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Category: Tax
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Experience:  over 40 years experience in tax matters
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My husband was riffed and given a severance package which amounted

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My husband was riffed and given a severance package which amounted to a good amount of money. Luckily, he was hired right away at about the same pay. With our combined salaries this will push us into the 33% tax bracket. What are some of the things that we can do to keep us in the 28% tax bracket? The only thought that comes to my mind is for me to somehow go on extended leave without pay.
Submitted: 6 years ago.
Category: Tax
Expert:  CGCPA replied 6 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.


An extended leave without pay is probably not the best choice if you need the income to live on. It will actually cost you more money than you can possibly save in taxes.


I suggest the following options:


Put the maximum permitted into your retirement plan(s) at work. This, if before tax dollars, will reduce your income while setting money aside for later.


Accelerate the payments of tax deductible expenses such as medical care, mortgage payments, and charitable contributions. Do not pay beyond this years costs as it will not benefit you. Paying down your mortgage will get you free of this obligation sooner saving many dollars in interest payments.


Consider going back to school. The education credits will help reduce taxes and the American Opportunity Credit is even refundable. As an added benefit, you will grow and enhance your knowledge and skills.


Consider starting a business. It can be simple but should be something you truly enjoy. The tax write offs for this are excellent even allowing up to $10,000 in start up costs to be deducted.

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