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Topic

Tax Reduction Measures for Salaried Workers

Problem / Need advice
#1
  • 🥧
  • mail
  • 2022/02/20 16:11

It is tax return season. I would like to ask for your wisdom as to what kind of tax saving measures you are taking.
Almost all of my income is from my corporate job.

I have a 401k that is maxed out.
IRAs could not be deposited due to income limits.
My children's college tuition was also not deductible due to income limits.

Even if I don't make it to this year's tax return, I'd be very grateful for the help for next year.
- do freelance work and deduct expenses
- create an LLC and use income from salaried work to fund the business

This text has been translated by auto-translation. There may be a slight difference between the original text and the translation. (Original Language: 日本語)

#2
  • Traditional IRA
  • 2022/02/20 (Sun) 20:21
  • Report

↑
Roth IRAs have income limits, but Traditional IRAs don't.

This text has been translated by auto-translation. There may be a slight difference between the original text and the translation. (Original Language: 日本語)

#3
  • 無知
  • 2022/02/20 (Sun) 20:55
  • Report

- Create an LLC and use the income from your salaried job to fund the business

I think there is a saying that if you create your own company and the income from one company is more than 80% of the total, the parent company will get in trouble with the IRS.
I don't know if the company you work for can check out your company in the first place. ？
The company you work for will not be responsible for insurance or anything
You will be able to drop expenses, but you will be responsible for all insurance, pension, and other expenses.
I wonder if W2's and 1099's can't be combined.

This text has been translated by auto-translation. There may be a slight difference between the original text and the translation. (Original Language: 日本語)

#4
  • 無知
  • 2022/02/20 (Sun) 21:04
  • Report

You're free to use your salary income to fund your business. You can use your personal income for whatever you want
But the company you created has to make a profit.　If you've been in the red for three years, the IRS is going to run you into the ground, because you'll be a ghost company that's all about expenses, and I'm sure your accountant will run you into the ground, too.

This text has been translated by auto-translation. There may be a slight difference between the original text and the translation. (Original Language: 日本語)

#5
  • 🥧
  • 2022/02/23 (Wed) 11:18
  • Report

#2 Mr. Traditional IRA also had $ 0 deductions due to AGI so I thought it was a bad idea to do it, but in the long run it is better to do it. Reference.
#3 Mr. "use it to fund a business" I was assuming the example you mentioned in #4 while working as a salaried employee. A company without substance would be a problem. I have a few ideas for businesses, albeit small, so I'll start with that.

In general, I feel that if you are a salaried employee and have an AGI above a certain level, tax savings are almost impossible.

This text has been translated by auto-translation. There may be a slight difference between the original text and the translation. (Original Language: 日本語)

#6
  • pooske
  • 2022/03/01 (Tue) 22:30
  • Report

There is no tax savings, but I think the only way is to invest the income.
There is a side business, but it is difficult if there is no profit for several years. But now that I have COVID, I think I can keep some of it going, but not if those sales are zero.
One option is to have your employment status as a consultant at your current company, but you will lose social security, etc., so, for example, if your spouse can get social security from the company he/she works for, that might be good...
The result is not tax savings, but only risk taking and investment. The result is not tax savings, but only risk taking and investing.

This text has been translated by auto-translation. There may be a slight difference between the original text and the translation. (Original Language: 日本語)

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