Year End Tax Strategies

The Ultimate Guide to Income Tax Reduction

Tax planning involves the most comprehensive and strategic way to legally and morally pay less taxes–major corporations take advantage of this and so should you.

Did you have a baby? Go back to college? Purchase a new home? Get a raise? Start a business?

These are all major events that involves tax strategies to reduce or minimize your tax liability. In this article, you'll discover some key strategies to implement as your life and financial situation evolves.

Get out ahead of it.

The absolute worse thing that you can do is wait until taxes are due before you develop a strategy. There are deadlines associated with many of the tax benefits and the strategies must be implemented correctly in order to be beneficial.

Tax Strategy #1: Max Out that 401k!

Tax Strategy #2: Start That Business!

Tax Strategy #3: Invest In Real Estate!

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Tax Strategy #1: Max Out that 401K!

Alright guys, let's get into it. I'm going to make this example really clean for you. Let's say you earn $100,000 per year. In 2022, the current tax rate is 24%. So that means you'll cut Uncle Sam a check for $24,000. Hold on to that number.

In 2022 the max contribution is $20,500. So by putting the money into a 401k you reduce your taxable income to $79,500. The tax rate is 22%. So that means Uncle Sam will receive $17,490. You have saved (earned) $6,510 just from listening to your Fairy Tax Mother 😉. Again, hold on to that number.

Your employer matches you the first $5,000 of your contributions which brings to a grand total of $11.510 in savings! We are On the Money Baby!!!

So my question is, do you want to invest or pay the IRS??

Tax Strategy #2: Start That Business!

On the Money knows business!

This is one of my personal favorites because what is considered for most to be a bill is now an expense.

The IRS gives tax breaks based on their overall contribution to society. Next to non-profits, businesses are wayyyyy up there.

A cell phone bill for the average consumer is a business expense for an entrepreneur.

Oh what does that mean, you say. Simply put, let say you make $50K and your annual tax bill is based on $50K, but your cell phone bill is $1200 annually and your iPhone cost around $1200 (you know how they are 😏). You will still be taxed on that $50K. An entrepreneur, on the other hand will be taxed on $48K less all the other expenses that are necessary and ordinary to maintain a business. Get the picture 🖼 ??

Tax Strategy #3: Invest In Real Estate!

Don't take it personal. I believe that everyone should own some ishhh.

Again, I'm partial because I'm also a Broker, HOWEVER... Depreciation and Opportunity Zones are your best friends as an investor. The cash flow is great as well but the tax benefits for you as well as the generation to come are astronomical. Here are a few of the benefits without me going too deep:

• Use real estate tax write-offs

• Depreciation

• Use A Pass-Through Deduction

• Take Advantage of Capital Gains

• Defer Taxes 🎉

• Be Self-Employed without FICA Taxes.

Regardless of the tax law changes, there are so many deductions out there for you to "Get More In Return".

Set up a consultation so that we can provide you with a solution.