Personal Finance Goodbye, allowances! The 2020 W-4 won't have them. A quick analysis. |
- Goodbye, allowances! The 2020 W-4 won't have them. A quick analysis.
- Guy nearly ran me off the road. His insurance wrote me a check.
- We took a two-week honeymoon in Europe for $3600. Here's our budget!
- Always check the prices at the cashier
- Is 100k too much debt for a job that will pay ~75k?
- If I pay off my mortgage right now, I'll save about $40,000 in interest. Are there any disadvantages to paying off a mortgage early?
- Can I buy a house in full with cash?
- $30k cc debt that I need to figure out
- 30k pay cut for a job where I'm appreciated
- Have a bill in collections that I didn't know about from like a year ago
- ELI5 - If treasury bill yields are identical at 1, 3 and 6 month - why not just get 1 month Tbills?
- 27 years old. $230 thousand of debt. Unique situation that no one seems to know what to do about. Looking for advice.
- I hit a car and left a note behind, best way to pay it off?
- New Visa Gift Card Not Worth $100 as it said
- Should I relocate for a significant salary increase? Need opinions
- Is PMI a responsible idea?
- Cousin (22 y/o) lost both parents, one to a car accident and one to cancer. Is there any benefits that they can claim? Any help will be appreciated.
- Buy a house or continue renting
- Can't find an app/system to budget my varied 3x/mo income. Suggestions?
- Help With 401k Choices. Future bleak.
- Paying into my own new 529 plan, to spend on college within the next few years. Suggestions/advice about my strategy?
- 52 years old, make 39K a year, and getting 500K in capital gains from home sale - what to do?
| Goodbye, allowances! The 2020 W-4 won't have them. A quick analysis. Posted: 02 Jun 2019 03:42 PM PDT So the IRS has released a draft of the W-4 for 2020 (PDF), which indicates withholding is undergoing a fundamental shift. Most notably, the concept of allowances is removed, no doubt due to the fact that personal exemptions no longer exist (the Tax Cuts and Jobs Act which became applicable for 2018 onward got rid of them). A FAQ goes over some of the reasoning and addresses key issues. My quick-look thoughts are this: The old way(skip this if you already know the existing system or don't care!) For those that don't know how the old system worked, it was based on the concept of allowances. Each allowance corresponded to the value of a personal exemption. So for 2017, this was worth $4,050. So say you're a single person and not a dependent. You'd get to subtract $4,050 from your income right off the bat. If you were a couple with two kids, 4×$4,050. Note you still got the standard deduction ($6,350 for single) as well. So say you're single with no kids, or other income or deductions. The IRS would estimate your annual income (paycheck × pay_periods), subtract a small fixed amount to account for the standard deduction as it was larger than the personal allowance ($6,350-$4,050=$2,300), and then would subtract $4,050×(allowances), so 2 allowances was the proper figure (so for a $1,000 weekly paycheck the IRS figures taxable income will be $52,000-$2,300-2×$4,050) The IRS would guide you through this (enter "1" for yourself... enter "1" if not a dependent). But then the entire concept of personal exemptions went away for 2018. But to keep people happy, Congress nearly doubled the standard deduction (now $12,200 for single) and to handle kids (which were always in addition to the standard deduction), doubled the Child Tax Credit to $2,000. Note this $1,000 credit increase is worth about the same as a $4,050 deduction if you're in the (large and wide) 25% (now 22%) bracket. OK, so now there's no more personal exemptions. But people know what allowances are, so the IRS chose to keep things simple - not to mention the Tax Cuts and Jobs Act was passed into law December 22nd 2017, giving the IRS four business days to enact the largest tax reform in 30 years, so it wasn't exactly a good time to overhaul the withholding system. The new wayNo more clunky conversions to allowancesSo what goes on now is essentially a more direct calculation of what was going on before: the IRS will use your paycheck to estimate your income (paycheck × pay_periods) and now they ask for additional income. Like before, they ask for deductions you expect, but now we're free from dividing by the "allowance number" ($4,200 for 2019). So if you