Currently working in California. What are the ways you use to reduce taxable income? I don't own a home here. I get everything on W2. Do people open bogus 1 man consulting firm just to show expenses? What are other ways?
Earn less.
earn less.
First the obvious ones, 401k, IRA, 529, etc. Next is owning a home, and other itemized deductions. Finally, for the hardcore investors, tax loss harvesting. It’s where you sell some depreciating assets at a loss, claim the loss on your tax return, and use the money to purchase some appreciating assets.
Does a529 even make sense in Cali???
Is the California 529 bad?
As others suggested just earn less. You may also consider to live less. The less you live the less tax you pay over your lifetime.
Go to Seattle or Austin where there's 0% income tax. Better yet try to convince your current employer or search for a new one that lets you work 100% remote. Then you could take advantage of the Foreign Earned Income Exclusion.
FEIE has a significant stress component unless you love doing logistics.
Elaborate?
401, IRA (if you qualify), get married, vote republican. Also, aggressively invest so that you can transition your earnings from w2 to 1099. If you can live completely off of 1099 (no job, full time investor), then you've made it into the lowest tax bracket for a wealthy person.
Get married? 🤣🤣🤣🤣🤣
If your partner makes significantly less than you, the tax savings are high, especially now after the trump tax cuts. Example, Filing married joint AGIs of 340k and 30k get you a savings of 20k compared to filing separately as singles. NB: I’m not pro-trump at all, just into tax efficiency.
Why so much sarcastic comments
It is just okay
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Migrate to another state