How to Lower your MAGI to get the most of the $8000 Home Credit

A client was asking my how they could reduce they MAGI (modified adjusted gross income), below the $150,000 threshold for Married Filing Jointly.

The answer was I don't practice as a CPA anymore. Having said, that I was still curious, so the the only way to reduce MAGI which is AGI (line 37 on the bottom of page 1 of the 2008 form 1040) is to reduce taxable income (defer income or increase 401k withholding) or increase the deductions to get to AGI (which are IRA, SEP and Health care account deductions).

Take a look at the 1040 Form

Or one could choose to quit working or take some unpaid time off - hey it's worth considering.

If anyone other ideas, please do share.

FAQ on the $8000 credit.