Yes, the thread is visible. You have great questions and clever ideas.
- The HRA- funded by employer. HSA funded by you would be an effective way to reduce income.
- The 401k with pre-tax dollars is a great place to tuck money away and lower your tax bill.
These are not a dollar for dollar swap so you will want to check your liability throughout the year (bonuses, stock options, etc) and verify your withholding is on pace. I recommend checking 4 times a year. That way you can make estimated payments or change withholding. The IRS expects payment the same quarter as the income earned.
@RogerD1 is correct about saving money and making estimated payments or changing your w4 at work where it has the withhold additional $ per pay period.
Use the Tax bracket calculator to find out what percent should be withheld to zero out or at least get below owing $5k and the extra penalties.
Start with
- Determine taxable income to date
- Determine federal tax withheld / paid and divide it by taxable income.
- See if you will owe money and make payment or adjust w4. It can adjusted at work daily if you want.
Example: Marginal tax rate 10% Take tax and divide by income
- Ex. $500/ $5000 = 10% on track to zero out.
- Ex. $500/10,000 = 5% is less than 10% so you will owe money.
- Ex. $500/ $4000 = 12.5% is greater than 10% so refund time.
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