we're going to get hit with taxes next year, help please

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squirm
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we're going to get hit with taxes next year, help please

Post by squirm » Sat Oct 28, 2017 2:12 pm

Next year we're going to get hit hard with taxes. Last year we got solar which wiped out a chunk this year. We were going to get an electric car which would have helped next year but decided to wait to buy one next year. Wife and i both have pensions. What are our options? We've donated as much as we can. We don't have any ira accounts.

rebellovw
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Re: we're going to get hit with taxes next year, help please

Post by rebellovw » Sat Oct 28, 2017 2:14 pm

We are going to get hit hard as well. Last year we owed 10K. This year we had a gain from selling property.

I'm making quarterly IRS payments - that should make a difference - but I'll likely still owe about 10K - so all I can do is save away for it.

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Silly Wabbit
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Re: we're going to get hit with taxes next year, help please

Post by Silly Wabbit » Sat Oct 28, 2017 2:50 pm

Where's the income coming from? Pension? Capital gains? Retirement account withdraws?

Gill
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Re: we're going to get hit with taxes next year, help please

Post by Gill » Sat Oct 28, 2017 3:24 pm

Hard to say what to do. I'm going to get hard as well. Nothing to do but lie back and enjoy it.
Gill

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FiveK
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Re: we're going to get hit with taxes next year, help please

Post by FiveK » Sat Oct 28, 2017 3:37 pm

The "what if?" worksheets of TurboTax, TaxAct, etc., and/or the marginal rate charting in the personal finance toolbox spreadsheet, may help your planning.

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mickeyd
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Re: we're going to get hit with taxes next year, help please

Post by mickeyd » Sat Oct 28, 2017 3:40 pm

Having to pay a lot to the IRS is a pretty good problem to have. My advice? Pay it quarterly and stash the rest away for the future.

Good luck.
Part-Owner of Texas | | “The CMH-the Cost Matters Hypothesis -is all that is needed to explain why indexing must and will work… Yes, it is that simple.” John C. Bogle

mrsbetsy
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Re: we're going to get hit with taxes next year, help please

Post by mrsbetsy » Sat Oct 28, 2017 3:51 pm

Feeling your pain. We are as well -- about 48K. Yes, we pay more in taxes than many people earn. We've done all we can do and that's just the way it is!

No words of wisdom, just pile it up and get ready!

Betsy

sport
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Re: we're going to get hit with taxes next year, help please

Post by sport » Sat Oct 28, 2017 4:00 pm

Depending on your situation, you may be able to save on taxes by bunching deductions into alternate years.

mhalley
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Re: we're going to get hit with taxes next year, help please

Post by mhalley » Sat Oct 28, 2017 5:41 pm

The only thing worse than needing to pay taxes is not making enough money to need to pay taxes. I was listening to a podcast today that recommended the alternate year strategy for taxes, ie give the yearly amount you normally give to charity every other year. Of course then you won’t have that deduction next year. :oops:

NotWhoYouThink
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Re: we're going to get hit with taxes next year, help please

Post by NotWhoYouThink » Sat Oct 28, 2017 5:43 pm

If you want actionable options, you need to be more specific. How much income, how much taxation? What deductions and credits you are already using, that kind of information.

There is no shame in paying taxes. Millions of people do it all the time. You are allowed to use the tax code to minimize your tax bill, but you aren't entitled to go through life tax free.

inbox788
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Re: we're going to get hit with taxes next year, help please

Post by inbox788 » Sat Oct 28, 2017 7:02 pm

squirm wrote:
Sat Oct 28, 2017 2:12 pm
Next year we're going to get hit hard with taxes. Last year we got solar which wiped out a chunk this year. We were going to get an electric car which would have helped next year but decided to wait to buy one next year. Wife and i both have pensions. What are our options? We've donated as much as we can. We don't have any ira accounts.
You can always donate more. Use a DAF.
Are you using an HDHP/HSA?
Kids/college plans? 529 - doesn't help with current taxes, but does with future like Roth
Capital losses?

https://www.irs.gov/credits-deductions-for-individuals

motorcyclesarecool
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Re: we're going to get hit with taxes next year, help please

Post by motorcyclesarecool » Sat Oct 28, 2017 7:14 pm

Sit down with a CPA / CFP who has a tax planning practice.

I have what for us is an unusually big tax bill this year. I sat down with a local CPA/CFP last year and pre-paid some property tax (At risk of AMT this year) and planned significant giving with a DAF.

To put a silver lining on the tax bill, I paid it with two “travel points” credit cards, racked up two sign on bonuses, and paid off the cards ASAP. Now for about $400 in total “convenience charges” and annual fees, our family of four is taking a 10 night vacation in the sun this winter, with flights and lodging paid.

