I would really appreciate some extra income. However, I am at the near top end of my income tax bracket and a second job would probably only be for a few dollars an hour.
Is there any way I could get around this, or another type of job I could do were the tax penalties wouldn't be as severe?
2007-03-01 05:28:33 · 7 answers · asked by gravvyboat 2 in Business & Finance ➔ Taxes ➔ United States
Put more money into your retirement accounts. Open an IRA.
Open a business instead of being an employee. You can be an independent contractor instead of being an employee. You will have expenses that you will be able to write off that you couldn't if you were and employee.
If you are an employee you can deduct the mileage traveled BETWEEN jobs only as an employee business expense.
2007-03-01 05:35:50 · answer #1 · answered by R Worth 4 · 4⤊ 1⤋
If you're at the top of your bracket, then the additional income would be subject to taxes at a higher rate. But the difference between brackets is 10% at most (when going from 15% to 25% bracket) so the most you could lose in additional taxes by hitting the next bracket is 10%of the ADDITIONAL income, compared to what would happen if you were NOT at the top of your bracket.
2007-03-01 09:25:10 · answer #2 · answered by Judy 7 · 1⤊ 0⤋
One clarification: Only the money that creeps into the higher tax bracket gets taxed at the higher rate, not all of your income. I detest income taxes as much as anyone, but it is a fallacy to say, "I shouldn't earn more because I'll be in a higher tax bracket." For crying out loud, I look forward to being in the highest bracket - I'd be making nearly $400k/yr!
The POINT: There is NO 100% tax bracket; the highest for individuals is 35%. Of course, 35% is oppressive & ridiculous (but better than in some European countries), but it is still worth getting the other 65%!
2007-03-01 08:04:49 · answer #3 · answered by Tom's Mom 4 · 2⤊ 0⤋
Just pay the taxes....they never take all of it.
I'm a tax preparer and I can't see any way you can predict a bracket. I'm not even sure "brackets" still exist. If you look at a tax rate table you will see an even progression from one level to the next with no obvious bracketing as there once was.
If you are talking about making too much to get the Earned Income Credit, then that is as it should be. That credit is designed to help low income people. If you are no longer Low Income, you don't deserve it anyway. That's the way a Capitalist society works. The government helps the poor and the ones who are better off don't need help from the government and should take care of themselves.
2007-03-01 05:53:50 · answer #4 · answered by Anonymous · 0⤊ 2⤋
You need to use the worksheets on page 2 of Form W4 to make sure that enough tax is withheld from both jobs.
There's no way to reduce the tax bite; you just need to make sure that enough tax is withheld so that you don't owe a large debt at the end of the year.
2007-03-01 05:53:27 · answer #5 · answered by Bostonian In MO 7 · 1⤊ 2⤋
I don't understand your Question.
If you are already making a lot of money, but you are afraid that working will cost you more in taxes than benefit, then on your second job, make it as far away from your primary job as possible, leave your first job for your second job. This mileage is deductible, and on your w-4 withhold -0- and have an extra 10.00 per paycheck withheld.
www.irs.gov, individual, withholding calculator
good luck & bless
2007-03-01 05:34:35 · answer #6 · answered by Wood Smoke ~ Free2Bme! 6 · 0⤊ 3⤋
as far as i know, income is income and the only way that you can get around it is if you don't report it, but of course being hired anywhere means a w-2 would be filled out... you are supposed to report all income... even interest is considered income!!!
My suggestion- find somewhere you can be paid under the counter, or sell drugs.
2007-03-01 05:33:59 · answer #7 · answered by Steffi . 2 · 1⤊ 5⤋