Don't worry, I'm not going to start getting into politics,
but I am going to talk about the tax, some of
the things that the, like Trump and Harris, some of the things that they've
been proposing as part of the tax law changes.
We're going to talk about that today, and we're really just going to focus
on three things, uh,
that Trump has proposed that are completely tax free.
So as a business owner or investor,
just someone, just a taxpayer in general, one of the ultimate goals is to
have tax free income, right?
Like if you've looked at like the eight step strategy,
the tax planning framework that I have, I the last step is tax free
income. So how can we receive tax free income is a huge part of
the goal that I have for myself, that I have for people that I
work with, that I'd want for you. Uh, so we're going to talk about
the three completely tax free proposals that Donald Trump has proposed.
So the first one is is, uh,
really in no specific order. And I'm not even,
I'm not even going to get into like, well, one,
I'm not getting into the politics of it and I'm not going to get
into like the monetary policy and impact on government and how there is
money to pay for this. We're just talking about who these,
uh, these tax proposals impact and how it impacts him specifically.
So the first one is tax-free tips.
Have you heard that? So he's proposing and assuming,
just assume it gets passed. We're not going to look at all the obstacles.
Assume it gets passed. How would tax-free tips look for you?
So whether it's you or, or who would it impact.
So you think of tips, like when you go to a restaurant,
uhm, like restaurants is the first thing that comes to mind,
but you go to restaurants, you leave a 10,
15, 20, 25% tip. That tip right now is taxed just like
all the other income. So if it's an employee and say they have a
wage, they're getting paid like part of what they're paid,
their tips are just added to their wages and like in the same way
that wages are taxed. And so whatever tax bracket they're in,
they're paying tax on all those tips. So if,
if taxes are, or if tips really are tax-free,
they're gonna get their regular wage, whatever dollar amount that is,
and then the tips are gonna be completely tax-free. And whether or not there's
some sort of reporting and how they're gonna track that,
who knows. But, uh, there, there could be some tax-free tips.
So that's, yeah, that, that's it. That will be a big impact for people
working in the industries where you could be receiving tips.
So here's where you've heard me talk about,
or just strategize in general, like what gets me excited is like,
honestly, I like new tax laws because it gets the gears of my brain
going of like, okay, how can I can we take advantage of that?
Not in a bad way or in a legal way, but just like,
hey, that's the tax law. Let's use it to our advantage.
So how can we use this tax law to our advantage?
This is the way that I want you to think of this.
And when you're planning for your own wealth, um,
so what I would think is going to happen,
and I might come up with some specific strategies for this,
but it, it'd be like, how can we have more of our income taxes
tips? Like that really could be a strategy.
Like, how can we have, like me as a CPA,
say you're, you know, charge, say it's $1,000 to do your tax return,
but what if I charged you $500 and had a recommended tip
of $500? Like, would it work for anybody?
Like, service providers? Like,
if you really are receiving a tip, remember tip,
the key part of a tip, is that it's discretionary.
Like, it's optional. You don't have to pay the tips,
unless, you know, there, there's some of those required tips,
like with, with big groups and stuff at restaurants.
Maybe that might be taxed differently if it's required,
but that, I think, will be a key part of it. It's discretionary and
So, myself, as a service provider, maybe there's a unique way I can,
I could send you an invoice and you could pay for part of it,
like, a lower price and maybe there's some add-on for a tip.
But, it, I know, like, my wife gets her,
her nails done or her hair done. what they're paid is tips.
That would be a huge benefit to the people receiving the tips.
But, there's, there's gonna be some gaming of the system,
which I am completely not against,
as long as it's within the law and legal and allowed and,
and there's a correct way to do it. So, I think,
uh, think that might, that might create some fun,
yeah, some fun planning opportunities.
Okay, so the other one is tax-free overtime.
Uh, so tax-free overtime,
so you think of who works overtime. These are hourly employees.
Hourly employees work overtime. You work overtime when you work over,
like, 35 or 40 hours in a week.
Your excess hours are considered overtime.
It is pretty common that your excess hours are paid time and a half.
