Making too much money (taxes)

GeorgiePorgie wrote:

You and your wife need to max out your 401k. Both need to put 18,500 in it per year. That lowers your effective rate by $37,000...

You and your wife need to max out your 401k. Both need to put 18,500 in it per year. That lowers your effective rate by $37,000.

Charitable donations. Calculate if giving the church $2000 can save you $2500. If so. Do it. (Example only)


If you plan on having kids consider a college savings If your state allows. In Ohio we can put away before tax money into a college savings. That lowers your rate even more. And seriously you should do this anyway because a college education is probably going to be 250,000+ in 18 years. Or it’s gonna fall flat on its face. Who knows. But might as well get the tax savings now.

Spend the money and see a CPA/financial consultant.

Calculate what you spend in healthcare put it in a HSA.

Can you put money in a Roth IRA if you’ve met your maximum 18,500 contribution in a 401k (if
You can max that out too. I’m not sure about the Roth. Considering starting one of those this year)

MX915 wrote:

Don't you pay tax on a Roth though? I believe your contributions aren't pre tax like a company 401k.

smashingpumpkins167 wrote:

That's right, IRA withdrawals come out after taxes, it's a good way to set money aside. Since it has already been taxed I don't think it...

That's right, IRA withdrawals come out after taxes, it's a good way to set money aside. Since it has already been taxed I don't think it gets taxed as heavily as a 401k is. Aren't taxes great?

I am able to avoid a lot of taxes as a travel nurse. The bad part is that I can't use my non taxed money to qualify for a loan, so I'm kind of screwed. But luckily my wife has a full time non traveling job.

Markee wrote:

Me and my wife are in a unique situation this year. We both work for the same company in the steel industry. My pay is performance...

Me and my wife are in a unique situation this year. We both work for the same company in the steel industry. My pay is performance based bonus, so if we produce more tons, we make more money. Well last year I passed my last technical evaluation for top pay in my department (maintenance mechanic). This has been a record year for the company, so I've made more money in tons and more by evaluation increase leading into the problem...

The problem is being pushed just nearly over into a 2% increase in federal income tax. As of next year, we can max out 401k contributions at 11% a piece from our standard 5% we did this year to help, but that doesn't help me now.

Other than that can you guys think of anything else we can do?

We have no children.

GeorgiePorgie wrote:

Eh well they can’t go to Vegas and buy alcohol with them but....ok. Lol. Not everyone on assistance is a leach. There are some genuinely good...

Eh well they can’t go to Vegas and buy alcohol with them but....ok. Lol. Not everyone on assistance is a leach. There are some genuinely good people needing it. WIC etc....

I guess Roth IRA is after tax. So can’t see the benefit in that besides saving long term and knowing your getting exactly what’s in that account in the end....I think I’m gonna have another sit down with financial guy see what my options are now. It’s been a few years.

71Fish wrote:

I make too much money, my wife is too pretty, and I have too much fun. There's a country song in there somewhere.

GeorgiePorgie wrote:

“Only 2%”

2% is 2%. I’m trying to keep as much as I earn!

GeorgiePorgie wrote:

“Only 2%”

2% is 2%. I’m trying to keep as much as I earn!

APLMAN99 wrote:

If you’re quoting me, you’re certainly taking it out of context......

Snipping 2 words out of any sentence tends to do that.

GeorgiePorgie wrote:

“Only 2%”

2% is 2%. I’m trying to keep as much as I earn!

APLMAN99 wrote:

If you’re quoting me, you’re certainly taking it out of context......

Snipping 2 words out of any sentence tends to do that.

GeorgiePorgie wrote:

Oh get off it. I was just saying I don’t care if it’s $0.01 If I can keep it I’m going to. How many of you...

Oh get off it. I was just saying I don’t care if it’s $0.01 If I can keep it I’m going to.

How many of you moto boys buy bikes outta state ? To save a couple hundred bucks. What’s that % ? Holier than thou’s won’t admit to that.

How many shopped at Rocky Mountain just for the free shipping? (ABout that no tax at the bottom of the receipt)

How many loved amazon.....before the tax hooks sunk into it ?

mikec265 wrote:

I want to keep as much money as I legally can. I buy write offs for my niche in a common business that hold value and...

