On Sunday I wrote about what I consider a fairly important oversight in the world of financial independence enthusiasts: a glaring disregard for just how minimal the taxes they spend so much time avoiding really are. Capital gains harvesting, for example, is the practice of realizing long term capital gains as often as possible in order to pay minimal taxes … [Read more...] about What’s the advantage of tax-advantaged accounts?
Finance hacking enthusiasts spend a vast amount of time minimizing the taxes they pay and shielding income and assets from taxation in the future. These techniques range from the commonsensical (max out IRA contributions each year) to the unhinged (name your favorite front-door/back-door/side-door/trap-door IRA strategy). How deep you decide to go into … [Read more...] about Sources of taxable income in retirement
Since the White House finally got around to announcing the outlines of their tax reform plan today, I want to briefly address an issue that's generally ignored in discussions of income tax rates and brackets. Marginal tax rates mean you pay taxes at lots of different rates You often hear as shorthand that "the wealthy pay a 40% income tax." … [Read more...] about Why “narrowly focused” middle-class tax cuts overwhelmingly benefit the wealthy
If you have your eyes open, one of the first curious things you notice about the "FIRE" community (Financial Independence, Retire Early) is their fixation on real estate. For example, Mr. Money Moustache "retired" from his job as an engineer in order to become a residential property manager, writing that "many of us consider property ownership to be a key part of … [Read more...] about Financial independence, early retirement, and real estate
One of the great advantages of being self-employed is the ability to open and manage your own small business retirement account. Employed people have to either take or leave their employer's 401(k) or 403(b) plan offerings, regardless of the quality or cost of the funds it offers, while the self-employed get to choose their own plan provider and pick exactly the … [Read more...] about Solo 401(k) accounts from Vanguard, with beneficial illustrations and calculations