Taxes

H

Horny4.65

Trusted Contributor
Messages
80
Since tax season is upon us I would like to ask for home pointers in regards to our situation. I don't like paying tax after tax after tax.

My partner and I made $170K in 2021 so we are filing "married jointly." We did the following:

- Each contributed to their 401K (traditional and roth) where I maxed out ($19.5K) and partner put about $11K .
- Was short of maxing out HSA ($7,200) total on my side.
- Put $6K in a bank Traditional IRA plan.
- No charity donations.

We still owe $6K in taxes between federal and state. Do you guys know of other things that could be done to reduce that amount we owe (possibly to have a heads up for next year)?
 
Horny4.65 said:
Since tax season is upon us I would like to ask for home pointers in regards to our situation. I don't like paying tax after tax after tax.

My partner and I made $170K in 2021 so we are filing "married jointly." We did the following:

- Each contributed to their 401K (traditional and roth) where I maxed out ($19.5K) and partner put about $11K .
- Was short of maxing out HSA ($7,200) total on my side.
- Put $6K in a bank Traditional IRA plan.
- No charity donations.

We still owe $6K in taxes between federal and state. Do you guys know of other things that could be done to reduce that amount we owe (possibly to have a heads up for next year)?
Click to expand...
Use the IRS calculator to figure out how many exemptions to take. Then do it again either quarterly or semi yearly and adjust as needed. If your already claiming 0 then you can set an amount to be withheld every check
 
Your combined income is too high to qualify for a tax deduction for traditional IRA since you have a retirement plan at work. You’re better off doing a Roth instead. If you want to lower your taxable income as much as possible do all traditional TSP and then HSA as well. Roth IRA is great but won’t help with taxes currently.

Not much you can do for 2021 at this point (obviously talk to a tax person for real advice) but you should adjust withholdings for next year. If your incomes are a lot different, like you make 120k and partner makes 50k you will probably need to do 0 and add extra to be taken out per check like 32 said to keep from having a big tax bill in April.
 
I'm absolutely NOT looking to get into a political argument here. But, I will say that with the tax law changes under the last administration my family's taxes as did many of my co-workers (married, filing jointly, unable to meet the new threshold for itemizing deductions) went up about $6-10K a year. The loss of the personal exemption hurts big time if you don't have kids.
 
Horny4.65 said:
Since tax season is upon us I would like to ask for home pointers in regards to our situation. I don't like paying tax after tax after tax.

My partner and I made $170K in 2021 so we are filing "married jointly." We did the following:

- Each contributed to their 401K (traditional and roth) where I maxed out ($19.5K) and partner put about $11K .
- Was short of maxing out HSA ($7,200) total on my side.
- Put $6K in a bank Traditional IRA plan.
- No charity donations.

We still owe $6K in taxes between federal and state. Do you guys know of other things that could be done to reduce that amount we owe (possibly to have a heads up for next year)?
Click to expand...
How many exemptions do your and your partner claim, assuming they’re a W2 worker?
 
I let my accountant figure all that stuff out. He has def saved me thousands compared to me just doing it myself and the most he’s ever charged me has been $250.
 
szaryk said:
I'm absolutely NOT looking to get into a political argument here. But, I will say that with the tax law changes under the last administration my family's taxes as did many of my co-workers (married, filing jointly, unable to meet the new threshold for itemizing deductions) went up about $6-10K a year. The loss of the personal exemption hurts big time if you don't have kids.
Click to expand...
Were we better under the previous admin or the current admin?

rhombus said:
How many exemptions do your and your partner claim, assuming they’re a W2 worker?
Click to expand...
We do not claim any exceptions

Thank you everyone for your kind responses. Definitely a good amount of info here, it's very much appreciated.
 
I would talk to a tax specialist on how you could improve your tax situation by lowering your taxable income. Could be contributing to a traditional TSP more, starting a small business, writing off depreciation on your real estate. This forum is probably one of the worst places to ask lol
 
Horny4.65 said:
Since tax season is upon us I would like to ask for home pointers in regards to our situation. I don't like paying tax after tax after tax.

