Those in the 35% Tax Bracket, how do you Value Relationships?

[AAAgent]

I hope to get there one day.

There's no secret that you did all that grinding to get to where you are at, maybe, prior to 40. That grind is essential to who you are, and hopefully, who you continue to be. Would you want your partner to have that similar trait?

I'm not the same person i was before grinding my way to this tax bracket. To get to this level not only requires hard work and intelligence, but on the business side, i'm heavily focused on metrics and success.

My wife doesn't work. Having that similar trait would be too much hassle. I want someone in my relationship to supplement my weaknesses, not someone to combat my strengths.

 

[MatureDJ]

Incorrect. Extended returns for 2021 run through October of 2022. 2022 returns using those tables cannot be filed until January of 2023. If you made $210,000 in 2021, you are in the 35% bracket.

The tax rates for the upcoming year are announced before the beginning of the year - e.g., the tax rates for 2022 were announced in late 2021. Typically business journals like Forbes will release an article in Aug/Sep about what the new rates will be, and they're usually spot-on, or spot-on enough.

 

[MatureDJ]

I'm not the same person i was before grinding my way to this tax bracket. To get to this level not only requires hard work and intelligence, but on the business side, i'm heavily focused on metrics and success.

My wife doesn't work. Having that similar trait would be too much hassle. I want someone in my relationship to supplement my weaknesses, not someone to combat my strengths.

I hope it works for you, but I am sure there are female divorce lawyers that salivate over this type of situation.

 

[MatureDJ]

I am a habitual extension filer lol

I'm the opposite - my typical filing date is Jan 2 regardless of whether I owe anything (I make a payment online for Apr 12, in honor of the world's first astronaut). I also file by paper & snail-mail. I do not want to go through the stupid screens for the tax software where I have to guess what I have to enter to correspond to a certain line on the forms - or even worse, have me enter every single stupid line from my 1099 form (something I don't have to do my doing it via paper). That said, doing my state income tax is pretty easy as it just about only entails entering my federal AGI, so I do that online.

Speaking of tax software, it is outrageous that with all the information that the IRS is getting, the IRS doesn't pre-fill out an electronic form with all that information, nearly all taxpayers wouldn't have to enter anything. This is due to the tax-preparation industry wanting to continue to fleece the Lumpenproletariat for their $200 fee - and for a certain folks in Washington that wants doing taxes to be as painful as possible.

 

[The Duke]

The rich people use real estate to depreciate their earnings and bring down their taxable income. Example, Let's say you earn 250k a year. Your fed tax bracket is 24% (approx). 250k 24% = 60,000.00. The standard deduction is 12,950, so you are down to $47050. You purchase a 2million dollar investment property and you get to depreciate the building, land is not depreciate. 2m divided by 27.5 years (depreciation) is approx. $72,727k a year. There you go. You now pay no taxes aside from FICA. The additional $25,677k "loss" is carried over to subsequent years. This is how the rich minimize or eliminate most taxes.

Others, who have massive securities (bonds/stocks/preferreds/UITs/etc) can actually "borrow" from their holdings via margin; assuming the interest rate is low enough, and their gains/dividends pay the margin off and they have legal tax free money. This is what Mark Zuckerberg, Elon Musk, Larry Page and others do. One doesn't need a few billion to do this. You can do this with a couple of million; but it may be a fruitless endeavor.

Example. One has $2,000,000 in securities. Their margin rate is 2%, in theory, they can "borrow" on margin $1,600,000 at 2% margin. Their annual maintenance on the 1.6m; assuming a person "borrowed" all of it would be $32,000 a year in margin interest. However, if they have dividends and bonds paying 4%, they are earning $64,000 a year in interest. So, they can legally "write-off" the $32,000 in interest, while borrowing $1,600,000 and still earning in dividends an additional $32,000 a year. Their personal tax liability would be only on the $32,000, not the $64,000 in earned dividends nor the $1,600,000 they used on margin. If the dividends are mutual bonds in their state, the dividends would be federal and state free.

Not accounting advice, just hypothetically how it works.

You are spot on. And wealth is exponential. The more you have the faster it grows.... exponentially. Start building wealth early. Youre money will do the work for you, and you can be your own banker.

 

[jaygreenb]

You are spot on. And wealth is exponential. The more you have the faster it grows.... exponentially. Start building wealth early. Youre money will do the work for you, and you can be your own banker.

