LEGAL adjusting of income

amother

OP ↓

Fri, Sep 06 2024, 8:03 pm

I keep reading on here about "adjusting income". We make just slightly too much for some programs. I work full time but DH lost job.

I was wondering what people mean by adjusting income to qualify for things.
Does this help us pay fewer taxes?
I only want to do something 100% legal, no funny games or just assuming we won't get caught.

amother

Denim

Sat, Sep 07 2024, 6:57 pm

If you are very close to the threshold, you can ask for a reduction in salary instead of a raise - often that means you end up with more money in your pocket

realtalk ↓

Sat, Sep 07 2024, 8:32 pm

It means reducing your taxable income. If you have a job that offers benefits, it could mean increasing your 401k contributions, HSA/FSA funding, basically anything that comes out of your paycheck pretax.

amother

Pansy

Sat, Sep 07 2024, 8:48 pm

realtalk wrote:

This may not work for certain programs. It may pay to get an actual slight pay cut in order to be eligible for some programs...

↑ realtalk

Sat, Sep 07 2024, 9:06 pm

amother Pansy wrote:

This may not work for certain programs. It may pay to get an actual slight pay cut in order to be eligible for some programs...

This is only a temporary solution. Inflation outpaces government funding. You don't want to cap your income for this

amother

Blueberry

Sat, Sep 07 2024, 9:38 pm

realtalk wrote:

That will reduce your taxable income but doesn't change your eligibility for benefits.

Usually the reductions people suggest won't legally help you and also don't reduce taxable income.

amother

Topaz

Sat, Sep 07 2024, 9:40 pm

I work in a school and there's a way that you put part of your income towards your kids' tuition (even at a different school)

amother

Dandelion

Sat, Sep 07 2024, 9:42 pm

amother Topaz wrote:

I work in a school and there's a way that you put part of your income towards your kids' tuition (even at a different school)

This is a great option but only works for teachers…

amother

Lilac

Sat, Sep 07 2024, 11:00 pm

amother Topaz wrote:

I work in a school and there's a way that you put part of your income towards your kids' tuition (even at a different school)

Only works in some states. In NY it worked great for us, when we moved out of town we can’t do it any more

amother

Bluebell

Sat, Sep 07 2024, 11:06 pm

I’m in New Jersey and we are at the limit for Jersey care for our children so we use 401k DCA and FSA/HRA to keep us eligible legally. I don’t think it works for all programs but for Jersey care it does. Only some employers offer these options so might not be helpful for you.
I do not recommend a pay cut unless absolutely necessary since hopefully your dh will get a new job soon.

glowing1

Sat, Sep 07 2024, 11:09 pm

I have my childcare paid for pre-tax. This adjusts my income. I think the child may need to be in legal and state recognized day care center. (Mine are).

amother

↑ OP

Mon, Sep 09 2024, 5:59 pm

Thanks.

No HSA or other benefits where I work.

I don't want to reduce my paycheck because long term it won't help me and they will base my future earnings off this lower amount.

Does Medicaid go based off taxable income or all income? I thought it was gross. Most programs seem to be gross...

summer0808

Mon, Sep 09 2024, 6:50 pm

medicaid is based on taxable income. So childcare, 401k, hsa, fsa would lower your income.

another idea is to make an IRA contribution. I'm not sure for which year it works. but it lowers your taxable income. I know a few people in NJ that do this to qualify for medicaid