My partner and I made $170K in 2021 so we are filing "married jointly." We did the following:

- Each contributed to their 401K (traditional and roth) where I maxed out ($19.5K) and partner put about $11K .
- Was short of maxing out HSA ($7,200) total on my side.
- Put $6K in a bank Traditional IRA plan.
- No charity donations.

We still owe $6K in taxes between federal and state. Do you guys know of other things that could be done to reduce that amount we owe (possibly to have a heads up for next year)?
Click to expand...

Lot of specifics missing, but then again, it’s the web so you don’t want too much out there.

Does one of you earn a lot more then the other? If you make 120 and the spouse makes 50, she is going to withhold less and boom, hello taxes due.

Or, if your spouse does side work and generates a 1099 from their employment and now owes taxes, that could cause issues as well.

I am the simpleton in my marriage, but I have gleaned these facts from my wife who is among many things a CPA and thus I withhold fairly high to sometimes cover our unique situations.

You have to be careful not to under withhold or the penalties start applying.

Good luck. Also move to a state with no income tax! ?
 
Max out your HSA in 2022 for 2021. You won't get the FICA tax benefit, but you can still reduce your income by whatever portion you contribute in 2022 allocated for 2021.

From what limited info you provided, this is the only thing I can think of at this point to actually reduce your tax liability.

See blog post:

healthsavings.com - healthsavings Resources and Information.

healthsavings.com is your first and best source for all of the information you’re looking for. From general topics to more of what you would expect to find here, healthsavings.com has it all. We hope you find what you are searching for!
healthsavings.com healthsavings.com
 
32andBelow said:
You could do a back door Roth and another 6k for your wife
Click to expand...


Why would they need to use a back door Roth/ Form 8606? They aren’t even close to the income limits of contributing to a Roth IRA. Not to mention he already said they contributed 6k to a Trad IRA. I’m not sure I’m following you.

OP- Definitely talk this over with your CPA if you have one about your particular situation. In the mean time, there are a lot of resources out there that can help you understand tax strategy that can really help you in the future.
 
caprisun said:
Why would they need to use a back door Roth/ Form 8606? They aren’t even close to the income limits of contributing to a Roth IRA. Not to mention he already said they contributed 6k to a Trad IRA. I’m not sure I’m following you.

OP- Definitely talk this over with your CPA if you have one about your particular situation. In the mean time, there are a lot of resources out there that can help you understand tax strategy that can really help you in the future.
Click to expand...
Oh I thought I read that his wife made 170 lol
 
Horny4.65 said:
Since tax season is upon us I would like to ask for home pointers in regards to our situation. I don't like paying tax after tax after tax.

My partner and I made $170K in 2021 so we are filing "married jointly." We did the following:

- Each contributed to their 401K (traditional and roth) where I maxed out ($19.5K) and partner put about $11K .
- Was short of maxing out HSA ($7,200) total on my side.
- Put $6K in a bank Traditional IRA plan.
- No charity donations.

We still owe $6K in taxes between federal and state. Do you guys know of other things that could be done to reduce that amount we owe (possibly to have a heads up for next year)?
Click to expand...
Maybe a dumb question but did you check the multiple jobs box on your W2?
 

Similar threads

K
Retirement CARES Act Withdrawal
Replies
5
Views
2K
Dontbotherme
Dontbotherme
GulfCharlie
Dismantling Section 804: A Policy Shift
2
Replies
26
Views
4K
doodii
doodii
L
So, You're Marrying an ATC...
2 3
Replies
58
Views
17K
SharDiNae
SharDiNae
K
Medical BCBS vs. Aetna HDHP
Replies
13
Views
5K
squawkIFR
squawkIFR
GulfCharlie
Retirement TSP Seasonal Strategies
2 3
Replies
57
Views
19K
Viceversa
Viceversa
Back
Top Bottom