Estimated Taxes and the Safe Harbor Rule

safe harbor

  Today’s Saturday Selection from the White Coat Investor is another post geared towards the non-employed physician. In this case, by non-employed, I mean not a W-2 employee, but rather an independent contractor or practice partner earning money reported on a 1099. To be non-employed is better than being unemployed, unless you’re unemployed by choice, of course. In this post, you will learn everything you wanted to know about estimated taxes. Note that this applies not only to physicians and other high income professionals, but also to self-employed individuals from all points of life. I’m looking at you, bloggers and entrepreneurs. […]

» Read more

The Best Way to Donate A Hundred Grand

Blue Door Kew Gardens

No, not the candy bar. The other day, I shared how I woke up $100,000 poorer on my 41st birthday. This act of portfolio sabotage was self-inflicted; I greeted the news with a smile. The hundred grand is no longer mine, but I now have the opportunity now to use it to do some good in this world that my family and I live in. I’ve discussed why I choose to donate. Today’s post will describe how I use a donor advised fund to get the most for my donated dollars.     The easiest way to donate to charity is to simply […]

» Read more

Tax Drag: What a Drag it is Getting Taxed

Bayview Drive View

Most of us start making our first investments in tax-sheltered accounts. These accounts, which include traditional and Roth IRAs, 401(k) and similar employer-based retirement accounts, allow your investments to grow tax-free. Hopefully, we eventually reach a point in our lives where we have filled all available tax-sheltered space, and have money left over to invest. This is where a simple brokerage account, or taxable account comes into play. There are advantages to a “taxable” account, despite that ugly word. You can access the money at any time without penalty. Your investment choices are not limited as they are in an […]

» Read more

Top 5 Ways to Pay No Tax on Capital Gains & Dividends

Today, I’d like to explore strategies to avoid taxes on capital gains and dividends. Both of these investment returns come in two flavors. Short-term capital gains and ordinary non-qualified dividends are taxed like income, so it’s awfully difficult to avoid taxes on those. Long-term capital gains (LTCG), realized when you sell an asset you’ve held for more than a year, and qualified dividends (QD) are a different variety. The tax treatment on them can be much more favorable. It can also be not so favorable. Typically, even though these are a better flavor of payout, you can expect to pay […]

» Read more

Top 5 Ways to Lower Your Tax Bill

Tax Day is just around the corner. Be sure to file your tax return (or file for an extension) before it’s too late! If you’re like me, this was taken care of weeks ago. If not, you (or your CPA) have some work to do. Have fun with that! Did you know that America’s retailers and restaurants now “celebrate” the date with weird deals, including free document shredding, $10.40 meals and bagel bundles, and free cookies? I’m a sucker for a good deal, and I’d never turn down a free cookie, but I won’t be out chasing deals on Tax […]

» Read more

The Taxman Leaveth: Taxes in Early Retirement

Ice Fishing Thanksgiving

During our years of wealth accumulation, a.k.a. working, we pay a pretty penny in taxes.  We become accustomed to knowing that after a certain point, we might only see about half of each additional dollar earned.  Adding up federal & state income tax and property taxes, many physicians will have annual tax bills exceeding $100,000.  If you’ve managed to accumulate a sizable nest egg over 20 years or less, you’ve no doubt contributed at least $1 million to the coffers of the taxman. Fear not. Much, much lower tax rates are on the horizon for the aspiring early retiree.  Let’s […]

» Read more

The Donor Advised Fund, a Smarter Way to Give

A donor advised  fund (DAF) is an excellent and tax-efficient way to give to charity.  The vast majority of my charitable giving is to and from my DAF.  There are several big advantages to using a DAF as opposed to giving cold, hard cash, or writing checks. You get a tax deduction in the year that you donate to the fund that you control. You can give from the fund to charities of your choice years later. You can donate equities that have appreciated and nobody owes capital gains tax. Your donated money can remain invested in index funds. I […]

» Read more