Advice on what to do - no current write off's in our life

[FloridaFool]

What is the name of your state (only U.S. law)? Florida

My wife and I were married a second time later in life. We are in our Mid 40's and have a 15 yr old daughter. Between our poor credit and low pay we have never had any write offs. Now, 5 years later from being married, our lives ar eon track, our pay has jumped up considerably from where we started and our credit is better. Thi sis the first year we are getting nailed with having to pay taxes.

I am ASSuming the main reason is because of our new tax bracket and that we have no write off's. I guess the easiest write off would be to purchase a house, but that's easier said then done and we are 1-2 years out from doing that.

There could be a very short answer to this, but is there anything we can do to shore up having to pay in the future? Im not sure if Im oversimplifying the question.

Any help and advice is appreciated.

 

[tranquility]

All a "write off" is is an expense the government will pay some portion of. (In that your taxes are reduced.) While there can be advantages to shift some from one year to another in certain circumstances, it is not generally useful to think of increasing expenses to get a write-off. It's like buying shoes on sale, no matter how much you "save", you're still out money. Better might be to take advantage of saving some of your income in tax advantaged vehicles like an IRA or Roth IRA.

 

[Stephen1]

You stated that prior to this year you didn't pay any taxes. Unless the government refunded 100% of what was withheld from your pay, this idea was wrong. You did owe taxes and you did pay them. I realize that many people think about taxes as only the amount that is greater than what was withheld from their pay - e.g., if not enough was withheld then they owe taxes and if too much was withheld then they don't owe taxes.

What happened to in the past is that the amount withheld from your pay was equal to or greater than what your actual taxes were. Apparently your current problem is that you had too little withheld. You can go to your payroll person and revise your W4 so that more is withheld from your pay.

If you can see your way clear to follow Tranquility's advice about an IRA that could defer taxing some income too.

 

[davew128]

You stated that prior to this year you didn't pay any taxes. Unless the government refunded 100% of what was withheld from your pay, this idea was wrong. You did owe taxes and you did pay them. I realize that many people think about taxes as only the amount that is greater than what was withheld from their pay - e.g., if not enough was withheld then they owe taxes and if too much was withheld then they don't owe taxes.

I was going to post examples as to why your statement is wrong, but realized I don't have all day. Bottom line, unless you looked at their tax return, you can't say that they paid tax or not, refund or no refund. It is ENTIRELY possible for a family of three including a school aged child with modest income to have no federal income tax.

 

[csi7]

There are certain credits available to low-income households that when removed, can create a situation where taxes are owed at the end of the year.

You can elect to have extra taken out of your paycheck by changing your withholding W-4. This will lower the taxes owed at the end of the current tax year.