Author Topic: Tax Experts Unite!  (Read 2602 times)

ibleedirish

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Tax Experts Unite!
« on: September 18, 2014, 05:57:31 PM »
Ok all you tax experts out there! I'm no accountant, but I feel like we should be seeing more in our take home pay. I also don't remember what we currently claim, as we've been at our jobs for a while (and, I have to admit, I just started paying attention. To everything financial. Thanks MMM!). We had our first child this January, and I'm wondering if we should be changing our withholding, so I can optimize our investing.

Married, filing jointly, one child.

My Gross: 137K
Her Gross: 45-50K

What should we each claim? One? Two? Ten? I'd love to break even tax-wise in April, as I prefer not to give Uncle Sam an interest free loan each year. Our income has fluctuated up/down a little the last few years as dinks, so we've varied from owing 8k (ouch!) to getting a $400 refund.

Cheddar Stacker

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Re: Tax Experts Unite!
« Reply #1 on: September 18, 2014, 06:55:39 PM »
Hard to say for sure. 2 or 3 exemptions on your w-4 is likely best. Max both 401k's for sure. The kid will help a bit but you make too much for the child tax credit.

ibleedirish

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Re: Tax Experts Unite!
« Reply #2 on: September 18, 2014, 09:04:32 PM »
We should totally try to make less. I'm going suggest we work half-time and help half the people, with our professions.
In all seriousness, thank you for your help. Sometimes I get irrationally bitter...

MDM

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Re: Tax Experts Unite!
« Reply #3 on: September 18, 2014, 09:13:35 PM »

Cheddar Stacker

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Re: Tax Experts Unite!
« Reply #4 on: September 18, 2014, 10:29:18 PM »
We should totally try to make less. I'm going suggest we work half-time and help half the people, with our professions.
In all seriousness, thank you for your help. Sometimes I get irrationally bitter...

Don't make less, defer more. I saw your other thread where you said you max both 401k's so that's great. Is any of that income self employed income? If so, get a sep ira. Keep any deductible debts. If you are paying for childcare you can get up to a $600 credit per child. HSA? Do everything you can to lower your agi to get closer to that $1k child tax credit.

I'm in the same boat as you. Good problem to have though. We defer about $35k of income via 401ks as well. Getting any part of the credits you are phased out of at that income level will reduce your taxes at a rate of 40%ish.

Scandium

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Re: Tax Experts Unite!
« Reply #5 on: September 19, 2014, 06:50:52 AM »
Are you paying for childcare? We will next year and I'm setting up a DCFSA. Contribute to it before tax and can use it to pay for daycare (as in keep receipts and pay myself back in december). Up to $5K/year for couple.

ibleedirish

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Re: Tax Experts Unite!
« Reply #6 on: October 08, 2014, 11:53:42 AM »
Good point on the childcare, I will have some expenses next year, and will be using my FSA to cover those.

Thanks all for the replies. Super helpful.