Tax saving tricks
How do you guys reduce overall taxes ? Do you max out 19K limit in 401K ?
401K ($19K regular + $37K megabackdoor Roth), $7K HSA, $21K housing interest deduction, $6K kid tax credit, $3K charitable donations. My marginal tax rate is 40%, so reduces my taxes by about $25K/year.
Megabackdoor Roth doesn't save you any taxes now though, right?
Not now; later. Didn’t include that in my calc.
get a house
How does that save in taxes ? Could you elaborate? Max benefit of interest you paid is capped to 12K if filing individual. No ?
Not as much anymore. You can deduct mortgage interest and (previously) property taxes. Trump tax kinda nullified this for many people
How much benefit do you get out of mortgage interest though
Quite a bit. I pay like 15k in interest a year, so that’s like what 4K less tax?
Be careful that you only save tax on mortgage interest if you itemize. I paid down my home mortgage when I realized that I am better off taking standard deduction of 24k.
To save on taxes you need to move your income flow away from ordinary income. Tax event should not happen that is assets should not change hands. There is not much you can do about your salary though. If that was your question
Yes