**Pay Day Today. I actually usually forget it is pay day and am surprised to get a check. I remembered because I had some other checks to deposit. Asked dh to just run them to the bank (had some cash, too), since I can easily scan my paycheck. So, became front of mind. BEfore this scanning thing, I just held all deposits to pay day.
The credit card is due the 31st, as is the mortgage. I will probably set the credit card to pay once my paycheck is deposited. Since I am adding extra principal to the mortgage - I will just pay it last minute. See if we can drum up more principal in 2 weeks time. It has a 2-week grace period, so no biggie. With no extra principal, I always pay it the 30th. But, I will likely pay it later with the extra principal factor. I'll decide exactly what to pay around the 31st, anyway.
Anyway, with 2 weeks before any bills due, no wonder I forget it is pay day. I just figured out this month with raise, tax cut and piano lessons, that I can pay everything on the 1st, transfer everything to savings, ROTHS, etc., and then nothing else to worry about until the end of the month (mortgage & big credit card). I like the simplicity. It doesn't always work out so easily...
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I had awesome news for a tax client. Couldn't have planned it better if I tried.
$50k taxable income? How much was his tax?
Um, $350???
That is an effective tax rate of 0.8%.
Is a low income tax client that came into some money. So, all he had was investment income - taxed at 0%. Tiny bit of tax on social security and disability. A whole $350 on that.
I sent him on his way and figured it was right, but couldn't wrap my brain around it. I had forgotten (or not known?) that capital gains rates were 0% up to the 15% tax bracket. I knew for 10% tax bracket. But not 15% tax bracket (up to $68k tax-free income for married couples).
I told him to enjoy it while it lasts - maybe 2 more years. I said "Welcome to being wealthy - the wealthy get all the tax breaks."
Not very many people can manage that kind of scenario (no income but loads of investment income). BUT, some can.
Pay Day
March 16th, 2011 at 03:36 pm