As I'm getting older I'm seeing the ways of tax shelters and for this year I'd like to be within the 15% tax bracket.I'm married filing joint. The 15% tax bracket is capped at $68,000. Let's say that our gross combined income is $85,000. If we contribute $10,000 to pre-tax 401k's and another $8000 in Roth IRA's, would we be in the 15% tax bracket for the year? Another situation, lets say that at the end of 2010, we estimate to be just inside the 25% tax bracket, would it be worth it to make a last minute contribution to a IRA or something, to drop within the 15% bracket?
How are you going to lower your tax bracket by contributing to a Roth IRA when Roth is a post-tax contribution? Taxes this year are awful. I just checked. What the heck happened? It's like they were in Bill Clinton's years again-almost. As usual I do not qualify for any special credits. And I hear they are going up when all Obama's imaginary rich people and businesses leave the country or shelter themselves. The money will have to come from *somewhere*.
One GOOD way to lower your yearly taxes is to file a property TAX GRIEVANCE with your local assessor. There is a company that provides an appraisal and populates the forms for you to give to your assessor. Homeowners using the Good Grievance approach have saved thousands. It does help to lower your tax bills for the year in addition to your income taxes. Good Luck
There no deductions for contributing to at Roth IRA. Most deductions require that you spend money. 1) Give a lot to a charity 2) Lose it in investments 3) Lose it in a business Personally, I like being in a higher bracket. It means my income was high. Worrying about taxes more than you worry about income is like being concerned about the color of your car as you are driving off of a cliff.