expect say, $5,000 in deductions, you put down $5,000. Before you would figure $5,000/$4,200, drop a fraction (better to withhold too much) and put down 1 more, so withholding was really based on you getting a $4,200 deduction. Also like before, the Child Tax Credit, being so widely used, is handled explicitly. Unlike before, new figures are nice and easy: $2,000 per child. The 2019 system is downright amusing: it asks you to pick 4, or 2, or 1, depending on your income. This is because if you're lower income (12% marginal bracket), you put 4 because a 4×$4,200 credit is worth 4×$4,200×12% = $2,016, so close enough to $2,000. Same logic for 2×$4,200×22% and 1×$4,200×35%. Emphasis on the IRS withholding calculatorThe IRS withholding calculator is mentioned twice in the line instructions and twice in the instructions. The W-4, like before, does not account for any YTD withholding, changes in income, or partial year jobs. So the IRS suggests their calculator, which does do this. It's accurate, and as you'll see next, good for privacy... Privacy. Or: I don't want my boss to know I have multiple jobs and/or a huge investment accountThe W-4 has always operated in a bit of a mystery mode: you put in allowances, and if those allowances need to go down (say you expect $4,000 in investment income - you would need to drop an allowance) it's been okay because you only needed to hand in the top portion. If you put in 1 allowance vs 2, your employer wouldn't know why. The new form though, asks for additional income, and also has spots for indicating multiple jobs. What if you want to hide this? There IRS addresses the privacy issue in the FAQ and tells us there are three main options:
Next stepsSo that's it for now - the IRS has a few more steps to complete before we can figure out the finer details:
Until then, the IRS is taking comments. I think this is a pretty great change, and more closely aligns with what withholding should be. [link] [comments]  |
| Guy nearly ran me off the road. His insurance wrote me a check. Posted: 02 Jun 2019 05:53 AM PDT A few months ago, a reckless driver tried to cut me off on i95 and ended up slamming into my car, nearly running me and my friend off the road. The guy lied to the cop and nearly had her believing his story. I stayed quiet, then I pulled out my dashcam once he was finished and showed the footage to the officer. I was obviously not at fault and the guy tried to offer to pay me off without contacting his insurance. He ended up being very difficult to work with so I just ended up calling his insurance and had them look at my car. They immediately wrote me a check for about $850 for the damage. I was quoted over $1,100 at both body shops I went to. I've been meaning to call the insurance company to tell them the check is not sufficient. To be completely honest, the reason I'm asking is because I don't even want to fix my car. It already has high mileage and I can deal with some light damage on the car. I've waited almost 6 months now and I fear it might be too late to negotiate (if that's even something that can be done). I'm about to go on a month long trip to Asia and could use the extra cash. Should I just deposit the $850 or do I have a chance at getting more? TLDR: Got in a crash that I wasn't at fault. The guys insurance gave me a check 5 months ago that I plan to just keep, but the damage is more than what they gave me. Can I try to ask for more? [link] [comments]  |
| We took a two-week honeymoon in Europe for $3600. Here's our budget! Posted: 02 Jun 2019 09:34 AM PDT Originally posted this in r/Shoestring, thought it might be useful here as well. My hubby and I recently tied the knot. We're recent college grads and don't have much savings yet, so we decided to forgo a traditional wedding in favor of eloping and going on a nice honeymoon together. We managed to keep everything under $4000 USD without sacrificing our overall enjoyment of the vacation. Here's an overview of the trip:
And here is a breakdown of our spending over the course of 16 days (rounded for easier math):
That brings our total cost to roughly $3600. We're very happy to have come out under budget, especially when we really did not feel like we were skimping. It was definitely not a "luxurious" vacation but we had a ton of fun and made some lifelong memories. I'll summarize by just giving a few tips to help others save some money on their travels.