Agree, if I had to do it all over again I would have invested and bought assets at much higher rate in my 20's. I would of also started a business and left the corporate world much earlier then when I did at 30. I really didn't do anything besides my 401k during that time. I blew a lot money on BS. I really didn't start aggressively doing this until my mid 30's and was making good money with my business. Once you hit certain net worth amounts you hit escape velocity and it grows much quicker. The best thing a young person can do is grind to get your income as high as possible and keep a high percentage investment rate. Do that for 10yrs and set up your whole life

 

[member160292]

I’ve read on here years ago that between 30-40 is where you make the most money. Being in my mid 30’s I’m glad that I grinded it out 27-34. Let’s you enjoy it as I’m entering my prime right now

 

[jaygreenb]

I’ve read on here years ago that between 30-40 is where you make the most money. Being in my mid 30’s I’m glad that I grinded it out 27-34. Let’s you enjoy it as I’m entering my prime right now

Not sure that is where you make the most money but is typically where you make that next jump in income and net worth. Your 20's is about paying your dues, getting experience and climbing in whatever field you are in. For people who prepared, that is typically where it all starts to come together and you reap the rewards. It is really where you start seeing the separation of those who made good choices and those who didn't. If I had to guess, I would say 40's and 50's is where you make the most money, could be wrong though.

Your 30's is a great time to be a man though, still young and spry if you took care of yourself and also making good money. 40's is where you start seeing slow physical declines. some more than others

 

[member160292]

Not sure that is where you make the most money but is typically where you make that next jump in income and net worth. Your 20's is about paying your dues, getting experience and climbing in whatever field you are in. For people who prepared, that is typically where it all starts to come together and you reap the rewards. It is really where you start seeing the separation of those who made good choices and those who didn't. If I had to guess, I would say 40's and 50's is where you make the most money, could be wrong though.

Your 30's is a great time to be a man though, still young and spry if you took care of yourself and also making good money. 40's is where you start seeing slow physical declines. some more than others

Should say significant growth in making money career-wise. Of course not the most money since investments are the biggest money makers as you said

 

[logicallefty]

I’ve read on here years ago that between 30-40 is where you make the most money. Being in my mid 30’s I’m glad that I grinded it out 27-34. Let’s you enjoy it as I’m entering my prime right now

This is one area of conflict I have with my wife. I also grinded it out from college (18) all the way through my 20s doing I.T. certifications out the azz and then going to police academy and becoming a cop in my early 30s. Putting in 18 hour days, studying every spare second I had. Now I have two stable careers in very high demand and make as much money as I want to make any given week. My wife always makes little snarky comments about things being "easy" for me as she only makes like $16/hr in the healthcare field. There isn't a damn but of "easy" anywhere in my life equation. It infuriates me when people call it "easy".

 

[EyeBRollin]

My wife always makes little snarky comments about things being "easy" for me as she only makes like $16/hr in the healthcare field. There isn't a damn but of "easy" anywhere in my life equation. It infuriates me when people call it "easy".

Sometimes I wonder if this is code for she wants to quit working and be 100% financially supported by you while she “pursues her dreams.” The snarky comments sound resentful. My wife doesn’t make a lot either. Lately she’s been on this tip about starting a business. Not sure why- she has no clue about anything relating to business.

Observation only- I believe women think making more money is the direct correlation to enhancing their lifestyle. Truly to their core they think any money she earns is hers only and any money you earn is also hers. My wife on three occasions now has refused to pay for things she doesn’t agree with and “made me” pay for it. Since I only allowed her to have joint accounts, it doesn’t matter which one of us pay.

 

[member160292]

@logicallefty @EyeBRollin

Thanks for your feedback. This was more the intent of my OP.

How does it make you feel that you make significantly more than your partner? Perhaps I value money too much that it would make me uncomfortable being practically the sole income earner in the relationship.

 

[EyeBRollin]

@logicallefty @EyeBRollin

Thanks for your feedback. This was more the intent of my OP.

How does it make you feel that you make significantly more than your partner?

I think it’s preferable. I feel like I retain some amount of leverage knowing that my career keeps the lights on and her career is just fluff. Women cannot respect men they don’t “need.” Fvcked up but it’s true…

 

[RickTheToad]

Sometimes I wonder if this is code for she wants to quit working and be 100% financially supported by you while she “pursues her dreams.” The snarky comments sound resentful. My wife doesn’t make a lot either. Lately she’s been on this tip about starting a business. Not sure why- she has no clue about anything relating to business.

Observation only- I believe women think making more money is the direct correlation to enhancing their lifestyle. Truly to their core they think any money she earns is hers only and any money you earn is also hers. My wife on three occasions now has refused to pay for things she doesn’t agree with and “made me” pay for it. Since I only allowed her to have joint accounts, it doesn’t matter which one of us pay.

Seems your wife doesn't know her role. You may want to put her back in her place and teach her the magic word of "NO". NJ law isn't the greatest for married people. You should always have a separate fund or some gold in case turd hits the fan.