Tax Liability

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12-21-2023, 11:48 AM

#11

RJSAviator76

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Posts: 3,629

A few ideas:

https://www.tesla.com/
solarroof

https://www.sunsailyachtownership.com

Or you can put your retro in Fidelity, play the market, save for taxes and keep the rest.

12-21-2023, 02:59 PM

#12

ZapBrannigan

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Thread Starter

Joined APC: Aug 2007

Position: Boeing 737

Posts: 4,796

I was thinking of fully funding my 401K this year as opposed to Roth 401K to lessen the tax liability.

12-21-2023, 05:41 PM

#13

Smooth at FL450

weekends off? Nope...

Joined APC: Apr 2014

Posts: 1,952

Quote:

Originally Posted by ZapBrannigan

I was thinking of fully funding my 401K this year as opposed to Roth 401K to lessen the tax liability.

I've switched to pre-tax 401k as well...this year will for sure be in a higher tax bracket than I foresee in retirement...but who really knows?

12-21-2023, 06:19 PM

#14

GoodJet

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Joined APC: Mar 2022

Posts: 534

Quote:

Originally Posted by ZapBrannigan

Anybody started thinking about how best to manage taxes under this new agreement? Both considering the retro, and just in general likely moving into a higher tax bracket?

I’m admittedly pretty dumb when it comes to this stuff. I generally go to HR Block every year. I withhold a little extra from my check to make sure I don’t owe anything. But this may get expensive pretty quickly.

so how will you handle it? Increased withholding? Pay estimated taxes quarterly? Anybody here smart about this stuff who can explain it simply? Thanks!

Hire a profesional to help you with your taxes. They'll at least be able to accurately describe what a marginal tax rate is and strategies for mitigating paying taxes. 10/10 I don't regret hiring a tax profesional since I started working at a major airline, starting two businesses and renting a property. I'm already seeing rumors of over 150 in retro payouts for SWA captains. Congrats! If accurate, you're 100K over every captain at my shop for retro in this contract cycle. Hourly that's quite impressive. You'd also be liable for over 45K of taxes just on the retro. Do you think not paying for a profesional will work out for you?

Also do you really want me to repeat the classic saying about financial advice and pilots?

12-21-2023, 06:32 PM

#15

ZapBrannigan

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Position: Boeing 737

Posts: 4,796

Quote:

Originally Posted by GoodJet

Anybody know a good - not overly expensive - tax guy in DFW area?

12-21-2023, 07:01 PM

#16

PNWFlyer

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Joined APC: Feb 2015

Posts: 998

Quote:

Originally Posted by GoodJet

they are getting that much in retro because they took the longest. It’s not a contest you want to win.

12-21-2023, 07:13 PM

#17

PNWFlyer

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Joined APC: Feb 2015

Posts: 998

Quote:

Originally Posted by ZapBrannigan

I was thinking of fully funding my 401K this year as opposed to Roth 401K to lessen the tax liability.

you should always fully fund you pre tax 401k.

12-22-2023, 02:48 AM

#18

JulesWinfield

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Joined APC: Jan 2018

Posts: 2,242

Quote:

Originally Posted by ZapBrannigan

I was thinking of fully funding my 401K this year as opposed to Roth 401K to lessen the tax liability.

This is normally a bad idea, as Roth ends up being a better deal, but you'll have to run the numbers for your specific situation. As someone pointed out, this is progressive, so it isn't like you are paying a huge amount more when you jump to a higher bracket, only the amount of income that is pushed into the higher bracket will be charged the higher rate.

12-28-2023, 02:01 PM

#19

Noconcessions

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Posts: 144

To really help yourself you need to have a actual business. Rental property will help. I have a active and passive situation. My plan will be to pay ZERO taxes on the bone-us. My accountant will tell me how much to defer and how much to spend between passive and active. I'll do the rest. If all you have is a W2, you are going to get a stiffy where it hurts. Simple? for you? Kinda. Defer all of that bone-us you can. Make gifts to your children and/or grands. HAVE A ACCOUNTANT SET YOU UP.

12-28-2023, 09:38 PM

#20

123AB

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Joined APC: Jun 2021

Posts: 376

Zap, definitely don't go to H&H Block. Keep talking to your buds and find an excellent tax advisor. There is a pretty good chance they will make you more money than you will spend on their services.