[link] [comments]  |
| Always check the prices at the cashier Posted: 02 Jun 2019 07:50 AM PDT I rarely check the prices at the counter when I'm usually buying groceries. So not sure if it's applicable to everyone. Today I bought a rain jacket today from target. The price displayed was $19.99. But at the checkout it was 29.99. I noticed it as I bought only 2 things and total looked higher. I told the cashier and she made it 19.99. The usual me would've just paid for it and not checked the prices at all. So just a heads up to ensure the prices at the checkout is the same as the price you see on the sticker! [link] [comments]  |
| Is 100k too much debt for a job that will pay ~75k? Posted: 02 Jun 2019 05:22 AM PDT I'm currently finishing up my first year of physical therapy school. It's a three year doctorate program The reality of the debt has weighed heavy on me since the beginning but for whatever reason it's really sinking in now. EDIT: Thanks to everyone who has responded. I've tried to respond to as many as I can. Lots of good opinions and insights both ways. [link] [comments]  |
| Posted: 02 Jun 2019 10:39 AM PDT |
| Can I buy a house in full with cash? Posted: 02 Jun 2019 06:11 PM PDT Can I pay for a house in full to avoid the hussles? We've saved about 80% of our budget for a house. We are not in a hurry, I think I can get to 100% in fall. Since we are foreigners with short credit score, driving years etc..I am not confident to get a good rate and have to pay for the multiple fee related to borrow money from the bank. After reading thru many threads about first time home buyer, a lot of the troubles coming from the bank as I see it. Our agent is no help, and I don't want to reveal that we intend to buy the house in cash. If we settle for a deal, is home inspection all I need? [link] [comments]  |
| $30k cc debt that I need to figure out Posted: 02 Jun 2019 03:49 PM PDT Hi All, Long time lurker, first time poster. I love following along in everyone's advise, I'm hoping I can get some myself. After poor budgeting and living beyond my means for years, I need to get ahead of my $30k of cc debt. I've done a lot of work in budgeting and have been successful in living/spending very frugally. I feel as though I have a good handle on that ( thanks to advice I've found here!). My question is in regards to managing my debt. Fact of the matter is there isn't enough time or money that I'm bringing in to start to really pay down the debt. I'm doing minimal payments plus a small amount here and there. My debt is across 2 credit cards, interest rates are 19.99% What are my best options to pay down this debt? My credit as you can imagine isn't good, balance transfer isn't an option. I've been declined for loans in the past, so I'm assuming consolidation wouldn't be approved either. Any tips that would follow a bare bones budget would be so appreciated! [link] [comments]  |
| 30k pay cut for a job where I'm appreciated Posted: 02 Jun 2019 02:57 PM PDT I've been at my current job for 3 years. The company itself treats me really well in terms of compensation (150k base, 6% 401k match, about 55k in additional bonuses - which puts me at 215k annual gross income). The only problem is, I feel undervalued on my team and essentially invisible at work. The job itself is very stable, and I have proven myself over the years and don't actually have to really work that hard at it. So other than my invisibility and bouts of unhappiness, it's basically a dream job. However, I recently got a job offer with 182k base, but with no bonuses, 401k match, etc. Instead, I was offered equity in a private start up, which I have read to treat as basically worthless since the startup could tank (though I believe it wouldn't). Regardless, using this methodology, I think I should decline the offer since it represents a a substantial pay cut (> 30k/year). However, the team itself was super excited about me coming onboard, and I met some of them personally and they were absolutely thrilled to meet me, talk to me, etc. They made me feel important. My question is, should I truly value the equity as worthless in a private startup that currently has negative cashflow (but in my opinion, I think they will do well in the long run)? Also, is a 30k pay cut ever worth it if it makes you feel appreciated? Or should I stop relying on my job to bring me happiness and instead focus on hobbies, family, etc that could bring happiness outside of work (and use the 30k difference to fund those hobbies, family trips, etc)? I'm very lost but ultimately want to make the best decision for my future and my family. Maybe I'm looking too deeply into how this new company made me feel (and maybe this was the beginning of a honeymoon phase that could fizzle out later. But I felt that it was truly genuine). I would love to hear your opinions on the pay cut vs happiness debate as it applies to these numbers and this situation [link] [comments]  |
| Have a bill in collections that I didn't know about from like a year ago Posted: 02 Jun 2019 05:42 PM PDT I called them and requested a hold until they send me an official bill from the hospital, it's been like 6 months and haven't received a bill...what should I do? [link] [comments]  |
