How Millionaires Get Into the 12% Tax Bracket

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Many people mistakenly believe that just because their income puts them into one tax bracket that they are stuck there. This just isn't true. In fact, tax strategy can be used to reduce taxable income so that even high earners can move down into the lower tax brackets such as the 12% tax bracket.

In this video, tax expert Karlton Dennis explains why it is so important to stay in the lower tax brackets, and how almost anyone can do this. Some of the tax strategies that he discusses in this video include the short-term rental rule, accelerating depreciation, maxing out 401(k)s, and IRAs, and more.

This video is ideal for anyone who feels like he or she is stuck in a high tax bracket but wants to learn how to move down into a lower one without making less money. The tax savings associated with moving into a lower tax bracket can be quite substantial. So, anyone who moves into a lower tax bracket without reducing earnings can potentially benefit enormously.

CHAPTERS:
0:00 Intro
0:54 The Mindset Shift
2:56 The Numbers
4:48 The Best Tax Strategy
7:22 Using Rental Real Estate to Offset Active Income
8:31 Accelerating Depreciation with Rental Real Estate
9:34 Example: How a Millionaire Pays Only 12% in Taxes
11:12 Outro

*Disclaimer: I am not a financial advisor nor am I an attorney. This information is for entertainment purposes only. It is highly recommended that you speak with a tax professional or tax attorney before performing any of the strategies mentioned in this video. Thank you.

#taxes #taxbrackets #millionairetaxes

[samsonswaroop]

One inaccuracy in the video 3:58 ... you will pay 37% only on income above 609, 350. So it will NOT be 370, 000 tax on a 1M income.

[NorthAlabamaRentals]

I turned this off as soon as he said a person making a million dollars is taxes 370k. I’m not taking tax advice from someone who doesn’t understand the graduated tax system.

[ers]

As a visual learner, the Animated Graphics makes the video 1, 000% better!! Keep it up! 👍👍👍

[williamcain]

Great video, one correction however. Making 1M and being at the 37% tax bracket doesn't equate to $370k bc it's progressive. Otherwise very useful info.

[jenkins]

There is actually plenty you can do as a W2 employee. You can invest within your 401k and traditional IRA. You can also tax loss harvest. All contributions and losses lower your AGI. Also tax brackets are progressive. Someone making 1 million isn't going to pay 370k in taxes. That's simply not how it works.

Just because your video has an agenda doesn't mean you should add leading and untrue info to further it. Have a little integrity or if you don't understand the subject don't talk on it.

[onthebcydefilms]

Are you investing the real estate as your personal property? Or adding that with a llc or s corp

[robyee]

how does accelerated depreciation apply long term? dont you have to pay it back if you sell the property?

[TheLazyLifterr]

For anyone who sees this, there’s a new book that released from Australia called “how to buy 10 properties fast”, and releases in the states on August 8th - I HIGHLY recommend reading it as it’s an easy read, easy to comprehend, and can be easily translated to USA real estate investing

[melaniegraham]

Karlton has the Best edits, hands down. Lol. Smart and funny! Love this channel

[MZ-hwgj]

Your videos are so informative and easy to understand. Thank you for sharing this information with us. ❤

[RHR]

Carlton, Is it worth to payoff the rental property soon

[scarlettb]

Do you have a video for those who are flipping houses? How can they get into the 12% tax bracket?

[WillKefauver]

POWERFUL video - It took me 10 years to learn all of this. Glad you're putting all of this info out there. Love the mindset shift point at the beginning. Cheers mate.

[vivydustin]

Great information! My question is if I have a 2.5 mil gain on my primary resident after the exclusion ($500, 000)
can I offset my gain with my personal investment losses from the sell of my stocks investment? Thank you so much

[pramodm]

Can you make an example for someone with $400k salary on W2

[TheLadamaglasting]

What age does my son need to be for putting him on payroll?

[hrstanya]

I don’t get it… whose rentals have depreciated.

[SeanChristopher-br]

God bless you Karlton Bank$. Great video. Thank you.

[locogang]

Where can i learn this informations for the rules in my country?

[Meena-komb]

What about depreciation recapture when you eventually sell the property. Then you have to pay all depreciation tax write offs back, correct?