So say you make $20 an hour in your typical,
typical hourly rate, wage. When you're working overtime,
you're you might be making $30 an hour. But if it's tax-free,
you could be earning that $30 completely tax-free.
And so whether it's, it's still wages.
And of course, there's not a lot of details yet in any,
in any tax proposals out there right now with the,
with the. Presidential, uh,
campaigning. But there's parallel taxes and income taxes.
I would guess that it's likely tax-free for income taxes.
But maybe it's just for parallel taxes. We don't know,
but that could have a big impact. And what does it do?
You think of like. What would this spur so we know who it benefits?
So benefits those hourly workers that are working over time,
of course. But what would it spur in the background?
Like, what is the, what is the economic reason for this?
Like, what are some benefits that the economy could see from this?
So it could be. It could promote people working more hours,
of course. People working more hours. Myself as an employer.
Um, so say instead of hiring a new employee that you have to train
and pay benefits for and all this other stuff. What if I had two
or three employees willing to work extra hours?
They got paid overtime for those hours. And if that overtime was tax-free,
it could incentivize them to work more hours and maybe I wouldn't have to
hire another employee. So with the pros and cons of that,
I won't even get into that, but just think of what that,
yeah, think of what. What, like, maybe a benefit for the business could be,
or maybe it's a detriment, because maybe you're not hiring as many people if
we want to spur the economy. Maybe we need to hire more people.
Or maybe we just need our people to be more productive.
That's kind of the argument you might have back and forth.
Umm. So that's the,
yeah, that's the overtime. And overtime pays,
that's workers. Uh, the other one,
and so are the tips. Uh,
the tax for tips. The other one is the tax free.
In this, I am so behind this one.
Like, I, I am a b— Big advocate for this.
And this is the tax free Social Security benefits.
Here's why. Here's why I am so behind it.
You think of like, what's so, like,
how was Social Security funded? Social Security,
like, this is this, this is for people that are retired,
of course, right? Like 65 plus typically receiving Social Security
benefits. How did you fund that Social Security in the first place?
It was taxes. It was your your payroll taxes from your own pay that
funded your own social security. And you think,
is all your. . . Like, you don't,
you're not getting a deduction for the payroll taxes when you pay it,
but it's being withheld out of your paycheck. So taxes are withheld out of
your paycheck. 20, 30, 40 years later,
you're getting some of that money back in the form of Social Security.
And now you're taxed on it. Isn't that weird?
Like, you didn't get a deduction when it went out. And it was just
a tax in the first place. And then it comes,
when it comes back two years later in retirement,
you have to pay tax on it at that point. I think it's weird.
I, I don't think we should be paying taxes on Social Security.
So I'm a big fan of that one. I know a lot.
A lot of our, any of us retired, and then it was received Social
Security. And Social Security is a little weird because,
like, part of it, if that's your only source of income,
you're not paying tax on it. Like,
there are some people that receive Social Security tax-free.
If it's your own, The only source of income. But we're seeing a lot
of this over 20 years of preparing people's tax returns.
We've seen a lot of this where, um,
people in retirement are still working, or their spouse is working,
and they file a joint tax return. When that happens,
when you have additional income on top of your Social Security.
That's when it's taxed. And up to 85% of it can be taxed depending
on your, your total income. So those are the three tax-free
proposals. These are, these are the three proposals by Donald Trump.
I'll do an, I'll do an episode on some of the things that Kamala
Harris is proposing. And there,
there's actually quite a few different tax little snippets that they're both throwing out
there. But tax-free tips,
there's tax-free overtime pay,
and tax-free Social Security benefits.
Those are the three things we've covered today. I, honestly,
I think, I think lower taxes is better.
I think a more efficient government is better. And you've,
that's the whole reason. One of the main reasons I've started this podcast and
what, what I talk about and the strategies and the planning.
It's about paying less, and less in taxes,
helping us stay more in control of our,
own wealth and our own decisions and how we're allocating those funds instead of
going to the government. So that's it.
That's it for today. Um, in the next,
in the next couple weeks, we'll, we'll bring up some of these other proposals
as well. But have a great day and text later.
