Joe Anderson
ABOUT Joseph

As President of Pure Financial Advisors, Joe Anderson has led the company to achieve over $2 billion in assets under management and has grown their client base to over 2,160 in just ten years of the firm opening. When Joe began working with Pure Financial in 2008, they had almost no clients, negative revenue and no [...]

Alan Clopine

Alan Clopine is the CEO & CFO of Pure Financial Advisors. He currently shares the CEO role with Michael Fenison, the original founder of the company. Alan is primarily responsible for the day-to-day activities of the firm while Michael’s focus is on expansion and hiring. Alan joined the firm about one year after it was [...]

How would you like to pay less in taxes? Chances are you are missing out on tax strategies that could save you tens of thousands of dollars especially if you are a high-income earner. The IRS qualifies high-income earners as a couple who makes an adjusted gross income of $196,000 ($133,000 for singles) or more. Surprised to find out Uncle Sam considers you a high-income earner? Financial experts Joe Anderson and Alan Clopine help you pay less in taxes by using tools from tax loss harvesting to charitable strategies.

Important Points:

(1:42) – The Top 20%: You may be surprised to find that you are a high-income earner. Today’s strategies on the show can be put in place by anyone, but the higher your income the more impactful they can be. All of us want to pay less in taxes.

(2:35) – Take The Sting Out Of Taxes: High-Income Earners
• Retirement Plans
• Charitable Strategies
• Sale of Real Estate
• Roth IRAs
• Tax Loss Harvesting

Let’s jump right into how you can make choices today that will help decrease your tax bill when you are a high-income earner. First off, you can reduce your taxable income by deferring salary or business profits into retirement plans. Every dollar you contribute to a pre-tax retirement plan reduces your taxable income by a dollar. In other words, you pay less in income taxes…

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(3:15) – Retirement Contribution Options for Employees
• Traditional & Roth IRA: $5,500 (+$1,000 if 50+)
• If Offered by Your Employer:
• Simple IRA: $12,500 (+$3,000 if 50+)
• 401(k) & 403(b): $18,500 (+$6,000 if 50+)
• State & local government employees 457(b): $18,500 (+$6,000 if 50+)

(4:21) – Retirement Contribution Options: Small Business Owners (under age 50)

Hypothetical Example of $100,000 in Business Profits – Sole Proprietorship in a SEP, SIMPLE IRA, 401(k), and Defined Benefit Comparison

(5:40) – Charitable Strategy: Donor-Advised Fund

(6:02) – How a Donor-Advised Fund Works
• You open a special account generally at a brokerage firm
• You control the investment and future contributions to charity
• The year you fund the account is the year of tax deduction

The best way to contribute either directly to charity of a donor-advised fund is by giving appreciated stock.

(7:53) – Example: Giving Appreciated Stock
• Current Value: $10,000
• Original Cost: $1,000
• Tax Deduction: $10,000

(9:16) – True or False? A couple can give away $30,000 a year to as many people as they like without paying any gift taxes.

(10:32) – Real Estate: What happens when you have a rental property that you’d like to sell but you’re afraid the taxes may be too high…

(11:00) – How to Calculate the Gain on the Sale of Rental Property

(12:04) – Strategies to Defer or Eliminate Gains: Sale of Rental Property
• 1031 Exchange
• Step up at Death
• Charitable Remainder Trust

(12:30) – 1031 Exchange Requirement
• Same taxpayer (sells and buys)
• Like-kind property
• 45-day identification period
• 180-days to purchase a replacement property
• Equal or greater price

(13:50) – Tax Exempt Trust Strategy

(16:00) – Roth Conversions

(17:36) – True or False? Section 199A of the new Tax Cuts and Jobs Act is a tax credit, not a deduction.

(18:50) – Tax Loss Harvesting

(20:49) – Viewer Question: How do I determine a good time for selling my loss positions in my stocks and mutual funds?

(21:24) – Viewer Question: My husband and I have invested heavily in antiques and artwork. How do we account for those items in our plan for retirement?

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