Taxes are inevitable, but there are ways to make them sting a little less.
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.

squirm
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Re: we're going to get hit with taxes next year, help please

Post by squirm » Sat Oct 28, 2017 8:22 pm

Hi all,
Thanks for the replies, to be more specific, the vast majority of the income is from wages, but dividends and interest account for a portion too, we also have rental property, but deductions offset most of that. None of the accounts are in tax sheltered accounts. Turbo Tax is stating we'll owe about $14k, based on last years taxes. Speaking of dividends, the Master Limited Partnerships, how does that work with the reported dividends? I purchased some MLP's last year.

Last year wasn't much of a problem with a decent sized solar array to offset a sizeable tax hit.

squirm
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Re: we're going to get hit with taxes next year, help please

Post by squirm » Sat Oct 28, 2017 8:25 pm

motorcyclesarecool wrote:
Sat Oct 28, 2017 7:14 pm
Sit down with a CPA / CFP who has a tax planning practice.

I have what for us is an unusually big tax bill this year. I sat down with a local CPA/CFP last year and pre-paid some property tax (At risk of AMT this year) and planned significant giving with a DAF.

To put a silver lining on the tax bill, I paid it with two “travel points” credit cards, racked up two sign on bonuses, and paid off the cards ASAP. Now for about $400 in total “convenience charges” and annual fees, our family of four is taking a 10 night vacation in the sun this winter, with flights and lodging paid.

Taxes are inevitable, but there are ways to make them sting a little less.
Not a bad idea, with the credit cards...i might want to look into that.

Gill
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Re: we're going to get hit with taxes next year, help please

Post by Gill » Sat Oct 28, 2017 8:32 pm

Is that a total tax of $14k or the excess above your withholding? If it's the excess, maybe you need to adjust your withholding.
Gill

squirm
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Re: we're going to get hit with taxes next year, help please

Post by squirm » Sat Oct 28, 2017 8:54 pm

Gill wrote:
Sat Oct 28, 2017 8:32 pm
Is that a total tax of $14k or the excess above your withholding? If it's the excess, maybe you need to adjust your withholding.
Gill
it's excess...I was hopping there'd be ways so we don't owe so much overall.

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Wildebeest
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Re: we're going to get hit with taxes next year, help please

Post by Wildebeest » Sat Oct 28, 2017 8:56 pm

We are hit hard with taxes and we feel fortunate to make enough that we are in the highest tax bracket.

Have you thought about a DAF? You will pay less taxes and it may help someone.

Have you maxed out your 401 K, Mega Roth and is there a tax deductible 529 ( state only) in your future?

It helps to be educated about taxes and get an tax wise CPA, if it all is too daunting.
The Golden Rule: One should treat others as one would like others to treat oneself.

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Mlm
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Re: we're going to get hit with taxes next year, help please

Post by Mlm » Sat Oct 28, 2017 9:15 pm

You still have time left to adjust your W2 withholding or bunch deductions. Year end dividends and capital gains can be hard to predict so I usually start with a high estimate at The beginning of the year and Ratchrt it down if it’s not needed
It’s important to pay attention to your tax situation throughout the year and not just at year-end
Or you could have quarterly or semiannual meetings with the tax repair to guide you
If you’re on top of things and then there never shouldn’t be any big surprises
Reality has a way of catching up with you

hq38sq43
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Re: we're going to get hit with taxes next year, help please

Post by hq38sq43 » Sat Oct 28, 2017 9:46 pm

"I like to pay taxes. With them I buy civilization."
Justice Oliver Wendell Holmes, Jr

Best wishes,
Harry at Bradenton

kksmom
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Re: we're going to get hit with taxes next year, help please

Post by kksmom » Sat Oct 28, 2017 11:16 pm

Image
:)

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CAsage
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Re: we're going to get hit with taxes next year, help please

Post by CAsage » Sat Oct 28, 2017 11:22 pm

What exactly is the problem here? You have a good income and owe taxes on that and the problem is ????? Unclear from post.

If the problem is how to pay them - look into estimated taxes. My problems are terrible, too, I have to pay lots of taxes. Most ideas I have found on paying less taxes require you to realize less income....
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

daveydoo
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Re: we're going to get hit with taxes next year, help please

Post by daveydoo » Sat Oct 28, 2017 11:37 pm

motorcyclesarecool wrote:
Sat Oct 28, 2017 7:14 pm
...and planned significant giving with a DAF.
+1. If the unexpected excess income is taxed at a higher marginal rate (i.e., is in a tax bracket that you generally don't reach), I agree with front-loading a few years' charitable contributions into a DAF like Fidelity Charitable. Won't save you a ton but a thousand bucks is a thousand bucks.

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