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Messages - gocurrycracker

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346
Taxes / Re: Capital Gains Harvesting - Understanding?
« on: May 28, 2018, 11:34:30 PM »
I only use ETFs.

I've never considered bid/ask spreads or whole shares a hassle. Just put it on autopilot and ignore it.

347
Taxes / Re: Better understanding of capital gains harvesting?
« on: May 26, 2018, 06:58:41 AM »
Am I finally getting it?  :)

Almost. I think you are mixing Total Income with AGI and MAGI and maybe a couple other things.

The standard deduction is $12k. The 10% bracket is the next $9,525. Qualified dividends and long term capital gains get taxed with total income above $50,600.

If you make a Roth conversion up to the 12% bracket you are paying some tax at 10%. That is pretty good, but it isn't zero tax.
Limit the conversion to the Standard Deduction ($12k, not a penny more) to get 0%.

You can then realize long term capital gains of up to $50,600 minus whatever other income you have (including Roth conversion.) With only a $12k Roth conversion you could realize $38,600.

This is GAINS. If your investment has doubled since you bought it, you could sell $77,200 worth... half is gain, half is basis.

These transactions will be taxed by your State, if applicable. They will also impact ACA subsidies, if applicable.

348
You don't need to do anything. Supposedly it is illegal for non-US residents to purchase MFs, but there is nothing that says you can't continue to hold the ones you already own.

349
Taxes / Re: Digital nomad living in Canada with an American LLC
« on: May 22, 2018, 07:53:53 PM »
Sounds like you just need a US bank account for direct deposits.

350
We keep a US mailing address (via Traveling Mailbox) and US physical address (a friend's house.)
https://www.gocurrycracker.com/snail-mail-paper-checks-21st-century/

We have funds at various brokerage companies and all have our US mailing address and US physical address

Vanguard has a policy of not working win non-US residents. There is really no good reason for it, but is a choice they made. You can either move funds to a different brokerage or not tell them you aren't in the US

351
Taxes / Re: Digital nomad living in Canada with an American LLC
« on: May 21, 2018, 08:45:24 PM »
This isn't advice...

Per your email:
You are subject to double taxation no matter what. As a Canadian resident, you are subject to Canada taxes on your worldwide income. As a US citizen, you are subject to US taxes on your worldwide income. There is no way around that, short of renouncing US citizenship.

You'll still file a tax return in the US every year, and use either the Foreign Earned Income Exclusion or the Foreign Tax Credit to minimize/reduce/eliminate US taxes.

I don't see a tax purpose in keeping the US LLC. I believe you set this up to minimize SE taxes. As a Canada resident, you'll pay into the CPP and be exempt from SE taxes via the US/Canada totalization agreement.


If you are making insane amounts of money well above and beyond the FEIE (say $300k-$500k/year) and wanted to create a US C-corp to
a) avoid paying 100% of earnings as a salary or dividends to minimize "worldwide income" subject to Canadian tax -or-
b) retain earnings for investing

Then you are moving well above and beyond DIY territory. C corps are complicated and expensive to operate, and not the best for single person consulting companies. (Maybe more nuanced than that after TCJA.) They also have limitations on how much earnings you can retain or investment income that can be earned before you are classified as a personal holding company or subject to retained earnings taxes. Both defeat the purpose of having a C-corp in the first place.


I would look for a tax lawyer who specializes in US / Canada. Dual citizens working cross border is very common. Find somebody who does this as their bread & butter, not a rando who is just speculating (That's not me: I'm just a random person on the Internet and have no special skills or knowledge.)

352
You can requalify for many bonuses after 2 years or so. So repeat. Plus new cards are being introduced all the time.

353
On average, more or less. See this post (tldr: average 2.3c on latest trip):
https://www.gocurrycracker.com/another-round-the-world-trip-another-7000-in-free-travel/

But, points have less flexibility than cash. So if you are only earning 1 pt / $1 and only getting 2.3cents/point, then 2.5% cash back is better and easier. (Most of our spending is on travel & dining out, earning 3pts/$1, so we actually got more like 7%+ back.)

When looking at just 2.5% cash back versus the alternatives, best would be put all spending on new cards for signup bonuses.

