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Archive for March, 2021

Moving Towards Normalcy

March 31st, 2021 at 03:08 pm

Vaccinated!  All of us but DL (because he is not 16 yet).  He will at the least be able to get vaccinated this summer, when he does turn 16.

They had a pop up vaccine event (in our neighborhood), intended to hit the uninsured and less privileged groups.  But...  They had 300+ vaccines leftover.   

I still am in disbelief, honestly.  Not only that one of us got a vaccine, but that we all did.

It will probably take a while to process what all this means.

Things discussed already:

--MH wanted to make travel plans to see his Grandfather this summer.

--MM(17) can (safely) get a job this summer.  We had kind of just given up the idea of our kids working at all this summer.

--MM(17)'s high school graduation seems to be a go.  I wasn't particularly enthralled with that (when a date/venue was announced a while ago).  But...  Now it seems more realistic and doable.

I am sure there is a lot I haven't thought about yet. 

Edited to add:  I personally haven't skipped any regular appointments.  So I have nothing to catch up on.  But both MM and MH have not gotten a professional cut in over a year.  They may want to get hair cuts.   

{In the end, my health insurer is highly prioritizing essential workers that work outside of the home.  & I mean, they are not following state guidelines.  They are making their own priority list.  I was offered an appointment today.  So...  I gained 3 days?!  But the leftover vaccines were *great* and life changing for MH/MM, who are at the absolute bottom of any priority list}.

If that's not enough excitement for one weekend...

My parents came up, for the first time in over a year.  My Dad took some sports photos of MM(17).  It was worth the wait!  I thought I missed the boat, but he just happened to get his uniform back a couple of months ago (they've been doing scaled down track meets this year).  So I was able to get the 'professional' sports photos I never would have otherwise gotten.  Will do a repeat when MM(17) gets his cap and gown.  My Dad will do his senior photos.

In other total random news, MM(17) gets his braces off today!  

Financial stuff:

Taxes are (were) on hold again.  I got an email about an unexpected tax loophole (unemployment in community property states).  This will save us $555.  Phew!  So glad I didn't file yet.  I was waiting for more firm confirmation (on this grey area), but got it a few days ago.  I may file our tax return tonight and get that rolling.  Especially now that we are getting a refund.

Oh yeah, I did also get confirmation in that email (from a tax publication I subscribe to) that the IRS has (or will) delay the IRA funding deadline to May 17th.  (I started typing this out a few days ago, it's been officially announced at this point).  I expect to have a lot more information by then and probably would be prudent for me to wait a while to make a final decision (Traditional versus ROTH).  But with the stock market being rocky (more oportunity to buy lower) and college costs getting more clear, I had already transferred $12,000 out of our savings account, ready to fund our 2020 ROTH IRAs.  Will probably just rip off the band aid and be done.

This still leaves $10,000-ish in addition to our 9-month emergency fund.  I updated sidebar (with stimulus and unemployment received this month).  We've got MM's freshman year of college well covered.  Will probably spend next school year (MM freshman year) saving up for Year 2 of college.  That is the rough plan, for the moment.  

Still no college decision.  MM is too busy with school.  His task for spring break is to make choice (still a coin flip) between two public schools.  Should also hear back from last college next week.   It would sure make life easier if they would get back to us before spring break.  It's plausible, but that would probably be too easy.  


Less Limbo, More Financial Freedom

March 24th, 2021 at 01:33 pm

Crazy Crazy Week(s)!

Things just went from 0 to 60.  Schools are opening back up (in person) this week.  We hosted guests for the first time in a year (St. Patty's Day dinner).  MH got jury duty.

& then College...

So far, we have ruled out the more expensive and more far away private colleges.  It's official that MM(17) will stay in state.  It's a super rough year on the college front, I already mentioned.  But the east coast college had 70% more applications that prior year(!) and dropped their acceptance rate from 8% to 4%.  Was a stretch anyway, but I think we are pretty shocked he didn't get into his #1 choice (LA college).  Have had some time to digest and move on.  Honestly?  We were supportive because MM was MM.  We were discussing *if* #1 college choice was $40K per year, we would make it work (with help from Grandparents).  He is extremely driven and he knows what he wants to study.  But...  Public school is so much better for *our* personalities.  Private school was so...  Complicated.  In the distance, in the cost of travel.  How MH couldn't work at all because it would just make it more expensive (he'd net nothing after increased college costs and taxes).  How we probably couldn't accept gifts, it would then be too prohibitively expensive.  I kept calling it "mushy gushy."  Public college is just so much more straightforward.  I literally wrote in my college comparison spreadsheet, "Unlimited Income and Assets!" for the public schools.  The cost won't drastically change if our personal circumstances change (for the better).

