OT: Suggestions on reducing taxable income

[Coronita]

Ok. Having done my taxes, I just realize how pathetic it is. My federal tax rate ended up being 16.9% and my state ended up being 9.5% I got to pay a $7000 AMT. Thank you….

Assuming a lot of this got special dividend tax rate treatment (which probably goes away next year), what else are folks doing to lower their tax bills for next year?

*Rental property expenses only go to $0, you can’t report a lose above a certain AGI.
* I guess I can take out a bigger loan on deduct the mortgage interest, and use the bigger loan for investments or other things.
* Charitable contributions…Yes, I made some, and next year with donations to DMUSD and other things, this should go up, but not significant.
* Business expenses: I guess this will go up next year as I become more active again
* Medical expenses: Can’t report most of them because despite my crazy medical bills, they don’t total > 10%
* Energy tax credits/deductions: Anyone taking advantage of these?

*Moving out of CA. Not an option.

The problem is that a lot of the deductions are tied to spending. I don’t spend. Hence I can’t take them….

[sdrealtor]

Work less?

[Hobie]

Self Employed SEP.

[UCGal]

Hold stocks longer for longterm cap gains rates? Change careers to be a hedge fund manager so your entire income is taxed at cap gain rates?

[no_such_reality]

Since we’re still carrying losses forward are effective rates were higher than yours.

It will be the last year of loss carry (hopefully). Currently sitting on unrealized gains but things could go south.

We installed new hvac and heat with tax credits. Installed a 7.5 kw solar syste
With credits but still higher rates than you.

The only we can dO is make more. Or have my wife quite her job as a syste
Engineer. It’s truly sad. She’s and engineer and if we consider her income at the marginal rate, after payin taxes and the nanny, little is left. If brown raises taxes and Obama rolls taxes back it will literally. Oat us money to have her work

All typos are mine and my iphone

[no_such_reality]

Actually UCGal, you’re close. If he hasn’t, he needs to spend the $700 to incorporate out of state. Contract through the corporation and pay himself and meager but reasonable salary and have the corporation distribute the bulk of his earnings as dividends for the stock he holds in the corporation.

(Note, I’m not a tax attorney so you need to verify)

And I would suggest getting much more serious but deducting your business expenses and identiying them as such.

[an]

Single income to lower your agi. Then take your cash and buy a bunch of rentals and claim losses to bring down your agi even further. Contribute to only deductible 401k and ira. Have the stay at home spouse be the property manager of those investment properties.

[SD Realtor]

Do whatever the tax code says in order to qualify yourself as a real estate professional. You can do this and keep your day job. Then you will not have the 100k agi limit on your real estate losses. At the same time your small business that you create for the real estate professional will also help create more deductions.

The hours you post on Piggington can go towards your hourly total as a real estate professional.

Presto!

[bearishgurl]

[quote=SD Realtor] . . . The hours you post on Piggington can go towards your hourly total as a real estate professional.

Presto![/quote]

LOL!

[all]

Home office?

[Coronita]

[quote=SD Realtor]Do whatever the tax code says in order to qualify yourself as a real estate professional. You can do this and keep your day job. Then you will not have the 100k agi limit on your real estate losses. At the same time your small business that you create for the real estate professional will also help create more deductions.

The hours you post on Piggington can go towards your hourly total as a real estate professional.

Presto![/quote]

Genius…now getting a tax benefit for being a LETDLITA really got my attention. Or better yet getting a tax benefit for being an a hole. Well gee then it won’t be hard to get a big benefit for that one.

Sent from an android phone. Typos included.

[Coronita]

[quote=captcha]Home office?[/quote]

Too risky of a deduction imho

[Hobie]

diddo. don’t need an audit

[Coronita]

[quote=UCGal]Hold stocks longer for longterm cap gains rates? Change careers to be a hedge fund manager so your entire income is taxed at cap gain rates?[/quote]

My personal historical data when I did this was that I ended up losing money more than just doing the short term thing.

[Coronita]

[quote=no_such_reality]Actually UCGal, you’re close. If he hasn’t, he needs to spend the $700 to incorporate out of state. Contract through the corporation and pay himself and meager but reasonable salary and have the corporation distribute the bulk of his earnings as dividends for the stock he holds in the corporation.

(Note, I’m not a tax attorney so you need to verify)

And I would suggest getting much more serious but deducting your business expenses and identiying them as such.[/quote]

I’m confused. If we’re talking about an s-corp, the dividend paid to shareholders, I believe still gets treated as ordinary income. (What it can do I believe is getting you out of paying self-employment taxes that you would pay receiving instead a salary), But then, even this, you have to pay yourself a reasonable rate.. Also, if you pay out a dividend, it goes to every shareholder.

Maybe I’m missing something.

[Author]

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