I received a substantial pay raise which puts me in the next tax bracket for income tax. After tax, I would still have more net income than before the raise (in fact, more than 80% of the income earners in the US would ever earn gross, and certainly more money than I need), but I don't like the fact that I now subsidise other people's education and welfare even more than before.


How can I avoid income tax to the maximum possible? Would gifting or donating work? Or should I start employing negative gearing?

(Please no "don't do that" answers. Apple and Google are doing this, so why not I? Also, this sort of question seems to be ok to ask here. (Note that that was Canada, I'm US-based.))

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    Is your ultimate goal to pay as little tax as possible, at any expense? That has a different (and very easy) answer compared to trying to maximize the portion of your income that you, personally, keep.
    – dwizum
    Sep 19, 2019 at 16:39
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    If you donated all of your new income (and you're already itemizing for other reasons, and your itemized deductions aren't limited or if these additional gifts don't put you over the limit) it would avoid paying new taxes.
    – The Photon
    Sep 19, 2019 at 16:41
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    By the way, do you have health insurance? Why, if you don't like subsidizing the welfare of others?
    – The Photon
    Sep 19, 2019 at 16:43
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    @ThePhoton: (True) insurance does not subsidize the welfare of others. It shares risk.
    – Ben Voigt
    Sep 19, 2019 at 16:50
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    "How to reduce my taxes" is too broad to be answerable without details. I also find the tone distasteful, but that's why I downvoted, not why I voted to close. Sep 19, 2019 at 17:04

2 Answers 2


Your best bet is to actually receive some education about taxes. "Jumping to a new tax bracket" does not mean your entire salary will be taxed at the new rate. How tax rates work are answered here.

The numbers you cite are not all that high. It depends on if you compare yourself with households or individuals. For individuals according to this site you are at about 60K. For households you are at about 130K. Taxes for both those income are just not that much.

For tax avoidance strategies see this question.

The money left over, after paying taxes, is far more enjoyable than not having it. Sure it is a wonderful thing to give to others, but doing so only to avoid taxes misses the point.


After tax, I would still have more net income than before the raise...

This is almost always true, because only the portion of your income above the threshold for the higher bracket is taxed at the higher rate. The exceptions typically involve edge cases where additional income disallows some tax credit/deduction that isn't phased out.

How can I avoid income tax to the maximum possible?

Deductible/pre-tax retirement contributions, HSA, charitable giving, solar/ev tax credits, 529 plans in some states. Lots of resources on these, so wanted to focus on the other two points more.

Would gifting or donating work?

Gifting is not deductible. Charitable donations (to qualifying charities) are deductible. If you already itemize, then your federal tax saving is your marginal rate applied to the donated amount. If you're at 28%, then you give $1000 and pay $280 less income tax. This deduction caps at 50% of your adjusted gross income, less in some situations (related to nature of donations).

Or should I start employing negative gearing?

You could certainly do this, invest in some rental property that will generate paper losses thereby offsetting income tax burden. This is mostly kicking the tax-can down the road since depreciation will be recaptured, but it could work out nicely. There's always the risk of future tax-law changes so can't bank on long-term benefit, but short-term it can reduce income tax burden.

If you can buy a property that earns you more money, that seems better than losing money just to avoid taxes. In my opinion any scheme that results in losing money just to minimize income tax burden doesn't make sense when you could instead take the money you would have lost and given it to a charity. Charitable giving seems the best way to choose how your excess money gets used while reducing income tax burden.

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