MM(17) is totally cool and fine.  He is not emotionally wrapped up in college choices.  Still has *no idea* which college he wants to go to and is a hard enough decision with just two college offers in hand. 

{Still waiting to hear back from one private college.  It's the least expensive and mushy gushy.}  

All remaining college options cost roughly the same.  One might be free tuition, the other might be free room and board.  But it all roughly comes out to comparable price (over 4 years) for all the options.  & the least expensive option has some other trade-offs.  Cost is removed as a deciding factor, for what's left.

This was my last post re: public college tuition.

Tuition and fees at our alma mater:  $31,000.  <---  That is total for 4 years (sticker price)

In addition, there is a state grant that I believe was $2K per year.  & MM is a kid who will get some scholarships.  I'd be surprised if we paid more than $15K?

In the end, the other State college is more expensive (full price is $40K; $10K x 4 years) but gave MM a substantial scholarship.  Our cost:  Probably $0.  It depends how the State Grant shakes out.  & he won't need a car there at all, which saves a lot of money.  So probably would be the most expensive school (of the schools he has been accepted to and we are waiting to hear back from), but they just leveled the playing field with a merit scholarship.  

It looks like college is probably going to be a small blip for us financially.  I am just going to enjoy that, for now.   😁 Am not going to bother worrying about any finer details until a college decision is actually made.  When the college decision is made, will work through all those finer details.  If MM needs a car, what we expect MM(17) to pay for, if we even touch his college funds (probably not), etc.  

Edited to add:  Don't have to buy MM a winter wardrobe, don't need to worry about travel/airfare costs, etc.  The cost savings are significant all around.



Stimulus/Unemployment Update

March 21st, 2021 at 12:06 pm

Final shake out of how the latest stimulus bill benefits us in direct payments and tax savings.

Stimulus (x4):


First $10,200 $20,400? of unemployment will be tax free for 2020:  

Tax savings 2020:  +$2,200

{I edited this part because of some tax loophole in community property states.  We probably get the full $20K and will save an extra $555 I was not anticipating.}

Child Tax Credit changes:

Tax savings 2021: +$1,000

$1,000 tax savings for DL (increased child tax credit)

I decided to just file taxes on time and not play the game with getting extra child credit for MM(17).  The more extra income we have, the less benefit we will get from playing the game.  Will opt for simplicity for over a (big maybe) few dollars.

I will check if our tax software has been updated yet for retroactive tax changes, and might just file our taxes this weekend if we can.  I already did our taxes a while ago, but then they changed 2020 tax laws.  (The work is done, but hadn't filed).

Unemployment extension:


MH just got renewed for another $5,000 of benefits.

Because of this, I think I am just going to bite the bullet and do ROTH IRA contributions for 2020.  I was initially hoping they'd extend IRA due dates and that I would have more time to decide.  But...  lots of college news this week and I think it's safe at this point to voluntarily pay an additional $1,500 in taxes.


Will use $1,500 of this money to fund ROTH IRAs. Basically, swapping Traiditional IRA deductions out for tax-free unemployment.  

Total unexpected monies:  +$12,300

$11,300 of this should be received this year (within the next month or two).

The rest will sort out when we file taxes next year.

A lot of college stuff is shaking out and I will do a separate post for that.  But it sounds like we will most likely use this money to cover college costs this year.  As of today, it looks likely that we will just stick with sidebar goals, and that college won't change anything.  Plan A was always to stick to inexpensive public colleges and to cash flow with current income.  This plan is shaping up pretty well.   


Stimulus Update

March 12th, 2021 at 02:20 pm

Final shake out of how the latest stimulus bill benefits us in direct payments and tax savings.

