Last April I bought a $10,000 I-bond and put the rest of my idle cash in BRK. It looks like it was about a wash as to which was a better investment. The $10,000 + interest is going into more BRK.
Going forward, I see a good return in a free $8,000 heat pump courtesy of the Inflation Reduction Act. I’ll be managing my Roth conversion this year to come in just under the income limit for the freebie. That’s why it makes sense to limit interest and dividends and delay SS to age 70. It gives you more financial flexibility to take advantage of the many things the tax code has to offer.
I sold 1 I-bond, and plan on selling the rest next year.
For your 3-12 month semi-liquid cash needs, do you just keep the money in a savings account ?
T-notes are paying far more than my credit union, and the interest is exempt from State taxes, so that’s where the intermediate-needed funds go.
There are some programs that give tax credits, and to take advantage of those you need to owe an offsetting tax. So for flexibility, you might want to owe a small amount in taxes.
The heat pump is a tax rebate, but the income cutoffs are based on the Area Median Income, which for urban me is $141,300, and for my country brother $88,400. Maybe 1/3 of households could get a free heat pump. Anyone looking for a job should consider HVAC, as the demand and pay are going up along with the prices. I did see a heat pump designed for DIY installation, and so maybe that’s a possibility.
“If your household income is 80% below your area’s median income, you receive the maximum rebate, covering your new heat pump at 100% up to $8,000. If your household income is 81-150% of your area’s median income, you’ll receive up to 50% of the heat pump’s cost. To look up your area’s median income, use this tool from Fannie Mae. You’re not out of luck if your household income exceeds 150% of your area’s median income. These homeowners receive a 30% tax credit of up to $2,000 on new heat pumps.”
Yeah, and those of us that make a decent income get zero rebate on the heatpumps. Ridiculous. I spent $11K on 3 hyperheat units, we got a 125% increase in electricity rates because of the bs spike in oil prices last year which Eversource is now milking, plus oil was over $5.50 a gallon at the start of last year’s heating season. I got a $450 check for the heatpumps while getting absolutely hosed for $1000+ a month just for keeping my house at 65 no matter what we do, just to exist. Good for you intercst. Broken.
That’s the whole crux of tax planning. You need to set yourself up with a way to not realize the income in a given year.
About 25 years ago I remember an article in one of the business magazines about the BRK annual shareholder’s meeting. The reporter joked, “This is the world’s largest gathering of multi-millionaires living on $30,000/yr.”
From what I understand it’s a point-of-sale refund paid directly to the contractor, not a tax rebate (i.e., you don’t claim the $8,000 on your tax return.) Each state has to write its own rules for verifying income and selecting qualified contractors. At this moment, DIY is not allowed for the $8,000 refund, but is allowed for the $3,000 tax rebate.