<p>“Our AGI this year is almost double what it was last year. Here is the kicker though, our TAXES have gone up 5 TIMES what they were last year, 5 TIMES. Stop whining about the tax rates you have now, thanks”</p>
<p>Wow, just wow! That must have been a shock.</p>
<p>“On taxes - you get used to them - whether they go up or down. It may take a year or two but it just becomes the new normal. Most of the people here should have been through a few major tax bill changes.”</p>
<p>I suppose that is right. But my estimate is an extra 2K/month, and it will take some time to get used to that. I guess we have all year to save up then. Son #1 is graduating in May, so instead of paying tuition, we can pay taxes. I did hope to fund 401K’s and pay down our mortgage, but so much for that. Or just figure out how to lower expenses and work less. Time to reread Dave Ramsey’s book, “Financial Peace”.</p>
<p>We should have done that, for 2012 and 2013. But am I correct that he could still make a lump-sum payment to his 401k, for 2012 (he has not maxxed out his contribution) and that would be deducted from income?</p>
<p>Busdriver11, a household with your kind of income should have approximately 400,000 after tax income a year.</p>
<p>I don’t know what you are spending your money on, but you should not be having too many financial issues. </p>
<p>If you and your husband work one extra year, you can fund 15 years of tax increases. Instead of working less, you and your husband work one more year and you are done. </p>
<p>By the way your income dwarfs those that make 250,000. You are at a different level. </p>
<p>It is funny how psychology works. A friend of mine’s wife just retired with a very solid income going forward. Much less than the numbers we talk about. They are happy.</p>
<p>My income will be way down for 2013 compared to 2012, so most of the increases except FICA should not affect us in any great way. And hopefully we get out of AMT because I have a nice big AMT credit I can use.</p>
<p>I’m happy I found a job before I burned through my severance pay. :D</p>
<p>No, dstark, the example we had used earlier was just an example, not my specific income. We don’t have that kind of money after taxes. And after we pay things that I consider necessary, like college (about 115K), 401K, mortgage, insurance, union dues, property taxes, bills…there is remarkably little left. The extra is going to have to come from things like 401K, it’s just too much to get by cutting back. And all of our savings went to buy 4 short sale condos, so we are very cash poor. Thinking about selling one to pay taxes, but we’d like to wait until the market improves. </p>
<p>We had far more extra money about 15-18 years ago. No school expenses for kids, low taxes, tiny house. I know you think I’m complaining, but my dispute has to do with the fact that this is really for nothing. Just delays the tough decisions another two months, makes no cuts, ignores the debt and the deficit. I’d be happy if we were actually working on solving the problem, but how can I be happy that this is purely for someone’s idea of “fairness”?</p>
<p>“If you and your husband work one extra year, you can fund 15 years of tax increases. Instead of working less, you and your husband work one more year and you are done”</p>
<p>Seriously? I thought we’d agreed that life was good and maybe it’s better to take more time off. That sounds far more appealing. Work an extra year to pay more taxes? Now that is a depressing thought!</p>
<p>^^Our training dept told us the average age of death for pilots at my airline is 64. Maybe a little less would be better, I don’t think we have much more in us.</p>
<p>I am not aware that you can do it for 401K, but you certainly can do it for IRA - before April 15th. You need to indicate that the contribution is for 2012 (very important). </p>
<p>Also, if you extend the taxes, you don’t have to make 2012 contributions to SEP-IRA until October 15th, 2013. I am not sure if this is true for regular IRA.</p>
<p>“We should have done that, for 2012 and 2013. But am I correct that he could still make a lump-sum payment to his 401k, for 2012 (he has not maxxed out his contribution) and that would be deducted from income?”</p>
<p>I am curious about this one too. Anyone know if people still contribute to their 2012 401K? I know you can for IRA’s, but didn’t think you could for the 401K’s.</p>
<p>There’s a number of factors, I suspect. They don’t have it pinned down. 10X the normal rate of brain cancer, melanoma. Exposure to radiation and God knows what else, working day/night cyle. I think the biggest risk factor is the area that a large number of people live in…tendency to get overweight, can cause all sorts of problems.</p>
<p>My luck, I’ll plan to die at 64 and live another 50 (in poverty and dementia).
Okay, this conversation is getting me off the couch to go running.</p>
<p>The law allows payments into a 401k for 2012 to be made in 2013 up until the due date of your taxes, as long as the plan has been created by 12/31/2012. </p>
<p>Whether or not your company’s plan allows this is a different story. I don’t recall that any company I’ve ever worked for allowed this, but I don’t recall the question coming up either. You will have to check with your plan administrators.</p>
<p>If you are self-employed with a 401k, you can still make 2012 contributions.</p>
<p>“My luck, I’ll plan to die at 64 and live another 50 (in poverty and dementia).
Okay, this conversation is getting me off the couch to go running.”</p>
<p>:)</p>
<p>That is a pretty low life expectancy and those causes suck. One reason I did go part time and eventually quit (floor trading) was because I thought the floor trading environment was very unhealthy. My wife’s best friend, who was a floor trader, died in her 30’s. Other people were getting cancer at young ages. I was getting bronchitis every year. So I left.</p>
<p>So…yeah…forget working an extra year. </p>
<p>I am going to for a long walk now. Burn a few calories. :)</p>
<p>Probably the radiation and unhealthy lifestyle.</p>
<p>There are jobs out there that are fun, interesting and mind-challenging and that provide a lot of flexibility though still a lot of hard work. I think that those jobs can add years to your life instead of the other way around.</p>
<p>Has anyone here figured out the details of reinstatement of PEAS provision and PEP ? The income threshold is apparently 200ksingle,250k couple for phaseout of itemized deductions, including mortgage</p>
<p>Employer contributions, not employee deferrals. There is no permissible plan design that allows an employee deferral to be made for a prior year.</p>
<p>I am interested to find out too. I know at some point there was a talk about limiting mortgage deduction to 50K a year, but I think the deal they reached is different now and is more complicated.</p>