We're DINKS and we're getting killed on our federal taxes because we're both W-2 employees. Our 2013 MFJ return is going to look like this:
358 Gross income
-35 401k deductions
+12 Dividends, interest, and capital gains
=335 Total Income
-21 Itemized deductions (7 mortgage intr., 12 sales/prop taxes, 2 donations)
-5 Exemptions
=308 Taxable income
77 Federal tax bill!
Neither of our current jobs can be easily converted to self-employment. We may add a dependent in the future but that's only a small benefit. Our deductions and exemptions have already started phasing out and that's only going to get worse. Is there anything we can do other than one of us quitting?
358 Gross income
-35 401k deductions
+12 Dividends, interest, and capital gains
=335 Total Income
-21 Itemized deductions (7 mortgage intr., 12 sales/prop taxes, 2 donations)
-5 Exemptions
=308 Taxable income
77 Federal tax bill!
Neither of our current jobs can be easily converted to self-employment. We may add a dependent in the future but that's only a small benefit. Our deductions and exemptions have already started phasing out and that's only going to get worse. Is there anything we can do other than one of us quitting?