Friday, April 19, 2019
Fareed Zakaria has a credible op-ed in the Washington Post today regarding the tendency for right-wing (or maybe left-wing too, like Chavez) populist politicians to try to bring their central banks under partisan control.
He discusses particularly Trump, and his desire to appoint “loyalists” to the Federal Reserve, as well as Erdogan in Turkey. In India, the national bank as “raided” to buy votes.
The article notes that this practice by politicians can be very dangerous to savings of retirees.
Monday, April 15, 2019
It’s a bit late on tax day, but the issue of how Trump’s tax law affects “blue states” by reducing the maximum state tax itemized deduction to $10000. It was always true that you had to choose between income or sales taxes. Here is a typical write-up.
Because there is no personal exemption but a larger standard deduction, many people loose “opportunity” from the change with respect to the state tax issue, and this will affect people in high state tax states, like New York and California.
I am in Virginia. HRBlock computed my federal tax assuming the standard deduction (without exemption) which now was more than the itemized deductions I had been claiming.
But it did not consider the state income tax, because the state hadn’t been computed yet.
So I may have been overcharged after all.
On the other hand, I underpaid the estimated tax this year because I did not expect an unusual gain on one bond fund in mom’s estate because of an unusual way it was handled.
I don’t know whether it will be worth my time to redo this.
I’ll talk to a financial institution to prevent this problem again.
It is very easy to pay overdue taxes electronically by HRBlock from your checking account.
Virginia now says that people with AGI’s over a certain amount must pay estimated taxes electronically. I had never noticed that before. I’ve already done 1Q 2019 by mail.
Tuesday, April 02, 2019
I do my taxes on HRBlock, and I typically copy PDF’s of all my 1099’s from financial institutions into a typical directory in Windows.
This year, on one of the banks (Suntrust), I almost missed a 1099-B on the last page. It showed a bond fund maturing and showing an amazing $21000 long term gain since 2014 based on a $75000 basis.
The bond was tied to the SP500, which was near one of its max points the day it matured.
This possibility exists, although it’s unusual. But typically investment accounts roll over the instruments and purchase something else. That could go down. It’s a good idea for a retiree to be told about this and put it in cash.
This year, the standard deduction swallows the personal exemption and in my case, the same deductions I took last year. I don't like to stretch things by trying to add deductions. This year real estate taxes are much lower after moving to a condo.