Good news is that this year I will be up there income...it wasn't like that last year and may not be like that next year, bad news is that the taxes on said income being only a w-2 puke are crazy when combined with DW income.
However, I was informed that I am eligible to participate in the non-qualified deferred comp plan.
By my math I can significantly reduce this years federal taxes by deferring a big chunk...I am talking effective of 10% of gross income vs 25%.
I would have to pick the amount, the date it is deferred until (not a retirement account so it can be any year in the future), how it is disbursed (lump sum or spread over a 5, 10, 20 year period), and what investments it is in (technically the money is not invested and is a liability of the company but it grows/declines in line with selected funds (all are low fee index). I would probably go with deferral five years out and five payment plan. Should also point out that upon separation (voluntary or involuntary) the deferred payments are accelerated to that time...so no waiting.
I am not worried about the company failing and losing it....company is rock solid. The biggest risk is that I am still working and making as much or more down the road when the deferrals start and then they would be back in the high tax bracket.
But the way I see it is that I save taxes now, the full income set aside (ie. before tax) gets to be invested just like my after tax pay would otherwise be, and with any luck or balls it will start paying out when my taxable income is back down or non-existent.
Anybody have any thoughts/experience with this.