zeromoney
First Time Poster
Cash: $ 0.25
Posts: 1
Joined: 08 Nov 2010
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| Early retirement buy out and taxes |
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I have accepted a retirement buy out from my company and am looking for the best action to take in effort to retain the largest portion legally possible. I live in the state of Maryland and will obviously be subject to the highest tax rate both on the federal and state level. My buy out is around $390,000, brining my 2011 gross income to just over $400,000 (my buy out is effective 01 February 2011).
I have pondered different strategies to retain as much after tax income a possible, but am still unsure as to what my best route should be. I have inquired with my mortgage company regarding prepaying all of the remaining interest (approx. $200,000) and taking the mortgage interest deduction in 2011. While this seems viable, is it even able to be done?
I also have considered forming a consulting company to work in my current field. While there is plenty of opportunity to do just that, what would my ability to invest a large portion of my 2011 income in a start up business and take a deduction the same year? Is there a limit to the amount of start up business deductions? I also assume I would be able to start a Keogh Plan and maximize my contribution.
I am already maxing out my allowable 401k contribution and am not eligible to take an IRA contribution deduction do to income level. Are there any other alternative suggestions as to the steps I should take to obtain the best possible outcome?
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