I sold 3 rental houses this year so my income will be higher than normal.....and I am supposed to sell another house soon possibly......

My wife has a 401k through her company and so do I, so we already put some $ into hers and $5k into mine....(the market sucks so I don't want to put too much $ there).

we give a fair amount of stuff (my hot wheel collection, clothing, etc...) to the Ronald McDonald house, etc....

I am glad to make decent $, but...... not so glad to pay as much as I think I may have to for federal taxes....

HELP...

 

How about this?

http://personal.fidelity.com/products/reti...eogh.shtml.cvsr

 

Why not do a 1031 Exchange?

Also, market timing is a loser's game. That being said, the 401(k) is a terrific tax shelter, so at least contribute the money and dump it into the money market or stable value fund (if the plan has one)

 

Own any stocks that are in the toilet? Sell before year end, losses will offset gains in houses. (Not stocks in IRAs or 401K's)
Watch out for AMT if you try prepaying state tax.

 

 

Why do you think the market sucks? Do you think you should start buying when everything goes up in value? I thought the point was to buy low and sell high. Maxing out your 401(k)'s will reduce your taxable income and help offset some of the income from selling the rental homes, right?

 

I hadn't thought of the 1031 thing.... I looked at the rules and it appears you have to have your next purchase lined up 45 days from when you sold? (did i read that correctly?).

I could try it with my next sale. that is tough though to have a new place lined up withing a month and a half.

I think from there you have 180 days to actually make the purchase.....

 

luckily i don't own any stock to speak of. I learned how horrible my stock picking was about 6 years ago so I have tried to stay away as much as possible.

 

I am now planning to max out my 401k. I have no idea where the stock market is going, but my timing always seems to be horrible. At least here at work they give me 50% (up to 6%) match for free, so even if the market goes down, i will hopefully still be ahead.

 

A couple of suggestions I have (some you've already done, I think):

1. Max out 401(k) to your allowed limit.
2. Try and claim as many losses as possible - as someone pointed out, if you lost money on an investment, claim it now. If you had claimable expenses in your homes (ie, especially those that don't have to be amortized), add those in.
3. I assume you designate a place in your house as an office? If not, designate one as an office and claim a percentage of your mortgage and utilities as business expenses.
4. Mileage for your rentals should be deductible - you'd need a log to "prove" your mileage, but you should be able to do that.
5. Make sure you claim all medical expenses.
6. You should be able to claim state sales tax as well - I know we can in Texas. If you've paid more than $600 in sales taxes (and can prove it with receipts), you can probably itemize those as well. Again, I know we can do this in Texas but I'm not certain about PA. If you bought a car this year, you should have well over $600 in sales tax.

In the coming year, it may be worth your while to do your taxes a bit ahead of the end of the yar to see where you stand. If you're on the low side of a higher income tax bracket, it may be worth your while to make a charitable contribution to drop your income into a lesser tax bracket.