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Need advice lowering AGI (Not for taxes!)

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  • Need advice lowering AGI (Not for taxes!)

    Hi WCI community,


    Long-time lurker, first time poster.


    I live in a very high COLA but have been able to keep costs down through a unique housing situation. Essentially, I live in a building where my monthly carrying costs are tied to my federal AGI on my yearly tax return. Due to staffing 'consolidation' at work this year, I have had to work more days than in the past and because of this my expected AGI looks like it is going to be 10K above last year. While normally it is great to earn more income, this increase will double my building carrying costs and the yearly bill change will be way more than the 10K. So I'm looking for advice on how I can legally lower my AGI before the end of December. My spouse just changed jobs (no income change) so I am eligible to change my benefits before the end of the year. We are both w-2 employees. State is NY. Moving is not an option due to kids in school, family etc. I would be willing to lower my AGI even if it means I don't get the money back so I'm wide open to suggestions.


    So far this year I have done/maximized the following for myself and spouse:

    401k and 403b

    backdoor roth


    flexible spending


    employee parking (pre-tax deduction)


    Any other ideas? From what I can tell a charitable deduction doesn't itself the lower AGI calculation.

    Thanks so much.


  • #2
    It's pretty hard to make any changes with only a month left. Of course, the backdoor Roth and 529 contributions have no effect. Given that you are W2 employees reduces your opportunities even more. Can you sell any investments in a taxable account to take a loss of $3k? You've maxed out the HSA and 401k/403b's, correct? I suppose you could take a week off, unpaid, in December, although that sounds kind of extreme and defeats the purpose of putting more money in your pocket, net.
    Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087


    • #3
      It's AGI, so you need business expenses and above the line deductions. Not so many of those. Retirement accounts, investment losses, HSAs, health insurance premiums for the self-employed...that's about it.

      Tough ask for two employees. Maybe you could take some unpaid leave next month? Or ask to get your December paycheck in January?

      Check out the instructions for 1040 lines 13, 14, 18, and 23-35. Maybe you can come up with something.
      Helping those who wear the white coat get a fair shake on Wall Street since 2011


      • #4
        For taxes or not, the same things apply.  Just go down the list of above-the-line deductions.

        You could pre-pay your ex-wife some 2017 alimony in 2016.

        Try to get a better contract not tied to your AGI?