Have Tax Questions? Ask a Tax Expert for Answers ASAP
Hello JA Customer,
Unfortunately there is no way to really avoid the higher taxes. The more money that you make, the higher the tax bracket that puts you in for the year.
The only thing you can really do is make sure you are taking advantage of all the deductions available to you. The biggest one would be contributing the maximum amount he is allowed to his 401k or other employer sponsored retirement plan. Those contributions will directly reduce his taxable income dollar for dollar for the year.
If your husband's employer offers a medical reimbursement account, these plans allow you to divert part of your salary to that account to pay for medical expenses. The contributions you make are free from both federal and state income taxes as well as SS and Medicare taxes, so you would want to take advantage of contributing to such a plan if it is offered.
If you are close to needing some repairs on your home such as a new HVAC unit, roof, windows or doors, this may be a good year to make those improvements and take advantage of energy credits being offered which directly reduce the amount of taxes you owe.
Any elective medical procedures you have been considering (laser eye surgery, etc) can be deducted as a medical expense, so it's good to consider these procedures in a year when your income is higher and you can benefit from the deductions.
Other than increasing the amount of your itemized deductions and maxing out your retirement plan contributions, these are really the only things you can do to help lower your taxes on this income.
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Thank you JA Customer
Hello again JA Customer,
Unfortunately I can only provide you with what advice is available. The simple matter of the fact is that the only way you can reduce the taxes your husband is paying on his increased overtime income is through increased deductions.
The more money that you earn, the higher your income bracket is. There are many married couples where one spouse chooses not to work at all for this very reason, as the increased tax liability is just not worth the net income they receive from the second spouse's income.
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