So how do you pay $0 taxes when you make six figures? The net result of clever tax moves has been proven. Here’s the exact method to follow:
Max out tax deferred savings plans like 401k’s, 457’s, and IRA’s
Funnel medical and child care expenses through HSA’s or FSA’s
Don’t miss out on common tax credits like the child tax credit and retirement savings contributions credit
What do you think of this strategy for paying $0 income taxes? What other ways can someone legally avoid paying taxes on a six-figure salary?
This year the Social Security tax rate went back to the pre-stimulus rate. It is now 6.2%.
If your budget runs off of your income (which it should) you’ll need to find places to adjust so that you don’t accidentally spend more than you make.
For those with a set pay date (1st,15th, every other week, etc) subtract your last December paycheck from your first January check. Then double it. This is the amount you’ll need to adjust your budget by.
If you need to setup a budget please review the Finances section.