How To Pay NO TAXES In 2024

What Nobody Tells You

Traditional 401k Contribution

This is a retirement account that gives you some great tax benefits. When you contribute to it, you can put in up to $23,000 per year with PRE-TAX money. That means for every dollar you contribute, your taxable income goes down by that same dollar. So, you end up owing less in taxes and have more money available to invest. It's a smart way to save for retirement and make the most of your hard-earned money.

Long Term Capital Gains Tax Rate

This is usually way less than what you pay on regular earned income. If you're single and earning between $47,025 and $518,000 a year, the federal tax on your long-term capital gains is just 15%. That could mean huge savings for anyone bringing in more than $50,000 a year. And get this, some income brackets don't have to pay any long-term capital gains tax at all.

Running Income Through An S-Corporation Or LLC

This is like creating a legal entity for your business. It's a way to manage your "Self-Employed" income. Here's how it works: your business income goes into the S-Corp, and then you deduct your expenses. After that, you personally receive the remaining money as a distribution. Distributions from an S Corporation don't have to pay Social Security or Medicare taxes. That means you can save a solid 15.3% on your hard-earned money.

Real Estate / Homeowner Tax Benefits:

1. The Capital Gains Exclusion: If you sell your primary residence and you've lived in it for at least 2 out of the last 5 years, you can exclude the first $250,000 of profit if you're single, or $500,000 if you're married. That means no taxes on that money

2. The 1031 Exchange: If you own a rental property, you can defer paying taxes when you sell it by exchanging it for another property within a certain time period.

3. Depreciation: The IRS says that your property has a lifespan of 27.5 years, so as it gets older, you can deduct its decreasing value from your overall profit. There's also something called a "cost-segregation analysis" that allows for even more depreciation upfront.

4. Cash Out Refinance: While mortgage rates are high right now, it's good to know that loans you take against your assets aren't considered "income" by the IRS. So, no taxes owed!

5. Real Estate Professional: If you meet certain criteria, you can use your real estate paper losses to offset your W2 / 1099 income. This means you could potentially make a lot of money and owe nothing to the IRS. Just make sure to keep track of your real estate activities and meet the requirements.

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