Wife and I were staring to file our taxes today on our own. Married (filed jointly) no kids, renting (saving for a house) and no major deductions - save for my work (I'm an airline pilot and I can deduct a fair amount).

We together earn a good income, but how is the IRS wanting almost another $1800?!?! We've paid over 19k in federal taxes alone. This is a huge shock since we got back a bit last year (I did earn significantly more this year however).

Did I screw myself over by paying off student loans early and waiting to buy a house? If we don't buy a house next year and continue to just save, how can I avoid this pitfall? Any solutions, save going to a professional to file my taxes? Mostly, I want to avoid this again in the future so any advice is helpful.

Many thanks

Get another loan that has interest that is tax deductible (mortgage, school, related to business expense)
Buy property for business use that can be depreciated
Have a kid/have another kid
Increase contribution to 401(k) or IRA

RK said:

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Have a kid/have another kid

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this is never a solution to coming out ahead on anything other than heartburn and hair loss...

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Its a solution for coming out ahead on your taxes. Especially if you have Obamacare. Deduct medical expenses (over 10% of AGI), get the child tax credit, and deduct child care expenses.

I'm not saying you dont end up losing in the long run, but it does help you come out ahead on taxes, at least for a few years.




Answer for OP- Invest more in IRA/Roth IRA? See if there is a pre tax first time homebuyer savings plan in your state (thought this will likely only reduce your state income tax)?

Sounds like after your income increase, you just need to rebalance your exemptions on your W-4. If you don't have much going on other than some basic deductions, you should be able to plan to where you aren't paying in big ever (unless you want to).

If you got a big raise & all else is equal, then you jumped a tax bracket. The breaks this year for married filing jointly are at 75,300 (15% to 25%), 151,900 (25% to 28%), and 231,450 (28% to 33%).

Looks like all we can do is up the 401k, buying a house or popping out a kid is not in the plan for 2017 more than likely
Not much wife or I can do for work - she is in academia and I fly a while plane. Unless we start a business on the side
True, at least I didn't give the government a free loan, just bums me out how much we are paying (I know, check my privilege!)
So, looks like we are SOL and just have to deal with it. Will up 401k to max but not much else for next year. Won't buy a house due to moving to frequently (maybe buy a rental?)
Thanks everyone

Do our have a HSA w/ a high deductible health plan? You may be able to lower 16 liability by contributing to your max.

19k combined? I paid nearly $30k this year, alone.

Make sure your W-4 allowances are set to S-0 next year. Max the 401k to reduce the liability. Assuming you're at about a 20% effective rate, you'll need to put about $9k in to get that down.

Claim some losses on selling stock.

Dworak said:

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Wife and I were staring to file our taxes today on our own. Married (filed jointly) no kids, renting (saving for a house) and no major deductions - save for my work (I'm an airline pilot and I can deduct a fair amount).

We together earn a good income, but how is the IRS wanting almost another $1800?!?! We've paid over 19k in federal taxes alone. This is a huge shock since we got back a bit last year (I did earn significantly more this year however).

Did I screw myself over by paying off student loans early and waiting to buy a house? If we don't buy a house next year and continue to just save, how can I avoid this pitfall? Any solutions, save going to a professional to file my taxes? Mostly, I want to avoid this again in the future so any advice is helpful.

Many thanks

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no sympathy. Welcome to the real world, kiddo. Just wait until you try to work harder to make more money to offset what you're losing to federal income taxes.

I must be doing something wrong...I'm a single parent (one dependent), take over $18k in itemized deductions (mortgage insurance and property taxes), max out my 401k, and use dependent care savings accounts and an HSA. I haven't done my taxes for 2016, yet, but in 2015 I made just under the income where contributions to a Roth start to phase out, and I still paid over $16k in federal taxes that year.

Taxes seem to be one of those things where everyone seems to think they are paying too much because they really have no idea how much everyone else has to pay (myself included).

That's exactly what the wife mentioned. Give back and direct our money to charities we like.

Goal seek for 21k in fed taxes....


http://taxformcalculator.com/tax/110000.html

Stive said:

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You only had to pay in $1,800? Congrats. You didn't give the gubment a free loan and you didn't have a 5 figure bill with penalties for not paying quarterly.

Sounds like you did it right!

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This times eleventy billion!!!

Enjoy that small tax bill while it lasts. It only goes up from here.

federal government just thinks you make too much money. Welcome to reality.

I really don't understand the argument of "have more kids" to do better on taxes. Maybe I a missing something during the filing process, or doing something wrong, but I have never really seen having 2 kids making that much of a difference in my taxes (aside from dependent care expenses).

It's from not having enough taken out of your pay check.

2 years ago I paid $1,200, last year was $600.

Happens to me too, Also a dink. High income earners (say 60k+), the w-4 form is not setup to withhold proper amount even if you put zero deductions.

You need to project your 2017 taxes that you will owe based on your income and pre-tax contributions (include your wife's) and then check the tax guidelines for employers where it breaks down how much to withhold from each paycheck for each deduction. It lists pay cycles and also how much each deduction is worth. This will let you determine how much your employer will deduct with 0 deductions. Then you compare that to your estimated tax burden, and on the w4 there is a space to specify additional withholding. Specify what you need withheld to make up the difference.

For dual incomes I find this easier to do sperstrlu for each persons income so that each contributes evenly, and may be easier to file taxes separately as well. There is no savings filing jointly if both are high earners.

set up withdrawls at single and 0 that will help

histag10 said:

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RK said:

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Quote:

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Have a kid/have another kid

---

this is never a solution to coming out ahead on anything other than heartburn and hair loss...

---

Its a solution for coming out ahead on your taxes. Especially if you have Obamacare. Deduct medical expenses (over 10% of AGI), get the child tax credit, and deduct child care expenses.

I'm not saying you dont end up losing in the long run, but it does help you come out ahead on taxes, at least for a few years.




Answer for OP- Invest more in IRA/Roth IRA? See if there is a pre tax first time homebuyer savings plan in your state (thought this will likely only reduce your state income tax)?

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like using a firehose to put out a candle.

AggieFanatic09 said:

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19k combined? I paid nearly $30k this year, alone.

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So is this how it (generally) works, make more, pay more?

shocking I know. This, however, is not what mainstream media would lead you to believe.

Make a 2016 contribution to IRA