Currently, I am making 45k in a southern state.
Here is the Singles Tax bracket for 2014:
So, right now I will be in 25% tax bracket, but I noticed that I can contribute more to my 401k and get under 36k easily.
This looks like a pretty good idea: I won't be giving an extra 2-5k to the IRS and essentially giving myself a 5% raise. (Is my logic correct here?)
I plan on making more money in the next few years. I noticed that this strategy will not work passed 50k anual earnings because you can only invest $17,500 into a 401k, as of 2014.This will not get you to that sweet 36k.
Are there other ways to lower your tax bracket besides getting married, having kids, buying property?
I am going to enroll in my employers health care, but I do not think that will make a large enough dent when I am pulling 60k+.
I also figured out that Traditional IRAs and 401k do not stack when taking away from your gross income.
Anyone have suggestions/methods to reduce gross income to continue to be in the 15% tax bracket vs 25%. I would also like input on if this is a solid idea - I will have to live a minimalist lifestyle because of this.
Here is the Singles Tax bracket for 2014:
So, right now I will be in 25% tax bracket, but I noticed that I can contribute more to my 401k and get under 36k easily.
This looks like a pretty good idea: I won't be giving an extra 2-5k to the IRS and essentially giving myself a 5% raise. (Is my logic correct here?)
I plan on making more money in the next few years. I noticed that this strategy will not work passed 50k anual earnings because you can only invest $17,500 into a 401k, as of 2014.This will not get you to that sweet 36k.
Are there other ways to lower your tax bracket besides getting married, having kids, buying property?
I am going to enroll in my employers health care, but I do not think that will make a large enough dent when I am pulling 60k+.
I also figured out that Traditional IRAs and 401k do not stack when taking away from your gross income.
Anyone have suggestions/methods to reduce gross income to continue to be in the 15% tax bracket vs 25%. I would also like input on if this is a solid idea - I will have to live a minimalist lifestyle because of this.