400k salary and creep factor we never really have much left

[Anonymous]

Anonymous wrote:

Anonymous wrote:We live a fairly modest lifestyle but with $400k salary and we do reasonable travel (not international or anything, like 4 star domestic trips, half drive half fly, public schools, just paid off cars but before payment was $600 a month, 567k mortgage balance (house worth 1.4 from appreciation), childcare is about $7k a year total, camps/activities for kids add up to several thousand but run of the mill team stuff… What’s the thing that had the biggest impact for everyone on just cutting down on spending? We spend on everything! A lot is charity, at least $15k a year for that and then it seems like endless other expenses and emergency expenses related to kids, pets and home. Advice needed. I would love to be more meaningful with our money and at least have something more to show for it like doing an amazing trip every year.

Where on earth is all your money going? You clearly don't have a modest lifestyle especially given your income. A 1.4 million dollar house is not modest.

They said it was 1.4 from appreciation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Also what’s with all the costs of fast casual now? Now that they added too it’s like $18 for a chicken rice bowl.

And they want to be tipped like they are waitstaff, but in a very passive aggressive way at the POS.

I agree. I actually have had a pickup order (I had to GO AND PICK IT UP) person say to me, pointing to the receipt, "This is where you sign, and this is where you tip me." I honestly forgot whether I bowed to the pressure, but I can tell you that I never went back to that establishment again. I just hate getting takeout for that reason (guess I'm saving money). I am happy to tip wait staff. I don't like being guilted or manipulated - that spoils the whole experience. If staff need a living wage, it's on their employer, and I as the customer can decide whether to pay the higher prices that are passed on to me via the sticker prices of the food.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Also what’s with all the costs of fast casual now? Now that they added too it’s like $18 for a chicken rice bowl.

And they want to be tipped like they are waitstaff, but in a very passive aggressive way at the POS.

I agree. I actually have had a pickup order (I had to GO AND PICK IT UP) person say to me, pointing to the receipt, "This is where you sign, and this is where you tip me." I honestly forgot whether I bowed to the pressure, but I can tell you that I never went back to that establishment again. I just hate getting takeout for that reason (guess I'm saving money). I am happy to tip wait staff. I don't like being guilted or manipulated - that spoils the whole experience. If staff need a living wage, it's on their employer, and I as the customer can decide whether to pay the higher prices that are passed on to me via the sticker prices of the food.

It’s spoils the whole experience of … picking up your food?

[Anonymous]

On one hand, I can see OP's point. We make about $500k/year, and it's not like we have piles of cash laying around at the end of each month.

But on the other, that's because we budget rigorously. We enjoy life and take nice vacations, but also save a ton, and set aside money for fixed or anticipated expenses. For example, WE save about $50k each year for the following year's insurance, fixed house expenses, holiday, camps, and health care expenses, and another chunk for travel. This is not living paycheck to paycheck, even though each paycheck is allocated.

OP, you're being a little ridiculous.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Also what’s with all the costs of fast casual now? Now that they added too it’s like $18 for a chicken rice bowl.

And they want to be tipped like they are waitstaff, but in a very passive aggressive way at the POS.

I agree. I actually have had a pickup order (I had to GO AND PICK IT UP) person say to me, pointing to the receipt, "This is where you sign, and this is where you tip me." I honestly forgot whether I bowed to the pressure, but I can tell you that I never went back to that establishment again. I just hate getting takeout for that reason (guess I'm saving money). I am happy to tip wait staff. I don't like being guilted or manipulated - that spoils the whole experience. If staff need a living wage, it's on their employer, and I as the customer can decide whether to pay the higher prices that are passed on to me via the sticker prices of the food.

I don’t think it is “pressure” to point out the space for a tip. If that makes you feel pressured, then consider why.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's easy to spend 400k when taxes takes almost half

Please explain how taxes would take up half. Also please read up on how we have a progressive tax system in the US.

