Since you're covered by a retirement plant at work, and make too much for Roth IRA, then, unless you're Married Filing Separate where the Roth limit is $10k, then you must make too much to deduct traditionally IRA contributons.

So among trad IRA, Roth IRA, and normal brokerage, you're paying income tax up front regardless. But Roth IRA means no income tax on withdrawals, unlike the trad IRA (tax on earnings) and normal brokerage (capital gains tax on gains). So Roth is your best bet here.

I think I got the same ones in Columbia this morning. I guess there's days that are better for contrails (moisture in the air... low pressure but not clouds?)

It works great in Columbia. A couple of times a year my personal phone won’t be as good as my AT&T work phone, but at $15/month, I’m very happy with it.

There is no deadline to convert traditional to Roth. But unlike contributions, which have an overlap period from Jan-April, the conversion always happens in the year it actually happened. So if you don't convert by the end of the day today, it will be a 2023 conversion.

Note if the IRA contribution is non-deductible, it really doesn't matter, as converting doesn't add to your tax.

> I assume this is the origin of the mistake?

Yeah, sounds like it.

So yeah, just start with 2018 and put the basis to $0. This $0 cascades forward. April 2020 was the first year 1040-X could be electronically filed so this might not be that bad.

It's probably not a huge risk to just keep it correct going forward. Outside of an audit, no one will care if past 8606's are wrong, and if you do get audited, you have the facts on your side.

If it were me, and I could do it all electronically, I'd pour a glass of wine and spend half an hour submitting 1040-X's. If I couldn't do it electronically, I probably wouldn't bother.

The $6,000 is for direct contributions, there's no limit on the amount to roll over. If you have a 403b after leaving an employer, you can keep it there (if >$5,000, otherwise your old company can force a cash-out to transfer), roll it to your own IRA, or transfer it over into your new work's plan if they allow it.

So if you had $10,000 in a 403b, you can keep it, roll it to an IRA, or if your new job allows move it to them. The money stays pretax, there's no tax added to your 1040, and no penalties. A small wrinkle if the transfer is done via paper check, but if that happens just ask us... within 60 days of getting the check.

I'm not a financial advisor, I just give out random advice on r/pf and help people with taxes, but my small pea-brain says you should use disability insurance for disability insurance, use life insurance for life insurance, and use retirement accounts for retirement. Using the financial vehicle designed to replace wages in case a car breaks your hip as the same one to give you tax advantages to allow you to retire just doesn't seem sensible.

What's most likely is your mom's financial advisor is making a commission on these products they're trying to sell.

>Now my major question is because the 403b match is trash and the vesting is 3 years should I even put money into the 403b?

Yup, because a trash match is still free money. And if/when you leave, you can just roll over your money into an IRA. Even if you get no vesting, we're still talking about retirement money which means no capital gains, no taxes on dividends, and the option to defer income taxes.

Go back to the first year of your mistake, file an Amended Return (1040-X). Repeat for all years until it's fixed. It's not that hard, really, especially since this doesn't change your tax amount and amended returns can be done electronically now, provided you e-filed your 1040 and your software allows it.

> I did the contribution and conversion twice after Jan 1 but before the deadline

The deadline for conversions is December 31st. It's not like direct contributions where you have a choice -- if you made a conversion in the calendar year 2022, it was a 2022 conversion. But the good news is that shouldn't matter, just clearing it up.

>Is there a downside (besides being out $1300) to cashing out both accounts

Yes, you're going to pay tax and a 10% penalty on your Traditional IRA withdrawal, and on any earnings from your Roth IRA. So say you've put in $10,000 into the Roth, then $1,000 is the earnings. So that's $6,500+$1,000 that gets added to your taxable income, although that may be low this year depending on your 2022 income so far. On top of that, there's a penalty applied after taxes are computed, which is going to be 10% of that, so $750. So you'll either pay that, or $750 is reduced from that refundable Child Tax Credit you have.

If you don't expect to use $16k, don't take out $16k. Take out your Roth contributions first. No tax, no penalty. Then take out $2k (or whatever) at a time from your Traditional IRA.

And are sure you have surrender charges? Those aren't common in IRA's. Unless you're using "surrender charges" to mean "taxes and penalties".

Yeah, so with medical, it's going to go to $0.

