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I believe you can deduct state from federal tax, which would save ~2.5% in marginal tax. In addition, social security phases out at ~120k so that's another 7.5%
by EdJiang 10y ago
I believe you can deduct state from federal tax, which would save ~2.5% in marginal tax. In addition, social security phases out at ~120k so that's another 7.5% savings. So the difference is almost a wash if I understand correctly?
- seattlefreeze 10y agoDon't forget about AMT. That usually throws a wrench in things. https://en.wikipedia.org/wiki/Alternative_minimum_tax https://en.wikipedia.org/wiki/Alternative_minimum_tax
- valleyer 10y agoCorrect. Specifically, it disallows deduction of state/local taxes from your federal taxable income.