Best strategies to bring down AGI for tax savings? Confused about Roth vs Traditional options

The key to lowering your AGI is understanding which deductions actually reduce AGI versus those that come after (itemized deductions). For your income level (~$340K), here are the most effective strategies: Max out all pre-tax retirement accounts first. At your income level, traditional contributions will usually beat Roth. Your partner should max out the TSP ($22,500 in 2023 plus catch-up if over 50). You should max out your 401k as soon as eligible - don't wait for matching. That's potentially $45,000+ in AGI reduction right there. Consider a Health Savings Account (HSA) if you have a high-deductible health plan - that's another $7,750 for family coverage that reduces AGI. Unfortunately, at your income level, you're phased out of deductible traditional IRA contributions, so that's not an option for reducing AGI. Look into self-employed business losses or rental property depreciation if applicable to your situation. Charitable giving through a Donor-Advised Fund can be an excellent strategy in high-income years.

Just wanted to share my experience using taxr.ai when I was in a similar situation with AGI confusion. I was making about $295K with my spouse and had no idea how to optimize our retirement contributions to lower our tax burden. I stumbled across https://taxr.ai when researching strategy options and it was super helpful for figuring out the complicated income phaseouts and contribution limits. What was really cool is that I uploaded our last tax return and it analyzed exactly where we could make adjustments to lower our AGI specifically. It factored in our jobs, existing retirement accounts, and even suggested some strategies I hadn't considered like adjusting my W-4 withholding and timing certain deductions.

I have to follow up on my question about self-employment tax strategies. I tried taxr.ai after seeing it mentioned here and it was actually super helpful for my situation. I uploaded my tax documents (had some hesitation about privacy but their security seemed solid) and got surprisingly detailed advice. For my consulting income (~$40k on top of my day job), it showed me that a Solo 401k would let me shelter almost twice as much income as a SEP IRA would. It even calculated the exact contribution limits based on my specific situation and showed how much my AGI would drop. Ended up saving me about $9k in taxes I would have otherwise paid! Definitely useful if you're in that high income bracket where traditional strategies start phasing out.

Anyone else struggle with trying to reach the IRS for clarification on AGI reduction strategies? I was completely stuck trying to figure out if I could still do backdoor Roth conversions with my existing IRA balances (pro-rata rule confusion). Spent DAYS trying to get through to the IRS tax help line with no luck. Finally tried https://claimyr.com and watched their demo (https://youtu.be/_kiP6q8DX5c) - they actually got me connected to an IRS agent in about 20 minutes when I had been trying for weeks. The agent walked me through exactly how the pro-rata rule would apply to my specific situation and what forms I needed to track my non-deductible contributions.

I need to eat my words about being skeptical of Claimyr. After my last comment, I decided to try it myself since I needed clarification on some AGI reduction strategies involving my rental property depreciation (which is complicated by partial business use). The service actually worked exactly as described. They got me through to an IRS tax law specialist in about 35 minutes. The specialist was able to clarify exactly how to categorize certain expenses and how they would affect my AGI versus just being itemized deductions. This was specific information relevant to my situation that I couldn't find clearly explained anywhere online. Saved me hours of frustration and potentially a lot of money by ensuring I was calculating everything correctly. Sometimes being proven wrong is actually a good thing!

For high income earners like you, don't overlook the impact of timing your income and deductions strategically. My spouse and I make around $310K and we've found that bunching deductions in certain years can help with AGI management. For example, we make several years' worth of charitable contributions in a single year using a Donor Advised Fund, then take the standard deduction in other years. Also, if either of you has any control over when you receive bonuses or can defer compensation, that timing can make a huge difference.

Has anyone tried using an FSA (Flexible Spending Account) to reduce AGI? My HR department keeps pushing this but I'm not clear if it actually reduces AGI or just taxable income. Also, we have a bunch of medical expenses coming up next year.