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Category: Tax
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Experience:  over 40 years experience in tax matters
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I am single, dont own anything (rent and have no car payment).

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I am single, don't own anything (rent and have no car payment). Here's the problem. YTD I have made $154,179.69 and have paid more in taxes that a lot of people make in a year ($52,477.04). I feel like I am getting killed!! What can I do, short of buying a house, to pay fewer taxes?
Submitted: 4 years ago.
Category: Tax
Expert:  CGCPA replied 4 years ago.

Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.

There are several options available to you which will reduce taxes:

1. Increase your retirement plan contributions at work to the maximum permissible. This will defer the tax until you retire and have, at least theoretically, a lower income.

2.Buy investment properties. With the housing market depressed there are many homes available to purchase at excellent prices. Often the tenant will be the former owner. Rental properties, if structured properly, generate tax losses which help reduce taxes while market value grows in the future. The key here is to combine this with item 1 so you income drops below the threshold for using such tax losses.

3. Buy a home for yourself. I know you really do not want to do this but home ownership has tax advantages and a home can include many lifestyles ranging from city condo to country farm.

Customer: replied 4 years ago.
Thanks. That is kind of what I thought. What kind of professional should I meet with to make sure my rental property is "structured properly." Tax attorney vs. tax advisor vs. CPA. Who has all the know how to help me?
Expert:  CGCPA replied 4 years ago.
Although any of the professionals you listed should be able to properly assist you, I would recommend you be certain the professional is licensed. Then at least you know he/she has satisfied legal standards. Also, many states will permit you to verify licensing status on line and some will even permit you to see if there are any complaints/charges against the individual. Stay away from anyone not licensed or charged. The problem is that every state has differing licensing for "tax advisor's" while attorneys and CPAs are uniform standards.
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