3 Easy Ways To Save On Taxes | Incite Tax

Here are 3 quick, easy ways to reduce your taxes. First one, retirement accounts. Now, if I'm an individual, uh, meaning I don't have a business, there are just a few things that I can do. I can invest in an IRA, or if the employer that I work for has a 401 plan or some other type of retirement account, I can potentially contribute to that. If you have a business, now there's a lot more options in how you set up a retirement account. You can create your own 401 plan, you can do a SEP IRA, you can do a simple IRA. Those you can have self-directed, meaning you choose what it's invested in. Those can be Roth, meaning you use after-tax dollars, and then the growth inside of the account is never taxed. So those are some options. There are some cons though. So like pros, benefit is those types of accounts I just mentioned are what we call qualified plans. So you can put money into it before taxes are pulled out. Those are with pre-tax dollars. So you save taxes now. But you would pay taxes when you pull the money out. Or it's still a benefit to you if you pay— if you use money that you've paid taxes on now, but then the growth is tax-free. There are also non-qualified plans, and those can be as simple as creating your own brokerage account, like with a Charles Schwab or John Hancock, those types of companies. Whole life insurance. Now, if you only listen to Dave Ramsey, you may Think, well, that's not an investment plan. Every product is created because there is scenarios where it makes sense, and whole life can be an option. But those, you don't get tax benefits upfront with those. You can create your own defined benefit plans. Depending on how much money you have, you can do nonprofits. So that's one way. Retirement accounts. Everything that I mentioned are things that help people Get to retirement, meaning they have money when they retire so they don't have to keep working forever. Another option is creating a side hustle. If I'm just a W-2 earner, the tax code is very black and white for me. I pay tax on the W-2 wages. Maybe I itemize and there's some tax savings I get that way, but not a whole lot. If I have a side hustle, Meaning I am making an attempt outside of my W-2 job to earn money, whatever that looks like. I can now take advantage of all of the tax code, meaning I can write off business expenses. There's no law that says I can't take business expenses. As I stuttered there, sorry. There's no law that says I can't take business expenses if I'm not making very much money, or even if I'm making any money, as long as I can prove I'm attempting to make money, I have the opportunity to write off some stuff. So that side hustles is an option, and that the sky's the limit on side hustles, especially nowadays with the way technology is. And then another option is investing in real estate. Real estate provides a lot of tax benefits. You buy the property and now you can claim the interest expense, you can claim property tax, you get depreciation, which is taking the purchase price of the real estate and taking a chunk of it every year to lower your taxes. And you can actually grow your wealth that way. Lots of people make a lot of money in real estate because now you have a property that you could rent out. Now, as of the recording of this, short-term rentals were quite the thing, and those have definitely died down. There's an influx or an overabundance of short-term rental properties now that exist, and the market doesn't need all of those options. So not as profitable as they used to, but guess what? There are hundreds of ways you can make money in real estate. If you're looking for recommendations, We have a bunch of real estate partners who are really great at creating whatever that niche is that they've decided to focus on. We're happy to give recommendations if you want to reach out to us, or if you are a client and have access to our Facebook page, you know, shoot some stuff in there and we're happy to make some recommendations. So those are your 3. Some sort of retirement account, those can be set up in a way to save you taxes now or save you taxes later. Or you can even just set it up in a way where you don't save taxes now or later, but it's still a way to create money that'll exist when you want to retire and stop working. Then we talked about creating a side hustle or real estate. So those are some quick, easy-hit options. Let us know if you have any questions. If you think there's people that you know who want to save money on taxes and would like information like this, please share this with them. Thank you.