Collaborate on Driver Bill Format for Planning with Ease Using airSlate SignNow

Driver bill format for Planning

taxes are going to be one of the largest expenses  of your life and whilst you have to pay it there   are many ways in which you can reduce your  tax bill legally so in this video I'm going   to uncover what they are and how you can keep more  of what you make this video is a highly requested   one I asked you in one of my recent videos if you  want to see this video on text that I had planned   out and out of the 1000 plus comments 95 of you  were all for it as a disclaimer I am a qualified   accountant but I am not a financial advisor I'm  just educating you on the possibilities of what   can broadly be done wherever you live but with  this information you need to find out what is   relevant for your own country and seek Financial  advice in the country that you're in right if that   introduction didn't give you enough time to click  off then you're here to stay so let's get into it   I'm going to be bold and assume you have zero  knowledge about taxes and so I'm going to cover   the basics the misconceptions and then build it  out from there I've got everything time stamped in   the description below so you can click to whatever  part that interests you the most and they'll also   be follow-up videos to this as well as we get  more and more into the details let's start with   How is income tax calculated there is a common  misconception that the more money you make the   higher the tax rate you'll pay on your full salary  and so I was speaking with someone last week and   he was saying how he doesn't want a pay rise  because he's currently at the 20 tax bracket and   if he gets a pay rise it will move him into the  40 tax bracket so he will end up making less money   but this isn't exactly correct most countries have  tax brackets and these tax brackets are different   depending on what part of the world you're in but  they apply in a similar way using a progressive   tax system so what that means is you get taxed on  the next pound or dollar of income depending on   what bracket that next pound or dollar falls into  so say you had the following tax brackets in the   country that you live in if you're an employee  earning 60 000 that means you fall into the 40   bracket but it doesn't mean you're paying 40 of  that full 60 000 in taxes what it actually means   is that for the first 10 000 you're not paying  anything in taxes once you max out that bracket   you move into the next bracket so you're paying  20 rate for the next Forty thousand until you Max   that out and then you move it to the next bracket  which is forty percent until you Max that out but   in this case it's just the remaining ten thousand  so if you're making sixty thousand ing to   these numbers you're paying twelve thousand  in taxes this is broadly how it works there   are some nuances and you want to check for your  country what those nuances are for example with   the UK once you hit six figures as an employee  then you start losing that tax free allowance so   effectively paying even more away in tax now we've  covered that let's move on to how you can reduce   through pension contribution pension contribution  is called different things depending on where you   are it's the 401K if you're in the US so you need  to check what it's referred to in your respective   country what's the idea behind this if you're  an employee working for a corporation you are   getting taxed straight away as soon as that money  comes through the door it is getting taxed before   you even see it but with a pension contribution  you're able to put a portion of your paycheck   away into your pension port and then you'll get  taxed on whatever is left so the end result will   be you pay income tax on a smaller amount and  whatever money that is in your pension Port will   be invested with tax-free earnings so say your  salary is sixty thousand if you weren't putting   away anything into your pension and assuming no  other deductions you'd be paying 12 000 in taxes   as we spoke about earlier now say you decide to  instead put 500 a month of that into your pension   or into your 401k every month so that's 6 000 in  the year that goes straight into your pension Port   without getting taxed and so your taxable income  instead of it now being sixty thousand it's fifty   four thousand so instead of paying 12 000 in taxes  you're only paying nine thousand six hundred this   is even better if you have an employer that has a  match contribution system and so for every pound   or dollar that you put in they do the same this  is free money that's also tax free on the flip   side on the downside however that this money is  locked away and you can't access it until you   retire although there are things you can do like  borrowing from it to buy property for example but   generally speaking this is you saving away until  you retire if you are in a position to contribute   to your pension and you don't necessarily need  that money at the moment this is a really good way   to reduce your taxable income and therefore reduce  the tax that you pay the next way to produce a tax   bill and this is one that I briefly touched  upon in my bad money Habits video