For those with high HHI ($500K), tax saving strategies

[Anonymous]

Anonymous wrote:

Anonymous wrote:Talk about first world problems lol my 30% tax rate is twice the median household income in the US whatever can I do about it?

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"

You acknowledge that for years you benefited from government programs. And now you don't want to pay into them?

[Anonymous]

Anonymous wrote: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.

To be clear, the people making the very least not only pay the least amount of tax, but also the least percentage of their income in tax. While that might frustrate some, consider that there is an economy of scale to living: it takes a certain amount just to live; income beyond that is for upgrades, savings, and additional wishes. The poor have no savings because everything goes to survival. Any government programs that aid them should be seen as our subsidy for the below-living wage and benefits that employers pay them. Essentially, other tax payers are not only subsidizing the poor, but their employers too.

[Anonymous]

All I can say is people like OP are what’s wrong with this country.

[Anonymous]

No suggestions, OP, just sympathy. Our CPA told us the same thing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So let me get this straight. You asked a CPA. You didn't like the correct answer s/he gave you. And so you thought you'd crowd source this?

Maybe count your blessings to be doing so well that you can contribute that level of taxation and be glad you don't live in other places of the world where taxes are higher (because the USA is basically the world's tax haven).

The short answers is the same your CPA gave you. You're salaried employees. Short of increasing exclusions like 401K contributions, there really are no magic tricks here. And thank God for that. Pay your fair share, damnit.

Why is reducing someone's tax burden a bad thing all of a sudden?

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)

Agreed. I’m tired of the assumption that government is the most efficient and benevolent spender of our money. Don’t get me started on state and local taxes. Always going up and so much grift.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So let me get this straight. You asked a CPA. You didn't like the correct answer s/he gave you. And so you thought you'd crowd source this?

Maybe count your blessings to be doing so well that you can contribute that level of taxation and be glad you don't live in other places of the world where taxes are higher (because the USA is basically the world's tax haven).

The short answers is the same your CPA gave you. You're salaried employees. Short of increasing exclusions like 401K contributions, there really are no magic tricks here. And thank God for that. Pay your fair share, damnit.

Why is reducing someone's tax burden a bad thing all of a sudden?

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)

Agreed. I’m tired of the assumption that government is the most efficient and benevolent spender of our money. Don’t get me started on state and local taxes. Always going up and so much grift.

Interest on the debt, defense, social security, and Medicare makeup the overwhelming majority of spending. Unless you think that money is poorly spent, you don’t have much of a point. Income and food support for poor people is 6% of the budget. Medicaid is another 10%. Compare that 16% to the 50% of Americans who have no savings and live literally paycheck to paycheck and it’s clear that the poor are not draining the bank.

In the last 40 years, the overwhelming winners have been the upwardly mobile and wealthy, as they have been the great beneficiaries of repeated tax cuts and equity gains. The wealth divide is growing for a reason, and it isn’t because the well-off are paying too much in taxes. Instead of moaning each year about taxes paid, the wealthy should be shouting from the rooftops about how much money they made.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So let me get this straight. You asked a CPA. You didn't like the correct answer s/he gave you. And so you thought you'd crowd source this?

Maybe count your blessings to be doing so well that you can contribute that level of taxation and be glad you don't live in other places of the world where taxes are higher (because the USA is basically the world's tax haven).

The short answers is the same your CPA gave you. You're salaried employees. Short of increasing exclusions like 401K contributions, there really are no magic tricks here. And thank God for that. Pay your fair share, damnit.

Why is reducing someone's tax burden a bad thing all of a sudden?

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)

Agreed. I’m tired of the assumption that government is the most efficient and benevolent spender of our money. Don’t get me started on state and local taxes. Always going up and so much grift.

Interest on the debt, defense, social security, and Medicare makeup the overwhelming majority of spending. Unless you think that money is poorly spent, you don’t have much of a point. Income and food support for poor people is 6% of the budget. Medicaid is another 10%. Compare that 16% to the 50% of Americans who have no savings and live literally paycheck to paycheck and it’s clear that the poor are not draining the bank.

In the last 40 years, the overwhelming winners have been the upwardly mobile and wealthy, as they have been the great beneficiaries of repeated tax cuts and equity gains. The wealth divide is growing for a reason, and it isn’t because the well-off are paying too much in taxes. Instead of moaning each year about taxes paid, the wealthy should be shouting from the rooftops about how much money they made.

I am aware of the spending pie. You do realize that interest on the debt didn’t just magically appear as a line item? That we have to have debt to have massive interest payments? And the debt was cause by overspending?

Yes the defense budget is extremely high.

And USG spending skyrocketed during COVID and we never course corrected on spending after that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So let me get this straight. You asked a CPA. You didn't like the correct answer s/he gave you. And so you thought you'd crowd source this?

Maybe count your blessings to be doing so well that you can contribute that level of taxation and be glad you don't live in other places of the world where taxes are higher (because the USA is basically the world's tax haven).

The short answers is the same your CPA gave you. You're salaried employees. Short of increasing exclusions like 401K contributions, there really are no magic tricks here. And thank God for that. Pay your fair share, damnit.

Why is reducing someone's tax burden a bad thing all of a sudden?

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)

Agreed. I’m tired of the assumption that government is the most efficient and benevolent spender of our money. Don’t get me started on state and local taxes. Always going up and so much grift.

