This is how a couple that's making $165,000 can save $51,000 in taxes.

@budgeters_anonymous

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Why it worked

The video provides a clear, step-by-step breakdown of how a couple can significantly reduce their taxable income and save a large amount of money. The use of visual aids (handwritten notes) and relatable financial concepts like 401k, IRA, and HSA makes the information accessible and engaging, likely driving shares and saves.

Summary

The video explains how a couple earning $165,000 can save $51,000 in taxes by maximizing contributions to their 401k, IRA, and HSA accounts. It details how these deductions reduce their taxable income, ultimately leading to a significantly lower tax burden and a substantial amount for living expenses.

Structure

1Introduce the tax savings goal for a couple earning $165k.
2Explain 401k contributions and resulting taxable income reduction.
3Explain IRA contributions and further taxable income reduction.
4Explain HSA contributions and the final taxable income.
5Detail the tax calculation based on the reduced taxable income.
6Show the final amount left for living expenses and its relation to median salary.
7Discuss long-term investment growth and financial independence.

Product placement

The video discusses tax-saving strategies using 401k, IRA, and HSA accounts, which are financial products/services. The creator uses a handwritten diagram on a sticky note to illustrate the calculations.

Original caption

Replying to @Dustin Bell That sounds unusually high based on the actual tax brackets that exist in the real world. #retirementplanning #retirement #investing

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On-screen text

Reply to Dustin Bell's comment On 165 bring home is 104. Try 61k in taxes. How a couple making $165k can save $51k on taxes FIRST, EACH PERSON IS GONNA MAX ONE K. TOGETHER, THAT'S $49,000 THAT THEY CAN SUBTRACT FROM THEIR TAXABLE INCOME. SO NOW THEY TAXED ON $116,000. THEN THEY WOULD THEIR TRADITIONAL WHICH TOGETHER IS $15K $101K $92K ONLY TAXED ON $101,000. THEY'RE GONNA MAX OUT THEIR H HEALTH SAVINGS ACCOUNT WOULD BE $8,700. NOW THEIR TOTAL TAXABLE INCOME IS $92,000. 1$92K| $0 -> $25K = 10% $25K -> $92K = 12% -$10,500 2 PEOPLE = $81K = $80K $1.6m = FI HERE'S THE WAY THAT $92,000 IS BASICALLY, THE FIRST $25,000 IS TAXED AT 10%, REST OF THAT MONEY WOULD BE TAXED AT 12%. GRAND TOTAL OF $10,500 IN TAXES. I'D LEAVE THEM WITH ABOUT $81,000 TO LIVE OFF. OR YOU SAY LIVE OFF $81,000. THE MEDIAN SALARY IS $80,000. THEY LIVE THIS WAY FOR 13 YEARS, UP HAVING $1.6 THIS IS ACTUALLY NUMBER. BECAUSE THIS IS HIT FINANCIAL INDEPENDENCE. CAN LITERALLY WITHDRAW $81,000 EVERY SINGLE YEAR WITHOUT EVER DRAWING DOWN THIS BALANCE.

Transcript

This is how a couple that's making $165,000 can save $51,000 in taxes. First, each person is going to max out their 401k. Together that's $49,000 that they can subtract from their taxable income. So now they would only be taxed on $116,000. Then they would each max out their traditional IRA, which together is $15,000 that they can deduct from this $116,000. So now they're only taxed on $101,000. And then lastly, they're going to max out their HSA sages account. That would be $8,700. Now, their total taxable income is $92,000. Here's the way that $92,000 is tax. Basically the first $25,000 is tax at 10%. And then the rest of that money would be taxed at 12%. Grand total of $10,500 in taxes. I'll leave them with about $81,000 to live off. Or you say that nobody can live off $81,000. The median salary is $80,000. They live this way for 13 years. They would end up having 1.6 million invested. This is actually a pretty significant number because this is when they would hit financial independence. This amount they can literally withdraw $81,000 every single year without ever drawing down this balance.