In Alternatives to a High Cost 401k Or 403b Plan , I mentioned non-deductible IRA as one of the options. If you are not eligible to contribute to a Roth IRA, you can still contribute to a Traditional IRA. Even though the contributions are not tax deductible, the money in the IRA still grows tax […]
401k Loan Double Taxation Myth
I don’t know who started it. Suze Orman certainly helped spread it. She says that you shouldn’t borrow from your 401k (or 403b) plan because you will be double-taxed. I did a Google search and I found this by Suze Orman: “Also, never ever borrow against your 401k plan because you will pay double taxation […]
RSU Sell To Cover Deconstructed
A breakdown of how sell-to-cover for tax withholding is done for Restricted Stock Units and how to report it on your tax return.
Mortgage Interest and Property Tax Deduction for Homeowners Who Don’t Itemize
The New York Times reported that Senate Democrats and Republicans reached a tentative deal on the new housing bill. Among the various provisions is a federal income tax deduction for property tax paid by taxpayers who don’t itemize deductions. Single taxpayers get a $500 deduction. Married taxpayers filing a joint return get $1,000. [Update: This […]
Want to Encourage Savings? Simplify the Tax Rules
It has been reported that the savings rate in the United States is negative. I’ve heard arguments saying it isn’t really negative but I think it’s fair to say that the savings rate is very low. Everybody wants to encourage people to save, which is great. We already have a hodgepodge of tax favored programs. […]
How $2,000 Became $20 And What To Do With It
In my foolhardy days, I bought WorldCom stock when it dropped from $60 a share to $4 a share. I thought it was a “buying opportunity.” When it dropped more from $4, I thought I had only a “paper loss.” You know the rest of the story. WorldCom went bankrupt. I lost $2,000. Later, some […]
Restricted Stock Units (RSU) Sales and Tax Reporting
RSU stands for Restricted Stock Units. It’s the new form of stock-based compensation that has gained popularity after the employers are required to expense employee stock options. The biggest difference between RSUs and employee stock options is that RSUs are taxed at the time of vesting while stock options are usually taxed at the time […]
Restricted Stock Units (RSU) Tax Withholding Choices
Ever since the companies are required to expense employee stock options, more companies started to grant the employees Restricted Stock Units (RSUs) instead of stock options. The first batch of RSUs I received will vest shortly. Unlike non-qualified stock options which are taxed at the time of option exercise, RSUs are taxed at the time […]
APR or APY, It Doesn’t Matter
It’s very strange. I see a lot of people reaching my blog when they search for information on converting APR to APY or vice-versa. They end up on my post last year Interest Rate: APY and APR which mentioned two Excel formula: EFFECT which converts APR to APY, and NOMINAL which converts APY to APR. […]
ESPP: What’s In It for the Company?
After reading my post about ESPP, a reader David sent me an e-mail and asked I’ve read a bunch of stuff about ESPP and while everyone talks about what a good deal it is for the employees who are able to participate, or the tax consequences of the various ways to sell the shares, no one talks about what […]
$10,000 Lesson On Variable Universal Life (VUL)
Variable Universal Life insurance or in short VUL is sold by insurance agents as a smart investment to unsuspecting people. The pitch usually goes like this: You invest in VUL. The money in the policy grows tax deferred. You get to choose what you invest in, stocks, bonds, international, you name it. It’s like a […]
The Commutative Law of Multiplication
The Commutative Law of Multiplication is a fancy way of saying when you multiply two numbers, it doesn’t matter which number you put down first and which number you put down second. a * b = b * a This basic law of arithmetic is taught in the second grade in elementary school. Yet it’s […]