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Forum
-> Household Management
-> Finances
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amother
OP
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 Sun, Jul 10 2022, 11:36 am
I have 2 dependents at home now
I paid almost $20,000 in taxes this year
Filed jointly with my husband
I got a nice raise now so my taxes will be even more!
What can I do legally to lower my taxes?
Some suggestions I got, finance a second car, Roth IRA or 401k. Can somebody please advise?My work does not offer any of these or have any suggestions
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NotInNJMommy
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Sun, Jul 10 2022, 11:40 am
Fund/use Healthcare FSA or HSA as applicable (depends on your insurance type), Dependent Care FSA or other deductions, definitely fund things with pre tax dollars (FSA/HSA are this, 401k, IRA, etc.) With Roth IRA you will pay taxes now (but not later), so if you're looking to pay less in taxes now, don't do Roth contributions.
I'm assuming you're in the US.
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amother
Mustard
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Sun, Jul 10 2022, 12:03 pm
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Ask your accountant. That's what you pay him for.
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Amarante
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Sun, Jul 10 2022, 12:19 pm
Consult your accountant to see if you are missing deductions or there are any things that can help lower your tax bill.
First you might not be taking enough in terms of deductions. There is no reason to get a big return - it just means that you have overpaid your taxes and essentially given the government an interest free loan.
As posted, you should maximize amounts put into your Roth or your IRA account and 401 (k) if offered by your employer. Also see if you can set up an HSA account.
Financing a car isn't deductible unless it is truly a business expense but it generally isn't for most people unless the business is providing a car and it is used almost solely for business. On the other hand, you can deduct mileage and transportation expenses for medical care - I.e. if you drive to a doctor you can take the mileage at IRS rate; parking fees; taxi fees; any kind of OTC medical stuff is tax deducible. Of course you need to have a certain minimum threshold.
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amother
Eggplant
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Sun, Jul 10 2022, 1:39 pm
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Are you a w2 employee or get paid 1099?
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amother
Nemesia
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Mon, Jul 11 2022, 7:57 pm
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Not much help, but we moved to a state with no state income tax after we realized NYS was making 30k off us (we got no benefits and nothing back on our tax return). We now only pay federal income tax of about 10k.
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amother
Magnolia
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Mon, Jul 11 2022, 8:23 pm
| amother [ Nemesia ] wrote: | | Not much help, but we moved to a state with no state income tax after we realized NYS was making 30k off us (we got no benefits and nothing back on our tax return). We now only pay federal income tax of about 10k. |
You must have had a big pay decrease or a real lousy accountant because income that would generate 30k in NYS tax would Generate a lot more than 10k in federal tax.
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amother
Nemesia
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Mon, Jul 11 2022, 8:30 pm
| amother [ Magnolia ] wrote: | | You must have had a big pay decrease or a real lousy accountant because income that would generate 30k in NYS tax would Generate a lot more than 10k in federal tax. |
Not at all, and I'm pretty good with numbers and taxes. It's what I do at my job but I refuse to file our own taxes because it's so easy to make mistakes. I do look over the paperwork before it's filed every year.
As an aside and just to prove something to my current accountant, we had him look over previous years tax returns from NYS. This guy is top notch and couldn't find any more ways he would've lowered it.
You, however, are free to believe I'm full of BS.
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amother
Mauve
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Mon, Jul 11 2022, 8:38 pm
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Agree! we are definitely considering moving to FL no state income tax.
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BrachaBatya
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Mon, Jul 11 2022, 8:56 pm
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It's tough. I hear you. We live in NY and make pretty high salaries but they don't go that far in this expensive part of the state, and after taxes. The taxes are enormous and we are never recipients of many of the relief gifts that many people receive - ie the stimulus checks when Covid hit, etc. We are grateful BH to be earning nicely but the taxes are ridiculous.
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amother
Magnolia
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Mon, Jul 11 2022, 8:59 pm
| amother [ Nemesia ] wrote: | Not at all, and I'm pretty good with numbers and taxes. It's what I do at my job but I refuse to file our own taxes because it's so easy to make mistakes. I do look over the paperwork before it's filed every year.
As an aside and just to prove something to my current accountant, we had him look over previous years tax returns from NYS. This guy is top notch and couldn't find any more ways he would've lowered it.
You, however, are free to believe I'm full of BS. |
I just done understand how your NYS tax can be 3 times your federal tax (assuming your income was all earned in the state)
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