STYLETHREAD -- LET'S TALK SHOP!

Irene · Dooney & Bourke

To those who know about taxes.

honey · Gucci

i'm no expert but my understanding is that just getting married helps decrease your tax liability. but you might ask lsubatgirl, she's really knowledgeable about financial stuff.

Andrea Julia · Coach

Do I remember you saying you were planning on going back to school? That will give you a bigger tax refund. My cousin's husband does my taxes and said the two things that make my taxes lower are my graduate classes and my 401K contributions.

JMR · Dooney & Bourke

Have a Baby!!! haha jk!!

This is something you really should talk to your accountant about. Primary residences have different tax breaks than second homes or investment properties.

Buying our house has absolutely helped us this year in taxes. We are also looking in florida for some real estate - BUT keep in mind if you rent it out and make a profit - well then you will be taxed on it.

Are either one of you self employed (or have the chance to be self employed - even if it is only a part time thing?) that always helps - there are ways to manipulate your taxes that way.

I highly recommend you talk to someone who is familiar with your financial status personally. I also highly recommend the book "Rich Dad Poor Dad" - it will give you some insite on real estate and taxes.

valenciana · Dooney & Bourke

just simply getting married does decrease your tax liability, there may be some slight variations though, between filing jointly, married filing separately, or if one of you could file as head of household. just investigate the tax scales on IRS.gov to see which way is better. that might require a bit of calculating it up multiple ways.

if you've moved, keep track of any moving expenses if you move to be closer to a job. if you travel for business, you may be able to deduct some of those expenses. also, if any part of your wedding could be filed as a charitable donation (if you make a donation as a favor, if you donate your dress afterwards to one of those charities, etc.), keep track of those too. have you been taking any classes this year? you might be able to write those off. you could set up a Personal Spending Account for medical bills; the money you contribute is not taxed.

i wouldn't buy a house just for the tax break though, i know you've been wanting to buy a vacation home though, but if the time's not right or you can't find what you want, i can't imagine the tax benefit outweighing the cost.

that is awesome that you are planning to increase your 401(k) contributions to 10%. I am really impressed with that! you could also look into an IRA to further reduce your tax liability and boost your retirement fund. wow, 10%, that's just really great. i hope you and Gary have great plans for when you retire!

Irene · Dooney & Bourke

quote:
Originally posted by: JMR
"Have a Baby!!! haha jk!! This is something you really should talk to your accountant about. Primary residences have different tax breaks than second homes or investment properties. Buying our house has absolutely helped us this year in taxes. We are also looking in florida for some real estate - BUT keep in mind if you rent it out and make a profit - well then you will be taxed on it. Are either one of you self employed (or have the chance to be self employed - even if it is only a part time thing?) that always helps - there are ways to manipulate your taxes that way. I highly recommend you talk to someone who is familiar with your financial status personally. I also highly recommend the book "Rich Dad Poor Dad" - it will give you some insite on real estate and taxes. "

Thanks JMR!

Neither of us have accountants. I want to figure out our retirement plan for having $2MM when we retire.

Anyway, the house in Florida is going to be our primary residence. We will not be renting it out.

Neither of us are sel-employed currently, but I hope to be inthe future.

Andrea - Yes, I am going back to school in the Fall and I already know about those tuition deductions..yay!

Valenciana - I really want to max out my 401(K) contributions by the end of 2006. The more money we put in the better right? I am trying to get Gary to increase his to at least 8%. He has been at his job for 12 years and has only been contributing 1%.

I guess G and I need to sit down with someone to discuss our long term goals. I just have no idea who that would be. I also want to figure out our retirement plan for having $2MM when we retire.

-- Edited by Irene at 10:54, 2005-04-12

lsubatgirl · Gucci

I'll get out my tax book tonight for you and check on the House issue. I don't know if you have to declare it as primary residence or not. The interest you pay on the Mortgage is what is tax deductible (Deduction from AGI). Tuition you pay is deductible for AGI. Traditional IRA contributions up to $4000 are deductible for AGI but not Roth IRA contributions. Not sure about the max on a 401K but its in my book so I'll check. But you can't go over a certain amt in your 401K (14000/yr) so be careful because then you have to pay penalty taxes for overfunding it and if you do an IRA that is taken out of the max you can contribute to your 401K.

Donations to charity (from AGI) as long as they clear a certain % of AGI - 10% maybe? or they don't go over 10% of AGI? (if you donate to Salvation Army you don't have to put what you donate as long as you don't donate more than like $250 worth of stuff at a time- FYI so you can value a bag of clothes for say $100 and they'll never know)

Medical Expenses not covered by your insurance (includes copays) are deductible if they clear 7.5% of AGI.

Don't file Married, Filing Separately. It will screw you over in a lot of these deductions!!!

Definetly check out a financial planner. They will be helpful.

bex · Chanel

quote:
Originally posted by: lsubatgirl
" Don't file Married, Filing Separately. It will screw you over in a lot of these deductions!!! Definetly check out a financial planner. They will be helpful."

unless you go into a MUCH higher bracket! i picked up FH's taxes from our accountant today and asked him how we should file once we are married. due to our incomes, if we combined for tax purposes we would get SCREWED! definitely speak to an accountant on what to do in your particular situation because everyone is so different.