is to make   sure you're earning through the right structure  suitable for your position and in this case   we're talking about as a company rather than as an  individual and this really applies when you have a   side hustle or a business so for example I'm here  speaking to you as an individual but I'm operating   as a business so the way I'm getting paid from  sponsors from Affiliates from YouTube is through   a company that I've set up and all I needed to do  was firstly set up a company online and secondly   set up a company bank account so all my invoices  have my company Bank name on it so as an employee   working for a corporation you earn you pay taxes  and then you spend whatever's left so if I'm   earning 60k I pay 12K in taxes and then I have 48  000 left to spend now say I earn the same amount   through YouTube as a side hustle I earn 60 000  I'll then deduct my expenses so that can include a   wide variety of things that can include my camera  my mic my laptop that I used to edit a portion of   my electricity bills for this room as it's my work  from home YouTube or Studio courses meets there   are a lot of things that you can expense which  you want to speak to your advisor about and then   you pay tax on the remaining amount and on top  of that the company or the corporation tax rate   isn't the same as the income tax brackets we saw  earlier and in most Western countries it's a lower   rate and in the UK at the moment it's currently  19 so as long as I keep this money in the company   I won't be paying any income tax on it I can keep  spending on business stuff and investing through   my company and deducting it as an expense what I  can also do if I wanted to is draw myself a salary   but the moment you draw money out of this company  is subject to those income tax brackets we spoke   about earlier so you you want to structure this  in a way where you stay in the lower threshold   and reduces the overall tax that you're paying the  next way to pay less tax relative to the amount   you make is by earning money through streams  that the government views as non-taxable one of   the most simple but effective ways to do that is  through investing via a stocks and shares Isa this   is called different things in different countries  in the US it's a Roth IRA and this is essentially   an investment account that Shields your profits  and gains from the tax man and I'll show you how   this doesn't reduce your taxable income this year  but you get the tax benefits on the back end when   you pull it out at least this is the way it is  right now if you're in the UK you may have seen   the recent headlines that Jeremy Hunt is looking  to introduce some new rules around this tax free   saving we'll wait to see how that pans out but in  the meantime I'm currently maximizing out my ISO   allowance as much as possible in the meantime  but there are a number of investment platforms   you can use one of them being trading 212 which  is an investment platform that I've used for the   last four years and they're also sponsoring this  video this app has the typical things I look for   and that's firstly that's regulated in this case  it's FCA regulated it has an automatic investment   feature which makes me a lot more disciplined  with my resting and thirdly I can buy fractional   shares with xero commission if you're new to  investing then I have an ultimate beginner guide   to investing and I'll link that here for you but  what I like about this Investment app as well is   that it has a practice mode and a real money  mode which means you can start investing and   practicing to invest with money with pretend  money that reflects the current markets and then   once you're ready you can move into the real mode  trading 212 are giving anyone who signs up using   the coupon code Nisha n-i-s-c-h-a a free share  worth up to 100 pounds what you do with your few   shares is none of my business you can invite  another friend you can get more free shares   you can sell and cash out if you want to but a  better option in my opinion would be to use this   to start your investment journey in a way where  any gains are tax-free I've started this tax video   series with three of the most applicable ways to  reduce your tax bill but honestly this is me just   scratching the surface in future videos I can go  over how to set up offshore accounts which again   is available to Everyday citizens like you and I  not just the Facebook and linkedins of the world   I can go over property tax stamp Duty how to get  energy efficient cars for nearly half the price   for the tax savings or if you have something  else you've heard and want me to make a video   about then let me know in the comments below and  I'll make that for you this is just guidance but   I promise you spending a few hundred here or  there for a professional advisor is well worth   it it will save you thousands in the long run if  you found this video helpful please share it it   helps spread the message of financial education  to more people I've also got another video here   on Investing For Beginners and I'll leave it  here for you thank you so much for watching   don't forget to subscribe if you haven't already  and I hope to see you in one of my next videos