These 7 Investments Will Reduce Your Taxes Immediately

it is very hard to build lasting wealth

when you are giving literally half of

your income away to Uncle Sam every

single year like you literally have to

fight to keep your hard-earned money

it's like when you have low income you

have to fight to earn more money to

build wealth and then when you finally

earn more income you have to fight taxes

to keep more of what you earn it's a

never-ending battle but fortunately

there is a way you can do both you can

build wealth and reduce your taxes at

the same time the ultra wealthy

understand this and are able to pay

almost 0% of their income and taxes but

you don't have to be ultra wealthy to

actually accomplish this you just need

to understand tax deductible Investments

or in other words Investments that can

reduce your taxes that's what this

episode is all about I am going to give

you the top seven tax deductible

Investments that you can make to reduce

your taxes while building your wealth my

name is Sherman the CPA and I coach

people on the best ways to do this every

single day at my CPAC coach.com I have

helped people reduce their taxes by over

six figures by simply moving their money

to some of the Investments you are going

to learn in this video so go ahead and

save this video comment below if you

have any questions and make sure you

subscribe for more guidance to less

stress and lower Tas

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taxes all right so as we go through this

remember your tax is based on your

income but when you make tax deductible

Investments you are pushing income off

of your tax return tax deductions reduce

the income reported on your return which

in turn reduces your tax bill these tax

deductions exist to incentivize people

to make certain Investments and all you

need to know is what those Investments

are so we are going to start with

various investment accounts that you can

simply transfer money to and receive a

tax deduction in return then we will

take it a step further and talk about

specific types of assets you can invest

in to receive very large tax deductions

which we'll cover in detail later in

this video so let's go ahead and jump in

number one the traditional IRA an IRA

simply stands for individual retirement

account literally anyone can set this up

at a brokerage like Fidelity Vanguard

TDA Mar trade and so on this does not

have to be done through a job employer

or your business so here's how it works

you can contribute up to about $7,000 to

a traditional IRA and when you do this

you will receive a tax deduction in

return and this is per person if you

have a spouse you can get another $7,000

in and you can even set this up for your

kids kids and get another $7,000 in per

child so if you're paying 40% of your

income in taxes you would save 40% of

your IRA contributions in taxes then

inside this account you can invest in

various assets like stocks bonds CDs and

other assets to build wealth up up until

you retire and as those Investments grow

in value you pay no tax on it you only

pay tax on withdrawals from this account

which you can start taking Once you turn

about 592 but if you are in a very high

tax bracket today and expect to be in a

low tax bracket at retirement you will

typically end up paying much less in

taxes as a result of using this account

number two traditional 401K now a 401k

is very similar to an IRA except a 401k

is set up through a business and have

much higher contribution limits which

also means greater tax deductions and

lower taxes you can take advantage of a

401k plan through your employer or even

better you can set this up through your

business or side gig for even more tax

benefits so here is how a traditional

401K works as an employee you can

contribute about

$23,000 of your wages to a traditional

401k account and when you do this you

create a

$233,000 tax deduction and if you are

self-employed you can make another tax

deductible contribution from your

business which can be up to

$69,000 that's a

$69,000 tax write off which is almost 10

times the contribution limit of a

traditional IRA also keep in mind that

you can take advantage of both a

traditional IRA and a 401k at the same

time so if you maximize both of these

accounts you would create a

$77,000 tax deduction don't forget you

can also do the same thing for your

spouse and get twice as much in which

would be

$114,000 in one tax year this is money

that you are not being taxed on and then

you can invest it to grow your wealth at

a much faster rate than you would with

after tax dollars now there are rules to

how these contributions work and I have

a separate video that addresses this so

be sure to subscribe to learn more

number three health savings accounts a

health savings account is another

account where you receive a tax

deduction in exchange for your

contributions but unlike retirement

accounts you can actually spend the

money in this account on health expenses

you already pay for like gym memberships

massages chiropractic care doctor visits

and so much more so this is how it works

you can contribute anywhere from $4,000

to $8,000 to an HSA depending on your

filing status when you do this three

things happen number one you will get a

tax deduction for the amount you

contribute to your HSA number two you

can invest your HSA funds into assets

