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Tax invoice pdf for Planning

this is urgent okay today i'm  talking about how to build a tax plan   or create a tax strategy and this is important  because listen 2021 is almost over and you have   to build a tax plan the year before tax  season starts okay let me say that again   you want to figure out how to build a tax  plan the year before the tax season starts so   even though you will file your taxes in 2022 you  should have implemented your tax plan in 2021   and the reason why this is so important is  because almost every tax season i have clients   who see their tax liability or they see their  tax refund and ask okay what can i do about   this number and sometimes as a tax professional  i'm able to actually help but more often than not   it's too late to do anything about their tax  outcomes because the tax year is already over with   so in this video what i want to do is help the  people who want to be proactive about their   tax situation learn about how to build a tax plan  step by step even if you're a beginner stay tuned hey there and welcome to our channel i'm sean with  life accounting the accounting company that helps   you save on taxes and build more wealth please if  you like this topic do us a favor and hit the like   button for the youtube algorithm it really helps  this video reach more people who also want to   learn about how to create a tax strategy all right  let's go ahead and dive in so step number one   understand your tax bracket it's almost impossible  to plan for the future if you don't know where   you are in the present and so it is key to  understand how much you pay in taxes even if   you are someone who is getting a refund because  you are still paying taxes at the end of the day   okay so step number one is figuring out your tax  liability and the best way to do that is to make   sure you understand your tax bracket now here in  the united states we have a progressive tax system   meaning that the more income you make the more  you get tax so i'll go ahead and put up on the   screen right now the 2021 tax brackets now these  tax brackets often confuse many people because   people think that they should just simply multiply  their total income by the tax rate in the bracket   that they fall into so for example if you had  a household income that made a hundred thousand   dollars then what most people would do is multiply  that by 24 and think that their tax liability   is 24 000 but that is wrong okay instead the irs  divides your income into chunks and taxes each   chunk at the corresponding tax rate for example if  your household made 100 000 of taxable income then   only thirteen thousand six hundred and twenty  four dollars will be taxed at the 24 tax rate   and in total you'd be looking at something like  fifteen thousand one hundred and three dollars   in tax liability after the standard deduction  instead of a tax liability of 24 000 which brings   us to step number two of creating a tax plan  understand tax deductions and tax credits okay   so by default every american household receives  what is called a standard deduction and this is   a tax deduction that is basically given to you so  for the 2021 tax year the standard deductions are   thousand five hundred and fifty dollars for people  filing single and twenty five thousand one hundred   dollars for people fouling married jointly and  eighteen thousand eight hundred dollars for   people head of the household now here's the thing  okay you don't have to take the standard deduction   because you can do something that is called  itemize your deductions which is more advantageous   to use if you expect to have qualified expenses  or deductions that exceed your standard deduction   amount okay now anyway tax deductions and tax  credits will influence how you create your tax   plan because you can reduce your taxable income  thus lowering your tax bracket okay so what is a   tax deduction these are usually qualified expenses  that you use to reduce your taxable income   on the other hand a tax credit is much better  because you get a dollar for dollar reduction   on your tax bill so for example let's say that you  make about forty eight thousand dollars in income   and you are looking at owing four thousand dollars  in taxes well if you have a three thousand dollar   tax deduction that will reduce your taxable income  from forty eight thousand dollars to forty five   thousand dollars which would in turn would reduce  your tax bill by three hundred and fifty dollars   so now you owe thirty seven hundred dollars  however let's say you have a tax credit for one   thousand dollars well that will reduce your tax  bill by the total one thousand dollars so now you   would owe three thousand dollars that's a pretty  big difference right so it's very important to   know what tax credits and tax deductions that you  currently qualify for when you're thinking about   how to build your tax plan and once you have that  then you can determine what tax credits and tax   deductions you want to go after proactively all  right after proactively now we have some great   videos breaking down different tax deductions and  tax credits which i'll link to in the description   below but i do want to just make sure you're  taking advantage of some of the obvious ones like   writing off college education expenses home office  expenses mortgage interest and property taxes   expenses and getting credits like the child tax  credit and the savers tax credit all right before   i continue is all of this helpful so far if so  please tell me in the comments section below if   you're learning anything from this video or if  you have any questions okay moving along to step   number three determine your tax liability after  deductions and credits so after going through step   one and step two you should be able to reasonably  estimate what your tax liability will be   after you're considering what tax deductions and  credits you want to go after now before you rush   into creating your tax strategy now you want  to ask yourself two very important questions   okay number one are you okay with your current tax  outcome so you may find that after doing step one   and two that you are paying very little in taxes  and that you don't need to make any adjustments or   you may find that you believe in paying your fair  share and you are okay with the tax rate that you   pay which by the way the average american pays  about 14.6 of their income and taxes every year   the second important question that you need to  ask yourself is are you okay with taking home   less income that's right are you okay with taking  home less income because here's the deal most   advanced tax strategies involve you making  investments into the future the fundamental   tax planning idea is that you defer income and you  accelerate your expenses so you really need to ask   yourself if you are okay or if it's even possible  for you to take home less income today in order to   have more income in the future at a lower tax rate  if so then you can move on to step number four   choose your tax strategy or strategies now  depending on how much tax liability you have   you may only really need one solid tax strategy  but in general as you make more income you will   need more tax strategies here are three tax  planning strategies that you should know about   number one start or invest into a business okay  most of the time when you are starting a new   business you have startup costs with zero income  so if you are actively building up your business   and incurring expenses then usually at the end  of the year you will end up with a business loss   and then you can use that loss as a deduction  against your taxable income and i personally like   this a lot because at this point you're actually  building a real asset that you own and control   for more future tax write-offs strategy  number two put your money into a 401k or ira   now these are tax shelters so essentially the irs  doesn't tax you on what you immediately contribute   to these accounts and at the same time you can  use these accounts to invest in other assets   like stocks or real estate now the main pushback  i get on this strategy is that you have to wait   until you reach retirement age to get your money  back tax-free but listen if you don't necessarily   need the income then this could save you hundreds  of thousands of dollars in taxes by the time that   you retire and every little bit helps now koran  has a great video breaking down 400ks versus   iras which i'll link above and in the description  below tax strategy number three maximize your   health saving accounts also known as an hsa so  health saving accounts are tax exempt accounts   you can use to pay any medical expenses that you  have so think about stuff like prescriptions or   high deductible insurance plans etc okay even  amazon has an entire catalog of different products   and services you can buy using your hsa or your  fha account at some point you're likely gonna have   to pay for something medically related and why  not use your money that is tax free now with a hsa   plan you can contribute about 3 600 every year as  an individual with high deductible health coverage   or 7 100 as a family with high deductible health  coverage we also have some really great videos   breaking down health saving accounts which i'll  link below now of course these aren't all the   tax strategies that you can deploy but hopefully  this gives you an idea of how to create a tax plan   so make sure you're subscribed to our channel  because we definitely will continue to let you   in on different effective tax strategies okay step  number five implement your tax plan now you have   everything you need okay you should know your tax  liabilities you should know what tax deductions   and credits that you want to go after you  should even know if you want to chase a tax plan   and a few strategies that you can implement  immediately so go out there do some math set   up your accounts and figure out how to build your  own tax plan now coming up next we have two videos   that i referenced earlier so make sure you check  those out next and we'll see you over there peace