Fsa Annuity Rates

Good morning. I am trying to understand if there is a way to reduce my tax debt. As you can see from the numbers below, my federal tax liability has risen steadily: in 2006, 8446, 2007, 12039, 2008, 14,601. I am currently working on my 2009 return federal tax, but I think the upward trend will continue.

I always used the standard deduction and exemption. I contribute the maximum allowable amount to my traditional 401k. I am paying part of my employer provided health insurance premium, which reduced my federal taxable income. I do not own a house, so I can not itemize and deduct mortgage interest and property taxes. I do not think I can deduct for an HSA because I have health insurance funded by the employer. I'm not independent. I do not pay child support. I do not think I am eligible to deduct traditional IRA because my income is too high. I do not pay the total amount eligible for a Roth IRA, however. I paid my student loans, so no deduction of interest there. My filing status is single and I can not claim as an exemption. I do not think I qualify for the earned income credit because my income level. I am 39 years old.

For 2009, I underwent laser eye surgery. I put the cost to the employer in an FSA established and this allowed me to pay for the surgery with an income before tax.

Would a master limited partnership, or a deferred annuity or other investment to reduce my taxes? My investments are mostly in 401K, 403b, Roth IRA, after-tax mutual fund and an emergency fund.

I hope to retire early. Is it possible that I can reduce my taxes while I'm in the accumulation phase.

Here are my numbers:

2008
83,397 adjusted gross income
74,447 federal taxable income
14,601 Total Federal Taxes
17.51% Effective Tax Rate
Wages 78,948
928 in taxable interest
3082 ordinary dividend
2445 dividends eligible
439 capital gain

2007
74,411 adjusted gross income
65,661 federal taxable income
12,039 Total Federal Taxes
Effective tax rate 16.18%
Wages 65,120
265 in taxable interest
3083 ordinary dividend
1621 dividends eligible
5943 capital gain

2006
58,216 adjusted gross income
49,766 federal taxable income
8446 Total Federal Taxes
Wages 51,342
292 in taxable interest
2419 ordinary dividend
1391 dividends eligible
4161 capital gain

Thank you for your advice!

I do advise you to do something important. It appears that you have dividend income that are not eligible. You can keep these investments (bonds or money market accounts) in a tax deferred account and hold funds or shares that pay qualified dividends in your taxable account.

Otherwise, you might consider a deferred annuity but if you do, go to a company such as Vanguard for it. You do not want to pay wholesale. Vanguard is the lowest I found and have the fewest tricks.

If you're such a temperament suited to, you could buy a rental property. At your income losses may be deductible in order to save enough money he will give you cash flow that will be partially sheltered by depreciation. (Do not assume that if it is not your bag or you can not find good professional management to take care of it for you.)

Overall, you do very well financially. This should be your first and main goal. Your taxes are not excessive when taken as a% of your gross income. You're not old enough to remember when you would have been in the tax bracket of 50% with this income.

Do not let the tail wag the dog tax finance.

My recommendation is to buy a house. There are several reasons:
1. Real estate prices are the UNU.