| ELI5 - If treasury bill yields are identical at 1, 3 and 6 month - why not just get 1 month Tbills? Posted: 02 Jun 2019 04:39 PM PDT I was looking at this graph https://www.marketwatch.com/investing/bond/tmubmusd10y?countrycode=bx which notes that the yield on treasury bills in the short term range (1-6 months) are at historic highs. My understanding is if I am purchasing a 1 month treasury bill with a yield of 2.3% that means that I am paying approximately 987 dollars NOW and then in 1 month I get a guaranteed $1000, which is profit of 2.3%. But I am beginning to think I might be wrong - is the quoted 2.3% yield based on an annualized rate (meaning my actual profit over 1 month would be more like 0.2%)? The reason I am so confused it is it seems like based off of the graph if I buy a 6 month treasury bill I will get the same profits (2.3%), it will just take 5 months longer. I guess my question is, why not just invest in the 1 month treasury bills if you get a faster guaranteed rate of return. Thanks [link] [comments]  |
| Posted: 02 Jun 2019 06:43 PM PDT This is actually in regards to my best friend, who I've known since we were toddlers. My friend (let's call him Ted) was recruited by the Naval Academy to play a sport. In order to get in, he had to also do two years of military prep school after high school. So he entered the academy at ~19/20 years old. He spent three years at the academy, but in his fourth year, despite being a D-1 athlete, was put on probation for his weight. The academy has measurement/body ratio requirements that he did not meet despite being very athletic. He holds fat, mainly around his waist, which he has always had since we were little kids. He's always been very health and tremendously active, he just holds weight in this weird way. Muscular/lean arms and legs, face, chest, but heavy around the lower abdomen. This is all relevant. Essentially, he couldn't meet the body proportion requirement despite outperforming a majority of the other male students on all physical tests. Despite this, was kept on probation and pressured to remove the weight. He's self conscious about his weight and always has been. He also is not one to speak up about anything. A very reserved/shy guy in most cases. As part of the probation he was required to get a nutritionist. I'm not quite sure why, but he didn't. From what I gather it was mainly because of embarrassment, the fact that he eats quite healthy (I've known him my whole life, am a bit health/fitness nut myself - this is the truth), and because given his sport requirement, needed energy for daily intense practice/weight training (would not be manageable on caloric deficit). In his senior year, it was eventually found by one of his superiors that he had been lying about having a nutritionist. Lying is considered an honor offense and taken quite seriously. Someone decided to take it so seriously that they escalated it, and to get to the point, he was kicked out of the academy. When entering the academy you essentially sign a document that says if you are kicked out you owe the DOD the equivalent value of your education. This was in excess of $150,000. Ted needed to finish his degree. He started at another school, but many of his credits from the academy didn't transfer so this took a number of years. In order to expedite finishing as much as possible, he continued with the same major from the academy which is a bit uncommon outside of the military. If he had graduated from the academy he would have been in the Navy for 5 years developing skills and getting paid at a good job. Because he had to go to a non-military school, the major was no longer made much sense given prospects. By the time he finished his degree he was 26 years old. He's had a lot of trouble finding a high paying job that would justify the amount of debt he is in. He honestly is more of a blue collar type guy. He has a lot of talent, but not academically, and hasn't found his niche. He has not made any kind of dent in the debt. The loan accrued interest, and was eventually transferred from the DOD to the Treasury which incurred a 30% penalty. That, in addition to the interest, jacked the loan balance to $230,000. This is in addition to a separate $40,000 loan for the other school. In total, he is in $270,000 of debt. He has no assets. He has been working full time, multiple side jobs, weighted average around $20/hr for the past 1.5 years. He is pursing a career doing anything, but regardless, $270,000 is near insurmountable. I think this is totally unreasonable. Relative to what I know other students have been caught doing at the Naval Academy, the treatment of his situation seems very out of the ordinary. People have done much worse and not kicked out (felonies), and many who have been kicked out have had their debt reduced or totally discharged. For whatever reason they wouldn't budge on his. Now they don't even own it, so it doesn't really matter. The $230,000 debt has recently been moved from the Treasury to a collections agency. The collections agency gave him a few options, one of