Interest on the debt, defense, social security, and Medicare makeup the overwhelming majority of spending. Unless you think that money is poorly spent, you don’t have much of a point. Income and food support for poor people is 6% of the budget. Medicaid is another 10%. Compare that 16% to the 50% of Americans who have no savings and live literally paycheck to paycheck and it’s clear that the poor are not draining the bank.

In the last 40 years, the overwhelming winners have been the upwardly mobile and wealthy, as they have been the great beneficiaries of repeated tax cuts and equity gains. The wealth divide is growing for a reason, and it isn’t because the well-off are paying too much in taxes. Instead of moaning each year about taxes paid, the wealthy should be shouting from the rooftops about how much money they made.

I am aware of the spending pie. You do realize that interest on the debt didn’t just magically appear as a line item? That we have to have debt to have massive interest payments? And the debt was cause by overspending?

Yes the defense budget is extremely high.

And USG spending skyrocketed during COVID and we never course corrected on spending after that.

And you do realize that much, if not all, of that debt reflects massive and repeated tax cuts for 40 years? Yes, the debt reflects overspending RELATIVE TO REVENUE. It’s been one party’s goal to eviserate basic safety net programs by claiming they’re too expensive by using the accumulated debt as “proof.” That same party doesn’t want to admit that even with reduced tax rates, small businesses and the wealthy OVERWHELMINGLY underpay their taxes. In fact, the IRS claims that those groups underpay taxes by $500 billion/year. Why do you think the same party has repeatedly undercut robust tax enforcement and most recently negated the hiring of 80k IRS agents? Why has the Administration massively cut enforcement at the SEC and every other financial watchdog? Why has the President mostly pardoned people who have committed financial crimes? As for COVID money, a third went directly to individuals. Another third to businesses and the rest to state governments and healthcare organizations. Yet, 70% of the COVID fraud occurred in businesses — that’s a fraud rate twice their benefit share. So, who here are the greedy and undeserving.

[Anonymous]

The budget was essentially balanced in 2000 with expectations for future surpluses. What happened next? Tax cuts and an unfunded $4 trillion war that led to the rise of ISIS followed by the mortgage financial crisis and the Great Recession. Are you seeing a pattern as to the Party that’s responsible for the debt? The debt is intentional to make Americans believe that government is mostly useless and bloated and that the growing wealth divide solely reflects merit.

[Anonymous]

Real estate investments in an LLC and I don’t get involved but my husband does something with tax lost harvesting and our stocks. And of course the basics, HSA, and for the future we both had a megs back door roth and between the two of us put 60K/yr in that and then of course max out 401k

[Anonymous]

My taxes did not go down under Trump. The changes to SALT and mortgage deductions plus the change in rules for inherited IRAs cost me more in taxes at a time when Trump is using my tax dollars to enrich himself and his friends. Plus the billionaires pay no taxes. I pay my taxes but I’m not excited about it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Start a business? All the magic tricks are for entrepreneurs and those in much higher brackets

This. Our HHI is around $800-1M and $100K or so is 1099. Even that “little” (relatively) amount helps a lot with taxes. Can one of you start consulting on the side, find a paid board seat with a smaller company, etc? Anything you can bring in via 1099 would help open up more possibilities.

What? Explain this. Being a 1099 employee is generally the opposite of "helps a lot with taxes."

Bump. I have a 1099 side gig. How does that help other than being able to count legitimate expenses against it?

Because most people funnel non legit expenses like meals out, "office expenses" etc through it.

That's the secret. This is how I operate. I started a side consulting business for this purpose. During my vacation in London, I met a possible client. I considered that trip a business expense. I turn most of my activities into business expenses. The business isn’t profitable yet.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Start a business? All the magic tricks are for entrepreneurs and those in much higher brackets

This. Our HHI is around $800-1M and $100K or so is 1099. Even that “little” (relatively) amount helps a lot with taxes. Can one of you start consulting on the side, find a paid board seat with a smaller company, etc? Anything you can bring in via 1099 would help open up more possibilities.

What? Explain this. Being a 1099 employee is generally the opposite of "helps a lot with taxes."

Bump. I have a 1099 side gig. How does that help other than being able to count legitimate expenses against it?

Because most people funnel non legit expenses like meals out, "office expenses" etc through it.

That's the secret. This is how I operate. I started a side consulting business for this purpose. During my vacation in London, I met a possible client. I considered that trip a business expense. I turn most of my activities into business expenses. The business isn’t profitable yet.

Just keep impeccable records and receipts in case of audit

[Anonymous]

Anonymous wrote:All I can say is people like OP are what’s wrong with this country.

Inquiring about LEGAL ways to save on taxes are a problem with this country? While the ultra-rich use every last advantage to them and refuse to put money back in for social services? Oay...

[Anonymous]

Anonymous wrote:My taxes did not go down under Trump. The changes to SALT and mortgage deductions plus the change in rules for inherited IRAs cost me more in taxes at a time when Trump is using my tax dollars to enrich himself and his friends. Plus the billionaires pay no taxes. I pay my taxes but I’m not excited about it.

Ours went up too, while all the Social Security and tip, etc. tax cuts and the handouts Trump brags about go to his LMC/LC MAGA supporters. We get democracy dead and pay more taxes. Not even a tax break on Social Security.