You're definitely gonna be in good shape if you stash 35% of your pay away for the tax man.

The first eight thousand or so is tax free -- in a way -- because everyone gets about that amount in standard deductions. If you have kids or other dependents (not counting the dogs) that number goes up. But then, so do the expenses. ;)

And, I think if you're a full time student, pretty much everything you make is tax free. It was that way when I was in college, but I barely made anything in those days. Quote

haha ditto

anyway, in canada an RRSP is a registered retirement savings plan, it may be like your IRAs, i don't know. the limit is much much higher than the two grand you quoted though. it is a fairly high % of your total income, and it carries over year to year so if you don't put anything in for many years, as i did, its pretty much whatever you want for a very long time

the basic idea is you hide money there and don't pay taxes on it...for example, I made 80K last year. I put 18% of that into my RRSP, so when I go to pay my taxes, I am taxed on an income of (roughly, i don't have a calculator) 65K instead of 80K. the money in the plan can be invested in a ton of different ways, and you don't pay taxes on any capital gains as long as it stays there. when you pull it out, if you are not (60 or 65, i forget....old anyway) you have to pay those taxes, but there are creative ways for us non geriatrics to get our money too without taking any monster hits....certainly less of a hit than I would pay in taxes in that tax bracket anyway.

i'm sure there is a lot more about them that i am not saying but fuck it i am a factory worker not an accountant ;)
i have seen people play some pretty creative games with theirs and come out waaaaay ahead

anyway, that is hopefully enough info for me to ask again...does anything like this exist for you unlucky non-canucks?

if so, get your ass involved, it is un-bloody-real how well you can do. it cuts your tax bill and also will make you a very comfortable senior citizen with relatively little sacrifice now Quote

ah yes, my favorite time of year ...

Time to talk to the Medici for the plan...

They did wonders for my friend Desiato. Had him spend a year dead. Quote

Lots of interesting comments here. Most are half true too. Best thing is to take the advice and speak to someone.

Just an example of a half truth... "first 8,000 or so is tax free because of standard deduction" For regular Federal tax thus us true, but as an independent contractor even if you had 900 dollars worth of income after your deductions, you would be paying a Self Employment Tax on that money. You will learn about this and about how you should make estimated tax payments if you speak to someone knowledgeable.

Also, remember that CPAs are not always the most knowledgeable when it come to taxes, It is a secondary thing that some do. After you "drop off" your papers, many of them have a temporary worker do the inputing for them. Don't get me wrong, some CPAs have people in their office that do specialize in taxes and can help. You can look for a Tax Preparer who happens to be an Enrolled Agent. That means that they are certified to practice before the IRS and represent their clients in front of the IRS.

One thing to remember. Make sure you feel comfortable with your tax person, it makes a world of difference.


Good Luck!! Quote

Well from what im told the first 10,000 you make from any job is tax free. Do you have another job? Because thats where I went wrong, I didnt think I would owe too much but because of my other job plus flirt put me in a higher tax rate then normal.You should def talk to someone now, caz you dont want to get a suprise at the end of the year. I have been saving only half of what I should of saved and I got a little suprise. So taxes are def setting me back.


i do have another job, but they as well don't take out taxes hehe
im a go go dancer, and they just pay me in cash the night i dance and record it, and at the end of the year they will tell me how much they paid me, plus i have my tips that i make there...so i will also have to owe money for that job as well

but i gues i can write off alot, lol

it takes me 45 mins to an hour to get to the club
Quote

it takes me 45 mins to an hour to get to the club


I believe that you can write driving off in terms of mileage. The fact that it takes you an hour to go three miles in LA County isn't gonna get you anything. ;) But more importantly, you can't write off your commute to work, generally speaking. What you CAN write off is a trip to the store to buy batteries for your toys, or to the salon to get your hair done for work. But again, so I don't get accused of half-truthing you again, you need to find an authoritative source to help you -- be it one of those NOLO books I mentioned or a tax professional.

Canada's RRSA (explained somewhere above) sounds a lot like 401K saving plans in the US. I didn't mention those because odds are people working at flirts don't have these through flirts. They're typically tied to employment and managed by your employer. I have one, and the tax law (it's called 401K, hence the name of the savings plan) allows me to put away $15,000 a year toward my retirement, and to do it pre-tax. (The income that's directed to the plan isn't taxed first. And it isn't taxed until you withdraw it during retirement.)

But ANYone in the US can start an IRA, even if they have a 401K or 403B or whatever. It's just another tool to save for retirement.

What about those college savings plans? If you have kids, you might want to ask your tax person about those. I'm not sure if there are any ways to use those to save on your taxes now, though. Quote