|
|
#11
04-05-2007, 02:56 AM
|
|||
|
|||
Re: High Yield Savings accounts revisited
[ QUOTE ]
Tax free money funds are a good deal now for residents of NY, California, and especially NYC, provided that you are in a high marginal bracket and are AMT-exempt. We're currently getting a pre-tax yield of 6.7%, which is as high a risk-free yield you can find anywhere. [/ QUOTE ] Specifics? I can't find tax free funds getting much over 3% with a little googling around. I'm in CA if it helps. eastbay 
|
|
#12
04-05-2007, 08:50 AM
|
|||
|
|||
|
Re: High Yield Savings accounts revisited
[ QUOTE ]
[ QUOTE ] Tax free money funds are a good deal now for residents of NY, California, and especially NYC, provided that you are in a high marginal bracket and are AMT-exempt. We're currently getting a pre-tax yield of 6.7%, which is as high a risk-free yield you can find anywhere. [/ QUOTE ] Specifics? I can't find tax free funds getting much over 3% with a little googling around. I'm in CA if it helps. eastbay [/ QUOTE ] The Vanguard NY MMY, VYFXX, (which is not AMT-efficient) has been paying a 7-day yield of 3.55% for quite a while. Fidelity has a NY AMT-efficient fund that is paying a little less 3.34%, FSNXX. Start with those providers. Then run a morningstar screen for a California provider. You'll probably find Fidelity, Vanguard, TRowe, or TIAACREF will be the best. This is a great option for high tax individuals, just be careful about AMT recapture.
|
|
#14
04-05-2007, 11:21 AM
|
|||
|
|||
|
Re: High Yield Savings accounts revisited
You are responsible for reporting it as income on your tax return.
BTW, the IRS <u>can</u> ask the financial institution to withhold 28% as "backup withholding" if they find that you failed to report it in the past. Just like withholding from your paycheck, that does not represent your ultimate tax liability. Bottom line: you report it as interest income and it impacts your overall tax liability.
|
|
#15
04-05-2007, 11:21 AM
|
|||
|
|||
|
Re: High Yield Savings accounts revisited
They pay and file a 1099-INT with the IRS. If you dont report, IRS knows.
|
|
#16
04-05-2007, 10:52 PM
|
|||
|
|||
|
Re: High Yield Savings accounts revisited
[ QUOTE ]
Newb question - is tax on savings interest witheld by the bank or is it up to you to pay it? [/ QUOTE ] What DIE said. Just log onto your e-savings account and look to see how much interest you earned in '06. Fill out Schedule 1 in your tax book. To answer your question, the bank does not take taxes out. You better report it.
|
|
#17
04-05-2007, 11:03 PM
|
|||
|
|||
|
Re: High Yield Savings accounts revisited
[ QUOTE ]
[ QUOTE ] [ QUOTE ] Tax free money funds are a good deal now for residents of NY, California, and especially NYC, provided that you are in a high marginal bracket and are AMT-exempt. We're currently getting a pre-tax yield of 6.7%, which is as high a risk-free yield you can find anywhere. [/ QUOTE ] Specifics? I can't find tax free funds getting much over 3% with a little googling around. I'm in CA if it helps. eastbay [/ QUOTE ] The Vanguard NY MMY, VYFXX, (which is not AMT-efficient) has been paying a 7-day yield of 3.55% for quite a while. Fidelity has a NY AMT-efficient fund that is paying a little less 3.34%, FSNXX. Start with those providers. Then run a morningstar screen for a California provider. You'll probably find Fidelity, Vanguard, TRowe, or TIAACREF will be the best. This is a great option for high tax individuals, just be careful about AMT recapture. [/ QUOTE ] Ok, there's a hole in my knowledge here, then. Isn't the 3.x% "7-day yield" an annualized number? And if so, where are you getting the 6.7% figure you quoted above? eastbay
|
|
#18
04-05-2007, 11:15 PM
|
|||
|
|||
|
Re: High Yield Savings accounts revisited
Anyone have any negative things to say about Amtrust Bank? Is there a reason NOT to get the highest rate out there right now??
|
|
#19
04-06-2007, 12:17 AM
|
|||
|
|||
|
Re: High Yield Savings accounts revisited
[ QUOTE ]
[ QUOTE ] [ QUOTE ] [ QUOTE ] Tax free money funds are a good deal now for residents of NY, California, and especially NYC, provided that you are in a high marginal bracket and are AMT-exempt. We're currently getting a pre-tax yield of 6.7%, which is as high a risk-free yield you can find anywhere. [/ QUOTE ] Specifics? I can't find tax free funds getting much over 3% with a little googling around. I'm in CA if it helps. eastbay [/ QUOTE ] The Vanguard NY MMY, VYFXX, (which is not AMT-efficient) has been paying a 7-day yield of 3.55% for quite a while. Fidelity has a NY AMT-efficient fund that is paying a little less 3.34%, FSNXX. Start with those providers. Then run a morningstar screen for a California provider. You'll probably find Fidelity, Vanguard, TRowe, or TIAACREF will be the best. This is a great option for high tax individuals, just be careful about AMT recapture. [/ QUOTE ] Ok, there's a hole in my knowledge here, then. Isn't the 3.x% "7-day yield" an annualized number? And if so, where are you getting the 6.7% figure you quoted above? eastbay [/ QUOTE ] I believe his number was a tax- equivalent number. Vanguard California Tax-Exempt Money Market Fund (VCTXX) has a compound yield of 3.54%. But the earnings are tax free. Assuming a 33% federal rate and a 9.3% CA tax rate you have an effective tax rate of 42.3%. You would need 3.54/(1-.423)or 6.13% in a taxable fund to achieve the same after tax earnings.
|
|
#20
04-06-2007, 01:19 AM
|
|||
|
|||
|
Re: High Yield Savings accounts revisited
[ QUOTE ]
Countrywide offers 5.4% on large balances. [/ QUOTE ] Be sure to read the fine print in the offers that require a large balance. Sometimes only the amount over the minimum will receive the special rate. If this is the case, you could probably earn more elsewhere if you are not putting in significantly more than the 60k. I do not know if Countrywide operates this way, my advice is just a general warning. Some banks will pay the higher rate on the entire balance as long as you have the required amount in the account.
|
 |
|
|
Linear Mode
