What Percentage of Your Gross Household Income is Spent on Wine?

[Victor_Hong]

For personal taxes, income should be recognized when paid or when accrued. Unrealized capital gains are neither, and hence not income.

Signed,
Not a Tax Lawyer (or retired one), Just a Dumb Noodle-Slinger

[Howard_Cooper]

I am retired. What is my annual income?

it should be what your tax return says it is.

My point is that what is on my tax return does not necessarily have any relationship to what I can spend. True for most retire people and also for many people who are still working. Thus, the answers to this poll do not really reflect much of anything. For example, person has $100,000 of salary and spends $20,000 on wine. Sounds like he is extravagant. But, he or she also owns $20,000,000 of stock that pays no dividends, real property where income is offset by deductions, amounts in IRAs or 401(k)s, etc. still extravagant?

The question asked about gross household income, not taxable income. Any decent tax lawyer or person with any kind of financial background would know they are not the same thing or even close.

[Victor_Hong]

I was just thinking gross household income. And Howard, if you’re retired I’m guessing you still have some income??

I certainly hope so but it depends on what year it is. I have stocks, which go up and down every day. I get dividends from the stocks. I get interest from bonds. Do I count as income increases in value of stock or bonds or just when increases and decreases are fixed - i.e., when I sell the investment. At this time last year, I would have thought I would have no net income for the year. Fortunately, it did not turn out that way. I know my net worth. I have no idea what my income will be this year. I have no idea what my income was last year. My tax return does not tell me that as a good bit of my investible net worth is in retirement accounts and all that shows up on a tax return from that is withdrawals from retirement accounts, not income or gain in retirement accounts. My spending is based on my needs and desires, not to exceed a percentage of investible net worth. Last year spending went down as we did not travel or go to restaurants.

Many people are probably underestimating their net income in answering the question as they likely are only counting income from salary, not from investments (which they are trying to accumulate for retirement, college for kids, etc.). So, if we are only counting salary, bonuses, etc., my spending on wine is an infinite percentage of my net income because I have no salary or bonuses, etc.

Unrealized capital gains or losses are generally not taxable as personal gains or deductible as personal losses, respectively.

Let me send you my bill.

[Howard_Cooper]

I was just thinking gross household income. And Howard, if you’re retired I’m guessing you still have some income??

I certainly hope so but it depends on what year it is. I have stocks, which go up and down every day. I get dividends from the stocks. I get interest from bonds. Do I count as income increases in value of stock or bonds or just when increases and decreases are fixed - i.e., when I sell the investment. At this time last year, I would have thought I would have no net income for the year. Fortunately, it did not turn out that way. I know my net worth. I have no idea what my income will be this year. I have no idea what my income was last year. My tax return does not tell me that as a good bit of my investible net worth is in retirement accounts and all that shows up on a tax return from that is withdrawals from retirement accounts, not income or gain in retirement accounts. My spending is based on my needs and desires, not to exceed a percentage of investible net worth. Last year spending went down as we did not travel or go to restaurants.

Many people are probably underestimating their net income in answering the question as they likely are only counting income from salary, not from investments (which they are trying to accumulate for retirement, college for kids, etc.). So, if we are only counting salary, bonuses, etc., my spending on wine is an infinite percentage of my net income because I have no salary or bonuses, etc.

Unrealized capital gains or losses are generally not taxable as personal income or deductible as personal losses, respectively.

You really are a moron. Of course that is true but my point is that they do impact someone’s ability to buy wine. Thus, asking about wine purchases as a percentage of taxable income (or even gross income or AGI) gives nonsense as an answer. But, I guess you and Maureen did not understand this or the difference between gross household income and taxable income.

[Max_S1]

If you don’t have a budget you’ll never hit it! That said, it’s great getting all my BD shipments recently. It’s like the thrill of the purchase all over again opening up boxes of things I forgot I bought.

Our family is in the lowest bracket listed. Two kids, a mortgage, daycare, and a classic car hobby eat into my ability to rationalize anything more.

