2020 was an interesting year in many ways including all things taxes… I mean, we paid $0 in income tax (again) on ~$143k income.
This was in part because dividends and blog revenue were lower due to COVID-19, which is a bummer. But it is also because we welcomed another child tax credit into the family, which is nice. Plus, he’s kinda cute.
But that’s not all… for all of you tax aficionados, this year’s tax return offers some good examples of both short and long term tax minimization, including use of the Foreign Earned Income Exclusion, the Child Tax Credit (with phase out), capital gain harvesting, Roth conversions, the Foreign Tax Credit (on International equities), and more.
But after ~7 years of the stock market trending upward and the conscious decision to spend more, in early 2019 we took some money off the table (sold stocks / bought bonds.) When literally everything went to hell due to COVID-19, we sold most of those bonds to buy stock and increase our cash cushion.
Now, this is what our portfolio looks like in 2021.
2020 was our 8th full year of “retirement.” While much of the world seemed a bit more chaotic than usual, we were fortunate to be largely sheltered from any abnormality.
We had a pretty good year – we started with a big ski trip to Japan (Jr’s 1st), traveled a bunch locally, had a baby, and joined a country club. We also upscaled our housing, our taxes, and our domestic staff.
These things were not inexpensive, but even so our spending was no higher than our most profligate travel years (just 3x our 1st year.)