How To Pay LESS Taxes for Annual Salary/W2 Income (2024)

Hi Savvy investors! In this video we talk about everyone's favorite topic... taxes! It might not sound exciting, but I know paying less in taxes every year and having more money is always super exciting!

There's a lot of information out on the internet and here on youtube on how to save money when it comes to self-employment income/ 1099 income, but I know many of you and myself included have a job that pay a salary. In this video best ways to pay less in taxes when it comes to your salary job/W2 income. The main ways you can save money is through these four categories:

The benefits and strategies discuss in this videos are all ways in order to decrease you're over pre-tax salary. Using the money you make on things you're already be spending anyways, allows you to save on taxes (there's less money for the government to tax at the end of the year). On average American's pay a 29.8% tax on their ordinary income with the federal, state/local, social security and medicare. So the way I like to think of it is every dollar I put into one of these programs, I'm actually saving $0.30 in my taxes.

1) Transportation
Most work offer a pre-tax program where you can put money on a debt card that allows you to pay for your transportation cost to and from work. I know I person spend $5 everyday to get to and from work and within a year that amounts to roughly $1,200 in transportation cost alone! Using this program I'm roughly saving about 30%!

2) Health Care
Health care has two main ways to save money with taxes when it comes to your salary job. The first is using your pre-tax money to pay for your insurance plans, such as health insurance, dental, and vision. Then the second way is using a FSA or a health savings plan to pay for those medial expense. This way you're saving money for your insurance and actually expenses.

3) Investing
With investing there's two main options for using pre-tax money. First is a 401k, which is only offered by employers. The second is a IRA. Both of these have different amounts you're able to contribute to the accounts every year. For 401K in 2020, you can contribute up to $19,500. While in a IRA you're able to contribute up to $6,000 for 2020. All the money you contribute now is not being taxed at the 30%, saving you 30% on any money you contribute. Note, you will have to pay taxes later when you're retired and pulling out money, but by then the mindset it that you won't be working and therefore, in a lower tax bracket then present day.

4) Other
Check to see what kind of pre-tax benefits your employer offers. Every place is job is different and some companies might offer some great pre-tax benefits that my job doesn't offer, such as educational or stock options.

----------
If you enjoyed this video and want to support me please leave a LIKE, write a comment on this video and share it with your family/friends. Subscribe to Kevin - Financial Tutor Youtube, like and click the 🔔 icon for notifications to follow me on my journey to financial freedom!

Useful Links:

Social Links:

Free Money Links:

Additional Links:
Patreon Page *Coming Soon*
Schedule Video Chat Consultation *Coming Soon*
Camera Equipment *Coming Soon*
Tubebuddy for YouTube *Coming Soon*

Video Links:

#SideHustles #HouseHacking #PersonalFinance #FinancialApp #Investing #RealEstateInvesting

👨‍⚖️Liability Disclaimer:

Video Tags (Please Ignore)
side hustle, passive income, make extra money, ways to make extra income, ways to make extra, how to make extra money with your car, how to make extra money with your phone

[joymae]

I guess the only way to save money is to not work a salary job haha

[reversemoustachecat]

Kevin, full pre-tax IRA deductions are available on a classic IRA if your modified gross income is $68k per year or less (2022). If it's more, you can deduct part of it, but if your adjusted gross is more than $78k per year, then you get nothing. Your full contributions will all be after-tax to an IRA, traditional or Roth

[gofdoom]

if you use the pretax transportation debit card for ubers to bars/gym is that allowed? or is it only to and from work

[dom]

Hey man thank you very much about that pre tax transportation can this be used for vehicle gas, repairs etc?. Would appreciate a reply thank you!?

[Tundra]

Is there a way to pay ONLY the amount of tax you need to? even if that means no tax returns during tax season

[jond]

There was some valuable information, but I suggest you research FSA and Dependent Care FSA's. Also, I'm not sure you understand the true power of the HSA. I suggest you do more research and recreate this video. Good luck!

[powergrower]

What can high income earners with W2 income do?

[twaltdwan]

you should do high deductible, pay less for insurance save more in your hsa-retirement acct

[TNash]

My idea starting January is to exempt all from taxes and invest into high-div etfs till the next January when taxes are due and only pay what I owe for taxes and then roll over the interest over and over. Is this a good idea?

[Realsesar]

Partially correct information here on #3. There are exclusions on how much IRA deductions you can take. If over $75k income you are not illegible

[Luxlookgood]

My job does not have IRA do you suggest opening one with fidelity or a bank or what?

[miguelnavarro]

Hey there reimbursement on personal car millage/gas ?

[cimuya]

I dont have health insurance and or investments but I pay child support I claim 0 and take 130 in taxes and 174 in child support can you help

[LukeDeutschlander]

Nice Video Kevin, we should collab. Fellow real estate investor / mentor.

[n.w.c.ah]

There is no law that says that you have to file an income tax form it would be a Fifth Amendment violation

[rota]

Lol im a business owner for 5 restaurants and don’t pay a penny on taxes