Here is the biggest tax hack that many people don’t know: You could...
The Money Cruncher, CPA@money_cruncher
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Nov 27, 2024
~1 min read
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Here is the biggest tax hack that many people don’t know:
You could pay 0% tax and live off $150,000 per year.
Let’s say you did extremely well in your early years and accumulated a good portfolio. You just turned 50 and thinking about the retirement.
Here is how you can pay $0 in tax:
If you are married, you can pull 29,200 (standard deduction) + 94,050 (long term capital gains) = $123,250 tax free.
You can set up a 72(t) plan to withdraw $29,200 from your 401k/IRA. No 10% penalty.
If you have a stock that you bought for $30,000 in a brokerage account, and now it's worth $124,000, your gain is $94,000, taxed at 0%.
So you just got $150,000 of cash and paid $0 in federal taxes.
P.S. You might have a small state tax liability, unless you live in states like FL, NV, TX, TN, WA, etc
You could pay 0% tax and live off $150,000 per year.
Let’s say you did extremely well in your early years and accumulated a good portfolio. You just turned 50 and thinking about the retirement.
Here is how you can pay $0 in tax:
If you are married, you can pull 29,200 (standard deduction) + 94,050 (long term capital gains) = $123,250 tax free.
You can set up a 72(t) plan to withdraw $29,200 from your 401k/IRA. No 10% penalty.
If you have a stock that you bought for $30,000 in a brokerage account, and now it's worth $124,000, your gain is $94,000, taxed at 0%.
So you just got $150,000 of cash and paid $0 in federal taxes.
P.S. You might have a small state tax liability, unless you live in states like FL, NV, TX, TN, WA, etc
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