Author Topic: How to tax plan  (Read 2603 times)

Murse

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How to tax plan
« on: September 24, 2015, 05:34:34 AM »
Okay, got a new job that starts on Monday with a pay increase. I am being hired as a temp until my background check clears and I believe I then have to wait 6 months before being eligible for the 457. I have no idea how to tax plan. I am projecting gross for 2016 to be just under 70k but will not have access to an employer retirement account for most of 2016 and I believe they put a monthly contribution limit of 1500/month so I do not believe I'll be able to wait until September and load it up from there. So, from my googling I believe I have discovered that I will not be able to contribute 5500 to a tira but should be able to contribute something. I plan on a savings rate of 40-50% (because I am also paying tuition/debt) What are my options to be able to get my AGI down to be able to contribute to a Tira? The more important question is how do I learn all things taxes for my situation? I am afraid of doing something wrong. I am half tempted to get a professionals help to be spoon-fed the answers but I would like to attempt to be a badass. Thanks.

Gin1984

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Re: How to tax plan
« Reply #1 on: September 24, 2015, 06:49:59 AM »
Do you only have access to a 457 or do you also have access to a 403b?

Murse

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Re: How to tax plan
« Reply #2 on: September 24, 2015, 06:56:11 AM »
I believe it is only a 457, but I was just looking over benefits online and it says that you are eligible the day you are a FT employee, so assuming that is correct, I can use the 457 to get my AGI down, then allowing me to use a traditional as well, correct?

Gin1984

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Re: How to tax plan
« Reply #3 on: September 24, 2015, 06:59:39 AM »
Yes, you can do that.  It is rare to only have a 457 and not a 403b unless you also have pension (and even then somewhat odd).  Recheck to be sure, including calling HR especially since you found differing info (6 month wait vs not).  Ask for the paperwork that states the rules.
Also, don't be afraid of doing something wrong, most things can be corrected without an issue.   

Murse

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Re: How to tax plan
« Reply #4 on: September 24, 2015, 07:03:17 AM »
There is a pension that they put 6% into but yes I clearly need more info. I am very excited, I was just reading about the benefits online and I also found where they talked about opting out of health insurance. 200$/month if you opt out and me being under 26 I get to use my parents health insurance. I'll check back here after having more info if I have more questions.

MDM

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Re: How to tax plan
« Reply #5 on: September 24, 2015, 10:43:51 AM »
There is a pension that they put 6% into but yes I clearly need more info. I am very excited, I was just reading about the benefits online and I also found where they talked about opting out of health insurance. 200$/month if you opt out and me being under 26 I get to use my parents health insurance. I'll check back here after having more info if I have more questions.

If you are covered under your parents' High Deductible Health Plan (HDHP), but not their dependent for Form 1040 purposes, you may contribute $6650 to your own HSA.  That would be your best option, but your parents do have to be on that HDHP....

For your original question, the best thing you could do is fill out your 2015 tax forms now, then adjust numbers to see the effects.  Ok, you can't do exactly that because
  - you don't know precisely what the rest of 2015 will bring, and
  - the final versions of 2015 tax forms aren't available yet.
But you can make a good estimate of your own situation, and most (all?) 2015 tax rules that will affect you are known, so you should be able to come very close.  See http://forum.mrmoneymustache.com/taxes/the-mustache-tax-guide-(u-s-version)/ and http://forum.mrmoneymustache.com/ask-a-mustachian/turbo-tax-vs-cpa/ for more ideas about this.


Murse

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Re: How to tax plan
« Reply #6 on: September 24, 2015, 03:35:22 PM »
There is a pension that they put 6% into but yes I clearly need more info. I am very excited, I was just reading about the benefits online and I also found where they talked about opting out of health insurance. 200$/month if you opt out and me being under 26 I get to use my parents health insurance. I'll check back here after having more info if I have more questions.

If you are covered under your parents' High Deductible Health Plan (HDHP), but not their dependent for Form 1040 purposes, you may contribute $6650 to your own HSA.  That would be your best option, but your parents do have to be on that HDHP....

For your original question, the best thing you could do is fill out your 2015 tax forms now, then adjust numbers to see the effects.  Ok, you can't do exactly that because
  - you don't know precisely what the rest of 2015 will bring, and
  - the final versions of 2015 tax forms aren't available yet.
But you can make a good estimate of your own situation, and most (all?) 2015 tax rules that will affect you are known, so you should be able to come very close.  See http://forum.mrmoneymustache.com/taxes/the-mustache-tax-guide-(u-s-version)/ and http://forum.mrmoneymustache.com/ask-a-mustachian/turbo-tax-vs-cpa/ for more ideas about this.

Thanks for the info, I don't believe they do have a HDHP. I believe it it referred to as a "Cadillac" plan? I think I have only paid copays less then a dozen times.

MDM

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Re: How to tax plan
« Reply #7 on: September 24, 2015, 03:43:48 PM »
Thanks for the info, I don't believe they do have a HDHP. I believe it it referred to as a "Cadillac" plan? I think I have only paid copays less then a dozen times.

Might be worth discussing with them because, depending on their medical spending, an HDHP might be available from the employer and to their benefit to use it and the HSA it allows.  Then the benefit to you would be extra.