<< I have fortunately(?) reached an annual income level that puts me in the highest tax bracket. In Vermont that means a combined Federal and State bracket of just under 50%. Where can I find strategies that will help reduce my tax liability? I am maxing 401K and we both buy IRA's and are considering variable annuities for life insurance and to defer taxes. Any thoughts? We are starting a business that my wife will manage and taht I will participate in part time. We are buying old furniture/pieces (100+ years old) and manufacturing reproductions using original materials and processes. These will be sold via consignment lowering our retail/markrting costs. We are planning to travel world-wide to find the pieces/parts. We will build a large post & beam barn as a re-manufacturing facility and will sub-contract labor. Also are purchasing a truck and an all wheel drive wagon for use in the business. Can we mix incomes (my salary/commossions and those of this new business) and take start-up losses against my high income?>>Not really much that I can tell you, Dave. Especially since I have no knowledge of your income, assets, goals, requirements, etc. My best suggestion to you would be to check out the local bookstore. You'll find any number of books in the business section that might provide you with at least a backround. Something that will provide you with a flavor for certain issues that you may be able to deal with on a personal basis.But, being in the 50% bracket, I would seriously suggest that you begin an association with a local tax pro. Your tax issues will become more complicated with the introduction of the business into your personal tax mix. It may be very possible that the losses that you incurr in the business will be deductible against your other ordinary income, but you'll have to become acquainted with both the passive loss rules and the hobby loss rules before too long. And probably the best way to understand what you can and can't do, and how to structure the business is with the help of a qualfied tax pro.TMF TaxesRoy
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