Reducing Taxes if your W-2 employee
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Any advise on reducing taxes if your on a W-2 employee for 2007. I am thinking outside the box. Thanks
PS-- ALREADY MAXING OUT ON 401K.
Since when is tax deferral the same as tax savings? You will be deferring $6645 in taxes today, to pay much more in taxes in the future.
Would you rather invest in your own business or the business of hundreds of other companies? The best businessmen invest in themselves. Why put the money in a 401(k) instead of investing in your own business? Invest in your own business and you'll get the same "tax savings", but with a much better rate of return if you are a good businessman.
[quote=TOP BROKER]
Any advise on reducing taxes if your on a W-2 employee for 2007. I am thinking outside the box. Thanks
PS-- ALREADY MAXING OUT ON 401K.
[/quote]
Isn't this a better question for your CPA than us? And if he/she can't answer it satisfactorily you might seriously consider finding one who specializes in assisting financial advisors...
I live in virginia and our state allows transferable state tax credits. I am purchasing them from a CPA whose client is selling them. Basically I can buy 18000 in state tax credits for 14900 dollars. That is a dollar for dollar reduction in you tax liability, on the state tax. Check with your CPA and see if your state offers this. The credits I bought were for Virginia Land preservation.
Also if you are married have you wife max her plan out also.
If you have kids you can do a 529 plan and my state, VA, gives you a state tax deduction. We actually opened 4 529 plans for my two youngest children. you get a decuction of 2k per child, per SS# donor. So 8k invested saved me about 600 dollars on state taxes. again, check to see if your state offers this.
Business miles is always a good deduction.
Any other ideas let me know because I am getting killed with taxes from my upfront bonus. I guess things could be worse.
[quote=blarmston]So lets talk about deductions...[/quote]
Get really sick and have a lot of medical expenses. Seriously, open a HSA account. The contributions are tax deductible. Make some charitable contributions.
Also talk to your CPA. They will know your situation better than we.
As an Indy and my husband is self employed too, we max out as many deducitons as we can. Much better than being a W-2 wage slave.
60% of your car lease.
Meals for clients.
Meals for employees.
Any periodical for business use (Barron'a, Journal, etc)
Office supplies out of pocket.
Etc,Etc
[quote=badmove?]
60% of your car lease.
Meals for clients.
Meals for employees.
Any periodical for business use (Barron'a, Journal, etc)
Office supplies out of pocket.
Etc,Etc
[/quote]
AMT will pretty much kill all of these, correct?
Yes, AMT kills a lot of things, but it won’t kill the capital loss. I spent yesterday, taking my lumps on a few bad picks in my play portfolio. 17 years of “playing” the market and I still struggle with a sell discipline…
[quote=aldo63]
I live in virginia and our state allows transferable state tax credits. I am purchasing them from a CPA whose client is selling them. Basically I can buy 18000 in state tax credits for 14900 dollars. That is a dollar for dollar reduction in you tax liability, on the state tax. Check with your CPA and see if your state offers this. The credits I bought were for Virginia Land preservation.
[/quote]
Hmmm, never heard of that before. I wonder what the CPA's commission is on these credits, 1%, 5%, etc?
[quote=joedabrkr]Who cares what the CPA makes if ultimately he has more $$ in his pocket? [/quote]
I was just wondering if it was worth looking into, for a Virginia FA, to also sell tax credits. When I was with Dean Witter, there was a type of "affordable housing credit fund" that was offered. The way it worked was, with a $100,000 investment, you might get $150,000 in tax credits over 10 years. (Again, a tax credit being a dollar-for-dollar reduction in federal income taxes.)
I remember the commission rate as being great, but I could never sell any.
[quote=doberman]
[quote=joedabrkr]Who cares what the CPA makes if ultimately he has more $$ in his pocket? [/quote]
I was just wondering if it was worth looking into, for a Virginia FA, to also sell tax credits. When I was with Dean Witter, there was a type of "affordable housing credit fund" that was offered. The way it worked was, with a $100,000 investment, you might get $150,000 in tax credits over 10 years. (Again, a tax credit being a dollar-for-dollar reduction in federal income taxes.)
I remember the commission rate as being great, but I could never sell any.
[/quote]
Boston Capital - 7% comiision. It actually worked too!
[quote=NOFX][quote=doberman]
[quote=joedabrkr]Who cares what the CPA makes if ultimately he has more $$ in his pocket? [/quote]
I was just wondering if it was worth looking into, for a Virginia FA, to also sell tax credits. When I was with Dean Witter, there was a type of "affordable housing credit fund" that was offered. The way it worked was, with a $100,000 investment, you might get $150,000 in tax credits over 10 years. (Again, a tax credit being a dollar-for-dollar reduction in federal income taxes.)
I remember the commission rate as being great, but I could never sell any.
[/quote]
Boston Capital - 7% comiision. It actually worked too!
[/quote]Yep I remember them...never put any $$ in. You did, I guess?
Top, I am not sure what firm you work for, but at my firm (Jones) you can participate in a business expense plan. You estimate how much you are going to use in business expenses for the year, and have that come out of your paycheck pre-tax. It’s a use-it-or-lose-it thing like the other IRS programs (flex spending accounts), but if you just estimate slightly lower than your actual usage, you will use all of it. That way there is no 2% floor to worry about. Not perfect, but if your firm offers these, it is worth it. It’s also a good budgeting tool.
the tax credits are not a product we can sell, though i would be interested in knowing if we could. if you find out, doberman, let me know. also he tax credits are not a 15 year deal like boston financial. they are for that year and can roll foreward fr a few years if you do nt use them.
i would not say the boston financial product wor ked out. they did give all the tax credits, but one my client who bought it(not from me) has not paid back the principle.(they have not liquidated the program when they said they would)
Well... To be fair, it HAS been a very tough real estate market for the past couple of years... They could be forgiven for not selling into that bubble, that's what we pay them management fees for right?
I bought a load of the Related Capital version of this LP. "Hey, if we sell it for just what we bought it for, you'll get 170% of your investment back from paydown of the mortagage ALONE! You'll get 99 cents of every dollar until we've returned to you 100% of your money PLUS a 10% non compounded rate of return, then we share at 75 cents to you and 25 cents to us for all the dollars after that!"
I can only hope the the money shows up before the Class Action Suit ppwrk does.
Mr. A
[quote=NOFX]
Boston Capital - 7% comiision. It actually worked too!
[/quote]
Bingo! Thank you! I wanted to say "something Boston", but I couldn't remember the name. The way I remember it, you invest $100,000 and it was extremely hard (if not impossible) to get your money back, in any amount. The investments were for used for the construction of public housing; hence, the federal tax credits. In return, the fund "expected" to issue annual tax credits at the rate of approximately 15% per year, for a certain period of years. I thought it was a good deal, especially if you knew you'd have future tax bills equaling your investment, but it was tough to sell.