7 ms·
Ask HN: High income salaried employees – How do you reduce your taxes?
If you are a W2 wage earner who earn a lot of money through salary, RSUs, etc, could you please share your favorite tax saving strategies? What are some legal ways to save on tax and build wealth? Any references to articles, videos, podcasts?
- simantel 2y agoI haven't done it, but am genuinely curious about the tax savings of moving to Puerto Rico. From what I understand, you only need to spend 183 days a year there, so you could leave for hurricane season.
- roland35 2y agoJust fund your 401k and pay your taxes! Count yourself lucky!
- nothercastle 2y agoMax out 401k HSA and all other tax deferred accounts. After that it’s really complicated game playing
- JohnFen 2y agoI do a 401k (and investing in my businesses, but that's neither here nor there) plus whatever my accountant recommends. I don't have any problem with the idea of paying taxes, so I don't put a large amount of effort into reducing my tax bill. There are more beneficial uses for my time and energy.
- muzani 2y agoThis is the way. Taxes outside of Europe aren't too bad, and they fund more good things than bad things. I also don't think people get to high income by min/maxing taxes. Best to focus on exponential growth than logarithmic savings.
- deleted 2y ago[deleted]
- idontwantthis 2y agoI lived outside of the US for five years and claimed the FEIE. That’s about $120k deduction each year. Obviously comes with its own complications and I didn’t do it just for the deduction.
- aristofun 2y agomaximize all your tax defer accounts (pension etc.), postpone cashing out stocks to lower income periods What else there todo (within legal domain)?
- nothercastle 2y agoWith large sums of Money you can play games on when taxes are due that can allow you to invest money that you will eventually owe for taxes and then do a step up basis when you die thereby never paying taxes but not really being able to use it. There are other tricks to use the money where you take a loan and use the investment as a collateral but it’s all really complicated to manage and only makes sense at the 5-10mil range.
- aristofun 2y agoIn all jurisdictons I know - gov steal your taxes right away from your salary. And then you have to beg them for some return next year. Other types of income I suppose outside of the original question.
- nothercastle 2y agoYes if you get salary then there aren’t options to play game like this. High net worth people don’t get paid salary for this reason
- dyingkneepad 2y agoChoose 3 countries. Live 121.6 days of the year in each. Don't pay any taxes because you're not a fiscal resident anywhere.
- hiAndrewQuinn 2y agoI'm not a W2 wage earner, but for more general investment advice, https://www.bogleheads.org/ https://www.bogleheads.org/ and https://www.reddit.com/r/Bogleheads/ https://www.reddit.com/r/Bogleheads/ are always my first recommendation to anyone starting to get into this. And max out that Roth IRA! Its growth potential is unreal, it's the best investment vehicle most salaried workers have in their lives and if it wasn't capped at $6500 a year or whatever it would be the financial equivalent of a game breaker.