300k salary - what about taxes?

amother

Tue, Jul 25 2023, 9:24 pm

For those who posted about earned household income of 300k, 500k, 1m - how do taxes work out?

Do you pay like 40% yearly or so;
Are there ways to legally minimize them and how?

amother

Glitter

Tue, Jul 25 2023, 9:26 pm

amother OP wrote:

For those who posted about earned household income of 300k, 500k, 1m - how do taxes work out?

Do you pay like 40% yearly or so;
Are there ways to legally minimize them and how?

Are you earning this much?

amother

Natural

Tue, Jul 25 2023, 9:26 pm

Pretax- 800k
Post tax, abt 550.
We hv a personal accountant & an LLC for some things to maximize deductions. Some yrs we'll get back a bit of the over 250k we pay, we give a lot of maaser so that helps. Better tzedaka than Uncle Sam!
Welcome to America!

amother

Chocolate

Tue, Jul 25 2023, 9:30 pm

If you own real estate, can take paper loss
If you have long term capital gains, pay a much lower rate
All sorts of deductions if you own a business

amother

Feverfew

Tue, Jul 25 2023, 10:11 pm

We earn just over 200K, and our tax bracket for my private teaching is close to 50%. It definitely hurts.

amother

Papayawhip

Tue, Jul 25 2023, 10:16 pm

amother Chocolate wrote:

If you own real estate, can take paper loss
If you have long term capital gains, pay a much lower rate
All sorts of deductions if you own a business

You can't take a real estate paper loss on that level of income unless you meet certain parameters (which is beyond the scope of imamother). Basically you can't .

The best thing to do, of course, is to invest whatever you can, whether in stocks or real estate, and watch your money grow. Tax free.

amother

Hosta

Tue, Jul 25 2023, 10:21 pm

Payroll taxes take off a whopping 40 percent from each check.
We give a choimesh so thats another 20 percent. (We want to give that much charity because we see open brachos since we started. No complaints bh)

So from gross 180k we come out with appx 90k!

Thats half of our hard earned money

Plus we pay insurance (3500 month) and full tuition because we’re earning more than everyone else….

And at the end of the year we always still owe thousands.

Maybe just maybe its time for everyone to go back to their own homes and be happy with what they have and stop thinking the cohens have it easier.

amother

Hosta

Tue, Jul 25 2023, 10:22 pm

401k is a good tax saver. But we need the money.
Real estate loses is a great tax saver but dont we need money to invest in real estate first?

What do they say? The rich get richer and the poor become poorer lol Smile

amother

Tue, Jul 25 2023, 10:31 pm

amother Papayawhip wrote:

But aren’t you first paying taxes on earned money, and then investing the leftover?
So you’re not minimizing the taxes, are tou?

amother

Chocolate

Tue, Jul 25 2023, 11:05 pm

amother OP wrote:

But aren’t you first paying taxes on earned money, and then investing the leftover?
So you’re not minimizing the taxes, are tou?

You only pay taxes when you sell. And it’s long term capital gains so it’s less

Not sure why previous poster said you can only write off depreciation if you make under 300k- I don’t think that’s correct.

amother

Navy

Tue, Jul 25 2023, 11:17 pm

About 33 percent to taxes. But we make under 250k so still have child tax credit and some other tax credits. Taxes also depend on the state you live in. I believe the state we live in is less taxes than NY not sure how NJ works. T he highest federal tax bracket is 37%. We fall in the bracket of 24% (190-364)

https://www.nerdwallet.com/art.....ckets

Also good to note that everyone pays the same amount of taxes on the lower amounts earned. As you increase earnings your taxes increase but not over the entire income just on the amount that is in the next bracket. This is a common misunderstanding. People think they will lose money if they make more cuz they are in the next bracket so will be taxed higher. No, you will only be taxed higher on the amount that is within the next tax bracket.

amother

Papayawhip

Tue, Jul 25 2023, 11:20 pm

amother Chocolate wrote:

It's under 100-150k, not 300k. Its called the mom and pop exception. You can write off depreciation against rental income but you can't take a paper loss against w2 income.

amother

Tue, Jul 25 2023, 11:33 pm

amother Chocolate wrote:

I’m still not getting something.

Don’t you buy your investments with post-tax money?
So you get a salary, pay income tax and invest leftovers.

That doesn’t eliminate income tax on your salary!

amother

Chocolate

Tue, Jul 25 2023, 11:46 pm

amother OP wrote:

No it doesn’t but I’m explaining how making 300k doesn’t necessarily mean you’re paying the highest rate of taxes on all that money

Maybe I’m making 300 k this year because I invested last year

amother

Chocolate

Tue, Jul 25 2023, 11:51 pm

amother Papayawhip wrote:

It's under 100-150k, not 300k. Its called the mom and pop exception. You can write off depreciation against rental income but you can't take a paper loss against w2 income.

You can clam depreciation against rental income in any tax bracket

amother

Papayawhip

Tue, Jul 25 2023, 11:55 pm

amother Chocolate wrote:

Yes, exactly. Its planning for the future.

So if you invested 10,000 in the stock market 8 years ago and you sell for 20,000, you're paying a lower tax rate on your profit.

If you are clearing 1,000 a month on your real estate rental, you may actually pay no taxes because of depreciation (paper loss).

It's about building wealth.

There is another way to get real losses against w2 income which involves short term rentals. I don't know much about it, you would need to consult somebody who knows about these things.

amother

Papayawhip

Tue, Jul 25 2023, 11:56 pm

amother Chocolate wrote:

You can clam depreciation against rental income in any tax bracket

Correct. You just can't take the loss against w2 income unless you meet certain parameters.

amother

Wed, Jul 26 2023, 1:25 am

How do you invest? Do you buy stocks on some platform basically?
I heard there is a way to defray paying taxes if, instead of selling a stock, you somehow swap it for a different one. Anybody knows about it?

amother

Papayawhip

Wed, Jul 26 2023, 8:13 am

amother OP wrote:

You don't pay taxes on gains unless you sell the stock.

I think you are talking about real estate, a 1031 exchange allows you not to pay taxes on the gain when you sell a house, if you swap it for a different one.