Youtube Video

Summary published at 11/20/2024

🎵 In today's episode, I will share strategies used by the top 1% of traders to pay zero income tax on trading profits. These strategies have saved me millions of dollars in taxes.

💰 Regardless of your income level, whether it's $25,000, $50,000, $100,000, or even millions, there are legal steps you can take to reduce your tax burden.

🏝️ The first strategy is to consider moving to Puerto Rico. As a resident, you can pay zero federal income tax on trading profits if you live there for 6 months and 1 day each year.

📈 The second strategy involves utilizing tax-deferred retirement accounts, specifically IRAs. Contributions to a traditional IRA can reduce your taxable income, and the growth within the account is tax-free.

💵 A Roth IRA allows for tax-free growth and tax-free withdrawals after age 59.5. If your income exceeds $153,000, you can use a backdoor conversion to contribute to a Roth IRA.

🏢 The third strategy is to trade through a business account. By creating an S-Corp, you can deduct business expenses and set up a solo 401(k) to contribute up to $69,000 annually.

📊 It's crucial to consider mark-to-market election for your taxes to avoid wash sales, which can complicate your tax situation.

💡 The sooner you start utilizing these tax-deferred accounts, the better. Whether you choose a solo 401(k), a Roth IRA, or even consider moving to Puerto Rico, there are strategies available to minimize your tax liabilities.

📞 Always consult a CPA for personalized advice, as they can provide invaluable assistance in navigating these strategies.

👍 I hope you found this episode helpful! Don't forget to subscribe for more insights!

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