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budgetthrowaway1209 OP t1_jdvhde4 wrote

Reply to comment by TriFolk in [OC] 2022 Income & expenses Sankey for family of 3.5 in SoCal by budgetthrowaway1209

Thanks! Don’t mind the downvotes as it was a fun exercise.

I hear you about the wealth management company, but not sure if it will benefit us… I don’t think we have high wealth, just high-ish income for now. We have 2 large blocks of income and a few large blocks of expenses that will remain constant (and sadly still big) for a while. Maybe when we’re a bit older and have more “wealth” to manage.

We did 2 backdoor Roth contributions, which is why the funds come from post-tax money.

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leg_day t1_jdvtdz4 wrote

The backdoor roth is such a game changer once you hit income levels where it's helpful and you can fully fund it!

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budgetthrowaway1209 OP t1_jdvwjfl wrote

Agree! Feels like we’re cheating the system, but I guess we’ll take it where we can get it.

We’d like to eventually explore mega backdoor Roths but don’t think we have the savings for that yet.

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leg_day t1_jdwn6vu wrote

I thought the same. But when you add it up, your effective tax rate is 40%... meanwhile, Trump paid an effective tax rate of 4% in 2018. And he's certainly not the only true 0.1%er paying ridiculously low effective tax rates.

So take any win you can get against the system.

(FWIW, 40% effective rate on a 568k W2 income is pretty damn great especially in a high tax regime like CA. Similar income profile in NYC and I sit around 45-49% effective tax rate.)

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budgetthrowaway1209 OP t1_jdwvwp1 wrote

Thanks! That’s a lot of what I was looking for with this post (beyond making pretty color lines) - some benchmarking for tax, savings, spend.

I think our tax rate was helped a lot last year by some renovations we did that had federal and state tax credits (e.g. solar) and our (outrageous) mortgage interest & state taxes.

And get me wrong - will take every take break we can get… I’m fairly liberal, but hope for our sakes the new proposed SALT cap lift gains traction. I can understand its not the most progressive and probably shouldn’t be lifted entirely, but at least make it $20k so it’s fair…

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leg_day t1_jdx7am9 wrote

I'm more liberal than most but support completely repealing the SALT cap. Why? I'd rather my taxes go first toward city, county, and state taxes, closer to where they are spent.

Lower city, county, and state taxes are correlated with much higher spend from federal tax dollars.

I can talk to the city council member to advocate for funding a project to refurbish a local park. No way I can meaningfully talk to my congress person about how federal tax money is being spent in Iowa.

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budgetthrowaway1209 OP t1_jdy3elt wrote

Yea I can see that and have heard that as well. Tbh, I wouldn’t shed a tear if that happened.

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