If you set up a solo 401k for your wife's business, you may be able to defer a bit more income there, between the employer and employee limits.My father passed away approx 2 years ago with an IRA balance of $4.1 million. Both myself and my wife are primarily W2 employees with a combined income of approx $180-$200k. We’re both nurses so income will always be consistent. Our FP said the best option is to break it up over 10 years (approx $400k/year), so that’s what we’re doing. However, We are getting hit hard with taxes with a combined income of $600k. I max out my 401k, put about 20k/year in 529 fund (in SCarolina 529 deduct from state tax), and we max out wife’s IRA, and put the majority of the $400k in brokerage.
In addition to my wife’s W2 nursing position, she also does aesthetic nursing (Botox,fillers) on the side as 1099 employee. Unfortunately, there’s not a lot to write off for that (she brings in about $20-$30k annual). Any suggestions anyone could give to assist in tax savings would be great! Thanks
You could map it out and see what the total taxes paid look like if you go up to the top of the 32% bracket and then a final year take a big hit.
You could also consider going up to the top of the 35% bracket and see what the totals look like after 10 years.
Don't forget to factor in NIIT.
Also, switch up your tax-deferred holdings such that the inherited IRA holds all of your fixed income. Your personal accounts should be 100% equities. That will help slow down the growth of the fixed withdrawals while maintaining your AA.
Based on current law, tax brackets will reset in 2026. 24% becomes 28%, 12 to 15, 22 to 25, 32 to 33, 35 stays, 37 to 39.6.
Statistics: Posted by exodusNH — Tue Jun 04, 2024 9:03 pm — Replies 5 — Views 361