So I'm married filing jointly, and my wife and I already have comp numbers for next year and it's really good news. Yay! But I checked our tax bracket and we'll absolutely be going up a tax bracket. Other than trying to use pre-tax deductions as much as we can, what else can we do? I really do not want to owe at the end of next year. Taxation is theft!
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The US has a progressive/waterfall tax system which means that you only pay a higher rate on the next incremental dollar. So long story short there's no need to do anything your marginal rate only effects your next dollar. not your whole pot.
Here's a good article that explains this.
https://www.nerdwallet.com/article/taxes/federal-income-tax-brackets
The above comment is correct, the brackets don't affect your entire paycheck, just the incremental above that amount, so going up a bracket isn't a big deal at all.
That said I'd highly suggest consulting with a tax advisor - not H&R Block, find a sole proprietor type of guy who is familiar with wealthy clients. Try to get a recommendation from someone at work. It'll run you like $100 for a consult and they are well versed in the best ways to minimize your tax burden, worth the investment.
I'll look into that. I've always done it myself but now we have 2 incomes, a house, a kid, and investments so might want find a professional.
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