Author Topic: Trump-Republican tax plan bad for large families  (Read 8824 times)

Online aygart

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Re: Trump-Republican tax plan bad for large families
« Reply #60 on: November 28, 2016, 02:17:29 PM »
CW is to always lean towards deferring taxes.
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Re: Trump-Republican tax plan bad for large families
« Reply #61 on: November 28, 2016, 03:38:49 PM »
CW is to always lean towards deferring taxes.
For years I would say that deferring taxes is akin to פישן אין די הויזן, at first you are relieved and warm, but at the end you stay wet and smelly.

So many decisions get distorted because of the fear of current taxation, when sooner or later, the bill will have to get paid.

However, when there's real sense that the overall tax burden might be changing in the near future, I think it might be prudent to defer for a short while, until we get some clarity on the changes coming, since the likelihood is that the tax burden will be lower.

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Re: Trump-Republican tax plan bad for large families
« Reply #62 on: November 28, 2016, 03:51:40 PM »
For years I would say that deferring taxes is akin to פישן אין די הויזן, at first you are relieved and warm, but at the end you stay wet and smelly.

So many decisions get distorted because of the fear of current taxation, when sooner or later, the bill will have to get paid.
The power of deferral is real. You are getting a free loan from the Govt. (not really because it is from your money....) In a retirement fund it can make a very big difference.
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Re: Trump-Republican tax plan bad for large families
« Reply #63 on: November 28, 2016, 03:59:23 PM »
The power of deferral is real. You are getting a free loan from the Govt. (not really because it is from your money....) In a retirement fund it can make a very big difference.
So is it your opinion that a traditional IRA makes more sense than a Roth IRA because of the "free loan" assuming all else is equal? (I think this past election cycle just proved to everyone the fallacy of making such assumptions, but let's leave that aside for the moment)

Offline CZ60

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Re: Trump-Republican tax plan bad for large families
« Reply #64 on: November 28, 2016, 04:39:00 PM »
So is it your opinion that a traditional IRA makes more sense than a Roth IRA because of the "free loan" assuming all else is equal? (I think this past election cycle just proved to everyone the fallacy of making such assumptions, but let's leave that aside for the moment)

I dont think he is necessarily saying that... They each have their own perks that, like all other financial decisions, must take into account the entire financial situation of a person. Hes not saying tax deferred is better than tax free, hes saying defer taxes that you may owe the following year. IRA's - separate ballgame.

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Re: Trump-Republican tax plan bad for large families
« Reply #65 on: November 28, 2016, 05:15:35 PM »
So is it your opinion that a traditional IRA makes more sense than a Roth IRA because of the "free loan" assuming all else is equal? (I think this past election cycle just proved to everyone the fallacy of making such assumptions, but let's leave that aside for the moment)
Once you include the investment of the amount deducted on your current year's taxes? A better point of comparison is a traditional vs Roth 401k because in a traditional IRA the money would get spent and not saved.

http://www.bankrate.com/calculators/retirement/401-k-or-roth-ira-calculator.aspx
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Re: Trump-Republican tax plan bad for large families
« Reply #66 on: November 28, 2016, 06:16:29 PM »

Once you include the investment of the amount deducted on your current year's taxes? A better point of comparison is a traditional vs Roth 401k because in a traditional IRA the money would get spent and not saved.

http://www.bankrate.com/calculators/retirement/401-k-or-roth-ira-calculator.aspx
Change the inputs in that calculator to have the same tax rate at pre and post retirement (if you're successful you might actually end up with a higher rate at retirement).

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Re: Trump-Republican tax plan bad for large families
« Reply #67 on: November 28, 2016, 06:40:15 PM »
Change the inputs in that calculator to have the same tax rate at pre and post retirement (if you're successful you might actually end up with a higher rate at retirement).
Not with proper planning.
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Re: Trump-Republican tax plan bad for large families
« Reply #68 on: November 28, 2016, 07:07:06 PM »
Not with proper planning.
If one has a very substantial 401k, just RMDs and Social Security can put one in a high bracket, also there's a chance of becoming single.

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Re: Trump-Republican tax plan bad for large families
« Reply #69 on: November 28, 2016, 07:08:50 PM »
If one has a very substantial 401k, just RMDs and Social Security can put one in a high bracket, also there's a chance of becoming single.
That is of course part of the planning
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Offline good sam

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Re: Trump-Republican tax plan bad for large families
« Reply #70 on: November 28, 2016, 07:16:19 PM »
No, no, he's building a wall and banning Muslims and deporting Mitt Romney. You'll see.

Your shver?
You'd have more likes if I wasn't always on tapa. Too bad.
If you don't care why would you comment?
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Re: Trump-Republican tax plan bad for large families
« Reply #71 on: November 28, 2016, 07:26:43 PM »
No, no, he's building a wall and banning Muslims and deporting Mitt Romney. You'll see.
How much crow will you eat if he keeps most of his promises most of the way?

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Re: Trump-Republican tax plan bad for large families
« Reply #72 on: November 28, 2016, 07:48:00 PM »
That is of course part of the planning
On the one hand you seem to say a traditional 401k is better. Max that out, and you will end up with a substantial balance at 70.5, resulting in higher RMDs. If 401k contributions were maxed, Social Security contributions are likely to have been maxed too, resulting in a high SS benefit.

So are you advocating for maximizing traditional 401k, or for planning to minimize RMDs? (Not to mention that successful business people might be in a top tax bracket even without RMDs.

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Re: Trump-Republican tax plan bad for large families
« Reply #73 on: November 28, 2016, 08:11:31 PM »
All of those are part of planning and you change your plans as things become clearer in any direction. One important point is that a traditional can be converted to an Roth and not the other way around. Will it always be best to defer? No, but the power of deferral is real enough that after paying taxes at the full income rate it can still make up for almost all of the taxes paid on something totally tax free even if someone is in a higher bracket. In his case neither one has the tax advantage that a Roth has.
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Offline mmgfarb

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Re: Trump-Republican tax plan bad for large families
« Reply #74 on: November 28, 2016, 10:37:06 PM »
I'd be interested to see the average difference between what people on DDF report as their income on CC apps and what they actually file taxes for.  :)
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