TW

It’s funny, I think our budget is very reasonable right now, buy I’ve agreed to cut it in half after next year when we expect to start having kids. I thought wine was expensive…

[Victor_Hong]

I certainly hope so but it depends on what year it is. I have stocks, which go up and down every day. I get dividends from the stocks. I get interest from bonds. Do I count as income increases in value of stock or bonds or just when increases and decreases are fixed - i.e., when I sell the investment. At this time last year, I would have thought I would have no net income for the year. Fortunately, it did not turn out that way. I know my net worth. I have no idea what my income will be this year. I have no idea what my income was last year. My tax return does not tell me that as a good bit of my investible net worth is in retirement accounts and all that shows up on a tax return from that is withdrawals from retirement accounts, not income or gain in retirement accounts. My spending is based on my needs and desires, not to exceed a percentage of investible net worth. Last year spending went down as we did not travel or go to restaurants.

Many people are probably underestimating their net income in answering the question as they likely are only counting income from salary, not from investments (which they are trying to accumulate for retirement, college for kids, etc.). So, if we are only counting salary, bonuses, etc., my spending on wine is an infinite percentage of my net income because I have no salary or bonuses, etc.

Unrealized capital gains or losses are generally not taxable as personal income or deductible as personal losses, respectively.

You really are a moron. Of course that is true but my point is that they do impact someone’s ability to buy wine. Thus, asking about wine purchases as a percentage of taxable income (or even gross income or AGI) gives nonsense as an answer. But, I guess you and Maureen did not understand this.

Anybody with a brain knows that I am a moron…which explains why I think that I am a maroon.
Maureen and I answered the written question.

[Jmigliano]

Or percent of your discretionary budget. I usually give myself a set number and try to stick to it. Last year I was about 2-2.5x over that. But much less eating out and no travel last year so it evens out.

This year I’m at like 75% already of my budget.

[Victor_Hong]

Transparency: I am in the lowest-spending response category. Bear in mind my penchant for cheap wines, in the $20-per-bottle zone.

[crickey]

I knew Howard was an attorney, but I didn’t realize he was a tax attorney. I guess that explains why he’s raising such a fuss about the question of what constitutes “income,” as that question was the basis for his professional life.

Taxable income isn’t quite the right answer, since people can have plenty of spendable cash coming in and will nonetheless (lawfully and properly) have no taxable income. I know retired people who lost so much in 2008 and 2009 that they lived tax-free for years afterwards on the loss carryforwards. Even without the loss carryforwards, the taxable income from the liquidation of the hypothetical $20 million asset base in Howard’s example may well be zero, or at least much less than the cash value associated with the liquidation. Pensions, too, are taxed at less than the cash flow.

I think the original question was aimed essentially at disposable cash flow and ignoring the taxation of such cash flow.

[Victor_Hong]

I knew Howard was an attorney, but I didn’t realize he was a tax attorney. I guess that explains why he’s raising such a fuss about the question of what constitutes “income,” as that question was the basis for his professional life.

Taxable income isn’t quite the right answer, since people can have plenty of spendable cash coming in and will nonetheless (lawfully and properly) have no taxable income. I know retired people who lost so much in 2008 and 2009 that they lived tax-free for years afterwards on the loss carryforwards. Even without the loss carryforwards, the taxable income from the liquidation of the hypothetical $20 million asset base in Howard’s example may well be zero, or at least much less than the cash value associated with the liquidation. Pensions, too, are taxed at less than the cash flow.

I think the original question was aimed essentially at disposable cash flow and ignoring the taxation of such cash flow.

It amazing how obsessed some people are with how much money people on this board have or don’t have.


Oh, wait, that was an echo.

[maureen_nelson]

I certainly hope so but it depends on what year it is. I have stocks, which go up and down every day. I get dividends from the stocks. I get interest from bonds. Do I count as income increases in value of stock or bonds or just when increases and decreases are fixed - i.e., when I sell the investment. At this time last year, I would have thought I would have no net income for the year. Fortunately, it did not turn out that way. I know my net worth. I have no idea what my income will be this year. I have no idea what my income was last year. My tax return does not tell me that as a good bit of my investible net worth is in retirement accounts and all that shows up on a tax return from that is withdrawals from retirement accounts, not income or gain in retirement accounts. My spending is based on my needs and desires, not to exceed a percentage of investible net worth. Last year spending went down as we did not travel or go to restaurants.