like stocks or bonds and number three

you can spend your HSA funds on

qualified Health expenses if you use

your HSA correctly you can effectively

never pay tax on the money you

contribute to the account so if you

already pay for health expenses this is

a no-brainer you would effectively be

getting a tax deduction for those

expenses if you simply use your HSA to

pay for it all right let's talk about

one more type of account number four

Donor advised funds so if you already

give money to Charities then you can

supercharge your charitable tax

deductions by investing money into a

Donor advised fund now a Donor advised

fund is basically like a savings account

to fund your future charitable giving

and you can easily set something like

this up at Fidelity so here is how it

works in general when you give money to

any charity you receive a tax deduction

in the year the charity actually

received your donation but when you move

money to a donor advise fund you receive

an immediate tax deduction based on your

contribution not necessarily when the

charity receives it so in essence you

could contribute a large lump sum of

money into a Donor advised fund to

create a massive tax deduction in one

given year and then you could give the

money to Charities over whichever period

of time you would like whether that be 5

years 10 years 15 years or however many

years but in addition to that you can

invest the funds in the account to grow

the balance over that period of time but

keep in mind that because this is a

charitable account the money must

eventually go to Charities you cannot

use the funds for any other purpose all

right so the easy stuff is out of the

way now we've cover some account

structures that will give you a

deduction for simply contributing money

to it now let's get into some specific

assets that provide very large tax

deductions number five small business so

not only is owning a small business one

of the fastest ways to build wealth but

it is also one of the best ways to

reduce your taxes this is because

business owners pay taxes after

deducting all of their expenses whereas

most people pay taxes first and use the

remaining money to pay the rest of their

expenses but by deducting expenses first

business owners are able to report less

income and consequently pay much less in

taxes the tax law allows business owners

to write off almost anything as long as

the expense has a business purpose you

can write off a portion of your mortgage

your rent utilities Vehicles food Health

expenses travel and so many other

expenses as long as there is a business

purpose associated with it plus the tax

law allows you to write off expenses

incurred to start and grow your business

the IRS allows you to write off startup

costs advertising expenses research and

development costs and so much more these

tax deductions alone can result in tens

of thousands of dollars in tax tax

savings number six real estate

Investments real estate is widely known

as one of the best tax shelters in the

world so first of all when you purchase

investment property you are effectively

creating a business which gives you the

ability to write off most of your

expenses but not only that you can also

write off depreciation which is a

non-cash expense that does not cost you

any money out of your pocket now this

deduction is so valuable that it

typically wipes out most of the rental

income reported on a tax return

resulting in little to no taxes paid on

rental income but in addition to that

you can accelerate depreciation to

trigger a deduction so large that it

offsets other income on your tax return

if you meet certain criteria and that's

just one deduction Real Estate Investors

can also deduct their mortgage interest

property taxes insurance premiums

utility expenses repairs and virtually

any other expense incurred to conduct

their real estate business because of

this it is very common for high income

individuals to incorporate real estate

into their long-term wealth strategy

number seven oil and gas Investments

this is one that has very large tax

benefits that is not talked about enough

you can invest money into an oil and gas

company and deduct 65 to 85% of your

investment in Year One oil and gas is

used in so many ways on a daily basis

from fueling our vehicles to heating our

homes and when you make an investment

into an oil and gas company you get two

huge tax benefits number one similar to

real estate oil and gas companies are

able to take very large amounts of

depreciation which in turn creates a

massive tax deduction and then number

two this tax deduction can be used to

offset other income on your tax tax

return and in some ways the tax benefits

of oil and gas are better than real

estate in order for you to use real

estate losses to offset other income on

your tax return you have to be highly

involved in the day-to-day operations

and then meet very specific requirements

whereas with oil and gas Investments you

do not have to be involved in the

day-to-day operations and you do not

have to meet specific requirements in

order for those losses to offset other

income on your tax return anyway be sure

to subscribe to our channel to learn

more ways to reduce your taxes and if

you want a tax plan that is guaranteed

to reduce your taxes by thousands of

dollars go to my CPAC coach.com right

now to talk to a tax professional

ASAP