Disclosure: this page contains affiliate links. This means if you click on a link and make a purchase, we will receive an affiliate commission. As an Amazon Associate I earn from qualifying purchases.
It’s official! This is the first year I’ve filed for a tax extension.
Every year I use the FreeFillableForms to fill out and submit my taxes. I was slightly concerned that I’d have to restart the process to file the extension. That was until I saw the nifty “File an Extension” button in the upper left hand corner that takes you to a digital copy of form 4868, where you can then pay your estimated tax for 2020. No need to start over. Now I have until October 15th to complete my taxes.
Why did I file for an extension? I did it to prepare for the off chance that there are any future pandemic shenanigans played by Congress. The steep cliff kept us out of the third stimulus, and while I have no idea what will happen in the next 6 months, there seems to be little risk in delaying my filing.
Technically, I could have waited until May 17th to file for the extension. Sadly, ,I have a habit of doing things earlier than I should.
Switching Child Roth IRAs to VTSAX
When my oldest became a lifeguard at the local pool, I incentivized her to start a Roth IRA. Unfortunately, the first year she didn’t have enough earned income to reach the minimum investment amounts for VTSAX at Vanguard. However, we could still open an IRA for her at Vanguard. So we directed it to VTI, the ETF-equivalent of VTSAX. At the time, we could only purchase whole shares, meaning there was always a residual amount of cash left over.
Now, she and her sister both have IRA balances that exceed the minimum investment in VTSAX. Earlier this month, I sold their VTI holdings and bought VTSAX. Now they are 100% invested with no residual cash hanging around.
Switching 401(k) Contributions Back To Traditional
Back in January, I wrote about switching from Traditional contributions in my 401(k) to Roth contributions. I also slowed down my front-loading strategy.
Why? In late-March, thanks to Frugal Professor, I found out about the additional, temporary child tax credit boost for 2021. Finding out that every dollar increase in my AGI would decrease that credit, I switched back to Traditional from Roth. I’d originally switched to Roth because I was worried that tax changes to the Traditional tax deduction could happen in 2021. In hindsight, switching to Roth will probably cost me ~$562 on child tax credit benefits. On the plus side, my soon-to-be 17 year-old should get one more year of eligibility as a child dependent.
Oh, and my DumpsterFire Inc shares that were sold in January as part of my covered calls experiment will likely cost me another ~$800 of lost child tax credit
I really shouldn’t be complaining. I’m still employed and doing well enough to disqualify for these tax savings. But these last minute tax audibles Congress is making are annoying, to say the least.
This is a catchup year on our charitable contributions. At the beginning of this month, I started the transfer of appreciated shares, most of which I bought close to the bottom last March. The shares have appreciated on average 80% since then.
In the past, Vanguard required a copy of their form to be mailed to them, adding a week or two before the gifted shares were actually received by the recipient. This year, the process was completely in Docusign and no mailing needed. Shares were transferred in one or two days instead of in a week or two.
At this point, I’m all caught up for 2020. I’ll repeat the process later in 2021. I am tempted to do it sooner, in part to (a) atone for delaying a year of contributions and (b) to reset my cost basis by buying replacement shares for my gifts.
Other Odds and Ends
- My March Madness bracket finished 6th of 22 entries in my extended family’s pool. Not bad for just following 538’s recommendation. I chose Gonzaga to take the tournament, which needless to say, did not happen.
- I tend to leave my blog settings untouched, which is why it was odd that earlier this month I stopped getting emails. I checked the settings, but everything looked great. Then I found out that Gmail has been sending them all to the spam folder. I really appreciate how effective Google’s spam filter is, but lately it seems to be a little too aggressive. Glad I figured it out. Sorry for the delay in my response to your comments.
- Our mortgage service changed this month. After we refinanced in March 2020 with FirstIB, it was shortly after transferred to SLS for servicing. Now, a year later, we’re on to our next servicer, PNC, where I expect it to stay for at least a couple years.
From the Bookshelf
I usually have four books going at a time. This month I finished the following:
- Skybreaker by Kenneth Oppel. The second book in the Airborne-series. All of my children enjoyed this steampunk yarn of high altitude zeppelins and pirates. We’re in the third, and last book of the series, Starclimber.
- It Was All a Lie: How the Republican Party Became Donald Trump by Stuart Stevens. Did find some of it repetitive, and kinda funny to read this sort of book after the election. I don’t even recall how this got into my queue. You’ll either like it and agree with it, or you won’t. ‘Nuff said.
- The Big Picture: The Fight for the Future of Movies by Ben Fritz. I picked this up after seeing it on A Wealth of Common Sense. It looked interesting to me because I’ve been dismayed by the glut of superhero movies with nonsensical plots. If you’ve ever thought, like me, what’s going on, this book could be the answer.
- The Manager’s Path: A Guide for Tech Leaders Navigating Growth and Change by Camille Fournier. By far, one of the better books I’ve read on technical management and any level, including individual contributors (i.e. non-managers). I listened via audiobook and I plan on going back over it in Kindle format as well. In other words “A++++++ Would Read AGAIN!!!!”
- Lifecycle Investing: A New, Safe, and Audacious Way to Improve the Performance of Your Retirement Portfolio by Ian Ayres and Barry Nalebuff. Lots of knowledge bombs in this eleven year-old book. Look for more posts as I ruminate over how far I should go down the temporal diversification path. I already took the first step in dropping my bond allocation to zero.
- The Culture Code: The Secrets of Highly Successful Groups
by Daniel Coyle. I almost didn’t finish this one. I read it on the recommendation of friend, but it felt like a Malcolm Gladwell clone (not a compliment). I like the ideas presented about safety, vulnerability and purpose, but the stories were too cliché for me. With books like this, once you’ve read one, you’ve just about read them all.
How was your April? Read anything interesting this month? I’d love to hear about it in the comments.