For those with high HHI ($500K), tax saving strategies
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Anonymous
Ditch the attitude!! It's frustrating to pay so much of your income in taxes. Those making over $178K pay 75-80% of all income taxes at the federal level. So while many of us are happy to do our part, it's frustrating to see so much of our hard earned income go to taxes ALL the time. We see no real breaks, and are not billionaires |
Anonymous
It isn't! Most of us in the making $178K and up are paying the majority of taxes in this country. Someone making $500K is paying even more. But yet we don't use the roads or services any more than the person not paying any taxes or paying barely anything. SO yes, we are happy to contribute, but the solution to a budget problem is not to tax us more....it's to budget better. Smart people work within the law to minimize their taxes. And for W2 workers it is challenging. And yes, when I have paid more in Federal taxes than most will earn in a lifetime, I think I've paid my fair share and would rather have my money to direct to charities that actually fully utilize the money (and to my own family and friends) |
Anonymous
Umm....most of us earning $400K+ are paying way more than "our fair share". As a simple example, we pay Medicare taxes on ALL earnings, yet when we hit 65, it will cost us well over $1K per each of us to have medicare, a gap plan and a prescription plan. We don't get any reduced rates, and in reality it will be much more than our healthcare was while we were working. So yea, the fact that we basically are paying for 200+ people to have medicare while we still pay max rates for a crappy medical plan in our retirement, yeah we have the right to complain. |
Anonymous
Well most of us got to that place by choices we made. I grew up poor, neither parent went to college, I've had free lunch several years in school, and we were on/off from food stamps whenever parents were laid off. Yet I managed to go to college, pay off my college debt and do well in life. Nothing was handed to me, I had to work hard for it all. Yes, I recognize there are others who have it "worse" but my life wasn't a picnic. I just knew working hard and an education was key to a better life. Then I chose to live within my means and save save save and take career risks to advance. The fact that those making $178K+ pay approximately 80% of the taxes in the US means that why yes we are in fact providing for the vast majority of society. It's our taxes that make roads, infrastructure, schools, and everything else happen. We more than pay our "fair share" |
Anonymous
Bump. I have a 1099 side gig. How does that help other than being able to count legitimate expenses against it? |
Anonymous
Run 1099 income through an s-corp. You need a CPA to set it up and help you maintain proper documentation and file taxes for it. This usually only makes sense at $60K+ in 1099 net profit annually. |
Anonymous
No, when you are a W2 employee you don't get a tax benefit. It's also very hard to cash flow positive around here unless you are buying outright and you can't write off the excess losses until you sell. |
Anonymous
Because most people funnel non legit expenses like meals out, "office expenses" etc through it. |
Anonymous
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Anonymous
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There's really not much you can do that's creative as a W2 employee. We make a lot more than 500k, but it's all W2. We each do 72k into 401k, 6k into Roth IRA, 4k into 529, max HSA, max DCFSA. A lot of that money is post tax though and we're just doing the fancy things to save for the future.
Focus on how quickly you're growing your NW not on optimizing taxes (assuming you're doing all the things listed above). |
Anonymous
Rentals are tough. The yield around here is way below 10%. It's above 10% in some places, but the numbers only work if you avoid paying a property management firm. It's not a golden bullet. |
Anonymous
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All the whining about taxes from people making so much is nauseating and uninformed. These people love to trot out the hackneyed statistic that all the people making the most money are paying most of the federal income tax, yet they never stop to consider what they just said — they pay the most tax because they make the most money! More importantly, however, when one considers TOTAL taxation — federal income tax, state income tax, local property tax, sales tax, payroll tax, personal property tax, etc. — people like OP pay similar portions of their income in taxes compared to middle wage earners.
I’ve never understood why people who have benefited so much from the US system/society begrudge paying somewhat more taxes than those who haven’t. Yes, these people use the same streets as the poor person, but they have extracted much more from the society’s overall structure and opportunities. Yes, to some degree that may reflect personal choices, but not completely. |
Anonymous
| I don’t mind paying taxes at a 500k+ HHI, but it really sickens me that billionaires pay significantly less than W2 employees in the 200k-1M range. There should be no billionaires. |
Anonymous
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You can only do a mega backdoor Roth if your employer allows it, right? (I’ve asked mine and they say they don’t allow it).
You will have more flexibility to avoid taxes when you retire. With W2 income there is not that much you can do. |
Anonymous
Right. The billionaires — the truly wealthy of our society — have no sense of noblesse oblige. They seem to think their success has been all them, and increasingly view the masses, even their own employees, with disgust. They have no allegiance to their community or country and happily abandon either or both to seek the lowest tax haven and company of similar types. Self-interest has gone amok with no scintilla of virtue to counterbalance it. |