>you could have a large tax bill when you file your taxes the following year. And if it’s too large, the IRS will even impose a penalty
It is actually called an "addition to tax", not a penalty, and in fact it is merely an interest charge, just like if you don't pay the full balance on your credit card each billing period (for tax, the "billing periods" are the (roughly) quarterly dates when estimated payments are due). If you can make more money elsewhere than the interest charge by the IRS (currently 7%) you are better off not making the payments during the year.
>Health Savings Accounts are the rare unicorn of triple tax advantage: money isn’t taxed (1) going in, (2) while it’s growing in the account, or (3) when it’s taken out.
I see this a lot and it is completely ridiculous. (1) and (3) are the same thing when it comes to your contributions-- there is no scenario where you would ever pay tax on money when you contribute it and also when you take it out. It is only a double tax advantage, not triple. (And the money only comes out tax free if you use it for a limited set of expenses namely health care).
2. The triple tax advantage is not ridiculous. (1) and (3) are not the same thing. 401k for example is not taxed going in (you fund it with pre-tax dollars) but is taxed when taken out. When you withdraw money from your 401k in retirement, you owe taxes on the capital gains that have accrued in the account since you first put the money in. But if you take money out of HSAs for paying medical bills, there is no tax on the capital appreciation you have enjoyed in your HSA account.
1. The IRS web page is not authority. See the Internal revenue code
§6654. Failure by individual to pay estimated income tax
(a) Addition to the tax.
Like I said, it is officially (by law) called an addition to tax, not a penalty.[0] Further, it is calculated as an interest charge. There is not any further interest charged on the interest. Yes, there are actual penalties such as Failure to File/Failure to Pay that do accrue interest, but this is not either of those.
2. The HSA is just a holding account. You can either pay for health expenses such as insurance pre-tax each year, or you can put it in a HSA and delay the payment. In either case, you only get one tax deduction, not two. The ridiculous claim is to say for a $1K contribution to HSA, you get a $1K tax deduction, then you get another $1k tax deduction when you take it out - not true.
Don't #1 and #3 become true when you consider capital gains on an appreciated account? Genuine question, because how I'd thought of it, and your assertion shakes my confidence in my understanding.
You only get a single tax deduction, not a double deduction. If you put in $1K and also get $0.1K gains in your HSA, for example, you only get a total of $1.1K tax deduction. There is no "triple tax benefit".
The point is you never pay tax on that money.
1. Your contribution is pre-tax
2. Your growth is tax free
3. Your withdrawal is tax free as long as you have receipts for qualified expenses.
I personally don’t have an HSA because it seems like a hassle and I don’t want a HDHP but I can see the appeal.
My point is that it is far from a "rare triple unicorn" or whatever overhyped language they use. You can put money in an IRA, get a tax deduction, and then not pay tax on the money and the earnings if you take it out via a QCD (qualified charitable distribution)), but no one calls this a rare triple unicorn. Also, many items paid through your employer, such as health insurance, flexible spending accounts, dependent care accounts also are tax free when contributed to and not taxed later if used for intended purposes. It is just a single tax benefit, not a "triple" tax benefit.
I much prefer POP, as I only send and receive emails on my desktop computer and I want to decide when I fetch new emails. Is there any way to make IMAP work more like POP?
fdm, imapsync, lots of similar alternatives. Synchronize email to your machine and then use any MUA, or even several of them, to read it from a local directory (Thunderbird also works AFAIK).
They can also remove email from the remote and keep just the local copy. Pretty much 1:1 with POP. I've been using this setup (with fdm) for probably more than a decade.
I learned a great new word from that episode. Archer is one of the best shows for strange and funny use of language, they just nail my favourite type of humour.
What does this calculator provide that I can't get from just examining my most recent paystub, which is also one page or less, no inputs, and instant breakdown?
Also, federal and state income tax withholding is just an estimate, not your actual tax liability. It does not take into account other income or deductions or credits that your employer knows nothing about.
This reminds me of the Sonic fast food chain. The first (and so far only) time I've visited Sonic was some years ago, I was staying at a motel across the street, walked over there to order, and was surprised there was no place to sit or even a normal counter to order at. The ads they run on TV give no indication that Sonic is strictly a drive-thru operation.
> I almost never take the full 5 weeks and end up accumulating it over the years.
Companies should have a policy to limit accumulation of unused vacation, such as 3 weeks maximum. The problem with unlimited accumulation is that it essentially allows the employee to assign themselves paid overtime[0] without any business reason or management oversight. For example, if the company policy is to have you work 49 weeks and take paid time off 3 weeks a year, but instead you work 51 weeks and carry forward 2 weeks vacation, you have just assigned yourself 2 weeks of overtime.
I used to work for a large corporation that finally implemented such a policy to address exactly what this person has done: 12 weeks of paid overtime that no one asked for and that the company probably hasn't budgeted for.
[0]I don't mean overtime in the sense of time-and-a-half pay or anything like that, rather overtime in the sense of working more paid hours than you were hired for.
In the US, the only common use of the word "overtime" implies three things:
1. Working outside of your normal shift hours or days on a non-routine basis to meet some deadline or specific business goal.
2. Working overtime is not generally voluntary on the part of the employee.
3. However, most companies acknowledge that overtime is an unwanted burden on the part of the employee and thus usually compensate overtime at a higher hourly rate. This is partially a reward for putting up with that burden, and also discourages managers from assigning overtime on a regular basis.
One of the reasons companies are hiring a higher percentage of their workforce on salary is that they can ask them to work longer hours and occasional weekends without the downside of paying them more.
This is why I had to footnote what I (didn't) mean by "overtime". The overtime I'm referring to does not meet any of your 3 implications -- it is entirely voluntary and self-administered by the employee. If there is a better term for it, I would like to use it. And yes, it is only feasible for salaried employees, not hourly-paid.
I really don't get the point of doing that. There's indeed a limit on how much you can "carry over" in most companies, but not in the one I work. I've been there for over 10 years. I will eventually take a very long vacation, perhaps 3 or even 6 months. So I am slowly building up (I might take some unpaid time off if I need to) towards that. The idea is to do a kind of sabatical... I've lived in 3 countries so far, and I would like to spend time actually "living" in one of them again, not just visiting for a few weeks.
I don't feel like I am doing "overtime" in any way, and my company is getting value from every working hour I put in, I can tell you that.
Yes, paying out the unused vacation time upon leaving the job is what I meant. It is especially pernicious in the case of public employees (police, fire) who spike their pension payments by adding all that unplanned paid time to their final year salary, which distorts the pension calculation.
> Companies should have a policy to limit accumulation of unused vacation, such as 3 weeks maximum.
I hate this. My company lets you accumulate unused vacation, but it has a cap of 300 hours, or 7.5 five-day weeks. After you reach the cap, you stop accruing. I'm constantly at the cap, so I just take a Friday off every time another 8 hours accrues, and spend that time putzing around the house doing routine chores and maintenance. I'd much rather just accrue and accrue, and then get all that accrual paid out when I leave or retire.
I understand that companies would rather I not do that, so they implement this "cap" that allows them to stop providing the benefit they promised during hiring.
>Opportunity Zones have shown a lot of promise at helping to direct capital to under-developed regions,
Not really. All of downtown Portland, OR has been designated an Opportunity Zone[0]. "the Ritz Carlton Hotel that’s going up in downtown Portland was partly funded with these tax breaks."
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