Taxes

Should I Itemize My Deductions When My Standard Deduction is Higher?

Unlike me, my sister is an actual accountant. When I was talking to her about her taxes a few months ago, my ears perked up when she said she was still itemizing deductions on her federal tax return, even though her itemized deductions were less than her standard deduction.  Huh? I thought the equation was… Continue reading Should I Itemize My Deductions When My Standard Deduction is Higher?

Personal Finances

Year End Financial Chores – 2020 Edition

It’s the end of another year. Here are some end-of-year financial “chores” that you might consider as we close out 2020 and head into 2021. Adjust W2 Withholdings I track my expected tax burden in a custom spreadsheet and tailor my withholdings to be as close to zero as possible. I’m okay with underwithholding, but… Continue reading Year End Financial Chores – 2020 Edition

Tax Avoidance · Tax Loss Harvesting

Tax Loss Harvesting Update – October 2020

A couple of years ago, I closed my Wealthfront account. After closing my account, I set out to DIY a tax loss harvesting system, modeled after Wealthfront. I’m tempted to call it my level 5 asset allocation strategy.  Building my own tax loss harvesting system has a few advantages, including: Avoid Wealthfront’s .25% management fee… Continue reading Tax Loss Harvesting Update – October 2020

Tax Avoidance

Bunching Charitable Contributions For Lower Taxes

Reviewing the 2017 changes to the federal income tax laws brought me back to a conversation I had years ago with a coworker, who I’ll call Jason. Jason suggested that alternating between taking the standard deduction and itemizing my deductions could reduce my taxes. Come again? To understand this tax optimization, let’s take a look… Continue reading Bunching Charitable Contributions For Lower Taxes