It’s NFL season and I’m still glued to the TV despite my team’s rough start and the fact that we lost our starting quarterback for the year.
In case you don’t know, my team is the Minnesota Vikings and our starting quarterback was Kirk Cousins who just went down with a brutal Achilles tendon tear.
Kirk makes a lot of money—$30 million in 2023. Of course, when we think of professional athletes, we generally think of them as crazy rich so you might not be surprised.
You might be surprised to know, however, that the actual median salary in the NFL in 2022 was only $860,000 per year. I know for a fact that a lot of you Wealth Formula listeners make more than that.
You know what I think of when I hear numbers like that? I think about how much they must be paying in taxes. Kirk Cousins is probably paying at least $12 million of his salary in taxes. And those guys at the median salary level are probably paying out almost $400K. They are, after all, W2 wage earners.
Again, no one is starving even after paying those taxes but it certainly puts things in perspective. After all, it’s not really about how much you make. It’s about how much you get to keep.
Every person’s finances are like a small business. You have income coming in and you have expenses going out. A small business is going to do whatever it can to decrease expenses so it can keep more profit.
So, if you are a business, what is your biggest expense? Probably taxes. And if that’s the case, what are you doing to try to reduce those expenses and bring more money to your own bottom line?
To be clear, we aren’t talking about anything illegal here. As it turns out, there are plenty of things the government wants you to do that will help you save on taxes. My friend, Tom Wheelwright, calls the tax code simply a series of incentives.
That’s the smart way to look at it. As it turns out, your best way of saving on taxes tends to be through the way you invest. And, there is simply no industry that has more tax benefits than real estate.
I truly believe this and want you to understand why. If you choose not to act on this information, that’s fine. But at least know what you are missing out on so you can only blame yourself. I am always amazed at how extremely financially sophisticated individuals have no idea what they are missing.
This week’s Wealth Formula Podcast reviews some of the major concepts in tax mitigation via real estate investing. There’s something here for everyone including those new to the game. So make sure to tune in.
Buck
Show Notes:
00:09:30:01 How are people overpaying taxes?
00:10:34:14 How to get around active income with passive investments
00:18:55:22 Real Estate Professional Destination
00:21:19:24 Audit protection
00:22:29:07 Getting the benefit of being a Real Estate Profession through your spouse
00:24:25:19 Getting the benefit of being a Real Estate Profession with short-term rentals
00:25:29:15 Should I put my real estate in an LLC?
00:26:48:22 The role of a C-Corp
00:28:51:10 How to audit-proof your returns
00:30:45:18 Are you more likely to be audited if you are a Real Estate Professional?
00:32:24:16 How to use your kids to reduce tax
00:34:06:15 What is the cost segregation analysis
00:38:43:18 Upcoming new tax laws
00:42:34:21 Learn more about Keystone CPA
Wealth Formula by Buck Joffrey