Reply #51: You Have $32,000 in Deductions? [View All]

I may be wrong here, but as I see it, you have about $32,000 in deductions.

In other words, over half of your income isn't taxed.

The 2007 Income Tax Tables show that a married person (filing jointly) with an income of $60,000 would pay $11,430 in Federal Income Tax.

For a married person (filing jointly) to pay only $3400 in Federal Income Tax, their taxable income (Line 43 on Form 1040) would have to be about $28,000 -- less than 1/2 of your total income.

Your deductions would include: $1600 in state income tax, $800 in property tax, and (at most) $8400 in mortgage interest (that assumes that your entire mortgage payment goes for interest. A wife and three kids will get you four deductions at $3,400 a deduction -- 13,600. All of that totals $24,400.

It looks as though you have another $8,000 or so in deductions.

I'd say you are pretty prudent and definitely use the tax laws to your advantage -- something rich people definitely do.