The math if you had no pretax deductions:

You make $63,060. Subtract $25,900 for the standard deduction and your taxable income is $37,160. You pay 10% on the first $20,550 ($2,055), 12% on the rest, $16,610 ($1,993) for a total of $4,048. Subtract $4,000 to Child Tax Credits. Divide $48 by 52 to get $0.92 withheld per paycheck.

And I had a typo in there and wrote $62k instead of $63k!

I just have my spreadsheet open all the time now :)

If you tell us your taxable income on your paycheck (sometimes "FIT taxable" or something) we can tell you how much you should have withheld. If you put your gross income in the IRS calculator and it said $400, it's very possible you have >$400 in deductions so your tax will be $0.

Well, let me just do this: for joint filers with 2 children under 17, a $62,700 income for 2022 results in $5 in tax. So if you make <$62,600/yr or so, your withholding should be $0. At $66,000/yr, federal tax liability is $401.

I'm an engineer who spent 18 years at my last company and will be at my second/current one until I retire, so let me offer my thoughts since we seem similar.

There's nothing wrong with staying with a company, provided you're paid what your worth (and like the job of course). If you have a good manager and/or stick up for yourself, that shouldn't be an issue. If someone gets paid more going to a new job, either they weren't getting paid enough before, or they're agreeing to more accountability and responsibility at their new job. The job offers I got when I switched were right around my then-current salary, and that was expected, because I had a good manager. I've never asked for a raise but have gotten one every year (two this year, thanks to inflation!)^1. I've never asked for a promotion either, but have gotten those as well.

And I can play the "what if" game all I want, but I know this: my current salary is consummate with my experience and skill. If I scored 10%-25% increases by job-hopping, there's no way I could be doing what I'm doing now (real engineering, minor project management), because my $250k salary (or whatever) would mean I'd be spending all day going over budgets, leading multiple team meetings, dealing with customers at a high level, and trying to turn little KPI icons green. No thanks.

^1 If you care, median is 4.0%, mean is 5.86%. These were 4.9% and 7.0% for my first job; my new job offers lower raises which I knew about going in, but they make it up in great retirement benefits.

There's actually a few options, two of which have "Simple"/"Simplified" in the name, so it's really not that bad. The IRS isn't much one for pros and cons so I'd read this NerdWallet page as well. There should be tons of resources, to be honest, as there's millions of self employed persons in the US.

I never had to set one up, but as a single-member LLC, I'd probably look at SEP most closely.

Yup, that works. Sometimes they'll offer incentives and expect to make more money via interest. But there's nothing wrong with paying it all down up front. Some loans have prepayment penalties, but it's not common. Check your agreement though to be sure.

$10k at 7.39% means you pay $10,000 × 7.39%/12 = $62 in interest in that first month, so $62 total if you pay it off by that first due date.

> The other scenario I could see with filing separately is if our combined income bumps us up into a new tax bracket (which I can't imagine happens often).

Just to provide some clarity and save research, that can't possibly happen unless you make $647,850 or more combined.

If you look at tax brackets, you will notice the joint numbers are exactly double that of Single (and Single brackets are the exact same as Married Filing Separate). Same holds true for the standard deduction. So if you make $50,000 taxable income (22% single) and your spouse makes $50,000 (22% again Single) then your joint bracket is $100,000 (22%) and it's impossible to ever go above that. Your marginal rate for joint can be equal to your separate Single brackets (if you make similar incomes) but it cannot ever go above that, at least at <$648k.

The opposite can happen, which is why people with disparate incomes benefit from joint. Say you made $100,000 and your spouse makes $0. You would be in the 24% bracket and your spouse would be in 0% if you did Single. But if you file joint, you're back down in 22% land. So it's like you can "move" your income off your stack onto your spouse's. So you move your 24% portion and some of your 22% portion down to your spouse's 10%, 12%, and 22%.

>They did have their own AGI up until August

For whatever it's worth, that's not how it works. Your 2022 taxes are based on the year 2022, which is kind of a theme you're discovering in this post. If you file joint, your incomes are combined (hence the term) and you, collectively, have one AGI for 2022. So if you file joint, your spouse did not have their own AGI in January, or August, or December, and neither did you. Your AGI didn't go up from January through December, either. It's just one fixed number that is set based on your combined 2022 income (minus adjustments).

You likely want to file joint, but say one of you is on an income-based repayment plan for student loans. That's one instance where giving up the tax advantage of combining incomes may outweigh having two separate AGI's (IBR payments are based on AGI).

Any particular reason why you want to file separately? You'd give up the advantage of being able to combine your incomes, which is a big benefit if your incomes for the year are relatively unequal.

