Ton Chou LSU Fan On the Levee Member since Feb 2010 291 posts
Reducing taxable income (Posted on 2/20/13 at 7:17 pm)
Any ideas on reducing taxable income when all you have are w-2's from your employer? Mortgage interest will only be about 5k for 2013 since refinancing in January so I'll probably be using the standard deduction for 2013 and will be losing the benefits a child since he'll be turning 17. I don't want to tie up all of my disposable income for the next 20 years either by dumping it all in 401k.
VABuckeye Ohio State Fan Oak Hill, VA Member since Dec 2007 9296 posts
re: Reducing taxable income (Posted on 2/20/13 at 8:31 pm to Ton Chou)
quote: and will be losing the benefits a child since he'll be turning 17
Say what? You mean the deduction? Um, no you don't.
1) He's a minor 2) You can claim him while he is in college as well 3) Standard IRA. You won't get a deduction if you do a Roth (which is probably the better choice to do anyway) 4) Plan ahead this year
Poodlebrain LSU Fan Way Right of Rex Member since Jan 2004 13770 posts
re: Reducing taxable income (Posted on 2/20/13 at 10:19 pm to Ton Chou)
It sounds like you are in that kids not yet in college zone that totally sucks for taxes. You lose the $1,000 child credit, and your kid isn't eligible for the benefits of paying college tuition. The only sure way to lower your taxable income is via charitable contributions, but you may be farther away from being able to itemize your deductions than you can reasonably afford to donate your way.
You might want to sit down with a CPA, or other advisor, and do some tax planning for 2013 and 2014 looking to minimize your taxes over 2 years rahter than approaching them separately.