which was to pay half as a lump sum. Obviously he couldn't do this, but this is telling in terms of how much they likely paid for it (pennies on the dollar). So maybe there is some room to negotiate it down? Honestly, I think he should have gone to the press. I think he was bullied for being fat and was cornered into lying about it. Not saying lying isn't serious when you're being groomed to become an officer in the military. It definitely is. But the penalty in this case seems unreasonable, and like he was being made an example of for some reason. As stated before, he is very reserved, and to be frank, not strategy-minded. I feel as though he didn't put up enough of a fight when he was being kicked out, but that was years ago at this point. Does anyone here have any familiarity with this. Is his debt considered a student loan (i.e., is bankruptcy not an option?). If he can file for a type of bankruptcy that dissolves the debt, I think it's obvious he should do that, but if it's a student loan then I think he could only file chapter 13, which would just defer it. Any advice or insight would be hugely appreciated. I love this guy and I want to help him. He's met a girl that he's been dating for about a year, they're about that age, and this debt really bars them from getting legally married in my opinion. If it's something that inescapable, I really don't know what he's going to do. He remains in decent spirits, but I think that's more because it's such an absurd amount of money that it's not even feasible that he'll ever pay it. Really don't know what to do. He's talked to a number of lawyers and military people over the years, and they don't seem to either. Probably glossed over something, so please ask questions if you think I could provide something that would add context. Thanks [link] [comments]  |
| I hit a car and left a note behind, best way to pay it off? Posted: 02 Jun 2019 06:35 PM PDT I'm a very inexperienced driver, and I suck even more at parking. Today was raining, and I was almost late to work, and there was an empty spot available for my car to park, albeit a small one. I tried risking it, but ended up scratching the car next to me. Panicked, I reversed, and ended up scratching the paint on the front right side of their car. I'm still a student a don't have much money, but it didn't feel right to just leave it behind, because I can imagine how shitty it must feel to find that one day an a-hole scratched the paint off your car and left without saying anything. So I left a note behind with my name and phone number. Currently, I have a TPP with CUA, who is partnered with Allianz, and I pay a basic excess of $550, and I'm wondering if I should even bother with contacting my insurance if they ever billed me. And is it within my right to ask for instalments if I don't have enough money to pay it off in one go? I don't think I have enough money to pay for a lawyer, but I've heard about students being eligible to ask for help from their uni for legal problems? Ps. For some reason the damage to my car is really minimal, maybe because it's silver, but I couldn't really see any damage besides the blue paint from the other car sticking onto it, and I'm a guy despite my username. [link] [comments]  |
| New Visa Gift Card Not Worth $100 as it said Posted: 02 Jun 2019 12:56 PM PDT Went to spend an unopened Visa gift card supposedly worth $100. Cashier at REI said it only had $58 on it. Who can I contact to resolve this? REI, King Soopers where it was purchased? I have a receipt from the gift giver. [link] [comments]  |
| Should I relocate for a significant salary increase? Need opinions Posted: 02 Jun 2019 06:19 PM PDT Hello personalfinance. To give a little background, I am in my late twenties and married with a wife who is a SAHM and two small children. I currently make 90k but live in the South in one of the lowest paying states for my career field. Looking at job postings in northern states, I frequently run across jobs in the 150k-200k range. I currently owe 50k in student loans but have no other debt besides a mortgage of 160k. With that being said, my family and I enjoy living where we do. All of our extended family are here and this is the only place we have ever lived. Our children are too young to begin school; however the schools in this area are of poor quality, which is another important factor to consider. I can't help but feel as though I am missing out on a huge opportunity to give my children a great life and get ahead on our finances. I would love to hear opinions of what others would do in this situation. [link] [comments]  |
| Posted: 02 Jun 2019 07:34 PM PDT My wife and I have enough income to pay a mortgage payment, insurance, property tax, utilities, living expenses, and PMI on a mortgage for the kind of home we want, but only have capital for a 10% down payment. We live in the SF Bay Area, and I'm terrified that by the time we have enough saved for a 20% down payment, that home prices will have risen enough that it'll be, again, 10% on the kinds of homes we're looking at now. My mom is a tax attorney and real estate agent, but hasn't worked full time in several decades. I don't think she really understands the market and our concerns, but she's adamant that PMI is a horrible idea. Is she wrong? If so, is there a break point where it becomes reasonable (12%, 15% etc)? [link] [comments]  |
