Quote:
Originally posted by Fred Quimby
Correct
To figure out how much in taxes you will save, just subtract your tax bracket % by $1,000.
So, I'm in the 35% tax bracket plus around 8% for state, that's 42%
42% of $1,000 is $420
So for ever $1,000 in deductions I can come up with, 42% stays in my pocket.
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Sure, I'm not saying deductions aren't useful.....what I'm saying is they aren't magical.
People say shit all the time like why don't you buy this and that and this for 10K....you'll get to write it off.....as if I basically get these things for free just because I get a deduction.
But it doesn't work that way.
Also, if you get audited, the IRS doesn't care so much about 1099's.....they're going to want to see your bank records.
If I have 50K in 1099's but put 100K in the bank, they're going to want to know about that other 50K.