Here are some strategies on how to pay less in taxes, and how to understand basic tax-reduction strategies to help keep MORE money in your pocket at the end of the year. Enjoy! Add me on Instagram: GPStephan
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Number 1: Traditional 401k Contribution.
This is a retirement account that’s created through your employer that lets to contribute money, and then REDUCE that from your total taxable income.
With a 401k, you’re allowed to contribute up to $19,000 per year - which means the IRS will tax you as though you have made $19,000 less. For someone in a 24% tax bracket, this could save you from paying about $4500 in taxes. If you’re self employed, you can open up what’s called a Solo 401K - which allows you contribute up to $56,000 per year.
Number 2: Traditional IRA.
This is very similar to the 401K, except anyone can open one up at any time, and you can contribute up to $6000 per year into this account that would then reduce from your total taxable income.
Further Resource to Read:
https://www.fool.com/retirement/2017/07/15/can-i-contribute-to-an-ira-if-i-have-a-401k-at-wor.aspx
Number 3: HSA - which stands for health savings account.
Assuming you qualify, with an HSA, you can contribute up to $3500 per year, TAX FREE, into this account. And this account is specifically used to pay any out of pocket medical expenses or charges that you incur…if you don’t use them one year, that’s fine, it rolls over to the next year.
Further Reading:
https://www.investors.com/etfs-and-funds/personal-finance/hsa-contribution-limits-hsa-rules/
Number 4: 457 B.
This is for designed people who are employed by s state or local government, so not everyone can do this one. With a 457B plan, you can contribute up to $19,000 per year and reduce your taxable income by that amount - exactly the same as with the traditional 401k. However, the benefit to a 457 plan is that you don’t need to wait until the age of 59.5 to withdraw that money…you can withdraw it at ANY age, upon retirement, with zero penalty.
Number 5: The Standard deduction.
This is the base amount that anyone is able to automatically “deduct” from their taxable income, just because. If you’re single - you can take the $12,000 standard deduction. Super easy. And If you’re married filing jointly, this number jumps to $24,000. This is fairly straightforward, and for most people - this is an easy one to take.
Setting up an S-Corp.
This is a legal entity you create that you run your business through. This means that all of your self employed business income goes into the S-Corp. All of your expenses go out of the S-Corp. Distributions made by an S corporation are not subject to Social security or Medicare taxes. This is meant to be something to discuss with a CPA if this is something that you’re interested in, this is way beyond what I can talk about in a YouTube video!
Long term capital gains:
If you hold that investment for LONGER than one year - then sell it for a profit - it’s taxed as long term capital gains. This means that if you make less than $434,000…that long term capital gains tax is capped at 15%.
Depreciating assets within your business.
In a business, you can depreciate certain assets over X years to offset earned income! Something like this is REALLY a topic to bring up to a qualified CPA because every business asset has its own depreciation schedule you MUST follow.
HIRE A VERY GOOD CPA. THE BEST YOU CAN.
This videos main purpose is JUST to give you some ideas of strategies you MIGHT be able to implement. But because the tax code is sooooooo complicated and there are a million moving parts for each person that would be impossible to ever cover in a youtube video like this, YOU MUST hire a CPA.
Not financial advice. For ENTERTAINMENT PURPOSES ONLY. Please consult a licensed, qualified CPA for tax advice.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
My ENTIRE Camera and Recording Equipment:
https://www.amazon.com/shop/grahamstephan?listId=2TNWZ7RP1P1EB
The YouTube Creator Academy:
Learn EXACTLY how to get your first 1000 subscribers on YouTube, rank videos on the front page of searches, grow your following, and turn that into another income source: https://bit.ly/2STxofv $100 OFF WITH CODE 100OFF (Limited Time Only)
Merch: http://www.GrahamStephanStore.com/
Number 1: Traditional 401k Contribution.
This is a retirement account that’s created through your employer that lets to contribute money, and then REDUCE that from your total taxable income.
With a 401k, you’re allowed to contribute up to $19,000 per year - which means the IRS will tax you as though you have made $19,000 less. For someone in a 24% tax bracket, this could save you from paying about $4500 in taxes. If you’re self employed, you can open up what’s called a Solo 401K - which allows you contribute up to $56,000 per year.
Number 2: Traditional IRA.
This is very similar to the 401K, except anyone can open one up at any time, and you can contribute up to $6000 per year into this account that would then reduce from your total taxable income.
Further Resource to Read:
https://www.fool.com/retirement/2017/07/15/can-i-contribute-to-an-ira-if-i-have-a-401k-at-wor.aspx
Number 3: HSA - which stands for health savings account.
Assuming you qualify, with an HSA, you can contribute up to $3500 per year, TAX FREE, into this account. And this account is specifically used to pay any out of pocket medical expenses or charges that you incur…if you don’t use them one year, that’s fine, it rolls over to the next year.
Further Reading:
https://www.investors.com/etfs-and-funds/personal-finance/hsa-contribution-limits-hsa-rules/
Number 4: 457 B.
