How To Pay NO TAXES In 2024 (What Nobody Tells You)

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WAYS TO REDUCE TAXABLE INCOME IN 2024:

1. Traditional 401k Contribution:
This is a tax-advantaged retirement account that allows you to contribute up to $23,000 per year of PRE-TAX money - meaning every $1 you contribute will reduce your taxable income by that very same $1. This way, you show less income, you owe less in tax - and you have more money left over to invest.

2. HSA / Health Savings Account
This account is specifically used to pay for any out-of-pocket medical expenses or charges that you incur throughout your lifetime. You can also invest within the account and potentially grow your tax savings even further - as long as you have a high deductible health plan (you must qualify for this). Contributions are tax-free, and withdrawals are tax-free on medical expenses.

3. Long Term Capital Gains Tax Rate
These tax rates are significantly lower than earned income - In fact, the federal long-term capital gains tax is only 15% if you make between $47,025-$518,000 per year as a single filer…that could lead to MASSIVE SAVINGS for anyone who makes more than $50,000. Some income brackets even pay $0 in long term capital gains!

4. Running income through an S-Corporation or LLC
This is simply a legal entity that you create to run your business through…in essence, all of your “Self-Employed” business income goes into the S-Corp, expenses come out, and then you personally take what’s left over as distribution. Distributions made by an S Corporation are not subject to Social Security or Medicare taxes, which can save you 15.3% on your money.

5. The SALT Cap Workaround
In 2017, the Tax Cuts And Jobs Act limited your deductions on State And Local Taxes. Some states have issued guidance on a “SALT Cap Workaround” to be able to deduct your state taxes in their entirety - saving you a TON of money.

6. Real Estate / Homeowner Tax Benefits:
-The Capital Gains Exclusion.
This allows you to sell your primary residence and pay no tax on the first $250,000 worth of profit if you’re single, or $500,000 worth of profit if you’re married, as long as you’ve lived in that home for at least 2 out of the last 5 years.

-The 1031 Exchange
If you own a rental property, you can indefinitely defer paying taxes when you sell a property, as long as you “exchange” it for another one within a certain time period.

-Depreciation.
According to the IRS, your property has a lifespan of 27.5 years - this means that as the home gets older, it loses value - on paper - that can be deducted from your overall profit. There’s also something called a “cost-segregation analysis” that allows you to take a substantial amount of depreciation upfront.

-Cash Out Refinance
Unfortunately, this one doesn’t make too much sense with mortgage rates as high as they are - but, in the eyes of the IRS, loans you take against assets aren’t “income,” because you technically didn’t sell - and because it’s not “technically income,” you don’t owe any tax.

-Real Estate Professional
In this case, you’d be able to use all of your real estate paper losses to offset your W2 / 1099 income, allowing you to potentially make a lot of money and owe nothing to the IRS. being a “real estate professional” is something that you’d have to be able to back up to the IRS in the event of an audit, and that includes “Spending more time doing real estate activities than all other business activities combined, and spending at least 750 hours per year in real estate.”

*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. This is not investment advice.

[Real.Estate.Report]

“Tax evasion is a crime. Tax avoidance is an art.”

[rileymayo]

Hey Graham, I love your videos and have been watching since about 2018. I work in tax and accounting. I am an EA which is an Enrolled Agent. An EA is someone who is enrolled to practice before the IRS. A CPA is licensed at the state level, whereas an EA is at the federal level. I think it is important to not use CPA and tax preparer interchangeably as you don't need to be a CPA to be a good tax preparer. Thank you for posting this video as so many people don't know anything about how to save money with the IRS.

[nezzee]

One thing to note with HSAs, the caveat to using it as a retirement account is that it is not protected against bankruptcy like other retirement accounts. Not that one plans on going bankrupt, but its just something to keep in mind for weighing risks. Other than that, its basically the best tax advantaged retirement adjacent account you can get for pre-tax dollars.

[atkhodier]

I opened up my Roth IRA at 26…turning 27 next month. I know I’m late but it should be 1.4 to 1.7 million by the time I retire!!! Ik I’ll need more to retire BUT one day I’ll get a 401k from work too!!!

[beautyandfinance]

Thanks, Graham!!! Excellent point AND timing.

[justintimefinance]

the HSA was a game changer for me and is beneficial when having kids. Looking forward to one day starting an LLC

[DominicQuintanilla]

My mission this year is to learn the game of keeping more money in my pocket, thank you for this Graham!

[wavewarrior]

Thanks for the info gram ….always give good information. Hope your having a good day!! Rob from WV

[CurtFarnsworth]

Great high level video, while providing enough nuance. I’m a CPA, and it drives me crazy how much bad tax advice there is on YouTube.

[reachtrita]

I’ve learned the most from this video. Thank you!

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[angelcarrascoza]

This video made me subscribe- good stuff Graham🎉 I’ve been watching for a while but this was without a doubt your most informative yet. It seems like most videos today only talk about getting out of pay check to pay check - there’s nothing out there for us who are actually making a substantial amount of money - this one did however so I’m happy

[SupapPengpopan]

I love your analysis, always on the point. And yes, Xeventy is a game changer. Great project!

[sandy]

Your videos are always so educational and interesting!! Appreciate all the time you put into your videos!

[ReconPro]

What's up guys have a great day! ❤😊

[richhands]

My three favorite channels: Graham Stephan, Stock Brotha, & How Money Works. Make my week complete! 🔥 🔥 🔥

[keithkleparski]

My apologies I've watched so many videos I assumed I was subscribed so that request to hit the button actually worked today

[erics]

doing all of these, this is good advice!

[abbyoneill]

What I’ve never understood is why not everyone will retire in a lower tax bracket. If you’re retired and lose that income, aren’t you in a lower tax bracket? Or are some people going to retire withdraw investments in greater amounts than they used to earn from their jobs?

[cyanvaughn]

As an expert one of the key details I disagree with is the “as soon as possible” with regards to setting up an S Corp. if you set one up and aren’t making enough money it will cost you. I’ve seen it countless times where someone sets one up too soon