I was just coming to say that if you a paying almost half in taxes, then you are doing your taxes wrong.

At the basic tax rates of the progressive tax system, the taxes on $400,000 would be $85,664, which is a 21.4% tax rate. Even if you were to use the highest tax bracket that OP is paying, that rate is 32%, but 32% is only on the top 36K of the income. Everything below $364,200 is paid at a lower variable tax rate. And that is with absolutely no adjustments or deductions.

OP has retirement contributions which are deducted before taxes. Also a mortgage interest deduction and charitable contributions. OP also has childcare deductions and probably several other deductions. OP probably has enough deductions to avoid the standard deduction and with itemized deductions will probably drop most of the income paid at 32% rate.

It is most likely that OP is paying around 19-21% taxes on that income. If not, they are doing something wrong and should get an accountant to review their taxes.

I agree with PP that the first PP really needs to read up on the progressive tax system.

Not the PP. Forgetting the FICA and state income taxes. In MD both of those would be 13-14% total.

19-21% plus FICA and Maryland tax makes it closer to 1/3 of income, not 1/2.

DP.. at the top of the scale, MD tax rate would be a bit over 9% -- state 6%, county 3.x%.

Federal could be 30%, depending on OP's deductions. That would take you up to 39%. But it's probably not 39% on $400K.

FICA is 7.6% and applies to all earned taxable earned income. MD county and state is ~9.2%. The OP spends around 50K on taxable products (such as 50 birthday gifts and probably 100s of restaurant bills), so there is sales tax for that. All of it will add up to around 40%, not 50%, but the original person that said 50% was simply estimating.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Also what’s with all the costs of fast casual now? Now that they added too it’s like $18 for a chicken rice bowl.

And they want to be tipped like they are waitstaff, but in a very passive aggressive way at the POS.

I agree. I actually have had a pickup order (I had to GO AND PICK IT UP) person say to me, pointing to the receipt, "This is where you sign, and this is where you tip me." I honestly forgot whether I bowed to the pressure, but I can tell you that I never went back to that establishment again. I just hate getting takeout for that reason (guess I'm saving money). I am happy to tip wait staff. I don't like being guilted or manipulated - that spoils the whole experience. If staff need a living wage, it's on their employer, and I as the customer can decide whether to pay the higher prices that are passed on to me via the sticker prices of the food.

It’s spoils the whole experience of … picking up your food?

Are you habitually dense?

[Anonymous]

Not another one of these...

[Anonymous]

Food. I guarantee you are spending thousands of dollars a month on food without realizing it.

[Anonymous]

Anonymous wrote:No one should pay more than 20% in tax. OP if this is your big expense, invest in a good CPA to help you save.

How ???!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Also what’s with all the costs of fast casual now? Now that they added too it’s like $18 for a chicken rice bowl.

And they want to be tipped like they are waitstaff, but in a very passive aggressive way at the POS.

I agree. I actually have had a pickup order (I had to GO AND PICK IT UP) person say to me, pointing to the receipt, "This is where you sign, and this is where you tip me." I honestly forgot whether I bowed to the pressure, but I can tell you that I never went back to that establishment again. I just hate getting takeout for that reason (guess I'm saving money). I am happy to tip wait staff. I don't like being guilted or manipulated - that spoils the whole experience. If staff need a living wage, it's on their employer, and I as the customer can decide whether to pay the higher prices that are passed on to me via the sticker prices of the food.

It’s spoils the whole experience of … picking up your food?

Are you habitually dense?

No, just when people are being ridiculous.

[Anonymous]

I raised two kids as a single parent in much less. Start tracking.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No one should pay more than 20% in tax. OP if this is your big expense, invest in a good CPA to help you save.

How do you get to a 20% tax rate? We pay 30%.

What is your HHI? I have friends including myself earning between 200-500 HHI, and none of us pay more than 20%. I know someone earning more than 1milliom/year, and he pays almost nothing in tax.

