I have an unusual tax situation some years. I have a wonderful accountant who advises me throughout the year (maybe a couple of phone calls, a visit or 2) for which he doesn't charge me. He just charges me to do my taxes. And believe me, he's saved me many, many times his fee over the years.

I'd recommend you get someone like that working for you. Not a store-front tax preparation place where the employees have a few weeks crash course on filling out the forms, but an actual accountant who knows his stuff, who has a real, year-round office. There are loads of legal ways to reduce your tax liability--a good tax accountant can help you find and utilize them. It's not against the law to use the tools that are built into the system--that's what they're there for.

Hi demeron,

Tax evasion gets one into a good deal of trouble.

Tax avoidance, learning the rules and working within them to reduce one's tax load, is a valuable exercise, that many of us say should be practised by everyone.

But most of us know little about how to do that, and a good accountant can, as azzalea says, save a good deal of tax for many of us.

Good wishes for finding all of the legit tax avoidance options available. Wouldn't want you to be illegit., now, would we?

ole joyful

If there is a flexible spending account available for medical expenses, I believe you can deposit money into there pre-tax and use it to pay health insurance premiums (among other things). The only drawback is this money is "use it or lose it" at the end of the year (and we've had a few years where we've gotten very expensive eyeglasses to use up money left over). If that benefit is available to you and you are not taking advantage of it, you should.

Our taxes sting too, even worse because we are in a high cost of living area so our salaries just don't go as far, sales tax is high, state income tax is high, property taxes are high. I think we lose about 1/3 of our salary to taxes. Yuck.

You probably pay more taxes than you think (see partial list in link below).

Taxes

Many taxes are paid by businesses then passed through to consumers in the price of goods and services. These are hidden taxes. Ultimately, only individuals pay taxes.

A good friend of mine is a CPA who specializes in small business taxes. He also prepares personal tax returns for a cross section of taxpayers. Each year I ask him for tax advice. The primary ways for middle class taxpayers to shelter income are:

1. Home/real estate ownership
2. Retirement fund contributions
3. Small business ownership

I think you can deduct medical insurance premiums if you itemize deductions.

Home Mortgage interest, Real Estate Taxes,,, ohhh, they've raised the deductions so much since I quit doing my own taxes..., but..

On the Medical Insurance, I know that if you total up all your Med. expenses, and they come to some percentage of your AGI... AND you can itemize, they're deductible... the rub here is that if you have health insurance, you're not likely to have much in the way of medical expenses.

Depending on your ages and health situations, you might want to do the math. I quit paying for health insurance (not subsidized by an employer) back when I figured I was paying $6K a year with an additional $5K deductible, but was only going to the 'doc-in-the-box' for the bi-annual ear-ache or rash, and my yearly gyn. A whole lot less than the $11K I was paying for "health insurance".

Now that I'm self-insured, I can save up all my medical receipts, AND I treat myself to an expensive "Comprehensive Physical" once a year. Still cheaper than the insurance was, and that 'comp phys' puts my med expenses into the percentage I need to be able to deduct.

Hope it helps.. do the math on everything!

edited to add: When you don't have health insurance, medical providers WILL deal with you on costs.

I think that not having medical insurance is reckless unless you are willing and able to spend several hundred thousand dollars or more for treatment of a catastrophic illness. Sure, you can save money by dropping medical insurance if you never get sick or injured just like you can save money on auto insurance if you never have an accident or life insurance if you never die. About half of the personal bankruptcies in the U.S. are caused by medical debt.

Getting back to the original question, here's a link to a list of common itemized deductions.

Itemized Deductions

Medical insurance is not primarily for the yearly checkup or the occassional "Doc in the box" situation.

I sincerely hope you are not in an auto accident that would disable you and result in tens of thousands of dollars in medical bills. Or cancer or any disease that would rack up many thousands of dollars in bills at the same time that it disables you. You would be unable to work to pay off the bills. Sure, medical providors will work with you. And charge you interest. And tack their losses onto people who do have insurance. Which is one reason it costs so much.

Back to the original topic, unless you are so rich that you benefitted from Bush's tax cuts, about all you can do is bite the bullet. Track whatever deductions you can deduct, figure out how much you will owe in taxes and arrange your W4 to cover it. That's pretty simple if your income is predictable - more complicated if it's not.

Even a couple of days in the hospital for a relatively minor situation could bankrupt someone who doesn't have med insurance. A couple of years ago, DH's dr. sent him to the hospital (leave here and go directly to the ER, I"m calling them now), because he thought he had an infection in his knee. 2 nights in the hospital, a few tests, an eventual diagnosis of GOUT, and the bill? Over 20,000!!!!

That was without any surgical procedures, or anything really extensive. Just think what the bill would be if you had to have emergency surgery, and needed to stay a week in the hospital, and maybe a few weeks in rehab for something more serious.

I know health insurance is high, but it's one of those things you simply cannot be without. I've known young people who felt they were healthy and didn't need it. One ate some bad food--ended up doing a stint in the hospital because of serious food poisoning--and was in debt for YEARS because he didn't have insurance.

I do hope you rethink your insurance situation. One car accident, a slip on the ice, an unexpected illeness or life-threatening situation that requires surgery could mean you'll lose everything you have, at a time when you cannot work to pay your other bills.

Thanks for the input, friends! Looks like I have my bases sort-of covered. I would be terrified to be uninsured, was for a brief period when I was nursing my terminally ill mother and of course that is when I got pregnant. Not a gamble I would willingly take again. My employer does subsidize the insurance so I end up paying "only" about $700 for our family of five-- but I thought that wasn't deductible? Our med expenses don't add nearly to 7.5, thank God. I think we'll up my DH's 401 because it might help us out across the board because of the phase outs.