Ways to reduce taxable income | TigerDroppings.com

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jimbeam
USA Fan
University of LSU
Member since Oct 2011
29999 posts

Ways to reduce taxable income


Putting the horse in front of the carriage here, but I plan (and hope I'm on the way) of having a successful career and all that jazz. With the way our future looks (to me) the wealthy will be supporting this country more and more.

What are some ways that people don't realize they can reduce taxable income?(legally of course)







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MoreOrLes
LSU Fan
Member since Nov 2008
16550 posts

re: Ways to reduce taxable income


HSA
PreTax IRA
Max on the 401K







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TJG210
LSU Fan
New Orleans
Member since Aug 2006
21596 posts

re: Ways to reduce taxable income


Goodwill Donations!





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jimbeam
USA Fan
University of LSU
Member since Oct 2011
29999 posts

re: Ways to reduce taxable income


quote:

PreTax IRA
b/c if you're making bank there's a good chance you can't do a roth anyway right?






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iknowmorethanyou
LSU Fan
Paydirt
Member since Jul 2007
4482 posts
 Online 

re: Ways to reduce taxable income


Right. Maxing out life insurance is referred to as "The Rich Man's Roth"...obviously no tax deductions though.

ETA: Folks have had success with cattle, but it's cyclical.



This post was edited on 7/10 at 4:21 pm


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jimbeam
USA Fan
University of LSU
Member since Oct 2011
29999 posts

re: Ways to reduce taxable income


currently single and the near future looks to remain that way. would I even need life insurance





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iknowmorethanyou
LSU Fan
Paydirt
Member since Jul 2007
4482 posts
 Online 

re: Ways to reduce taxable income


Not the death benefit, but the tax-deferred and potentially tax-free income from the policy cash value is worth a looksee.





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gatorsimz
Florida Fan
cafe risque
Member since Feb 2009
5346 posts

re: Ways to reduce taxable income


quote:

b/c if you're making bank there's a good chance you can't do a roth anyway right?



you can't deduct your IRA contributions if you're making bank. you can contribute but pay taxes

ETA: that's if you're covered by a retirement plan at work



This post was edited on 7/10 at 4:47 pm


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gatorsimz
Florida Fan
cafe risque
Member since Feb 2009
5346 posts

re: Ways to reduce taxable income


Also..

quote:

With the way our future looks (to me) the wealthy will be supporting this country more and more.


wouldn't that mean higher taxes in the future on the wealthy. if you believe this then you'd want to limit your future tax liability






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Bubba Bexley
LSU Fan
Member since May 2007
3579 posts

re: Ways to reduce taxable income


You could give it all to TAF





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MG
LSU Fan
New Orleans
Member since Dec 2007
268 posts

re: Ways to reduce taxable income


Hide your money in Iraqi Dinars. Profit.





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jimbeam
USA Fan
University of LSU
Member since Oct 2011
29999 posts

re: Ways to reduce taxable income


Exactly





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TigerTatorTots
New Orleans Pelicans Fan
Mandeville, LA
Member since Jul 2009
64818 posts
 Online 

re: Ways to reduce taxable income


Someone on the same subject- is buying physical metals a tax write off?





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TJG210
LSU Fan
New Orleans
Member since Aug 2006
21596 posts

re: Ways to reduce taxable income


quote:

is buying physical metals a tax write off?


I don't think so, but out of curiosity, what makes you think it would be?






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wegotdatwood
Arkansas Fan
Member since Aug 2009
17094 posts

re: Ways to reduce taxable income


Will the saver's credit still be around next year? After deductions we'll be south of 53k. We'll get 10% credit of the $6700 we've put in retirement accounts this year.

It doesn't matter the type either. 401k, roth, traditional etc.






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Poodlebrain
LSU Fan
Way Right of Rex
Member since Jan 2004
14952 posts

re: Ways to reduce taxable income


There are three different concepts of income to keep in mind. The first is gross income. You can reduce your gross income by incurring losses, or simply earning less income. You can also try to influence the character of the income you earn to minimize your tax liability. This is done primarily through investment decisions.

The second is adjusted gross income. Adjustments to income include things like qualified retirement plan contributions, HSA contributions and certain education expenses. Some of the adjustments to income are limited by types of gross income you earn. Minimizing adjusted gross income is beneficial since some deductions and credits are limited based on a taxpayer's AGI.

The third is taxable income, and it is simply your AGI less allowable deductions. The only discretionary deductions are charitable contributions, and they are limited to a percentage of AGI based on the type of property contributed and the type of organization.

Effective tax planning can be quite complicated as it needs to focus on all three areas, and it should take into consideration multiple years rather than just a single year.






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BestBanker
New Orleans Saints Fan
stuck in a moment
Member since Nov 2011
3051 posts
 Online 

re: Ways to reduce taxable income


Legitimately there are only two ways to answer your question:
Don't accept it as income, and/or
Give it away.






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RickAstley
LSU Fan
Reno, Nevada
Member since May 2011
1600 posts

re: Ways to reduce taxable income


You could try listing yourself as Democrat. You're less likely to be targeted for underpaying that way





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jimbeam
USA Fan
University of LSU
Member since Oct 2011
29999 posts

re: Ways to reduce taxable income








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wegotdatwood
Arkansas Fan
Member since Aug 2009
17094 posts

re: Ways to reduce taxable income


PB, will the savers credit still be in place next tax season?


This post was edited on 7/11 at 2:12 pm


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