As the handle suggests, I am new to trying to manage money and would like some insight in to how to maximize my moonlighting income/minimize my tax liability to pay down my debt. I just got the WCI book and have been trying to do some reading online but the rules for 1099 income are still somewhat confusing to me -- it seems certain parts of my tax liability can be reduced but not others and I don't fully grasp the specifics.
Some background: Grew up well below the poverty line, made it through college and med school with a moderate amount of educational debt and a large amount of consumer debt due to family crises I had to manage. I am currently in residency and moonlighting as much as I can to aggressively pay down my high interest consumer debt before graduating so I can refinance my educational loans and move toward financial independence.
I have made about 15-20k in 1099 income so far this year and anticipate another 5-10 before the year ends. I am currently putting about 30% into savings for anticipated taxes at the end of the year because I figured it was better to have too much saved rather than not enough and get fined. At first, I didn't mind it because everything felt like extra money but now I'm starting to wonder if I could be putting those thousands of dollars in some other type of account for myself instead.
Would contributing to an HSA or increasing my 403b contributions through my W2 job decrease my tax liability significantly? If so, is there an easy way for me to calculate by how much (I want to make sure I still have plenty set aside for my tax bill)? Are there other options you would suggest instead? Should I just hire a CPA this year for help?
If it helps, other tax info for me: married, spouse without income this year, renting home, expecting first child before the end of the year
Thanks in advance for any advice you have to share!
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