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Hall of Famer [21833]
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I hate paying taxes
May 14, 2021, 9:07 AM
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can't ####### stand it, matter of fact. I get that I'm getting shafted b/c no kids, wife got tons of money to move, blah blah blah. #### that.
Does anyjuan have some good strategies for mitigating tax liabilities as a W2 employee?
What are the expectations once the baby is here?
Would appreciate some resources if anyjuan has anything of value.
Also looking forward to the joungey responses. Inb4 be poor. TIA
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Oculus Spirit [80954]
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I'm also listening.
May 14, 2021, 9:12 AM
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Prelims show me owing $8500 this time. You?
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Hall of Famer [21833]
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$9300
May 14, 2021, 9:19 AM
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was about to move some cap around to buy some stonks on sale. instead I get to mail it to Washington. woot woot
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Oculus Spirit [80954]
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I was going to buy a golf cart.
May 14, 2021, 9:28 AM
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I guess the gubmint needs my money more than I do.
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All-In [31830]
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What is your effective fed tax rate?***
May 14, 2021, 9:13 AM
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Hall of Famer [21833]
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24%***
May 14, 2021, 9:21 AM
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All-In [31830]
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my 2 cents...
May 14, 2021, 9:45 AM
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First, don't do something stupid/spend money on something stupid just to avoid paying taxes. Example, don't finance something just so you can take the interest you pay the bank and claim as tax deduction.
In other words, don't pay the bank $100 of interest so you can save paying Uncle Sam $24 of taxes. There are A LOT of people that do things like this.
Second, take advantage of any pre-tax options your company offers...like health insurance (obvious), health savings accounts, retirement, etc...Actually, for retirement, you might have an option of a 401k or Roth 401k...you should consider each option. I do Roth 401k, which is after-tax investment, but returns and withdrawals will be tax-free.
Consider making additional IRA contributions outside of employer 401k.
Make sure when you're weighing standard deduction versus itemizing that you're including everything, like car tags/taxes, all charitable giving, mortgage insurance/points, etc...
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Lot o points [163008]
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Timing of contributions may help. If you are close to the
May 14, 2021, 9:57 AM
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standard deduction (lots of people are these days due to maximum taxes allowed as an itemized deduction), and you do a significant amount of charitable giving, skew it so you give 2 years worth in one year and none in year two (let your charity know what you are doing).
Other than the retirement, H S A, etc. stuff you can do at work, hard to get deductions for W2 employee.
On the IRA front, it you cannot make a deductible contribution, make too much to do a Roth (and do not have other IRA's) look into the back door Roth conversion option - I would much rather have a Roth vs an IRA with tax basis.
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Heisman Winner [105418]
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I still gotta pay and I got three fucktrophies, so the kid
May 14, 2021, 9:15 AM
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might swing it in your favor, but you may still owe.
Take more taxes out with each paycheck maybe? Makes tax time slightly less stressful.
Max out retirement contributions
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Hall of Famer [21833]
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that's what my accountant recommended
May 14, 2021, 9:26 AM
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tough sell for me though. I know this year is an anomaly, but I put the money that wasn't with held in the market and had good returns.
So I owe .gov 9k and some change. over the course of this past year, I've invested north of that in addition to what was in my brokerage acct, and realized nice (ridiculous) returns.
my dumb math says keep 10k over course of year, invest it at 8% return, get back 800 is better than uncle sam taking the 10k over the year w/ no investment gains. but idk. at some point i'll pay an additional 15% (probs more w/ Xiden) on the cap gains, too.
reading up on my wife becoming a Real estate professional so we can get better deductions in REI...but the cost of entry right now blows deek
retirement contributions don't give us any advantages based on my understanding of the thresholds for deductions, etc. same w/ HSA, additional IRA.
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All-In [31830]
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To me, this is like how much is the monthly payment....
May 14, 2021, 9:27 AM
[ in reply to I still gotta pay and I got three fucktrophies, so the kid ] |
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question certain ppl ask when buying a car.
It's not really "how much you owe", but what do you have to pay in total...right?
What you owe or what you get as refund is just a reflection of how you have your W-4 withholdings set-up.
For me, I like to owe as much as possible without triggering underpayment penalties and forcing quarterly estimated payments.
That's about the $3000 range in my experience/what turbo tax tells me.
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Heisman Winner [105418]
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Ultimately, I would like for April to be a zero sum game, I
May 14, 2021, 9:30 AM
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fill out a form and they take nothing and send me nothing. I cannot find that sweet spot though. I just want all this alot more simple.
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All-In [31830]
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yeah, I get that sentiment....
May 14, 2021, 9:48 AM
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it's doesn't make that much real difference, but I like not giving Uncle Sam a loan and want to avoid a refund at all costs. My income varies year-over-year, so I never get it exactly like I want it. 2 years ago I went a little overboard and end up owing too much and had a pay a small penalty. I've moved a little more conservative since then.
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Oculus Spirit [78823]
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All-In [30181]
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All-In [32580]
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Set up an S Corp - consulting - write offs become plentiful
May 14, 2021, 9:24 AM
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at some point you have to show a profit OR set up a new named S Corp consulting company every 3 or so years.
Also - get a VERY aggressive tax accountant - worth the $1000 a year for that - will help set up the S Corps, too.
And like @Greenr say - max out retirement stuff - either through the company or on your own.
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Hall of Famer [21833]
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that saved me in 2019
May 14, 2021, 9:38 AM
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I quit job w/ no parachute, then did some consulting gigs for a few months. mitigated all the bonuses and additional revenue I got from my W2.
I would much rather be a 1099 or S-corp, but it is what it is.
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All-In [32580]
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I think you are missing the part about setting up an S Corp
May 14, 2021, 3:31 PM
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as a consulting gig that is in addition to what you are doing day to day.
