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Archive for January, 2022

Extra tax bill - ouch

January 6th, 2022 at 01:18 am

Two of our taxable mutual funds paid out particularly large year-end distributions. Along with other taxable investment income, it came to about 46K, as I said in my last post.

I sent that info to our CPA and he ran our numbers and we need to pay over 10K in taxes. We need to pay at least $9,400 by 1/18 to avoid an underpayment penalty.

We have the funds, so that's not an issue. I just wasn't anticipating a 10K bill.

I did log in tonight and turn off reinvestment of dividends and capital gains for the one fund. The other fund already paid out rather than reinvesting. So at least when this happens again 12/22, we'll have those funds to draw from to pay the taxes.

Oh well. My father the accountant always said it's better to make the money and pay the taxes than to not make the money at all.

Investment income

January 3rd, 2022 at 01:59 am

I just had to add up our taxable investment income - interest, dividends, capital gains - for our accountant to see if we need to make an estimated tax payment.

It came to $46,000.

There was also about another $6,000 in dividends from two inherited stocks that are still in my late cousin's name and were paid to the estate, not to me directly.

In 2022, I have to start taking RMDs from the inherited IRA. That will be about $20,000 this year.

Finally, there's just over $550,000 still sitting in the estate bank account currently earning nothing. I will gain control of those funds soon and be able to invest them. Even at a modest 3% return, that would be another $16,000/yr. Obviously more if I can do better than 3%, which I think I can.

All together, that comes to $80,000 or so in income that we can reasonably expect this year. That's before touching a penny of our retirement accounts (except that inherited IRA) and in addition to my income from work.

If it truly plays out that way, I think I'd be well-positioned to retire by the end of the year, which has been my plan. It's just nice to have some actual numbers to back it up.