Hello,
For the year 2008, me and my wife made a combined wage of 162,000 (I made 85,000 and my wife made 77,000). Our combined salary falls in the 28% tax category and I just found (through TaxActonline.com) out that I owe IRS around 8000$ (since I opted to pay less taxes on my regular paycheck). Please let me know if there are ways to reduce our income so that we fall at least in the 25% tax bracket.

I know that I could open up an IRA account, but since our MAGI is around 162,000 and my wife already has her employer 401K plan... doesnt my contribution phase out? And How much money can I deduct from my overall income.

I do not own a home... so I cannot take the first time home buyer credit.

Please let me know if there are any other ways to reduce our taxable income.

Yes, give 35,000 to a variety of worthy causes in the United States and deduct that amount on schedule A

Children ? Do you have education funds set up for them.

Do you have our IRA, not your wife's,

But in the end, if you chose to pay less in during the year, at some point the money has to be paid