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About to enter higher htax bracket, looking for books, guides, options before end of year.

discord 511 28 November 28, 2015 at 06:01 PM
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My tax bracket is about to change significantly to a much higher level (about 2X 2014). I think there might be some moves I should make before the end of year. Have a 401K with company match match. Live in Washington State, no state taxes to file. Usually I just enter my tax forms into turbotax, taxact, etc.

I Can anybody recommend an up to date, concise book? I'd like to look at something that emphasizes brackets, retirement plans, etc. I think there'd be many books on this subject, not sure where to look. I feel like I have quite a bit to learn in this area.

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#2
You do realize that tax brackets are marginal right?
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#3
Do what you can to deduct where it makes sense for your budget, but ultimately the best option may be just to pay higher taxes. Please understand that if you hit the next bracket and go over by $1 your taxes will only be a few cents different than last year. It will only affect dollars you earn BEYOND each threshold.

With few exceptions any savings you get from increased deductions will not pay for themselves. In other words, there's things you can do to minimize your tax burden but there is no magic bullet to actually save you more than you put in. This is why rejecting a raise because "it will actually cost you more money in taxes" is terrible advice even though many of us have heard it from co-workers.
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Last edited by dukeblue219 November 28, 2015 at 06:28 PM
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#4
Quote from flatlight View Post :
You do realize that tax brackets are marginal right?
Sadly. most people don't.
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"This whole.. I have XX company so my pee pee is 2" longer talk is hilarious. Who cares what company is cheapest, best, etc. Pick the company and plan you want and keep it to yourself."
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#5
Quote from discord View Post :
My tax bracket is about to change significantly to a much higher level (about 2X 2014). I think there might be some moves I should make before the end of year. Have a 401K with company match match. Live in Washington State, no state taxes to file. Usually I just enter my tax forms into turbotax, taxact, etc.

I Can anybody recommend an up to date, concise book? I'd like to look at something that emphasizes brackets, retirement plans, etc. I think there'd be many books on this subject, not sure where to look. I feel like I have quite a bit to learn in this area.
There aren't any silver bullets to help you out... 401ks help, so do IRAs (if you don't make too much $) as can itemizing your deductions (if you have enough). Apart from that not what else you can do really.
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#6
Double pay property taxes in 1 year if you can.
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#7
Quote from Krazen1211 View Post :
Double pay property taxes in 1 year if you can.
(If you itemize and are not subject to AMT this year)
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#8
it really depends on your current situation. max out your 401k, buy some real estate for investment purposes, buy instead of rent, etc...
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#9
Quote from Krazen1211 View Post :
Double pay property taxes in 1 year if you can.
I'm sure I'm missing something here, but what does that actually accomplish? Won't he just end up paying the income tax he saved in the following year when he has lower deductions?
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#10
Quote from xryanx View Post :
I'm sure I'm missing something here, but what does that actually accomplish? Won't he just end up paying the income tax he saved in the following year when he has lower deductions?
The idea is to claim the standard deduction in the off year,and itemize in the on year.
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#11
Quote from Krazen1211 View Post :
The idea is to claim the standard deduction in the off year,and itemize in the on year.
I see. Will most states allow you to do this?
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#12
Quote from xryanx View Post :
I see. Will most states allow you to do this?
Will the gov't allow you to give them $ earlier than you have to?

Where's that slap smiley when you need it. Of course they will!
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#13
I believe the prepay strategy only works for high variable yearly sales commission. prepay in the good year, no pay in the bad year.
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#14
Quote from tennis8363 View Post :
Sadly. most people don't.
True story....
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#15
Quote from SeeK View Post :
I believe the prepay strategy only works for high variable yearly sales commission. prepay in the good year, no pay in the bad year.
No, it works if you have a straight W-2 salary each year. You just have to fall into a narrow window where you are on the fringes of itemizing or taking the standard deduction. You might be able to, for example, pre-pay taxes in year 1 such that you now itemize and get a bigger deduction. You would have less to deduct in year 2 except that you still have the standard deduction as a "floor" to fall back on. It would be better than just taking the standard amount each year.
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