I DON'T KNOW DID THIS INTENTIONALLY

@shermanthecpa

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Why it worked

The video provides actionable tax strategies that directly address a common pain point for business owners: reducing their tax liability. The use of specific examples and clear explanations makes the complex topic of tax loopholes more accessible and valuable to the audience.

Summary

The video explains tax loopholes that business owners can use to reduce their tax burden. It highlights strategies like the Augusta Rule, paying family members, and setting up tax-free reimbursement plans for various expenses.

Structure

1Introduction to tax loopholes
2Explaining the Augusta Rule
3Paying family members
4Tax-free reimbursement plans
5Dependent care and accountable plans
6Advanced scenarios

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Original caption

These Tax Loopholes Can Reduce Your Taxes #taxloopholes #taxstrategies #taxstrategy #taxsavings #taxtips

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IRS: The Internal Revenue Service, a U.S. government agency responsible for tax collection and tax law enforcement. It appears as a logo on documents and is mentioned in the speech. Removing it would not change what happens in the video. IRS: The Internal Revenue Service, a U.S. government agency responsible for tax collection and tax law enforcement. It is mentioned in the speech as acknowledging a business advantage. Removing it would not change what happens in the video.

On-screen text

I DON'T KNOW DID THIS INTENTIONALLY BUT THERE ARE SEVERAL LOOPHOLES THAT BUSINESS OWNERS ARE RIGHT NOW TO MOVE THEIR INCOME AROUND TO REDUCE THEIR TAXES FOR EXAMPLE THE AUGUSTA RULE IS A POPULAR ONE THAT ALLOWS BUSINESS OWNERS TO PAY THEMSELVES A TAX DEDUCTIBLE RENTAL FEE THAT IS ACTUALLY EXEMPT FROM BEING TAXED WHEN STRUCTURED CORRECTLY JUST IMAGINE PAYING YOURSELF $20,000 DEDUCTING THE FULL AMOUNT AND PAYING ZERO TAXES ON THE MONEY YOU RECEIVE THIS IS 100% POSSIBLE UNDER SECTION 280A ANOTHER ONE WE SEE ARE BUSINESS OWNERS WHO HIRE THEIR FAMILY MEMBERS WHICH EVEN THE IRS ACKNOWLEDGES AS AN ADVANTAGE OF OWNING YOUR OWN BUSINESS EFFECTIVELY MOVE MONEY OUT OF THE BUSINESS OWNER'S HIGH TAX BRACKET A FAMILY MEMBER IN A MUCH LOWER TAX BRACKET I HAD A CLIENT THAT PAID HIS FOUR KIDS $60,000 IN WAGES DEDUCTED THE ENTIRE AMOUNT ON HIS BUSINESS TAXES WHICH ENDED UP SAVING HIM $22,000 PLUS THE KIDS OWE NOTHING ON THEIR PAYMENTS BECAUSE THEIR STANDARD DEDUCTION WIPED IT OUT COMPLETELY THESE PEOPLE ARE ALSO DOING THINGS LIKE SETTING UP TAX FREE REIMBURSEMENT AS BENEFITS IN TO REIMBURSE THEMSELVES FOR ALL DIFFERENT TYPES OF EXPENSES FOR EXAMPLE THERE'S MEDICAL REIMBURSEMENT PLANS THAT CAN REIMBURSE YOU FOR OUT OF POCKET MEDICAL EXPENSES THERE'S DEPENDENT CARE ASSISTANCE PLANS THAT CAN REIMBURSE YOU FOR CHILD CARE EXPENSES YOU MIGHT HAVE AND THERE'S ALSO ACCOUNTABLE PLANS THAT CAN REIMBURSE YOU ANY TYPE OF BUSINESS RELATED EXPENSE THAT YOU PERSONALLY PAY FOR WHEN STRUCTURED CORRECTLY THINGS THAT COULD BE TAX FREE TO YOU AS THE RECIPIENT UNDER IRS RULES AND THIS IS JUST LEVEL 1 I HAVE SEEN MORE ADVANCED SCENARIOS WHERE BUSINESS OWNERS WILL SHIFT INCOMES TO VARIOUS LIKE CORPORATIONS MANAGEMENT AND EVEN THEIR OWN NON PROFITS TO TAKE ADVANTAGE OF DIFFERENCES IN THEIR TAX TREATMENT

Transcript

I don't know if the IRS did this intentionally or not, but there are several loopholes that business owners are using right now to move their income around to reduce their taxes. For example, the Augusta rule is a popular one that allows business owners to pay themselves a tax deductible rental fee that is actually exempt from being taxed when structured correctly. Just imagine paying yourself $20,000, deducting the full amount and paying zero taxes on the money you receive. This is 100% possible under section 280A. Another one we see are business owners who hire their family members, which even the IRS acknowledges as an advantage of owning your own business. Effectively move money out of the business owner's high tax bracket to a family member in a much lower tax bracket. I had a client that paid his four kids $60,000 in wages, deducted the entire amount on his business taxes, which ended up saving him $22,000. Plus the kids owe nothing on their payments because their standard deduction wiped it out completely. These people are also doing things like setting up tax-free reimbursement as benefits in to reimburse themselves for all different types of expenses. For example, there's medical reimbursement plans that can reimburse you for out of pocket medical expenses. There's dependent care assistance plans that can reimburse you for child care expenses you might have. And there's also accountable plans that can reimburse you any type of business related expense that you personally pay for. When structured correctly, things that could be tax free to you as the recipient under IRS rules. And this is just level 1. I have seen more advanced scenarios where business owners will shift incomes to various like corporations management and even their own nonprofits to take advantage of differences in their tax treatment.