Holy Tax Bill Batman

[Anonymous]

Anonymous wrote:

Anonymous wrote:At $450k it gets tough.. You even get hit by the NIIT (net investment income tax) or at least we did, to the tune of another $20k in taxes.

Get a financial advisor. Ours helped us get things down a bit through tax loss harvesting, and also set up the back door Roth IRAs.

Neither of those is particularly sophisticated or mysterious-- I wonder how much you paid for that advice.

I know it's a snark, but we pay about 1% of managed funds. Totally worth it for us, because we just don't have time to deal with it. I also pay someone to mow our lawn, because he's more efficient than I am, and it's not worth my time.

Yes, I could spend my time learning about the latest tricks like backdoor Roth, and rebalancing our portfolio, and doing tax loss harvesting. It's just not worth my time. Our previous strategy was to throw our money in whatever mutual fund or ETF seemed "good" at the time, and basically ignore it for years, due to lack of time to deal with it.

For those considering a financial advisor, my main advice is to pick one who doesn't get a commission from selling you their own funds or products. Pick one that's independent so they are going to steer you to the best investments for you, not just the ones their company offers.

[Anonymous]

Anonymous wrote:Thanks for your advice PP. Yep, we got hit with NIIT. I know it's ridiculous to cry about our HHI, as we're doing just fine and our HHI is very normal in the area. It just sucks crossing into a new threshold on the lower end. Not in your favor.

Anyone setting up trusts at this HHI level? Please advise.

We have trusts. Really, most people should.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Thanks for your advice PP. Yep, we got hit with NIIT. I know it's ridiculous to cry about our HHI, as we're doing just fine and our HHI is very normal in the area. It just sucks crossing into a new threshold on the lower end. Not in your favor.

Anyone setting up trusts at this HHI level? Please advise.

We have trusts. Really, most people should.

+1

Generation skipping trust here.

[Anonymous]

What's the benefit of having a trust? I love these types of thread. I find it's so useful. Thanks OP for asking!

[Anonymous]

Anonymous wrote:What's the benefit of having a trust? I love these types of thread. I find it's so useful. Thanks OP for asking!

Lets you pass on wealth without inheritance taxes, which can be enormous.

Actualy we have our will written so a trust will be set up _if_ we die, for tax avoidance purposes.

[Anonymous]

Anonymous wrote:At $450k it gets tough.. You even get hit by the NIIT (net investment income tax) or at least we did, to the tune of another $20k in taxes.

Get a financial advisor. Ours helped us get things down a bit through tax loss harvesting, and also set up the back door Roth IRAs.

You had >$500,000 in investment income?

[Anonymous]

Anonymous wrote:

Anonymous wrote:What's the benefit of having a trust? I love these types of thread. I find it's so useful. Thanks OP for asking!

Lets you pass on wealth without inheritance taxes, which can be enormous.

That's only kind of sort of true. OP: don't take free legal advice on the internet.

[Anonymous]

For 2015 you will only face an estate tax if the value of your estate is over 5.43 million dollars. Trusts for estates under this threshold are a waste of money.

[Anonymous]

Unless democrats get their way in the future and tax this money for the third or fourth time and destroy personal wealth.

[Anonymous]

At what point would the death tax become offensive to people? 1M, 200K?


Doesn't change the principal which is that estate tax is completely egregious.