This is for designed people who are employed by s state or local government, so not everyone can do this one. With a 457B plan, you can contribute up to $19,000 per year and reduce your taxable income by that amount - exactly the same as with the traditional 401k. However, the benefit to a 457 plan is that you don’t need to wait until the age of 59.5 to withdraw that money…you can withdraw it at ANY age, upon retirement, with zero penalty.
Number 5: The Standard deduction.
This is the base amount that anyone is able to automatically “deduct” from their taxable income, just because. If you’re single - you can take the $12,000 standard deduction. Super easy. And If you’re married filing jointly, this number jumps to $24,000. This is fairly straightforward, and for most people - this is an easy one to take.
Setting up an S-Corp.
This is a legal entity you create that you run your business through. This means that all of your self employed business income goes into the S-Corp. All of your expenses go out of the S-Corp. Distributions made by an S corporation are not subject to Social security or Medicare taxes. This is meant to be something to discuss with a CPA if this is something that you’re interested in, this is way beyond what I can talk about in a YouTube video!
Long term capital gains:
If you hold that investment for LONGER than one year - then sell it for a profit - it’s taxed as long term capital gains. This means that if you make less than $434,000…that long term capital gains tax is capped at 15%.
Depreciating assets within your business.
In a business, you can depreciate certain assets over X years to offset earned income! Something like this is REALLY a topic to bring up to a qualified CPA because every business asset has its own depreciation schedule you MUST follow.
HIRE A VERY GOOD CPA. THE BEST YOU CAN.
This videos main purpose is JUST to give you some ideas of strategies you MIGHT be able to implement. But because the tax code is sooooooo complicated and there are a million moving parts for each person that would be impossible to ever cover in a youtube video like this, YOU MUST hire a CPA.
Not financial advice. For ENTERTAINMENT PURPOSES ONLY. Please consult a licensed, qualified CPA for tax advice.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
My ENTIRE Camera and Recording Equipment:
https://www.amazon.com/shop/grahamstephan?listId=2TNWZ7RP1P1EB
Tax avoidance is by definition a crime.
You should rename this as "tax strategies"
You would thank someone would have to had to sign for that .
Keep spare change in a jar tax man don’t need to know what u got in house
What about illegaly
Gives full disclosure then still gives financial advice, then don’t fcking give the advice if you’re not in the position to give the advice, I hate how there’s a lot of people out there that give advice but then always give a disclosure that they aren’t experts dumasses
Having fun smashing the like button
You forgot add that removing yourself from US jurisdiction you can legally avoid taxes.
Thank you Stephen for the legal and CPA advice lol.
How the heck do I use the mortgage interest deduction? All my looking has shown I can't…🤔
HSA doesn’t roll over. You will lose it if you don’t spend it all.
Jeff bezo's backstory.
Thanks Graham! You help me a lot with your video! I’m just some random young adult learning how to be billionaire and avoiding taxes. For real, I’m honestly grateful for learning this.. I should have done this long time ago as a kid. May Lord be with you and have a good day\night 🙏🙏🙏
I have watched this video many times as I do my taxes (with the help of a CPA – but no one loves my money more than me….). Might be time for an updated version if you're so inclined. Understanding your state write-offs is also important. Some states have write-offs for solar, some for certain types of wood stoves, etc.
Great Video! Thanks Graham, I also have a full video in my channel that i specifically tell about the situation for "non-residents" if anyone needs..
@Graham. Don't you think by avoiding taxes, you are not doing yourself a favor. Taxes are really important for the overall growth of a country. Germany is not a tax haven, that's the reason they have free schools, colleges and not a lot of disparity between rich and poor.
Just look at the states or countries with low to zero income tax, they always have high sales tax or high college tuition or expensive healthcare systems. Its a zero-sum game and we are just shooting at our own legs by legally avoiding taxes. What's the use of being a few dollars rich but everything around you is unaffordable. I rather be a small boat in fast flowing river than a huge ship in a stagnant river.
I'm coming for you Graham
IRS is a terrorist organization, change my mind.
Oh I need as much capital as available to invest and don't want to sock away into retirement.
Just sell 40k +12,400 long term stock/ year when you retire and it's tax free. F Liz Warren.
Who is ur cpa??
Thanks Graham! You helped me out a lot!
U M B I N E HIGH MER/
colum45
Taxes should be illegal
Oh hey I can commit tax fraud
Just stop paying taxes as a whole
Too much rubbish talk. I wonder the script writer must be an idiot.
You're awesome. Thankyou.
20 rn and learning this thanks graham !
People who earn money and work hard to become successful knows how hard to give away the money you earned. Imagine what would happen if government decides to tax rich(a guy like Graham) people 80%.
Coming back to this very video after two years now that’ve graduated and am going to make 100k with my shiny STEM degree
Next thing you know…graham got a call from IRS…lol
Slightly different concept, but American Opportunity Tax Credit (AOTC) can get you a maximum annual credit of $2,500 per eligible student. If you are an undergraduate student, you will likely find this deductable helpful. This year, my wife and I got a $5,000 deductible in total just by learning and earning a degree. 🙂
So… if I were to magically have a 401K and max the contributions along with the IRA, I could have 100% tax deductions of my less-than-40K salary LOL.
Does the 401k bit work for 403b, as well?