Upper Middle Class After Almost Failing College

[resjudicata]

@hwereson I didn't even know you could over contribute. I always assumed they would stop you before paying in more than the 6500 yearly max. Do they penalize you? Do you have to pay taxes to take back the money?

 

[webershome]

@hwereson Tax plan my friend, getting absolutely crushed.

Net worth via cash flowing investments greater than giving irs money today

 

[jorravn]

@webershome Could you elaborate on what you mean?

 

[webershome]

@jorravn Op is paying too much in taxes.

The goal should be to pay no state or federal taxes.

So should be tax planning to achieve this goal.

The best part is two folds.

You don't pay taxes and invest in yourself or own business instead.

Said investments will become worth more than your w2 over time and essentially be FIRE.

 

[jean777]

@webershome Genuine question- what’s the difference between this and tax evasion? Is tax planning just the legal way to do it?

 

[webershome]

@jean777 If you start a business and lie about all the expenses that would be fraud and illegal.

If you start a business and incure expenses, and write it off, you can pay less in taxes

Tax planning strats

There are tons of loop holes you just need to invest in them.

You can invest in multiple family property through syndication and get a portion of the depreciation to offset cash flows and w2.

Actually that child care tax credit bs bill they just passed gives 100% bonus depreciation for 2023 yay.

The best one is to be considered a real estate professional and have a non working spouse to meet the test of hours, then you're not capped at income limits to write off depreciation on your real-estate investments.

You can create a 501(c)(3) and donate to yourself then hire yourself as manager and flush cash for everyday expenses. Lots of high net worth people or athletes have their own foundations...yeah they are tax planning schemes, I mean I'm sure they care A LOT.

41% of millionaires in the USA, earned first million as an entrepreneur. Start your own business and watch as many everyday expenses become writeoffs.

Home office, meals, food, clothes if you need to target or portray certain image, gas to and from home office or for business purposes, portion of home utiliites, if use home as office see irs guidelines. I mean fuck hunter biden wrote off his drugs and prostitutes, under his consulting business.

Section 179. Bently, Benz, esclades oh my! Put 4k down, finance the rest and drive away in a mega tax deduction courtesy of the irs. Bonus depreciation of 80% for 2023,

Say you take a vacation with family, squeeze a business deal or sale attempt in middle of it. Monday to Friday, irs stipulates traveling to and from count as business days, so just throw a something in there one other day and write whole trip off. Hotels, food, etc.

Invest in art. Art is a great tax planning investment. Many high net worth inviduals have made purchases, get one of auction houses to appraisal bs it for significantly more than purchased. Donate it to your Foundation and take a huge loss! I mean generous donation to a great charity. Google this particular method, its disgusting how many are doing this. Not just for the ultra wealthy, the appraisal from a reputable x person or newspaper posting with value saying it's worth that you may or may not paid to have published. Art is of course subjective.

 

[hwereson]

@webershome This seems like tax fraud with extra steps

 

[araina]

@hwereson The rule of thumb I learned from The Money Guy (who is a CPA btw). Imagine sitting across from an IRS rep in the middle of an audit and having to explain your tax decisions. Could you reasonably explain how you were justified in deducting your personal expenses as business expenses, or how you gave your 5 year old kid a $60k salary for cleaning their room?

 

[webershome]

@araina Rule of thumb, this example is extreme dumb dumb dumb.

Now paying your kid 500 dollars a month into roth ira...smart and legal

 

[araina]

@webershome Yes, only if the work your kid does justifies the $500 a month. Having them do household chores in order to give them a 1099 or W2 doesn't count.

It's not reasonable to assume a 6 year old can make $500 a month.

 

[webershome]

@araina Respectively, it does count.

Have to do it correctly, setting up family mgt llc.

That bills your llc, llc pays family mgt company that processes payroll through 3rd party provider to your kid.

Kids less than 2 years old can be hired as models and put on business cards for 500 a month for photo shoots with common catch phrase a busines that grows with you.

You would be paying to process payroll and for the business cards, but little price to pay to get the child earned income and set up their future.

Initial costs of llc setups unless u know how to do it yourself, reoccurring payroll cost and business cards each month.

Then the steps of business transactions themselves.

Business bank accounts x2
Bank account in childs name.
Signed notary statement of roth ira deposits, ups can stamp this for couple of bucks.
Set up roth ira for kid through fidelity, easiest company to do for child.

Benefits:
Roth ira grows tax free and can be used for medical or education expenses. Principle can be withdrawn at any time penalty free.

Business gets a 6k writeoff assuming 500 a month, as child ages can increase with benefits being paid up to standard deduction.

Child doesn't have to file tax return as long as under standard deduction, not applicable for fica taxes.

Children can be assigned age-appropriate tasks such as administrative work, cleaning, marketing, and advertising. These tasks help them learn responsibility and contribute to the business's operations. It is important to consider the child's age, abilities, and interests when assigning tasks to ensure a positive and educational experience.

 

[webershome]

@hwereson I'm a cpa

It's not tax fraud.

They're legal tax planning strategies steps to avoid paying taxes.

This group always down votes the cpa trying to tell you, paying taxes is dumb. If you really think anyone over 500k is paying, you are out of your mind.

That child care tax credit farce they just passed, gave crumbs to everyday people and gave huge discounts to anyone with a business. Extra depreciation and section 179 deductions yummy.

Keep down voting me, all of you are fucked in the head for paying taxes, instead of investing that money into your families, you will stay middle class finance with that thinking.

The extra steps is effort required to get to the desired outcome, after all if you won't play you will pay.

 

[webershome]

@emcomus Majority are not, keep listening to CNN they aren't paying either lol

 

[emcomus]

@webershome My reference isn't CNN. It's knowing people who make 500k+

 

[jorravn]

@webershome Ya I worked in tax for 7 1/2 years at one of the largest firms and this sounds like typical TikTok bullshit. I only asked bc I know there are people with more knowledge and experience in my field but you sir/madam, are not one of them

 

[webershome]

@jorravn For the people in the middle class finance forum, these strats are it.

There are much much more complicated fun loopholes, but the people in this sub, it will go way over their heads.

 

[resjudicata]

@webershome This!

 

[salea]

@hwereson Went to college. Didn't like it, would rather work instead.

Worked my way up from $8.25/hr in 2014 to just over $50/hr now.

It is very possible if you DO work.

 

[johanlolz]

@salea If you don’t mind me asking ,what do you do?

 

[salea]

@johanlolz Analytics work related to supply chain and logistics.

I make lots of stuff move really fast.