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Make sure you’re maximizing all the standard pre tax benefits like 401k, college savings, hsa/fsa, etc. For better or worse, there’s not much w2’s can do in terms of tax avoidance
Hire an accountant that specializes in tax mitigation strategies or move. Pretty much all you can do. Anything more than that and you're going to have a bad time with the IRS at some point. Also know most tax mitigation strategies are made for people with top 1% wealth (to be clear: 1% wealth not income).
Move and vote
Thats more long term impact actions :) like the saying men who plant tree don’t get to enjoy its shade. I was looking for more immediate steps to take.
Subject Expert
Immediate step: change your feelings
Subject Expert
This person asked a serious question then dismissed the only helpful advice as being too hard
I moved to a low tax state for exactly this reason
Wasn’t the primary reason to make the move but it sure as hell sweetened the deal
Start your own consulting firm. No joke. You get far more levers to minimize your taxes while operating it and when you decide to sell it to a larger firm. It takes some guts to do it but if you have the energy, the right focus and enough courage, you can have an incredible pay off.
Be careful who you ask. Some, not me but some, might tell you that you pay your fair share.
In the meantime, establish residency in a low tax state like Texas, Florida, Tennessee or Nevada.
*don’t
Declare your spouse a real estate professional. Can deduct your w2 salary against RE “losses”
Say more
For state and local income, you need to change your primary residence.
If you can get a second residence in a Florida, Tennessee or other state without income tax, that will change your income tax obligations. If you are out of MD or DC office and working there, KPMG is going to log that and tax you.
Moving your primary residence and work location is your primary option here. I went from NJ to Washington and despite a higher cost of living, my tax reduction more than offsets this.
It could but it’s highly unlikely.
My official office is in Seattle and my official residence and mailing hasn’t changed. I’m still paying utilities and everything else in Seattle. Even with the cost of maintaining my place there, it’s cheaper than what NJ would take in income taxes.
You also know that taxes are used to fund public expenditures and by definition, the people that earn well will also pay higher taxes?! My effective tax rate is 39% (non-American) but in return, I get good public schools, free medical care and a social security system that deserves its name
Really?! Wow, I didn’t know. That doesn’t sound like a good deal then… 🙃
Donate to some good causes and take the deduction. I would rather give twice as much away than what the govt would take from me and feel good about what I did at the same time. I live in CA so feel your pain.
Yes, I donate a lot. That is one thing I am really proud of.
Section 179 for large auto write-off. Home office(s) write-off, if you have investment property and do short-term rentals you can capitalize and depreciated furnishings as well as the asset value. Those were the bigger ones for me.
Section 179 doesn’t apply to w-2 nor does home office. If you took these expect an audit
I’d like to think I’m a very creative person and there’s really no avoiding it. Unless you move to a state like Florida where there is no state income tax We Claim zero an even file single not married to pay more in taxes each month and at the end of the year we still over an additional $200,000
Mentor
Curious why you didn’t state your state…
Reduce your income.
Move to PR you can be a 4%’r