he’ll be paying everything he earns in the independent contractor job (maybe more) in taxes!
he might want to consider choosing one job over the other taking more time off and doing barter - or volunteer work for the satisfaction of it
Exclude any money made from Movies, Television, or other forms of entertainment.
You could make up for it by doubling the taxation rate of money earned via military or law enforcement service.
Accellerate your income into 2009!
These tax increases likely won’t apply to 2009.
I’m taking that approach with my interest in my Father’s “decedant IRA”.
I got my first Obama tax cut check guess what?
FACTS ARE IN – I DID THE MATH.
My bi-weekly federal withholding LAST PAYDAY 246.54 THIS PAYDAY 215.77
Extra on my bi-weekly paycheck + $ 30.77 or 61.54 a Month
BUT I just got a letter that my Escrow is increasing $117 a month beginning April 1st due to property tax increases.
MY NET LOSS each month – $55.46. That’s Right, this middle class well below 250K worker, in fact below 100K, WILL BE PAYING MORE TAXES.
ping
No. The communists will eventually get every penney.
Do I have this right, the guy makes $400K a year and is asking you to get free tax advise off the internet, right?
OK, here is my advise: Get an unlisted social security number.
.....Bob
I just don’t think it will stop at $250,000 mark. It will affect all eventually.
First he needs a home office. Use all available deductions associated with it—utilities, car, insurance, etc. Also he should take maximum SEP IRA deduction. This will greatly reduce the taxable income associated with his self-employment.
He needs a house with a big mortgage payment to reduce his taxable income. If he has some savings, I suggest hiring an investment advisor. The 2% management fee adds up and will further reduce his taxable income while hopefully growing his nest egg.
He can also give to charity and take advantage of other Schedule A deductions.
All of this assumes that the Obama soak-the-rich plan kicks in if you have 250K left AFTER deductions.
Do you really believe that only people who $ 250,000 are going to be taxed? The socialists are not going to renew the Bush tax cuts that are due to expire in December 31 2010. Every tax payer will be paying much higher in taxes starting January 1 2011.
Errrrr... excuse me, but when the 2003 tax cuts expire under Obama at the end of 2010, the entire federal income tax rates go back up to the higher rates of the year 2000. Low income, middle income, and high income will have have their federal income tax rates increased and take home pay decreased.
There is no getting below $250K to not get a tax increase. Obama is playing with smoke and mirrors and most people are buying it and have no clue that the expiration of the 2003 tax cuts is a tax INCREASE on all income levels.
Also, as the law stands, next year we will be able to recharacterize regular IRA money into Roth IRAs regardless of income (right now you can only do it if your joint income is < 100K). He should recharacterize all that he can. That way he will pay tax only on the principal that he recharacterizes and not on any accumulated earnings, and the tax will be at 2010 rates, which I don’t think will reflect the Obama increase.