What on earth? We have and use an accountant. How is this even possible. We make $1 million and pay close to 38% in federal and state taxes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's easy to spend 400k when taxes takes almost half

Please explain how taxes would take up half. Also please read up on how we have a progressive tax system in the US.

I was just coming to say that if you a paying almost half in taxes, then you are doing your taxes wrong.

At the basic tax rates of the progressive tax system, the taxes on $400,000 would be $85,664, which is a 21.4% tax rate. Even if you were to use the highest tax bracket that OP is paying, that rate is 32%, but 32% is only on the top 36K of the income. Everything below $364,200 is paid at a lower variable tax rate. And that is with absolutely no adjustments or deductions.

OP has retirement contributions which are deducted before taxes. Also a mortgage interest deduction and charitable contributions. OP also has childcare deductions and probably several other deductions. OP probably has enough deductions to avoid the standard deduction and with itemized deductions will probably drop most of the income paid at 32% rate.

It is most likely that OP is paying around 19-21% taxes on that income. If not, they are doing something wrong and should get an accountant to review their taxes.

I agree with PP that the first PP really needs to read up on the progressive tax system.

Not the PP. Forgetting the FICA and state income taxes. In MD both of those would be 13-14% total.

19-21% plus FICA and Maryland tax makes it closer to 1/3 of income, not 1/2.

DP.. at the top of the scale, MD tax rate would be a bit over 9% -- state 6%, county 3.x%.

Federal could be 30%, depending on OP's deductions. That would take you up to 39%. But it's probably not 39% on $400K.

FICA is 7.6% and applies to all earned taxable earned income. MD county and state is ~9.2%. The OP spends around 50K on taxable products (such as 50 birthday gifts and probably 100s of restaurant bills), so there is sales tax for that. All of it will add up to around 40%, not 50%, but the original person that said 50% was simply estimating.

I doubt OP is buying enough stuff to make the total tax paid (income + sales) to be 50% of income.

Even if OP spends $100K on taxable items, that would be $6000 in sales tax. That would not amount to 50% of OP's income going towards tax.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's easy to spend 400k when taxes takes almost half

Please explain how taxes would take up half. Also please read up on how we have a progressive tax system in the US.

I was just coming to say that if you a paying almost half in taxes, then you are doing your taxes wrong.

At the basic tax rates of the progressive tax system, the taxes on $400,000 would be $85,664, which is a 21.4% tax rate. Even if you were to use the highest tax bracket that OP is paying, that rate is 32%, but 32% is only on the top 36K of the income. Everything below $364,200 is paid at a lower variable tax rate. And that is with absolutely no adjustments or deductions.

OP has retirement contributions which are deducted before taxes. Also a mortgage interest deduction and charitable contributions. OP also has childcare deductions and probably several other deductions. OP probably has enough deductions to avoid the standard deduction and with itemized deductions will probably drop most of the income paid at 32% rate.

It is most likely that OP is paying around 19-21% taxes on that income. If not, they are doing something wrong and should get an accountant to review their taxes.

I agree with PP that the first PP really needs to read up on the progressive tax system.

Not the PP. Forgetting the FICA and state income taxes. In MD both of those would be 13-14% total.

19-21% plus FICA and Maryland tax makes it closer to 1/3 of income, not 1/2.

DP.. at the top of the scale, MD tax rate would be a bit over 9% -- state 6%, county 3.x%.

Federal could be 30%, depending on OP's deductions. That would take you up to 39%. But it's probably not 39% on $400K.

FICA is 7.6% and applies to all earned taxable earned income. MD county and state is ~9.2%. The OP spends around 50K on taxable products (such as 50 birthday gifts and probably 100s of restaurant bills), so there is sales tax for that. All of it will add up to around 40%, not 50%, but the original person that said 50% was simply estimating.

FICA stops before $150k so on a $400k salary it ends up being less than 3%