Income tax

[buntatog]

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I tried reading on it, can't seem to wrap my head around it. I started working as an attending this August, my tax deductions are "married but filed as single". Should I be concerned that I will owe the IRS money in unpaid taxes? I used the IRS calculator, and it is recommending me to keep the married but single rate withholding", so I won't owe anything to the IRS at the end of the year and expect a refund of about $500. This sounds absurd but if paying almost 100K in federal income tax, to get about nothing in return?? I'm finding this whole taxation thing hard to understand. Does anyone have any advice on how I can maximize my deductions to not be royally screwed?

 

[Oggg]

Get a good CPA. They are worth it.

 

[Silent Cool]

I tried reading on it, can't seem to wrap my head around it. I started working as an attending this August, my tax deductions are "married but filed as single". Should I be concerned that I will owe the IRS money in unpaid taxes? I used the IRS calculator, and it is recommending me to keep the married but single rate withholding", so I won't owe anything to the IRS at the end of the year and expect a refund of about $500. This sounds absurd but if paying almost 100K in federal income tax, to get about nothing in return?? I'm finding this whole taxation thing hard to understand. Does anyone have any advice on how I can maximize my deductions to not be royally screwed?

ask Blade.

 

[Mman]

This sounds absurd but if paying almost 100K in federal income tax, to get about nothing in return?? I'm finding this whole taxation thing hard to understand. Does anyone have any advice on how I can maximize my deductions to not be royally screwed?

You don't want a big refund. If you get one it means you had too much money withheld from your paychecks and gave the government an interest free loan for the year.

Get a CPA. Mine charges a couple hundred dollars for the year and saves me thousands and thousands of dollars a year in taxes. At your income level, you'd be dumb to not use an accountant. Too much at stake and your chances of getting audited are relatively high compared to most people.

 

[geauxg8rs]

agree on the CPA.

I also recommend reading some of the posts on

whitecoatinvestor.com

He has some good posts about limiting your tax liability.

 

[Impromptu]

Aside from the absurdly high rate of wealth redistribution, you can face fines if you don't have enough of your money withheld and you owe too much come April. I think there is a grace year when you first have a major change in income levels, but by next year you should try to avoid those penalties.

Keep good records. Even getting a simple accordion filing system each year and putting financial documents into it is helpful. The major deductions will be a mortgage, charitable, and student loans. HSA accounts with high deductible insurance plans can be beneficial, though over the counter drugs can no longer be purchased with them. Some people can have their group buy them a car. IRA and Roth IRA investing. If you have used TurboTax or other tax software in the past, just look at the different areas they have you enter to find out where deductions can be found. Wealth preservation and protection are as important as growth.