Note what your company thinks, or what your insurance is set to, or what you put on your W-4 has no bearing on how you file. If you're married on 12/31, you're married for tax purposes. So you can choose to file separately (you each have your own AGI which can be beneficial, but you pay the higher tax rates single people pay) or you can file joint and combine incomes with the tax bracket thresholds set at 2x the Single rates.

While you may not find as many activists as opposed to DC, DC is probably the pinnacle. Like most of central Maryland, the area leans very left. I ran every street in Columbia two years ago, mostly around election time, and I saw countless signs for Democrats and literally only two houses with Trump signs. And one of those was a flag hanging inside a guy's garage, only open because he was washing his car. It's not common to find a place in the US where people are embarrassed to show support for Trump.

I've never lived in Boston, and only visited a few times, but I'd say it's similar enough. I'd say Boston is probably closer to Annapolis politically, where you have a good majority of Democrats, but there's enough old money people who are going to be conservative. Columbia has no old money :)

At age 25, it's hard to gauge how much to have saved, as everyone starts saving at different ages. But a common early metric is save about a years' income by age 30, so I'd say you're doing great. And 25%+match is also great. If/when you start paying rent/mortgage, you may need to back that down. But now, you're fine, even with the coach.

>If you’re a fan of tax free growth — why don’t most people do the 401k match, Roth IRA, and then Roth 401k? I

It's very common here to suggest 401k to the match, then IRA, then back to 401k. Note there's no capital gains taxes on pretax 401k's or IRA's, either (what I would call growth taxes).

>Would that be a good plan?

At your tax bracket, no - I'd do pretax. Remember that while you pay taxes on earnings with pretax, that's offset by the fact that you can afford to save more pretax dollars. Say you pay 24% on every dollar of pretax 401k in retirement. If you earn $1,000 now, it grows say 10× (8% for 30 years, e.g.) to $10,000 and you're left with $7,600 after taxes. It's the same amount you'd have if you earned $1,000, paid $240 in taxes, and put the $760 into a Roth. While the $2,400 in taxes with pretax is higher than $240 with Roth, that $240 you would have forfeited up front (with Roth) grew into that $2,400. So if your marginal tax rate now is the same as the rate you get taxed on these dollars, there's no advantage to Roth (or Trad).

But the key here is paying 24% on every one of those dollars in retirement. In order to do that, you'd need $109,000 (single) or $218,000 (joint) of other taxable income in retirement… where is that money coming from? Outside a huge pension or several million dollars saved up in other accounts, you won't get taxed 24% on all your 401k withdrawals. So do pretax when you're in those higher brackets now.

You got it. Say you make $14×40×52 = $29,120 for the year. Subtract $19,400 standard deduction. 10% of the $9,720 left is $972. That's your tax before credits.

Now subtract credits; it's not $4,000 since your lower income lowers it, but you get Earned Income Tax Credit with that low income, so I'm computing $6,700 "refund" even though you paid $0.

There's no tax for Head of Household filers with 2 kids ($4,000 in Step 3 on your W-4) until your paychecks are about $55,000/(number of pay periods). With 3 kids ($6,000 in Step 3) it's $72,000/(number of pay periods). So until you make that much in a paycheck, there's no withholding as your tax for the year will be $0.

Your YTD doesn't matter - withholding looks at your annualized income every paycheck.

>Yes -- once you make above the taxable threshold, the system will withhold.

OP seems to be asking once they make a certain amount in a year, will withholding start. The answer is no. Withholding is based on annualized income, so it depends on the paycheck amount × the number of pay periods. In other words, it's based on the pay rate, not the amount earned so far (otherwise, everyone would get tax free paychecks in January thanks to the standard deduction).

Like HoH with 3 kids means you need $75k to have tax liability. If OP makes say , $3,000 per biweekly paycheck (>$75k) they will have withholding from the first paycheck (as opposed to $0 withheld and then a big chunk on their last paycheck).

I have it as well, and I'll just comment that the other commenter is right in that BGE is able to separate out car charging from non-charging, which was at the same right everyone else gets.

So the whole system needs to know how much energy was used to charge your car. So they need either a smart meter, or your car can tell them. So if you own a Tesla (or any vehicle on this list I'd imagine), they just use that.

So I now tell my car to start charging at 8:00 p.m., and I save a few dollars on every bill. Weekends are also at the low rate. It's not a huge money saver, though.