Stimulus (x4):


First $10,200 of unemployment will be tax free for 2020:  

Tax savings 2020:  +$1,700

Child Tax Credit changes:

Tax savings 2021: +$2,000

At the lease, $1,000 tax savings for DL (increased child tax credit)

Probably $1,000 for MM (advanced child tax credit).  Best I can determine, they can't clawback $2,000 (of advanced credits) if our AGI is below $60K.  It's $1,000 that they can't clawback if our AGI is below $90K.   I'd say the biggest unknown (re: our 2021 AGI) is unemployment income, noted below. 

MM is not eligible for this tax credit (he turns 18 this year).  He will most likely get the advanced tax credit because we have not filed our 2020 tax return yet.

Note: The catch is we can't file our tax return for a long time.  Will go on extension and plan to file around the 10/15 due date. 

Unemployment extension:


MH did receive his last unemployment check and it had a note that said it will automatically renew and nothing he has to do.  If that's the case, will just keep taking benefits.  (I noted in my last post we were kind of over the red tape and had already replaced two years of his income).  

Note: If we do continue to receive unemployment benefits with Fed boost, the less we can keep of advanced child tax credit for MM (who turns 18 this year).  Will evaluate as the year progresses.

I can further manipulate AGI by throwing more into my 401K, but I don't foresee doing that this year.  I need all the cash I can for college.  TBD, I guess.  I am still in the "can hope for a free ride" stage (waiting for acceptances).  

Total unexpected monies:  $9,300

It took a little time for me to find (more detailed) clawback/phaseout rules for the 2021 advanced child tax credit.  Just noting a very detailed blog post for future reference (linked below).  That's getting complicated enough, I want to at least be able to remember why I made this plan (to file our tax return 10/15).  I will get more in the weeds when I take my professional education classes later this year.


Stimulus & College

March 9th, 2021 at 02:40 pm

I feel like every time I look at the news, there's more money raining down on us.

{I am so glad I haven't contributed to 2020 IRAs yet, or filed our tax return.  We would have had to change/amend everything.}

It seems likely this is the first year (ever) that we will go on extension.  Our taxes are very simple.  But...  As much as I had come to abhor the ridiculousness and tradition of 12/31 retroactive tax changes (which made my life mostly impossible when I worked in tax).  Making tax changes March after the year is over, is just absurd.  😠 I hope it's a 'once in a lifetime' pandemic thing and doesn't become the new way of things. 

Mostly irritated because, we really really really could have used that extra $11,000 for college.  But I put it in my 401K to avoid a tax cliff (50% tax rate).  Nothing we can do about it.  That is something I can not change.  

{This commentary is in regards to retroactively making first $10K-ish of unemployment tax-free in 2020}.

I can revise this when new stimulus is finalized, but it looks like this is probably how things will shake out.

First $10,000-ish of unemployment will be tax free for 2020:  

Tax savings 2020:  +$1,700

Child Tax Credit changes:

Tax savings 2021: +$1,750?**

At the lease, $1,000 tax savings for DL (increased child tax credit)

**Oh boy, this one is going to get complicated.  If we don't file our 2020 tax return, we will get advanced child tax credits for MM that we won't have to pay back.  At this point, maybe we just file our tax return in September (final due date).  I will have to go through the math and figure this one out.  

Thankfully, they also made this credit more refundable.  I was already targeting -$0- Federal taxes in 2021.  This could mean that we literally pay -$0- in Federal taxes but the government pays us (negative tax rate).  We pulled this off during some of our early one-income/maternity no-income years.  Our tax rate hasn't been -0- or negative since our kids were babies.

Unemployment extension:


I did see the latest unemployment extension being thrown around is through Labor day, or when MH's job would most likely come back anyway.

I am not sure if MH will keep looking for work or will have the patience for unemployment red tape.  We will have to run through tax and college financial aid calculators to figure out if we are getting anything net net net (with extra income).  This will be better math once we have a college decision in hand.  Unemployment has already replaced two years of his income, for reference.  We may just be happy with that and done with this red tape mess.  



This is the amount we will probably receive.  I've never seen any AGI cutoff discussed that would affect us. Our AGI was same 2019 and 2020 (based on current tax law) and so it doesn't matter which year they pull to base this stimulus off of.  Potential new tax law just lowers our AGI even further for 2020 (which wouldn't change anything).

