The Bacon

We don't believe in taxation without explanation

[The Bacon @TheBaconUS]

2020 Year End Tax Minimizing Strategies (a thread)

[The Bacon @TheBaconUS]

The expansion & extension of the Employee Retention Tax Credit is really something for Small Business Owners.

$14,000 refundable tax credit per employee through Q2 2021

[The Bacon @TheBaconUS]

You don't need to become a CPA to understand your specific tax situation. You just need to spend some time learning the basics and have consistent communication with a forward thinking CPA 🥓🥓

[The Bacon @TheBaconUS]

Business owners pay income taxes, employment taxes, unemployment insurance, property taxes, & sales tax. It is vital to optimize your tax obligation wherever possible 🥓🥓

[The Bacon @TheBaconUS]

The compounding effect on money you don't pay in taxes is wild.

Start early. Invest your tax savings into the stock market, RE, or your own business.

[The Bacon @TheBaconUS]

One of the most frustrating problems for people when it comes to taxes is that they don't know what question to ask.

Sadly, the school system failed to teach us basic life skills such as taxes. It's going to be up to you to learn the basics so that your net worth can grow.

[The Bacon @TheBaconUS]

Won't it feel nice to check your bank account after you were able to slash your tax bill by 2, 5, or 10%? Minimizing your tax bill means giving yourself a raise for the year. What would you do with the extra cash?

[The Bacon @TheBaconUS]

Don't just let taxes happen to you. Work smart to minimize them.

[The Bacon @TheBaconUS]

Taxes are one of your largest lifetime expenses as a business owner, but they don’t have to be.

[The Bacon @TheBaconUS]

In 2021, it is our goal to 1.) build content centered around optimizing your tax situation now 2.) create a community that connects people who want to optimize this part of life.

[The Bacon @TheBaconUS]

Look to optimize the lowest hanging fruit first. Then move to the bigger things.

[The Bacon @TheBaconUS]

HYPE!

[Jared Halpern @JaredHalpern]

House has approved $2000 stimulus payments 275-134, meeting the 2/3rds majority threshold. Now heads to the Senate.

[The Bacon @TheBaconUS]

@DavidJNage Creating content that teaches people how to optimize their taxes.

[The Bacon @TheBaconUS]

This is a tweet promoting this substack post that is promoting a tweet. https://t.co/crP54VRvEK

[The Bacon @TheBaconUS]

If you have a baseline understanding of your tax situation, meetings with your CPA will go smoother.

You can skip over the basics and get right to strategies that will minimize your tax bill. You will leave your CPA's office feeling confident not confused.

[The Bacon @TheBaconUS]

Refundable tax credit - The tax credit is more than your tax bill and you are refunded the excess

Nonrefundable - The tax credit can only get your tax bill down to $0 but you are not refunded any excess.

Each specific tax credit will specifically spell out which one applies

[The Bacon @TheBaconUS]

How to calculate tax savings

1. For deductions, these lower your taxable income. So the tax savings is found by multiplying your deduction amount by your marginal tax rate. i.e., if you're in the 24% tax bracket and you have a $1,500 business deduction, you save $360 on taxes

[The Bacon @TheBaconUS]

2. For tax credits, these are subtracted after the tax calculation and lower your tax bill dollar for dollar. So if you have $15k tax bill but a $2k tax credit, now your tax bill will only be $13k. It's important to know if the credit is refundable or nonrefundable.

[The Bacon @TheBaconUS]

We're on a mission to generate $5B of value in 2021 by helping 1M people save $5k+ on their taxes.
https://t.co/p2d1dvLYrL

[The Bacon @TheBaconUS]

Okay, that's all for today! If you found this info helpful, make sure to head over to our YouTube channel (link in bio) for helpful financial & tax content there too! Also share this thread with friends as it could save them thousands when they go to file their taxes next year.

[The Bacon @TheBaconUS]

2020 Year End Tax Minimizing Strategies (a thread)

[The Bacon @TheBaconUS]

In order to avoid this, try to keep purchases under $2,500 per item. These can be deducted immediately (See De Minimis IRS rule). Also the Sec 179 deduction can be used to immediately expense up to $1M for certain items purchased by a business. This includes certain vehicles too.