2018 Federal Income Tax Highlights

[VacationForever]

Well, technically true. Some cannot manage money well, so, it does work for them, known many of them and while not the best financially, still I can see why they do it (you'd have to know them). Having a balance due (ideal) means instead of loaning the govt interest free, you are taking a loan interest free, which sounds good to me! I do totally agree with you. It's been hard for us to make it come out the last few years due to widely fluctuating (and non predictable) pre-retirement and post retirement incomes (and, wildly fluctuating dividends vs return of capital), but we should have smooth sailing from now on.

Over the past 15-20 years, I was rarely able to make it come out perfectly and owe enough as desired. I always tried to owe a little. Something would always happen, a year end bonus, whatever. But it was surprising to see how many years my fed tax owed or due was within $100 of my prediction (estimated taxes paid)!

One year I sold a property overseas and since I always play by the rules I reported the large capital gain. I sold my property earlier in the year and that same year California votes passed the "millionaire" tax bill that was retroactive for the year. I owed about $250K between Federal and State income tax on that property. Friends called me stupid. I said I could sleep and not worry about IRS knocking on my door. We are glad never to need to pay state income tax again. My son wants me to move back to California and stay with him if my husband goes before me and I will have to think really hard on that. My goal will be to convince him to move in with me.

 

[Steve Fatula]

One year I sold a property overseas and since I always play by the rules I reported the large capital gain. I sold my property earlier in the year and that same year California votes passed the "millionaire" tax bill that was retroactive for the year. I owed about $250K between Federal and State income tax on that property. Friends called me stupid. I said I could sleep and not worry about IRS knocking on my door. We are glad never to need to pay state income tax again. My son wants me to move back to California and stay with him if my husband goes before me and I will have to think really hard on that. My goal will be to convince him to move in with me.

Wow, that's a *lot*! I would call you honest, not stupid. Definitely convince him! Some of the things like changed laws are outside of our control, however, for state taxes, you can always move which you did. Kudos!

Yes, very happy with not paying state taxes as well. And low property taxes too. Well, we're in the middle property tax rate wise, but once you combine property values and rate (since houses are cheaper for the same house), we're 9th lowest. i.e., Nevada has lower raw rates than us, but we still pay less for the same house. Sometimes, people miss that it's the combination that counts, but I know you don't. You are financially saavy! Allows me to do many more things than I otherwise would be able to. As a mid country guy, it's always hard to fathom the money people pay in other states. Not saying they are wrong, they may love where they are, make enough, etc.. I am just trying to say the amount of money is amazing to me. Can't relate. That tax you paid is more than my house value!

 

[Miss Marty]

Health Coverage & Your Federal Taxes

https://www.healthcare.gov/taxes/

No health insurance?
See if you'll owe a fee

For plan years through 2018,
if you can afford health insurance but choose not to buy it, you may
owe/pay a fee called the individual "Shared Responsibility Payment".
(The fee is sometimes called the "penalty," "fine," or "individual mandate.")

Starting with the 2019 plan year (for which you’ll file taxes in April 2020),
the Shared Responsibility Payment no longer applies.


Find out if the Premium Tax Credit can benefit you

The premium tax credit helps eligible individuals and families cover the premiums for insurance purchased through the Health Insurance Marketplace. You can choose to have all, some, or none of your estimated credit paid directly to your insurance company throughout the year.


Form 8962 - Premium Tax Credit (PTC)

https://www.irs.gov/pub/irs-pdf/f8962.pdf

Instructions for Form 8962 (20 page pdf)

https://www.irs.gov/pub/irs-pdf/i8962.pdf

 

[VacationForever]

Wow, that's a *lot*! I would call you honest, not stupid. Definitely convince him! Some of the things like changed laws are outside of our control, however, for state taxes, you can always move which you did. Kudos!

Yes, very happy with not paying state taxes as well. And low property taxes too. Well, we're in the middle property tax rate wise, but once you combine property values and rate (since houses are cheaper for the same house), we're 9th lowest. i.e., Nevada has lower raw rates than us, but we still pay less for the same house. Sometimes, people miss that it's the combination that counts, but I know you don't. You are financially saavy! Allows me to do many more things than I otherwise would be able to. As a mid country guy, it's always hard to fathom the money people pay in other states. Not saying they are wrong, they may love where they are, make enough, etc.. I am just trying to say the amount of money is amazing to me. Can't relate. That tax you paid is more than my house value!

I admire how much you travel, especially that it includes a good amount of international destinations. I guess everything is relative wrt to cost. Our overall cost of living is lower than in California but higher than some other states. At the end of the day, if we are mobile and not tied down to one location because of family or other reasons, then we all can choose where we live based on environmental, costs, income/assets and maybe even political affiliation reasons. We love where we now live and cannot imagine living anywhere else.

 

[Steve Fatula]

I admire how much you travel, especially that it includes a good amount of international destinations. I guess everything is relative wrt to cost. Our overall cost of living is lower than in California but higher than some other states. At the end of the day, if we are mobile and not be tied down to one location because of family or other reasons, then we all can choose where we live based on environmental, costs, income/assets and maybe even political affiliation reasons. We love where we now live and cannot imagine living anywhere else.

Totally agree. Everyone has different criteria. That’s why its good there are 50 states!

 

[DavidnRobin]

Totally agree.
We live in one of costliest areas (Silicon Valley) that exists, but I accounted for our living costs (incl CA State Taxes) in the calculation of our Retirement Spend for well into our future. When/If we leave? Gravy...

Yep, our money could go further in probably >99% other places - but that would not be here - and it is not always about money. And for this part in our lives (and necessity) - it is great
(sans insane traffic, but we drive infrequently and transit station is 4 min walk).
Life is Good.





Sent from my iPhone using Tapatalk

 

[Miss Marty]

VacationForever

I owed about $250K between Federal and State income tax on that property.

 

[VacationForever]

VacationForever

I owed about $250K between Federal and State income tax on that property.

Sorry, I missed your post. Did you also sell a property? Mine was overseas which I bought way before coming to the US. I guess I could have hid the sale and slowly brought the money back. But I didn't want to cheat the system, no matter how unfair I felt it was. I sold it when I decided that I was not going to move back and get citizenship here instead.

 

[HitchHiker71]

VacationForever

I owed about $250K between Federal and State income tax on that property.

Did you have to pay in-country taxes on that as well? Or does that 250k include taxes from both countries?


Sent from my iPhone using Tapatalk

 

[VacationForever]

Did you have to pay in-country taxes on that as well? Or does that 250k include taxes from both countries?


Sent from my iPhone using Tapatalk

Are you asking me? I paid no taxes overseas. It is a country that does not tax capital gains.