Spending $45k on the Alliant card is worth about $1100 ($1,125 - $59 annual fee.) Not bad, but not much travel either.
A 50k signup bonus on the Sapphire Preferred by itself is potentially worth $1150 (assuming 2.3c/pt)

After minimum spend on that card you still have $41k budget for the year. Maybe you apply for another card or 2 with $6k total min spend, earning another $500 - $1000 in signup bonus value.

Total remaining budget: $35k. That can be targeted towards high value category cards (e.g. 3pts/$1 on travel, 5 pts on groceries / gasoline, etc...) Maybe this is $10k total.

Now you have $25k budget remaining for the year. That can go on a cash back card, but:
$25k on Alliant = $625 - $59 fee = $566
$25k on Citi Double Cash = $600 (better)(no annual fee)
$25k on Freedom Unlimited = 1.5 pts / $1 = 37,500 points. Cash value is $375. Booking travel with Sapphire Reserve value is $563. Or if you transfer and get 2.3 - 2.5c/pt, then $863 - $938.

Subtract fees in year 2 for Preferred or Reserve (if applicable, minus $89 - $150.)

So it depends. Straight cash back is simpler / easier, but not the highest ROI. We definitely do better with the points.

354
You can use any 12-month period and they can overlap.

See Pub 54, Figure 4-B
https://www.irs.gov/pub/irs-pdf/p54.pdf

Thanks Jeremy. Looks like I'm good to go then. Just to be clear....

For my 2018 taxes, I would be able claim my 12 month period to be 6/23/2017 - 6/23/2018. I have 0 days spent in the US during that time frame. Since I'll be back in the US in 8/2018 for the first time since early 2017, would I then be allowed to spend the rest of 2018 in the US and still get the full FEIE deduction since it's outside of that 12 month period? I just wouldn't be able to claim FEIE for 2019 then....

Thanks again for all your help. The past few years I've lived such a similar lifestyle to you, so you've made my life much easier by doing all the dirty work when it comes to this stuff.

Cheers to your 1st home made cold brew!

You only get the exclusion for the 12 month period. Any days outside that 12 months are not eligible for exclusion.. Even with the FEIE, days working in the US aren?t excluded anyway.

If you were in the US Aug-Dec 31 2018, pre August is excluded / post August is not.


355
Taxes / Re: Mega Roth Rollover for Post-Tax Contributions for 401k
« on: May 14, 2018, 01:40:37 AM »
I?m confused by the examples you provided.

A backdoor Roth is just something you do when income is too high to qualify for a direct Roth contribution. You make a non-deductible Traditional contribution and then immediately convert it to a Roth.

A mega backdoor Roth is not the same as a Roth conversion ladder.  it isn?t aka.

A mega backdoor is when you do after tax contributions to your 401k and then convert that portion to Roth, still in the 401k. Some 401k plans allow this, but most don?t.

A ladder is when you stop working and then convert funds every year for the rest of your life. See this post
https://www.gocurrycracker.com/gcc-vs-rmd/


If this doesn?t make sense, search for these terms individually on Bogleheads

356
General Discussion / Re: Welcome
« on: May 14, 2018, 01:30:41 AM »
Hi, I just joined. Hope to be able to learn lots and share just as much information.

I'm an expat, just in the opposite direction. I moved to the US instead of from it XD.

Hi prognastat

Life in the US is nice. Where did you move from?

357
General Discussion / Re: How to invest 50k cash right now?
« on: May 14, 2018, 01:29:28 AM »
Not advice, but...

Pick a target asset allocation and commit to it. Ignore the market

358
UR points are worth 1.25cents or 1.5cents when used for direct purchase through Chase. You can just look at any price info for an estimate (Expedia or whatever.)

This is only worth more if you get more than ~2pts/1$ of spend

The UR points become more valuable when you transfer them. For example, if using them to book biz class airline tickets through United. The best I?ve ever done is about 20cents/pt

359
Taxes / Re: FEIE and Roth Conversions in the Same Year
« on: May 14, 2018, 01:20:39 AM »
Yes

360
You can use any 12-month period and they can overlap.

See Pub 54, Figure 4-B
https://www.irs.gov/pub/irs-pdf/p54.pdf

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