8 Years of Early Retirement Tax Optimization

2020 was our 8th full year of this thing we do. It’s been an incredible ride – we’ve traveled, adventured, and procreated, with the best yet to come.

We’ve also done a fair amount of tax optimization, paying little tax each year while taking steps to minimize future taxes.

Do these optimization efforts actually work? Let’s find out.


Go Curry Cracker 2020 Taxes

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.

Let’s explore, shall we?


Maximizing the Child Tax Credit (even without earned income)

So you’ve done the impossible – retired with young children (or retired and then had children.)

Congratulations, you are eligible for a generous $2,000 Child Tax Credit (per kid.)

But if you no longer have earned income and/or already have a low/zero tax burden, you could miss out on thousands of dollars.

This is how to avoid that. (This is especially important now that we have doubled our potential for Child Tax Credits.)


All the President’s Taxmen

Follow the money. Always follow the money. – Deep Throat

Recently the New York Times published an analysis of 20 years’ of President Trump’s tax returns, concluding that he paid no taxes in 10 of the last 15 years and just $750/year during the first 2 years of his presidency.

Is something dubious going on? Or is this quality advertising for his accountants?

I’m tax-curious… let’s follow the money.