I want to keep as much money as I legally can. I buy write offs for my niche in a common business that hold value and rise in value with inflation. Those same write offs will also make me more money. I really wish I could just blow it all on motocross instead of shit I don't need to make more money. The amount of tax I pay on things during the year is crazy, but I usually don't pay income tax. Other government fees, registrations, and permits might as well be reworded as taxes.
Even without paying income tax, the government/irs is still winning big time. There's no way to really win against them.

mikec265 wrote:

I want to keep as much money as I legally can. I buy write offs for my niche in a common business that hold value and...

I want to keep as much money as I legally can. I buy write offs for my niche in a common business that hold value and rise in value with inflation. Those same write offs will also make me more money. I really wish I could just blow it all on motocross instead of shit I don't need to make more money. The amount of tax I pay on things during the year is crazy, but I usually don't pay income tax. Other government fees, registrations, and permits might as well be reworded as taxes.
Even without paying income tax, the government/irs is still winning big time. There's no way to really win against them.

ns503 wrote:

Write offs aren't write offs unless they fall in value.

mikec265 wrote:

I want to keep as much money as I legally can. I buy write offs for my niche in a common business that hold value and...

I want to keep as much money as I legally can. I buy write offs for my niche in a common business that hold value and rise in value with inflation. Those same write offs will also make me more money. I really wish I could just blow it all on motocross instead of shit I don't need to make more money. The amount of tax I pay on things during the year is crazy, but I usually don't pay income tax. Other government fees, registrations, and permits might as well be reworded as taxes.
Even without paying income tax, the government/irs is still winning big time. There's no way to really win against them.

ns503 wrote:

Write offs aren't write offs unless they fall in value.

mx617 wrote:

Write offs purely for write offs are a waste of money. No one with a basic understanding of math would spend a dollar to save forty...

Write offs purely for write offs are a waste of money. No one with a basic understanding of math would spend a dollar to save forty cents.

If it's something you otherwise need then fine.

Markee wrote:

Me and my wife are in a unique situation this year. We both work for the same company in the steel industry. My pay is performance...

Me and my wife are in a unique situation this year. We both work for the same company in the steel industry. My pay is performance based bonus, so if we produce more tons, we make more money. Well last year I passed my last technical evaluation for top pay in my department (maintenance mechanic). This has been a record year for the company, so I've made more money in tons and more by evaluation increase leading into the problem...

The problem is being pushed just nearly over into a 2% increase in federal income tax. As of next year, we can max out 401k contributions at 11% a piece from our standard 5% we did this year to help, but that doesn't help me now.

Other than that can you guys think of anything else we can do?

We have no children.

SPYGUY wrote:

When you move into a new tax bracket, you only pay the higher tax rate on the income that is above the new, higher threshold. It...

When you move into a new tax bracket, you only pay the higher tax rate on the income that is above the new, higher threshold. It does not mean you will pay 2% more tax across the board.

woodsrider427 wrote:

You can do an IRA as a Traditional or a Roth. Traditional is tax deductible now and a Roth is deferred. 401K's I believe are offered...

You can do an IRA as a Traditional or a Roth. Traditional is tax deductible now and a Roth is deferred. 401K's I believe are offered the same way, Traditional and Roth. So it depends on what you think your tax bracket will be when you retire (or what taxes in general will be in the future, I'm guessing higher knowing the government) versus what your tax bracket is now. If your income is above a certain threshold you are ineligible to do a Roth, but you can do a traditional and later do a "back door Roth" conversion.

I was always told to contribute to your 401K only up to what your employer matches first, then max out an IRA, then go back and contribute more to your 401K if you have any extra funds left. I am self-employed so no 401K here, but this is what we have done for my wife in the past.

Like was said above though, you only pay the extra 2% on the amount crossing the threshold, so it's not so bad.

woodsrider427 wrote:

You can do an IRA as a Traditional or a Roth. Traditional is tax deductible now and a Roth is deferred. 401K's I believe are offered...

You can do an IRA as a Traditional or a Roth. Traditional is tax deductible now and a Roth is deferred. 401K's I believe are offered the same way, Traditional and Roth. So it depends on what you think your tax bracket will be when you retire (or what taxes in general will be in the future, I'm guessing higher knowing the government) versus what your tax bracket is now. If your income is above a certain threshold you are ineligible to do a Roth, but you can do a traditional and later do a "back door Roth" conversion.