Find opportunities to "consult" when you can throughout the year and write off a bunch of expenses.
Generate an invoice or 2 . . . . through PayPal or whatever.
Can be related to what you do for a living or it can be a hobby you are "passionate" about.
If you don't show a profit (or increasing income) after 2 to 4 years, the man might give you grief IF you get audited . . .
If you can't show a profit (which defeats the whole purpose) after 3 or 4 years - dissolve it & start a new one.
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Hall of Famer [21833]
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ah. i'm smelling what you're stepping in now.
May 14, 2021, 3:57 PM
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i'm gone noodle on this with my eow 420 fest.
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All-In [32580]
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There ya go - Cannibis Consulting of Catawba County.
May 14, 2021, 4:11 PM
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You. are. Welcome.
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Lot o points [163008]
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Is the thinking that the S corp vs a single member LLC
May 14, 2021, 4:01 PM
[ in reply to I think you are missing the part about setting up an S Corp ] |
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gives you a little less "notice" to inquiring eyes, aka, computers from EyeREss?
If you don't want to incorporate, you can form an LLC and elect to have it taxed as an S corp.
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All-In [32580]
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The info USED to be (and this is pretty dated) is that S
May 14, 2021, 4:10 PM
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Corps were at the VERY bottom of the totem pole for inquiring eyes . . . and this was back when they HAD inquiring eyes - meaning boots on the ground.
( And for clarification - inquiring eyes start at the TOP of the totem pole in this hear partiquelar analogygram)
That's why my dealios are all S Corps.
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All-In [40868]
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if you start an S-Corp
May 14, 2021, 4:41 PM
[ in reply to that saved me in 2019 ] |
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make the company name with name in it such as dawghater23 Dog Washing Service. Ask people to pay by check. Tell them they can just make the check out to dawghater23. Cash the check. Spend the cash. Remember to include the cash transactions when you do your taxes, it's the law.
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All-In [31830]
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All-In [32580]
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Nothing I’ve said is illegal. Nice try, tho.***
May 15, 2021, 3:21 PM
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Oculus Spirit [75671]
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Quit working and go live in a treehouse or
May 14, 2021, 9:27 AM
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system of caves or something. I reckon you'd still need to buy a hunting license. The show I'm watching on Hulu hasn't covered that yet.
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Heisman Winner [135611]
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Psshhh ain't nobody working at the IRS anymore
May 14, 2021, 9:33 AM
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just send them what you think is fair and don't worry about it.
#Iamnotalisencedtaxconsultantandnotliableforanypenaltiesasaresultoftakingmyadvice
PS it's better to be too rich to pay than to be too poor
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All-In [46768]
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Just be poor***
May 14, 2021, 9:36 AM
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Hall of Famer [21833]
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Re: Just be poor***
May 14, 2021, 9:40 AM
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CU Medallion [59974]
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you need to learn to be a better citizen
May 14, 2021, 9:37 AM
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and pay more so I can keep getting my stimulus checks - signed FBCoach
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Oculus Spirit [79110]
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For the 2019 tax year, I paid I think $415 in taxes federal
May 14, 2021, 9:37 AM
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This year I think I paid ~$4K. Not sure how I did it for 2019 other than my wife (who's part time) worked even less than normal b/c grad school. That and I was paying more into my $401K. Don't think I've had a double digit effective tax rate in years.
Hears my tip:
1) of my peanus
B) make more fucktrophies
tree) Max out your HSA
DW4) Lie about all your HSA purchases
V) Max out your FSA
Sex) up those 401K non-roth contributions brah
7) Have someone go back to school at least part time (biggest differentiator)
All this to say that when my wife goes back to work as a nurse practitioner and we no longer have anyone in college we'll be uber wealthy again and taxed accordingly.
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Oculus Spirit [78823]
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part time wife?
May 14, 2021, 9:57 AM
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.
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Oculus Spirit [79110]
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It's half the nagging and I get the house to myself more
May 14, 2021, 9:59 AM
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NOT
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All-In [31830]
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Oculus Spirit [79110]
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I OWED THAT MUCH FOR THE HOLE YEAR
May 14, 2021, 10:36 AM
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I got like $8K back. Never had that happen before but that's the number turbo tax spit out and that's the number the IRS agreed to.
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All-TigerNet [11241]
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Re: Faack TurboTax
May 14, 2021, 12:01 PM
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I had forgotten how they screwed up my State taxes last year. I caught it this year before I paid the homoasswholemuddafuckkers. They do it on purpose so you have to upgrade just to talk to somebody. Their answer was to just refile. I hadn't even submitted! Never again you bunch of crooks! They pulled a number out of the air and into my state tax withheld and then there is no way to back out and correct it/their error. I knew it wasn't right when I was getting refunded more than I paid in. It was not the number I had inserted. I'm sure they work for Putin.
So, I go to FreeTaxUSA. Easypeasy at a fraction of the cost. PSA: Do not use Turbo Tax! Fool me onest...then tried it again.
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All-In [40656]
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Our net difference in taxes post baby
May 14, 2021, 12:04 PM
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Was nearly $8k.
Highly recommend a kid. Good thing you have one coming.
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Hall of Famer [24442]
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You have the joy of being part of the 20% of tax payers who
May 14, 2021, 3:16 PM
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pay 90% of all taxes, then get to hear the left tell you that you don't pay your fair share.
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Hall of Famer [21833]
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if someone told me that right now
May 14, 2021, 3:59 PM
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in person
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Oculus Spirit [80954]
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FBcooch thinks its funny
May 14, 2021, 4:33 PM
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But I probably would too if I was a communist.
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All-In [40868]
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Make sure you get pain in cash for you side hustles
May 14, 2021, 4:34 PM
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of course immediately give the irs their third
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