| Posted: 02 Jun 2019 07:26 PM PDT 22 year old, Female. College Student Lost both biological parents, Mom died in car accident this weekend, dad died a while back from lung cancer. She's inheriting a home, life insurance, etc. However, is there any benefits or assistance that she should be claiming as well? Anything important that perhaps she should be aware of during this time? I'm just hoping that I can help her in some way. [link] [comments]  |
| Buy a house or continue renting Posted: 02 Jun 2019 05:49 PM PDT I'm a mid twenties military member that has been renting a room for a few months and have been considering purchasing a house rather than renting. My only conundrum is that I am almost guaranteed to be moving away in 2.5 years. So I would have to either sell or rent the house out fairly quickly after moving in. The housing market here is generally good cause the large military base and it's expansion. So as long as I choose a house in a good location it should keep its value at least. I definitely want my own space so renting a room is going to have to change soon enough. Is it a smart move to take the plunge and buy a house and then when I leave sell it or rent it out? Or should I just consider renting a house for myself and not worry about the market or anything? [link] [comments]  |
| Can't find an app/system to budget my varied 3x/mo income. Suggestions? Posted: 02 Jun 2019 07:20 PM PDT I've tried all kinds of (free) apps and templates, but it's hard to find something that works for my situation. For example, I earn the same amount of money each month, but always on the 1st, 10th, and 20th. All the apps show me the combined balance on the 1st of the month, even though I have not earned it all yet. Is there an app or system that shows my balance as and I spend AND as I earn? [link] [comments]  |
| Help With 401k Choices. Future bleak. Posted: 02 Jun 2019 01:42 PM PDT Hello guys! I am a 30 year old dude currently working a pretty decent retail job. I figure I have about 30 more years to work before I retire in to the great beyond. My employer is having us pick 401k investments: and I have NO IDEA WHAT I AM DOING. Please somebody give me some kind of ELI5 advice (how many of these should I choose, which ones would YOU choose/ and how much should I contribute from an approx $35k a year salary). I will PM you a picture of my cat in return. love you guys. [link] [comments]  |
| Posted: 02 Jun 2019 04:40 PM PDT Hi there! I've just opened my own 529 plan, and I'm returning to college for the first time in a decade (the logistics are all in order on the FAFSA, taxes, and attendance front). I have a decent grasp of how everything involved works -- I think -- but I wanted to summarize my plan here and ask you guys if I'm doing this thing right. I have a Colorado Stable Value Plus plan for my 529 (it's a low-risk low-interest sort of thing since I plan to use the funds sooner rather than later) and I can afford to put in $30/month right now, which is obviously measly, but the other main reason I've opened the plan is to use it as a vehicle for donations. Obviously, the amount that may end up donated over the next few years is a variable outside my control and which I can't usefully predict, so my goal in posting here is to make sure I'm clear on The Rules of Everything and all the general principles/timing, rather than looking for projections about specific numbers. Here's what I think I know/would like to be corrected on if I'm wrong, organized by gradual mutation into things that are altogether questions:
Thank you so much for being here to ask! I hope everyone has had a great weekend. :) [link] [comments]  |
| 52 years old, make 39K a year, and getting 500K in capital gains from home sale - what to do? Posted: 02 Jun 2019 10:08 AM PDT Hi everyone, Im actually making this post on behalf of my mother, who is widowed and has recently worked her way up from a minimum wage job to a better paying one, is selling her home (purchased at 180K, sold for 725k), and finally moving on. I'm so proud of her! However, I've been looking into the financial implications of her being so close to the $39,376 limit for the 0% tax bracket and am a bit worried. She has close to nothing saved for retirement and this money could go a long way, but I'd hate to see 15% of it go because she picked up a few extra shifts at her second job. Who would I consult to help with this? Would a financial planner be best, or a tax advisor? Would it be foolish to take a leave of absence or leave the job early (She would be leaving the position anyway to move out of state) in order to not hit this next tax bracket? I realize this is a highly specific and off question, but any general advice on investing such a large amount or planning so late in the game would be much appreciated, as I'm very early in my career/investing as well! [link] [comments]  |
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