I was always told to contribute to your 401K only up to what your employer matches first, then max out an IRA, then go back and contribute more to your 401K if you have any extra funds left. I am self-employed so no 401K here, but this is what we have done for my wife in the past.

Like was said above though, you only pay the extra 2% on the amount crossing the threshold, so it's not so bad.

DPR250R wrote:

My advisor told me to max out my 401K first then come back to talk to him if I have any extra. Wonder what the difference...

My advisor told me to max out my 401K first then come back to talk to him if I have any extra. Wonder what the difference in thought is?

As for the OP... I would second the advice of maxing out your 401K to 18,500 a year.

Also, who does your taxes? If you are concerned it might be a good idea to speak to a professional. Should just be a couple hundred for a tax accountant.

woodsrider427 wrote:

You can do an IRA as a Traditional or a Roth. Traditional is tax deductible now and a Roth is deferred. 401K's I believe are offered...

You can do an IRA as a Traditional or a Roth. Traditional is tax deductible now and a Roth is deferred. 401K's I believe are offered the same way, Traditional and Roth. So it depends on what you think your tax bracket will be when you retire (or what taxes in general will be in the future, I'm guessing higher knowing the government) versus what your tax bracket is now. If your income is above a certain threshold you are ineligible to do a Roth, but you can do a traditional and later do a "back door Roth" conversion.

I was always told to contribute to your 401K only up to what your employer matches first, then max out an IRA, then go back and contribute more to your 401K if you have any extra funds left. I am self-employed so no 401K here, but this is what we have done for my wife in the past.

Like was said above though, you only pay the extra 2% on the amount crossing the threshold, so it's not so bad.

APLMAN99 wrote:

He may have been meaning to max it to the employer match level and not been very clear about it. I’ve seen that from a couple...

He may have been meaning to max it to the employer match level and not been very clear about it. I’ve seen that from a couple of people in the financial business who assume that everyone knows what they mean, but forgets that the general public only thinks about this stuff a few times a year.

Or it’s also possible that his recommendation is based on locking in a systematic savings plan that takes a little bit of effort to cancel or change, meaning that it’s more likely to be followed or continued during small periods of tough cash flow, etc.

woodsrider427 wrote:

You can do an IRA as a Traditional or a Roth. Traditional is tax deductible now and a Roth is deferred. 401K's I believe are offered...

You can do an IRA as a Traditional or a Roth. Traditional is tax deductible now and a Roth is deferred. 401K's I believe are offered the same way, Traditional and Roth. So it depends on what you think your tax bracket will be when you retire (or what taxes in general will be in the future, I'm guessing higher knowing the government) versus what your tax bracket is now. If your income is above a certain threshold you are ineligible to do a Roth, but you can do a traditional and later do a "back door Roth" conversion.

I was always told to contribute to your 401K only up to what your employer matches first, then max out an IRA, then go back and contribute more to your 401K if you have any extra funds left. I am self-employed so no 401K here, but this is what we have done for my wife in the past.

Like was said above though, you only pay the extra 2% on the amount crossing the threshold, so it's not so bad.

APLMAN99 wrote:

Actually a traditional is “tax deferred”, a Roth is tax free at withdrawal.

mikec265 wrote:

I want to keep as much money as I legally can. I buy write offs for my niche in a common business that hold value and...

I want to keep as much money as I legally can. I buy write offs for my niche in a common business that hold value and rise in value with inflation. Those same write offs will also make me more money. I really wish I could just blow it all on motocross instead of shit I don't need to make more money. The amount of tax I pay on things during the year is crazy, but I usually don't pay income tax. Other government fees, registrations, and permits might as well be reworded as taxes.
Even without paying income tax, the government/irs is still winning big time. There's no way to really win against them.

ns503 wrote:

Write offs aren't write offs unless they fall in value.

ns503 wrote:

[i][b]Write offs don't have to decrease in value. If I buy a $30k widget with cash ( Which I bought 3 more in 2018),current tax laws...

Write offs don't have to decrease in value. If I buy a $30k widget with cash ( Which I bought 3 more in 2018),current tax laws allow a 100% depreciation aka write off.

Depreciation = 'write off' = decrease in value.

If there is no decrease in value, there is no depreciation. No 'write off'.

You're talking in contradictory circles.