Is it ever better to purposefully make less money for tax purposes?

March 5, 2011 4 comments

Question by George: Is it ever better to purposefully make less money for tax purposes?
For example, would it be better to purposefully make less money in order to be eligible to contribute to a Roth-IRA and enjoy its long-term tax benefits?

(I know there are tons of other examples and complicated tax code rules.)

Is it ever better to make less?

Best answer:

Answer by .
Only if you’re loonie tunes.

What do you think? Answer below!

IRA better, Ever, less, money, purposefully, purposes

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Written by jwthoughts about 3 days ago. Reply

If I ever pay $1 million in income taxes because I made so much money that it was what was due, I would rejoice about a FANTASTIC year.

Those who advise you to earn less or to find a way to take a loss have one thing in common. They are BROKE!

It is pure ignorance to lose $1000 to avoid a $200 tax. It is like those who claim that you need a mortgage deduction or you are losing money. You would rather pay the bank $10,000/year in interest than the government $2,000 and keep your $8,000??

Do not fall for the ignorance of the poor.

BTW…I own 7 businesses and have sold 15 businesses. I am semi-retired and just stay in the game for fun. I would NEVER try to earn less money for the tax “benefit”

ADDED: As I said. Those who give you examples of reasons to do that, talk from a poverty mentality. Read a book called “The Richest Man in Babylon”. It is a short, simple, but INCREDIBLY profound read. And never take financial advice from people who are not at a point where you want to get financially. If you want to be struggling while working two jobs, then follow that advice.
Written by Reality has a Liberal Bias about 3 days ago. Reply

Rarely. Remember that marginal tax rates are just that — the tax rate on the extra money you earn beyond a certain threshold.

So, a person with a top marginal tax rate of 28% isn’t being taxed 28% on ALL of his or her income, he or she is being taxed a low percentage for the first bracket, a higher percentage for the second bracket, etc., up to 28%
Written by TAT about 3 days ago. Reply

Yes. It is better to make 199.000 dollars a year than 200,000 dollars a year because you will get to keep more and actually come out a head with the 199 thousand. And you are correct, there are many examples of those who make more paying a higher rate. Then there is the fact that those who support themselves don’t get to suckle at the govt teat nears as often
Written by paul s about 3 days ago. Reply

that’s my issue. working two jobs I get punished by the IRS. I will probably have to go bankrupt. I can’t fight lifes battles along with a government who hates the self sufficient. Then I will be free to dump money into an ira and hopefully avoid those people. Mind you, I claim as few deductions as possible and my financial situation has me needing to work two jobs. I have no problem paying my child support but then at the end of the year they are on my like I didn’t give them first shot at my paycheck, hitting me up for another seven thousand. If I could put away seven thousand I wouldn’t be working from eight in the morning to midnight. You are right, if you are not now needy, you soon will be.

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Is it ever better to purposefully make less money for tax purposes?

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