Taxes

I have written that for the past few years I have been diligently performing Roth conversions spreading my conversions out on a monthly basis to sort of dollar cost average. In my reading I have learned that when the markets are down it is advantageous to do conversions as when the price goes down you can convert more shares per dollar. With the recent downturns I have been taking advantage of this phenomenon. However I think I may have found an error in my thinking.

IF YOU OWN a home or are planning to buy one, there are a few things you need to know from the tax standpoint that could save you money:
1. Mortgage Interest
If you have a mortgage, you can typically deduct the interest you pay on the loan up to $750,000 ($1,000,000 if taken before December 16, 2017) but only if you itemize your deductions (schedule A)
You can also deduct points you paid if you itemize.

A POPULAR JOKE about retirement is that it can be hard work. That’s because financial planning is like a jigsaw puzzle, and retirement often means rearranging the pieces.
In the past, I’ve discussed two key pieces of that puzzle: how to determine a sustainable portfolio withdrawal rate and how to decide on an effective asset allocation. But there’s one more piece of the puzzle to contend with: taxes. Especially if you’re planning to retire on the earlier side,

Have you heard of the IP PIN?
(This is from the IRS website)
“An identity protection PIN (IP PIN) is a six-digit number that prevents someone else from filing a tax return using your Social Security number (SSN) or individual taxpayer identification number (ITIN). The IP PIN is known only to you and the IRS. It helps us verify your identity when you file your electronic or paper tax return.
If you don’t already have an IP PIN,

For those HD readers that want to know about the future of two of our biggest entitlement programs.
A new study from the Cato Institute about who pays more in Social Security and Medicare taxes  than actually receives in benefits that has resulted in a $1.7 trillion benefit to those two programs.  Listen or read the piece on Markeplace.
https://www.marketplace.org/story/2026/02/23/immigrants-reduce-deficits-study-shows

David Bach has an interesting whitepaper that proposes the government offer a program where withdrawals from retirement accounts are taxed at 12% from ages 60 to 68. The thesis is that 83% of the boomer generation do not tap into their IRA until RMDs forces them to.
What do you think?

So probably all of you with big wallets have discovered this years ago, but I just tripped over the NIIT for the very first time.  Like all good engineers with an interest in personal finance, I have spreadsheets of my spreadsheets.  I have been working the last few years to do some ‘bracket bumping’ with my Roth conversions and I thought this year I had it totally dialed in.  Like down to the dollar.  I put all of my numbers into freetaxusa.com and zipped right along…

Sharing an article from the NYT on 2025 Tax Changes.  A good overview, a few items have a bit more nuisance that the headline, e.g. “No Tax on Tips.”  Feels like the SALT changes will be the biggest opportunity for most filers.  I’m hopeful the charitable donations for those who don’t itemize ($1k single and $2k joint filers) will be helpful for the nonprofit world.
https://www.nytimes.com/2026/02/06/business/2025-taxes-return-refund-income.html?unlocked_article_code=1.K1A.iHXT.kv9jMyWndiZh&smid=url-share
Happy Tax Filing!
 

Just a reminder, all those little charitable contributions that we make in 2026, outside of Qualified Charitable Distributions (QCD), are deductible as an above the line tax deduction. The maximum deduction is $1000 single, $2000 married filing joint, and you need to save your receipts. 
Just to be clear, this isn’t for our 2025 tax returns. This is for tax year 2026.

A sensible recommendation is to invest 20% to 50% in foreign markets. That seems reasonable on the surface. But, which of the 3 sources of funds is best to invest in foreign markets? Broadly speaking, there are 3 big sources of funds: Tax-Free (Roth), Qualified (401k, IRA), or taxable brokerages.
My preliminary conclusion: Investing Tax-free and qualified funds in foreign markets would incur double-taxation. Taxable brokerage funds seem best.
USA has tax-treaty agreements with about 70 countries that avoid double-taxation.

I know in the US you don’t have to file your tax return until mid April. Here in the UK the filing date has just passed at the end of January. I’m always amazed by the sheer number of people who fail to meet the filing deadline, as if it somehow sneaks up on them despite being the same date every single year. Last year, even with reasonable extensions, it was close to 10% of the population who ended up getting hit with late fines.

A couple years ago I wrote a check to the IRS  for a tax payment with more than enough funds in my account to cover it.     The bank rejected the payment.  I went to the bank and they told me that the IRS was the one who rejected payment, not them.  Called the IRS a number of times as well as wrote them with all the relevant bank statements.  They said the bank denied payment.

HD contains numerous articles and comments about taxes, many of which talk about avoiding or minimizing those taxes. There are some like FICA that are certain. But income taxes are far more complicated and I guess you could say flexible.
I have the impression that Americans are unique in complaining about taxes, in part because they don’t see the connection between taxes and what they provide, at least not as much as many Europeans do. 
The United States is not a high tax country,

Just a short update on Trump Accounts.   https://trumpaccounts.gov/
Myself, I wish they had named these “Ben Franklin” accounts, in honor of the first American, the Favorite Founder. 200+ years ago, Ben showed us how to do super long term investing.
Read: M. Meyer, Benjamin Franklin’s Last Bet, The Favorite Founder’s Divisive Death, Enduring Afterlife, and Blueprint for American Prosperity, 2022, Harper Collins
Beyond Ben
Not only will you want to investigate this opportunity. You will also want to prompt your employer to consider adding Trump Accounts to your employer’s IRC 125 cafeteria plan (pre-tax contributions for health and welfare benefits –

MANY PEOPLE don’t know, but there is a net investment income tax of 3.8% that applies to some of your income. Today, I want to discuss what it is, how we can reduce its impact, and how we can save money.
Let’s dive right in:
Net Investment Income Tax (NIIT)
The net investment income tax is imposed on investment income if the modified adjusted gross income (adjusted gross income + foreign income exclusion) is more than $200,000 for single filers or $250,000 for those married filing jointly.