Top strategies for avoiding taxes

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ethilo

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Just sitting here weeping about the amount of federal income tax withheld and I've been pining for a way to reduce this tax burden. I have hit the traditional stuff - max out Roth and options through employer, I'm a partner in a corporation so I claim my phone / internet / CME / licensing etc as business expenses, deducting mortgage interest. Just curious if anyone out there has any other strategies that they've employed to help reduce their tax burden or other business expenses they've claimed? All creative ideas welcome! Also, any good books / resources people suggest for learning about taxes other than White Coat Investor?

I've been playing around with the idea of starting a home business doing beekeeping and edible exotic mushroom cultivation (No, not the illegal kind) in order to potentially claim my utilities as a business expense and be able to claim purchases for the business / hobby as a business expense.

My main purpose for this thread is specifically talking about strategies for tax deduction / avoiding taxes with creative strategies.
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Not that creative, but how about taking a job in a no income tax state?
 
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sethco said:
Not that creative, but how about taking a job in a no income tax state?
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We definitely encountered that scenario right out of residency - we had to choose between a state with an effective state income tax of ~10% vs. a state with sales tax of ~10% and no state income tax. Chose the state with the sales tax. The difference has paid for a full-time nanny.
 
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How exactly does using a "hobby" as a LLC/business venture work? I do a fair amount of metal working and wood working, and occasionally sell some things. Mainly giving family/friends discount rates on custom made projects, etc. Less than $1,000 sales per year I'd guess. Most of what I do is just hobby level things for myself and our house.

But if I make an LLC for this, I can deduct any expense related to this entire hobby/"business"?
 
There’s no avoiding taxes. You will work harder at avoiding them than it’s worth. With our income level we are screwed regardless.
 
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ethilo said:
Just sitting here weeping about the amount of federal income tax withheld and I've been pining for a way to reduce this tax burden. I have hit the traditional stuff - max out Roth and options through employer, I'm a partner in a corporation so I claim my phone / internet / CME / licensing etc as business expenses, deducting mortgage interest. Just curious if anyone out there has any other strategies that they've employed to help reduce their tax burden or other business expenses they've claimed? All creative ideas welcome! Also, any good books / resources people suggest for learning about taxes other than White Coat Investor?

I've been playing around with the idea of starting a home business doing beekeeping and edible exotic mushroom cultivation (No, not the illegal kind) in order to potentially claim my utilities as a business expense and be able to claim purchases for the business / hobby as a business expense.

My main purpose for this thread is specifically talking about strategies for tax deduction / avoiding taxes with creative strategies.
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Bogleheads forum and wiki are helpful

Tax loss harvesting

Tax loss harvesting - Bogleheads

www.bogleheads.org www.bogleheads.org

At a certain point, you will just have to pay the tax man unless your job is set up with creative things to defer compensation (457 plans etc).
 
surgndoc said:
How exactly does using a "hobby" as a LLC/business venture work? I do a fair amount of metal working and wood working, and occasionally sell some things. Mainly giving family/friends discount rates on custom made projects, etc. Less than $1,000 sales per year I'd guess. Most of what I do is just hobby level things for myself and our house.

But if I make an LLC for this, I can deduct any expense related to this entire hobby/"business"?
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Yes, you can set up an LLC for your side-business. The IRs will give you a few years to turn a profit or you must explain why the business keeps losing money year after year. That said, you can and should lose money the first 3 years by deducting all of your expenses.
 
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surgndoc said:
How exactly does using a "hobby" as a LLC/business venture work? I do a fair amount of metal working and wood working, and occasionally sell some things. Mainly giving family/friends discount rates on custom made projects, etc. Less than $1,000 sales per year I'd guess. Most of what I do is just hobby level things for myself and our house.

But if I make an LLC for this, I can deduct any expense related to this entire hobby/"business"?
Click to expand...

Earning side income: Is it a hobby or a business? | Internal Revenue Service

Tax Tip 2020-108, August 25, 2020 — Whether it's something they've been doing for years or something they just started to make extra money, taxpayers must report income earned from hobbies in 2020 on next year's tax return.
www.irs.gov www.irs.gov
 
His fault was only being a millionaire. Avoid taxes as a millionaire? Straight to jail. But a billionaire? Nothing happens.
 
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nimbus said:
Hey Elon sold a bunch of his TSLA shares to pay taxes;)
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Elon should learn from Peter Thiel, put the stocks in a Roth account. Canadian/South African folks do not know American tricks.
 
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narcotics999 said:
Elon should learn from Peter Thiel, put the stocks in a Roth account. Canadian/South African folks do not know American tricks.
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Peter Thiel is a **** and the reason why congress is looking to modify Roth rules. When someone cheats in such a ridiculous way this was bound to happen.
 
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ethilo said:
Just sitting here weeping about the amount of federal income tax withheld and I've been pining for a way to reduce this tax burden. I have hit the traditional stuff - max out Roth and options through employer, I'm a partner in a corporation so I claim my phone / internet / CME / licensing etc as business expenses, deducting mortgage interest. Just curious if anyone out there has any other strategies that they've employed to help reduce their tax burden or other business expenses they've claimed? All creative ideas welcome! Also, any good books / resources people suggest for learning about taxes other than White Coat Investor?

I've been playing around with the idea of starting a home business doing beekeeping and edible exotic mushroom cultivation (No, not the illegal kind) in order to potentially claim my utilities as a business expense and be able to claim purchases for the business / hobby as a business expense.

My main purpose for this thread is specifically talking about strategies for tax deduction / avoiding taxes with creative strategies.
Click to expand...

BLADEMDA said:
Yes, you can set up an LLC for your side-business. The IRs will give you a few years to turn a profit or you must explain why the business keeps losing money year after year. That said, you can and should lose money the first 3 years by deducting all of your expenses.
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i thought the money being deducted is only against profit of your business? if no profit it gets carried over? its not like you are directly deducting all of it from your anesthesiology income
 
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anbuitachi said:
i thought the money being deducted is only against profit of your business? if no profit it gets carried over? its not like you are directly deducting all of it from your anesthesiology income
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You can start a side business (separate from anesthesia) and lose money. Let's say you open a Chipotle or fast food restaurant. The business cost you $1.5 million. You will lose money for several years and can deduct those losses on your return. Now, with anesthesia it is very hard to "lose money" if you are working as a 1099. But, you can deduct all business expenses, healthcare, retirement and cash balance/defined benefit plan. I know people who deduct a second home or condo which they claim as all business. Don't forget about your secretary/VP deduction. That Tesla is deductible as well. Office staff who clean your "business" areas are deductible.
 
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BLADEMDA said:
You can start a side business (separate from anesthesia) and lose money. Let's say you open a Chipotle or fast food restaurant. The business cost you $1.5 million. You will lose money for several years and can deduct those losses on your return. Now, with anesthesia it is very hard to "lose money" if you are working as a 1099. But, you can deduct all business expenses, healthcare, retirement and cash balance/defined benefit plan. I know people who deduct a second home or condo which they claim as all business. Don't forget about your secretary/VP deduction. That Tesla is deductible as well. Office staff who clean your "business" areas are deductible.
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i wish my job did 1099 but we dont. not even for per diem
 
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anbuitachi said:
i wish my job did 1099 but we dont. not even for per diem
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you really need a new job man..... its borderline depressing hearing about your job conditions over the past three years on this forum. #thoughtsandprayers
 
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