Looking for advice on optimizing my taxes.
I am 58 and semi-retired. I earn $12K/yr in consulting income, which I can receive just before or just after January 1, and usually take just after. I also have about $5K in interest income and $5K in qualified dividends.
I have three pots of money of about equal sizes. One is non-retirement, of which a significant amount is in appreciated securities (I did a lot of tax-loss harvesting in mid-2009). The second is a Keogh and 401(k) of pre-tax money, and the third is a Roth IRA.
My financial goal, which I may not achieve, is to live on the non-retirement money until I am 66 1/2 and eligible for social security. My tax goal of course is to minimize my taxes over the long term.
I help pay some of my girlfriend's bills, which I usually do by depositing some appreciated securities in her account and selling them. I know I should file a gift tax return if that exceeds $14K/yr. I will not have a taxable estate. When she has medical bills I pay those directly since I know such payments are not subject to gift tax. (She's needed some dental work lately.)
Each year my goal is to fill up my 10% and 15% income tax brackets, either with Roth conversions or realizing capital gains. Currently the latter are taxed at zero. I contribute a lot of the $12K consulting income to my Keogh (which is structured as a self-employed 401(k)).
I do a pro-forma tax projection and try to optimize the numbers so that I'm hitting my target. However I don't typically know all the final numbers until very close to December 31. For reasons not worth explaining, I cannot do a Roth conversion after about December 20. I've also had it suggested to me that given a choice, I should realize capital gains now rather than do Roth conversions, because the rules on Roth conversions are unlikely to change but the zero rate on capital gains might not last forever.
So I have two basic questions:
1) In general, do I have a good plan? Am I missing anything? 2) If I really want to optimize, is there something else I should do? The problem is that most things are locked in by December 31 and I won't usually be able to do a perfect projection. One option that occurs to me is to contribute a little less than I plan to the Keogh, and then possibly top it off after January 1. I know that in theory I'm supposed to have a written agreement with myself about how much to contribute and I think I'm supposed to contribute it no later than January 15 of the year after it's earned, but I won't feel like the worst criminal since Al Capone if I backdate a letter to myself on the salary deferrals.As a side matter, I am currently insured by COBRA, but there will come a future time when that will end and I'll probably be on Obamacare. Coincidentally the threshold for subsidies is about the same as the threshold for the 15% bracket, so when that day comes (not until late 2018) I will want to be even more careful to end up $1 under the cutoff than $1 over.
Comments and advice most appreciated.