Taxes Hierarchy - what to do?

[2buttons]

Fairly new to all this. Read all the blog posts on MMM.  Read the book - YMOYL. 

Here is my question.  Going beyond cutting lifestyle etc.  It seems to me that one of the best moves to do is to reduce your taxes by investing in tax deferred (assuming deleveraged all debt other than mortgage have proper emergency fund etc.)

So the question I have is in terms of the hierarchy. 

1. Max out your limits on your tax deferred accounts (in my case SEP IRA, and DW's 457).
2. Look at Traditional to Roth conversions for both of us. 

What else can I do to reduce taxes?  Anything?  We do not have access to HSA so that is off the table. 

Anything I am missing?

Additional question - do people fund early in the year to max out or do it gradually through the course of the year?

[NoStacheOhio]

A Roth conversion would increase your tax liability, not decrease it.

If you're self-employed, make sure you're claiming all of the tax deductions for which you're eligible. Things like home office, cell phone, mileage, computers, anything money you spend to do business.

How are you filing? If your revenue is high enough, an S-corp may make sense. There are a lot of variables here, and we need more info.

[2buttons]

Super helpful. I have a CPA. We filed for S Corp this year.  Should have done that years ago, but was focused on getting out of debt. Now on to trying to reduce AGI.  Definitely taking deductions, save for home office, I tried to find a way, but at this point I don't qualify. 

What else can I provide?

[dandarc]

You could look at a solo 401K to defer more than a SEP-IRA. 

If you're taking more than $212K in salary already though, the SEP-IRA lets you defer just as much.  Since you went S-Corp, it is probably unlikely that you're taking over $212K in salary - S-Corp tax benefits dwindle over the social security limit.

[Axecleaver]

Are you depreciating any corporate assets? Try to Sec 179 them, instead. This lets you completely write off expenses in the year you have them, instead of having to depreciate it over time. Popular items are computers, software, and home office furniture. Job-related expenses like car mileage to job sites from your home office and lunches add up.

Lots of people fund as early in the year as possible because growth is all tax-deferred, too. So if you have $53k in disposable cash on Jan 2, your account will grow faster than if you make the contribution than it would if you made the contribution 16 months later before the tax filing deadline.

[2buttons]

Thanks really helpful. Will definitely look into sec. 179.  So the idea of early funding your SEP is you have longer growth time. Makes total sense to me. The challenge is to free up the cash early on. 

Also, one other question. I funded my sep this year prior to tax filing deadline. I think I can characterize that as 2015 contributions thereby reducing my tax liability for 2015, correct?