No sure why you would never take your FS government pension.
This does assume your COL (with three kids) is so low you can max out all your pension
It’s possible to pay $150 in taxes on an income of $150K
11–20 of 107 posts
Re: It’s possible to pay $150 in taxes on an income of $150K
#12The author has 3 children, and that's a _household_ income of $150000. 150 grand is not a huge family income to support 2 adults and 3 kids; as a country, we give people tax breaks to encourage having children and to help support people who make that choice. Calling this "Houdini-like" (author's words) tax hacking seems like a bit of a misunderstanding of deliberate social policy!
> 150 grand is not a huge family income to support 2 adults and 3 kids
This could be anywhere between solidly upper middle class to struggling to make ends meet depending on where you're at in the US.
Re: It’s possible to pay $150 in taxes on an income of $150K
#13The two biggest reducers he cites are 401k contributions and tax-loss harvesting.
#1. 401k.
While this is a great idea, if he's trying to retire at 33, putting 17.5k away from his 70k paycheck is not going to help because he can't touch it until he is 59.5 (w/o penalty).
#2. Capital losses
Tax-loss harvesting means selling securities that are underwater to get a capital-loss deduction. I don't know where to start explaining why this is such a bad idea. I'll pick the two most compelling reasons why this is dumb. First, you can only do this so many times before you've whittled your investment to zero. Second, you are violating the most basic principle of standard-person (non-rich) investing: buy and hold.
That's all he's got in his back o' tricks.
What an awful post.
Re: It’s possible to pay $150 in taxes on an income of $150K
#14> Taxes. It is our duty as patriotic Americans to keep our individual taxes as low as possible.
Can someone explain that sentence? What's "patriotic" about paying less taxes?
Re: It’s possible to pay $150 in taxes on an income of $150K
#15Their after tax is $70K. What’s their rent or mortgage? 3 kids, what do they pay for childcare?
and watch it come out that their parents take care of their kids and their house is paid off :D
There's not even enough money to buy food unless they are living off savings. They couldn't even pay property tax!
By definition, if they were living off dividends or capital gains - if they were doing things legally - they'd have a higher taxable income.
This is click bait to the extreme.
Re: It’s possible to pay $150 in taxes on an income of $150K
#16Yup.. you don't really start to get hit by federal taxes bad until after that 150k mark. You'd still be getting wrecked by property taxes or rent and sales tax in my state though.
This will be the first year I’ll be making more than $150k, not looking forward to next April considering im still basically broke.
Re: It’s possible to pay $150 in taxes on an income of $150K
#17The best tax optimization trick you can do is to open an LLC.
Costs $800/year to maintain in California, enables you to claim business expenses for a looot of things. Sometimes surprisingly.
You don’t even need a whole lot of revenue. Just sell something, anything, and go for it.
The penalty for going overboard is to pay back taxes with a bit of interest. As long as you don’t do anything crazy, you should be fine.
Remember: USA uses taxes to encourage you to spend money on approved activities. Like running a business, having kids, or buying your primary residence.
Re: It’s possible to pay $150 in taxes on an income of $150K
#18> Taxes. It is our duty as patriotic Americans to keep our individual taxes as low as possible. Can someone explain that sentence? What's "patriotic" about paying less taxes?
The author is writing tongue-in-cheek.
Re: It’s possible to pay $150 in taxes on an income of $150K
#19The author has 3 children, and that's a _household_ income of $150000. 150 grand is not a huge family income to support 2 adults and 3 kids; as a country, we give people tax breaks to encourage having children and to help support people who make that choice. Calling this "Houdini-like" (author's words) tax hacking seems like a bit of a misunderstanding of deliberate social policy!
> 150 grand is not a huge family income to support 2 adults and 3 kids
It's more than double the median household income.
Re: It’s possible to pay $150 in taxes on an income of $150K
#20> Taxes. It is our duty as patriotic Americans to keep our individual taxes as low as possible. Can someone explain that sentence? What's "patriotic" about paying less taxes?
I... usually hear this sentence sarcastically... but here it really seems as if the author isn't using it as such. I dunno, if you're a proponent of Starve The Beast [0], this is a consistent belief I suppose.