Unfortunately, now days if you want to make a million you have to make two. Once you hit 39.6%, mortgage interest, out of pocket medical and child credits are gone. Well, not technically, but unless you spend over $100k in medical then after that point any amount spend over is deductible, so yeah.

I've been so upset over it the last two years. When you are at 39.6%, you truly are paying your tax bracket. Other below aren't because of the other tax credits they can take.

Max contribute to either your 401(K) or a SEP IRA. Other than that, well, I say donate the max amount without getting red flagged. I think that rate is around 17% of your income before it's a potential red flag.

Depending on your position, say you own your own business, there are some options but it depends on the industry of your company. There is a company that helps a business owner utilize R&D credits (research and development) which can REALLY make a difference. But again it depends on your situation.

I've been on quite a kick about it lately and showing examples to my kids how bad it can suck. I did the Bill Murray thing. 3 of my kids got ice cream. One of them worked much longer and harder on his chores so he got more. I served them each and then the analogy hit me. I reached over to my son's bowl and scooped out 1/2 of his ice cream and put it into my bowl, the other two, just under a 1/3. They actually all flipped out but my son was speechless.