, normally the standard deduction has been better than itemizing.

This year I went through the sched-A form in detail looking at additional forms and found a few things I had missed before that helped. One field asked me what I spent in non-work related hobbies, never noticed that before so was happy to deduct the way-too-much woodworking expenses.