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Messages - gocurrycracker

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406
Taxes / Re: tIRA Fund Inefficiency
« on: January 15, 2018, 07:54:07 AM »
Thanks NT, much appreciated.

You can't withdraw the funds tax efficiently, but you can recharacterize a Traditional IRA contribution in whole or part into a Roth IRA.

Let's say you contribute $5,500, but only $3k is tax deductible. You then recharacterize the remaining $2,500 to Roth (basically, a partial backdoor Roth.) You have until your tax filing deadline to do this, up to Oct 15th with extension.

edit: See the boglehead forum post on this for examples and details
https://www.bogleheads.org/wiki/IRA_recharacterization

407
Taxes / Re: S-Corp or Sole Proprietorship?
« on: January 09, 2018, 12:35:16 AM »
As with most things, it depends. There is a point where cost of S-corp exceeds the benefits.

One of the main reasons people use S-corps is to minimize Self-Employment taxes. If you make $100k biz income, as sole proprietor you pay SE taxes on all of it, about $15k. As S-Corp, you only pay SE taxes on the reasonable salary, say $40k (so 6k SE tax.) The remaining $60k is a distribution that is SE tax free (but of course subject to fed and state taxes.) Since you already pay the max employee payroll taxes on your day job, your burden is half as much.

S-corps have to file a corporate tax return each year, which has a cost. Maybe you pay your CPA to prepare this. If cost is greater than SE tax savings, then better to be sole-proprietor. And vice versa.

One thing to consider: with sole proprietor you can hire your kids, and since it is a family business they don't have to pay payroll taxes at all. With S-corp they would. They can earn up to standard deduction each year completely Fed tax free (that's $12k in 2018, thanks to TCJA.) This can then be contributed to their Roth IRA and/or the companies solo 401k. See this post for more:
http://gocurrycracker.com/gccjr-for-hire/

408
Traveling with kids / Re: polyglot nomadic children
« on: January 08, 2018, 06:48:03 PM »
I only speak English and Winnie only speaks Chinese with Jr.

Jr primarily speaks Chinese (the mother tongue...) but speaks English perfectly when he wants to. He speaks a little Japanese with the Japanese girl in our building, sings a couple Korean songs, and says good-bye in a ton of different languages (Au revoir, ciao, adios, sayōnara... he'll use the appropriate word based on who he is speaking with.)

This is as natural as walking for him. If he sees Western people he will start speaking English. When in Japan he would try speaking Chinese with people, and when they looked confused he would switch to English.

409
General Discussion / Welcome
« on: January 08, 2018, 07:13:37 AM »
Welcome to the Go Curry Cracker Community Forum!

This is the place to be for early retirees, tax geeks, expats, world travelers, nomadic families, and adventurers.

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