Many people are probably underestimating their net income in answering the question as they likely are only counting income from salary, not from investments (which they are trying to accumulate for retirement, college for kids, etc.). So, if we are only counting salary, bonuses, etc., my spending on wine is an infinite percentage of my net income because I have no salary or bonuses, etc.

Unrealized capital gains or losses are generally not taxable as personal income or deductible as personal losses, respectively.

You really are a moron. Of course that is true but my point is that they do impact someone’s ability to buy wine. Thus, asking about wine purchases as a percentage of taxable income (or even gross income or AGI) gives nonsense as an answer. But, I guess you and Maureen did not understand this or the difference between gross household income and taxable income.

I understood the OP’s question. I also understood that, per usual, you wanted to make a fuss. And brag about your “income.”

[Zachary_Mancini]

If you don’t have a budget you’ll never hit it! That said, it’s great getting all my BD shipments recently. It’s like the thrill of the purchase all over again opening up boxes of things I forgot I bought.

Our family is in the lowest bracket listed. Two kids, a mortgage, daycare, and a classic car hobby eat into my ability to rationalize anything more.

TW

It’s funny, I think our budget is very reasonable right now, buy I’ve agreed to cut it in half after next year when we expect to start having kids. I thought wine was expensive…

Ya I love kids but they are money suckers. If I ever had any, my wine buying would be reduced very significantly.

[Victor_Hong]

Unrealized capital gains or losses are generally not taxable as personal income or deductible as personal losses, respectively.

You really are a moron. Of course that is true but my point is that they do impact someone’s ability to buy wine. Thus, asking about wine purchases as a percentage of taxable income (or even gross income or AGI) gives nonsense as an answer. But, I guess you and Maureen did not understand this or the difference between gross household income and taxable income.

I understood the OP’s question. I also understood that, per usual, you wanted to make a fuss. And brag about your “income.”

Unrealized capital gains are evidence of superiority. Tell everybody, except in a tax audit.

[Adam_Noble]

The way to avoid cutting purchases when kids arrive is to ensure your income grows accordingly. Luck is a factor there.

[alan_weinberg]

I am retired. What is my annual income?

it should be what your tax return says it is.

My point is that what is on my tax return does not necessarily have any relationship to what I can spend. True for most retire people and also for many people who are still working. Thus, the answers to this poll do not really reflect much of anything. For example, person has $100,000 of salary and spends $20,000 on wine. Sounds like he is extravagant. But, he or she also owns $20,000,000 of stock that pays no dividends, real property where income is offset by deductions, amounts in IRAs or 401(k)s, etc. still extravagant?

The question asked about gross household income, not taxable income. Any decent tax lawyer or person with any kind of financial background would know they are not the same thing or even close.

I defer to your expertise. I read the question as how much do you spend out of what you make yearly. Didn’t consider assets such as property or stock as part of the equation. Regardless, the answer is “too much.”

[Zachary_Mancini]

The way to avoid cutting purchases when kids arrive is to ensure your income grows accordingly. Luck is a factor there.

True. But given a typical raise of 3% year over year. Unless you get a huge promotion or bump in pay much won’t change imo.

[Bdklein]

Less than 1% for us, but not an option in the poll.
We do ok, and don’t buy a lot nor expensive wines.

[Victor_Hong]

Less than 1% for us, but not an option in the poll.
We do ok, and don’t buy a lot nor expensive wines.

You must be my better twin.

[AD_Northup]

I took a guess but didn’t go to CT and so the actual math. The real tough part is 2020 was a large increase in purchasing, but I expect that money to get reallocated back to travel/dining out/etc. at some point, so maybe should have answered with a target instead.

[David_Bu3ker]

I took a guess but didn’t go to CT and so the actual math. The real tough part is 2020 was a large increase in purchasing, but I expect that money to get reallocated back to travel/dining out/etc. at some point, so maybe should have answered with a target instead.

Similar thing here. 2020, and so far 2021, went way above normal levels. I was using available funds, that would have gone for other discretionary activities, to purchase additional wines. A lot of that was related to the pandemic support sale that was held here, and wanting to help out wineries that were hit by COVID destroying their restaurant sales, and then later doing what I could for those affected by fire. We could afford it, so it made sense to do it. Wine keeps!