Reply to Upper-Middle Class vs Middle-Class Lifestyles

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]"And we pay half our income to the state and federal government don't forget."

OP, you need to find a decent accountant.[/quote]

Not sure what an accountant can possible do.  Wage income is reported to the IRS.  The alternative minimum tax was beautifully designed and it limits deductions.  If your deductions are limited and your income is mostly wage income, there isn’t anything an accountant can do.

[/quote]

The average effective tax rate in PP's income bracket is 25%. If she's truly paying 50% between state and federal taxes, she does need an accountant. That's not about the AMT; it's about poor financial planning or failure to take all of the available deductions.

(But really, it's probably just inaccurate. If PP earns $750K in wages, I'm willing to bet her HHI is higher because she very likely has additional income in the form of interest, dividends, capital gains, etc. unless she is truly just spending every dime of that and not saving or investing any of it. So she might be paying 50% of $750K in taxes--but on far more than $750K in overall income.)[/quote]

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