I talk a lot about simplifying the tax code, for two big reasons. First, the complexity of the tax code leads to absurd economic outcomes, like arbitrary cutoffs between eligibility and ineligibility for benefits like the Retirement Savings Contribution Credit. Lest you think my concern is exclusively for the poor, I’m equally infuriated by things like the personal exemption … [Read more...] about A modest proposal for individual tax reform
I've been doing a deep dive lately into one-participant 401(k) plans, which has caused me to observe that people are often extremely unclear about what they are talking about when they talk about one-participant 401(k) contribution limits. The reason is that multiple types of legal entities can sponsor one-participant 401(k) plans, including unincorporated sole proprietors … [Read more...] about S corporations: logic and illogic
[edit 6/13/17: I've been convinced that employee "elective" and employer "non-elective" solo 401(k) contributions can be made with the same money, so have slightly updated the values below to reflect that employer contributions don't have to be made with what's "left" after deducting up to $18,000 in elective employee contributions. I'll have a post soon exploring this issue in … [Read more...] about The sole proprietor’s marginal federal tax rates
I am on the record as skeptical of the value of paying a roboadvisor to execute capital-loss harvesting, but capital-gain and capital-loss harvesting is a subject that excites financial independence bloggers (e.g. here, here, and here), so I don't want to brush off the subject completely. For those unfamiliar, capital-loss harvesting allows you to offset … [Read more...] about Five ways to capitalize asset price movements
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?