It’s not what you make, but what you keep.
How do I minimize the amount of taxes we pay? It seems like with every promotion and pay increase, I end paying more taxes. Unfortunately, 20% pay bumps only equates to a few hundred more in net pay per month. Our marginal tax system means if your pay increase pushed you into the next tax bracket, every extra dollar earned is taxed more. I often hear that the super wealthy pay very little taxes as a percentage of income but they have businesses that might enable them to be crafty. Warren Buffett at one point even said his tax rate is lower than his secretary. How can we get in on some of that strategy?!? (more…)