I actually was holding off tax filing because technically MM(17) was not eligible for the last two stimulus amounts.  It sounds like he will be this round.  I wasn't going to volunteer that he has turned 17 last year, in case he wasn't eligible for this round either.  <---This is the reason we haven't filed our tax return yet.

Phew! Thank goodness we held off.  Now, I am going to wait for unemployment taxes to sort out.  I don't want to have to amend a tax return.

I do hope they can figure this out before April 15th.  (I mean, between finalizing the bill, and getting everything programmed with tax software and IRS.  It takes time to implement tax law changes).  I don't want to go on extension, and it would be nice to know how much we could put into Traditional IRAs before the April 15th deadline.  🙄  (Depends on our AGI).

Edited to add:  This was written before I read we could get some child tax credit for MM and not pay it back, if we do go on extension.  I guess extension it is.

Total unexpected monies:  $9,050

I guess that breaks down into $5,600 expected soon and $4,700 at the end of 2021.  Minus some advanced tax credits we may have to pay back in 2022. I can't adjust my withholding to pay negative tax (or even $0 tax), so I don't have any other way to advance these monies into 2021.  But I guess it works out nicely that the government wants to advance these tax credits, July through December of this year.

If MM goes the public school route (and lives in the dorms) then that is 1000% what I am going to do with this $9,050 basically falling from the sky.   We needed to roughly come up with $10K per year.  We are going to probably pay most of the dorm costs with his college fund and it sounds like the bajillion dollars in groceries we spend (for that kid) will equate to dorm food costs.  That leaves about $5,000 that I think is mostly hyper inflated expenses (that we would be more frugal about), things MM(17) covers already (like the cost of his car), and things we expect him to pay for (books, personal expenses).  <---- He also has very generous grandparents willing to help him fill up this $5,000 bucket.  

This is really rough, but is where our heads are at with public colleges:  We will get -0- financial aid**.  I never expected any financial aid for public in-state colleges, but it's official that the financial aid reward is: $0.  (I do not seriously consider student loans as a financial aid reward).

**We are technically eligible for some automatic State grants, which sound like they may be $2k per year (for public college).  Those will take forever to sort out, so I don't know.  We are putting this in the 'not counting our eggs, but will take more money falling from the sky' category.  I expect more details in October, if he chooses a public school.

No one in our family has ever lived in a dorm (and did not go away to college, for the most part).  Though MH and I both chose not to spend our 'college money' on college, and felt we needed that more for post college housing in the SF Bay Area.  We have kept that same mindset and never really expected to use this money for college.  It's extra complicated because MM's college money is gifted from grandparents.  Too many strings and weirdness, which is also some of why I just ignore it.  So... we discussed recently and agreed that pretty much his college fund would be spent on dorm costs.  If MM is going to live in the dorms, we won't be saving this chunk of change for him to use after college.  It will be up to him.  (We won't pay it forward, if he chooses a significantly more expensive college route).

I had a lightbulb moment.  I have to back up first though.  I've gotten a few well meaning comments (over the years, in this blog) that we need to be prepared to pay for college before college starts.  ??? (& to clarify, I mean like having to pay a semester ahead of make a down payment.  Though honestly, all I see is installment payment options, anyway. We are more "pre-pay as much as we can" personalities.  I think we'd pre-pay the semester rather than deal with the hassle of more frequent payments.  But I am also hyper aware that is not normal whatsoever).  Look, I entirely put myself through college.  I know how college works.  We also have never borrowed for anything (but our home).  You don't do that just flying by the seat of your pants.  I think people are confused.  We have never tied up a penny of our money 'specifically for college.'  This doesn't mean we have no money, no plan.   MM(17) can go to school pretty much anywhere he wants to go to school, and we intend to pay cash.

Hence my lightbulb moment.  As I think through how much these windfalls mean we pretty much will be spending $0 or our own income/savings this year.  It's... 1 year down and only 3 to go!?  It's kind of blowing my mind.

I just keep thinking, "6 more years..." and so it's kind of nice to realize that it may just be "5 more years..."  College is our last big mountain before financial independence.