I am married with no kids. I rent and I have 2 dogs.
2007-10-08 02:56:30 · 3 answers · asked by KEVIN C 1 in Business & Finance ➔ Taxes ➔ United States
You don't pay that much in taxes. The US has some of the lowest taxes in the industrialized world.
In your current situation there's not a lot you can do to reduce your tax liability. You could buy a home, but unless the interest and property taxes exceed the standard deduction (currently $10,700 for 2007) you'll get no tax benefit from that.
You can (and should) put as much as possible in your retirement account, either at work or an IRA, to save for your retirement. However, you should use a Roth IRA or Roth 401k) if available through your work. You won't get any immediate tax benefit but the accounts accumulate tax free and you don't have to pay any tax on the distributions when you retire, unlike a traditional IRA or 401(k).
Anything else that you "spend" to get a tax break will cost you more than you'll save in taxes so is not worth the expense if a tax break is your only goal.
2007-10-08 03:08:08 · answer #1 · answered by Bostonian In MO 7 · 3⤊ 2⤋
Buy a house. While rent isn't deductible, mortgage interest is.
Max out your 401k's. If you both have 401k's at work, you can each put up to $15,000 away for your retirement. You don't have the money to spend now, but it is not taxed either.
2007-10-08 03:01:30 · answer #2 · answered by Wayne Z 7 · 1⤊ 1⤋
My goal is actually to INCREASE the taxes I pay. I don't want to pay more as a percentage of my income. I want to have more after tax income. Everyone keeps asking this question BACKWARDS.
Ignore bostonianismo. Tax rates in other countries are MORE insane than ours, but that does NOT mean ours are sane.
2007-10-08 07:34:42 · answer #3 · answered by STEVEN F 7 · 0⤊ 2⤋