The Money Mustache Community
General Discussion => Forum Information & FAQs => Topic started by: BlueHouse on June 29, 2015, 02:18:16 PM
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There's quite a lot of useful tax strategy throughout these discussions. I'm surprised there isn't a category in the Forum for Tax minimization. Would anyone else find this useful? or is there a way to search on Tax strategies that I don't know about?
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Some that come to mind:
- Every other year emphasis on itemized deductibles, e.g., charitable contributions, property tax, and state/local income tax.
- Take full advantage of pre-tax deductions, e.g., 401k and IRA, insurance premiums and HSAs and/or flex spending accounts (as available).
- Be aware of saver's credit cliffs, e.g. the 50% cutoff at $36,000 for MFJ
- Most (all?) commercial tax prep software will calculate the minimum tax for "normal" returns. Examples to the contrary could be useful.
- Much better to use such software (or roll-your-own spreadsheet customized for your situation) during the tax year instead of waiting until after the fact.
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Once you FIRE taxes are decreased due to low incomes so there isn't much to discuss. Those that are still working and saving a significant portion of their income are likely maxing out plans such as 401ks and 457s that in turn reduce taxable income.
Was there specific tax information you were seeking or just a general wondering?
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- Be aware of saver's credit cliffs, e.g. the 50% cutoff at $36,000 for MFJ
Another potential one is if you are in EITC territory, don't have too much in unearned income or you lose it.
A friend of mine got nailed a few years ago by cashing out a lot of savings bonds (which are basically terribad investments anyways) but that then also screwed them out of EITC.
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Some that come to mind:
- Every other year emphasis on itemized deductibles, e.g., charitable contributions, property tax, and state/local income tax.
Also, you can donate appreciated stocks in your taxable accounts to charities to get your charitable contribution deduction and avoid paying the capital gains.
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I've wondered why there isn't a subforum for tax questions too!
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MOD NOTE: Good idea. Done.
http://forum.mrmoneymustache.com/taxes/
Locking thread.