Taxes, Behavior Control and Keeping Your Money

indigoocean (67) in money • 6 years ago (edited)

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6 years ago by indigoocean (67)

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agmoore (64) · 6 years ago

I know you left value judgment out, and I understand, because how can you argue values? What are we willing to pay for? Who are we willing to pay for? A swamp, inviting dispute. So I'll stick with what you ask us to address--ways of saving money on taxes.

My husband and I are simple people--wage earners. Wage-earners have the obvious tax break of retirement accounts--both work sponsored and individual. There's an initial tax deduction and the benefit of tax-free growth over the years. Not only that, in some states (NY, where I live) retirement accounts are off bounds to most creditors, if times should ever get really tough. There are limitations on how much can be deducted and who can deduct. Anyway, that's my idea.

Nice blog. Got me thinking again about solar again--just have to talk the husband into it:)

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indigoocean (67) · 6 years ago

Yes, it is always an endless conversation on what taxes SHOULD go towards, but we all know we want to pay less of them so we can decide exactly what we do with our money ourselves.

Great point on the retirement savings. I didn't even realize they can't be touched by creditors. That makes them a better store of value than real estate. However, I think it's really important to think about what goes into those retirement accounts. Right now the stock market is probably at its top (meaning it can only really go down in the near future) and interest rates are less than the rate of inflation. I wouldn't know what to put into a retirement investment account until they come out with BTC ETFs!

Definitely do look at solar, but may be better to wait a year if you've waited this long. New tariffs were just added on foreign solar panels, making them 25% more expensive in the short run. Better to wait for that to be reversed.

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agmoore (64) · 6 years ago

Well, it will take a year to talk my husband into solar :) And besides CDs, at this point, I wouldn't know where to go--better than the mattress, I guess.

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ross-early (51) · 6 years ago

Sounds like it's time for me to stop using the online tax software sites and pay a professional. My assumption has always been that my financial situation isn't complex enough to benefit from the professionals increased cost.

This all goes back to the saying we can't control the hand that we are dealt, but we can decide how to play our cards.

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indigoocean (67) · 6 years ago

The trick is finding a tax professional who thinks like this. A lot really do just check boxes and don't think creatively. They see their job as making sure you don't get audited by not making any mistakes. They don't see their job as figuring out how to save you money. That's why I wound up paying about $600 a year to have my taxes done. I had to pay more for a proactive tax person. You could get them prepared for you for more like $200 and they wouldn't be any better than the software.

That said, it also depends on what's going on in your life. Might you go back to school ? (I think you mentioned that.) Selling or buying a house? Have options about handling retirement contributions? Etc.

If nothing is really going on and it's just mortgage interest and how many kids under a certain age as your only deductions, and no self-employment issues either, it starts saving you less to hire a professional.

I'm definitely glad I did, but I can't say it is worthwhile in every situation.