Anonymous
12/16/2022 11:26
Subject: 400k salary and creep factor we never really have much left
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.
Anonymous
12/16/2022 11:07
Subject: 400k salary and creep factor we never really have much left
Anonymous wrote:On that income you should not be taking out car loans. You should have enough saved to pay cash for cars.
I agree with the others. Track every penny for a couple of months and look at where the money is really going.
This works best if both you and your spouse are committed to saving more.
Agree, although many have car loans at very low interest rates such as 0.99% or 1.99%. Sometimes car dealers offer 0% financing on 36 month loans.
Anonymous
12/16/2022 10:27
Subject: 400k salary and creep factor we never really have much left
On that income you should not be taking out car loans. You should have enough saved to pay cash for cars.
I agree with the others. Track every penny for a couple of months and look at where the money is really going.
This works best if both you and your spouse are committed to saving more.
I agree with the others. Track every penny for a couple of months and look at where the money is really going.
This works best if both you and your spouse are committed to saving more.
Anonymous
12/16/2022 10:24
Subject: 400k salary and creep factor we never really have much left
Anonymous wrote: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.
600. I do taxes myself, which is probably why this is an issue.
you need a cpa.
Anonymous
12/16/2022 10:24
Subject: 400k salary and creep factor we never really have much left
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.
Then it’s not w2 income! Look w2 income is very heavily taxed and reported directly to the IRS. Then there’s AMT and limitations on deductions. The average 400k HHI is paying out a lot in taxes since it’s likely mostly w2 income. Stop misleading people that someone earning 500k can somehow barely pay any taxes.
Anonymous
12/16/2022 10:22
Subject: 400k salary and creep factor we never really have much left
Anonymous wrote:Anonymous wrote:You don’t need to donate to charity if you feel not wealthy yourself.
Studies have shown that MC are the most generous to charities. Remember the story in the Bible of the poor widow who gave her last 2cents.
OP doesn't have to give $15k to charity but it's seriously ridiculous to say someone who makes $400K doesn't feel wealthy enough to give to charity.
It's also ridiculous that OP doesn't feel wealthy at $400K.
Our HHI is $250K, and we are very comfortable, including taking one flying vacation every year. We have teens, and their activities are pricier than when they were younger; save $15K/yr on college; max out our retirement.
But here's what we don't do:
1. have expensive cars
2. eat out a ton
3. buy expensive clothing/shoes/bag/accessories
4. spend a ton on entertainment
IMO, at $400K, OP could do some of #1 to #4 and still save.
I guess it goes to show that even people with a lot of money need better financial literacy.
Of course you can donate to charity and you should. You’re not facing a high tax burden.
Anonymous
12/16/2022 08:56
Subject: 400k salary and creep factor we never really have much left
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.
600. I do taxes myself, which is probably why this is an issue.
Anonymous
12/16/2022 08:35
Subject: 400k salary and creep factor we never really have much left
Anonymous wrote:19-21% plus FICA and Maryland tax makes it closer to 1/3 of income, not 1/2.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.
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.
Anonymous
12/16/2022 08:32
Subject: 400k salary and creep factor we never really have much left
Anonymous wrote:You don’t need to donate to charity if you feel not wealthy yourself.
Studies have shown that MC are the most generous to charities. Remember the story in the Bible of the poor widow who gave her last 2cents.
OP doesn't have to give $15k to charity but it's seriously ridiculous to say someone who makes $400K doesn't feel wealthy enough to give to charity.
It's also ridiculous that OP doesn't feel wealthy at $400K.
Our HHI is $250K, and we are very comfortable, including taking one flying vacation every year. We have teens, and their activities are pricier than when they were younger; save $15K/yr on college; max out our retirement.
But here's what we don't do:
1. have expensive cars
2. eat out a ton
3. buy expensive clothing/shoes/bag/accessories
4. spend a ton on entertainment
IMO, at $400K, OP could do some of #1 to #4 and still save.
I guess it goes to show that even people with a lot of money need better financial literacy.
Anonymous
12/16/2022 08:15
Subject: 400k salary and creep factor we never really have much left
Anonymous wrote:Anonymous wrote:No one should pay more than 20% in tax. OP if this is your big expense, invest in a good CPA to help you save.
How do you get to a 20% tax rate? We pay 30%.
What is your HHI? I have friends including myself earning between 200-500 HHI, and none of us pay more than 20%. I know someone earning more than 1milliom/year, and he pays almost nothing in tax.
Anonymous
12/16/2022 08:06
Subject: 400k salary and creep factor we never really have much left
Anonymous wrote:No one should pay more than 20% in tax. OP if this is your big expense, invest in a good CPA to help you save.
How do you get to a 20% tax rate? We pay 30%.
Anonymous
12/16/2022 07:59
Subject: 400k salary and creep factor we never really have much left
No one should pay more than 20% in tax. OP if this is your big expense, invest in a good CPA to help you save.
Anonymous
12/16/2022 07:42
Subject: 400k salary and creep factor we never really have much left
I’ve always followed the rule to “pay myself first”. We both max out our 401ks and I max out my mega Roth (25k) by May of each year. We also do direct deposit of X$ into our brokerage each month and $x into savings which cover future cars, home repairs and trips.
We then yolo all of our savings each month without regard.
We do not give to charity, but we do donate to our kids schools. However that only adds up to about 10k/yr
I find paying ourselves first via direct deposit is nice because I never see that money and know I can spend everything that hits our savings.
We then yolo all of our savings each month without regard.
We do not give to charity, but we do donate to our kids schools. However that only adds up to about 10k/yr
I find paying ourselves first via direct deposit is nice because I never see that money and know I can spend everything that hits our savings.
Anonymous
12/16/2022 07:36
Subject: 400k salary and creep factor we never really have much left
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.
as someone who got on the property ladder in DC in 1999 and has a port gate if 1900/mo I can assure you that is a very very very modest payment.
OP only has a 567k mortgage and has probably seen the same appreciation I have.
Anonymous
12/16/2022 07:15
Subject: 400k salary and creep factor we never really have much left
Anonymous wrote:Anonymous wrote:Why are you donating $15k a year to charity? That’s excessive.
No, it's not. It is not even close to near enough on that income. We make about $300,000 (give or take $15k), and we donate over $35k every year. It's called being a good human being, and helping those who are in greater need than yourself.
I agree with everyone else, track your spending for a month. You'll be surprised at where it goes and it'll be easy to cut back
You’re a fool. We are at least 500k hhi and pay at least 100k out in taxes. Not our fault our tax dollars aren’t better spent. I have little interest in donating even more money to organizations where the CEOs are one percenters.