Bob GauvreauAsk Bob Gauvreau Questions Based On His Training

Accelerating Tax Deductions #shorts

26 Jul 2023 · 1 min

Watch on YouTube

0:54

A short YouTube clip by Bob Gauvreau explaining the principle of "accelerating" tax deductions while cautioning against spending simply to create deductions. He uses a simple numeric example (income $100, tax rate 20%) to show that spending just to get deductions can leave you worse off, while noting spending can still be appropriate when it buys business assets or future value.

Questions this video answers

Income = $100; tax rate = 20%.

July 26, 2023.

Chapters

Let's talk about accelerating tax deductions. Ultimately, what we're trying to do is get as much deductions in as we can to reduce our tax bill. It's not necessarily about spending money just to get a tax deduction. If we think of income at $100 and our tax rates 20%. For simplicity, if we pay tax on that $100 at $20, we have $80 left. If we spend money. If we spend that $100 just to get a tax deduction, we're saving $20 overall. Instead of having $80 left after paying the tax, we have $20 left, which is our tax savings. Which one's better? I would go with the $80 left in my account. Now, it doesn't mean that we don't need to spend that $100 on an asset or something inside our business to help grow or to better prepare ourselves for the future.