What are ways to reduce my Reportable Wages?

Nice subtle brag thread

You could walk into your boss' office and tell him what you really think about him. That should do the trick.

Other than that, maybe buy a house and claim the mortgage interest. Giving money to charity reduces your tax bill but of course you're still giving money away, so that doesn't help you financially. I say that b/c I once had someone tell me quite adamantly that he was financially better off giving money to charity.

Maybe there are certain trust arrangements you can make as well but I'm not very familiar with them. I'd expect though that you couldn't benefit from the trust, but maybe your kids could. I think there are some educational tax-sheltered arrangements out there.

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I say that b/c I once had someone tell me quite adamantly that he was financially better off giving money to charity.

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But by giving away the dollar, he's saving 40 cents on his taxes! How do you not understand that? :D

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Unless he was close to the next tax bracket and donating put him right under the bar?

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Doesn't work that way. Suppose the bracket goes up at x dollars. You still pay the same tax on the first x-1 dollars regardless of what your final income is. It's just that you pay a higher income tax on what you make above x. Bill Gates' income tax bill on his first $40K of income is the same as Joe Blow who makes $40K all year. It's just that Gates would pay a greater portion on reportable income above that.

There are certain benefits to being under a given limit if it makes you eligible for certain things. For example, you can't contribute to a Roth if your income is above a certain amount. But you're still generally better off just raking in as much money as you can and to hell with the tax consequences.

And a lot of people don't get that

OMG I just crossed the next tax bracket. I wish I made less money

Pls

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this was my understanding

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That's how it works. My personal favorite is I had a relative that turned down a promotion with additional cash because he "didn't want to end up paying more in taxes". You just want to smack these people, and hope some sense leaks in.

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Not based on pure income taxes, but hasn't it been shown that there are negative affects to income increases somewhere between 30-50K?

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I think it is lower than that- as poor people come out of poverty they become eligible for fewer gov't benefits, thus making it "expensive" for them to hit certain earnings points.

LINK

Unless you're thinking of something different.