papadad111
Thinks s/he gets paid by the post
- Joined
- Oct 4, 2007
- Messages
- 1,135
My sources of income are changing as I have moved from working for megacorp to being FIREd
I've never enjoyed doing taxes let alone paying them.
I'm looking for a tool to help estimate my annual tax liability
Clearly a dollar earned is not always a dollar. Taxes take their toll depending how that money was earned.
Like many here, we have both tax sheltered and taxable accounts with some cap gains. Most of the dividends in taxable account are taking in cash and of course we pay taxes on the dividends most is as qualified div's. We take no WD from sheltered accounts for another decade + as we are in mid 40s
DW and I also have part time hobby jobs mostly to earn income which allows funding an HSA and a 401K and to for DW earn the required SS credits.
For me, it's a way to stay busy and trade a little work and a small cash stipend that goes with it in exchange for grad school tuition.
We get health insurance through the jobs. So no need to manage MAGI income for ACA.
We also have a small rental duplex - bringing in rental income ( rental properties are fully depreciated).
For the next 4 years I'm required to take distributions from a deferred compensation plan which is taxed at ordinary income and the withholdings are at a set rate of about 28% federal and state combined.
It seems that my taxes are very high right now because of the earned income despite shielding much of the income by way of 401(k) or HSA we still seem to cross the threshold to a fairly high tax rate.
I think the real solution is that once the deferred comp payout ends, we should be in a lower earned income bracket and that implies even the dividends and other non-earned income will be taxed at a lower rate.
I think we may even be impacted by AMT in the current scenario -- but not sure --- hopefully if that's the case it ends once deferred comp ends.
I'm just trying to figure out a tool to use in order to model the situation over the next four years and then beyond those 4 years to figure out what I actually need long term in my budget for taxes.
Suggestions ? Approach ?
I've never enjoyed doing taxes let alone paying them.
I'm looking for a tool to help estimate my annual tax liability
Clearly a dollar earned is not always a dollar. Taxes take their toll depending how that money was earned.
Like many here, we have both tax sheltered and taxable accounts with some cap gains. Most of the dividends in taxable account are taking in cash and of course we pay taxes on the dividends most is as qualified div's. We take no WD from sheltered accounts for another decade + as we are in mid 40s
DW and I also have part time hobby jobs mostly to earn income which allows funding an HSA and a 401K and to for DW earn the required SS credits.
For me, it's a way to stay busy and trade a little work and a small cash stipend that goes with it in exchange for grad school tuition.
We get health insurance through the jobs. So no need to manage MAGI income for ACA.
We also have a small rental duplex - bringing in rental income ( rental properties are fully depreciated).
For the next 4 years I'm required to take distributions from a deferred compensation plan which is taxed at ordinary income and the withholdings are at a set rate of about 28% federal and state combined.
It seems that my taxes are very high right now because of the earned income despite shielding much of the income by way of 401(k) or HSA we still seem to cross the threshold to a fairly high tax rate.
I think the real solution is that once the deferred comp payout ends, we should be in a lower earned income bracket and that implies even the dividends and other non-earned income will be taxed at a lower rate.
I think we may even be impacted by AMT in the current scenario -- but not sure --- hopefully if that's the case it ends once deferred comp ends.
I'm just trying to figure out a tool to use in order to model the situation over the next four years and then beyond those 4 years to figure out what I actually need long term in my budget for taxes.
Suggestions ? Approach ?