Just spoke to a founder who could pay zero taxes on more than $400M when they sell their company

It's completely insane tax jiu-jitsu yet fully legal with how the law is written

Here's how they set it up: Most people have heard of QSBS or Qualified Small Business Stock, the most generous tax break for startups

QSBS allows you to pay no taxes on $10M when you sell your company... or 10 times your basis (whichever is more)

The trick here lies in the second part!

Peter Thiel just turned 57 years old

In less than 3 years, he will get access to the $5B (yes, billion!) dollars locked away in his Roth IRA

The best part? He will not owe a single dollar of taxes on it

Here's how he set it up (& how you can emulate the strategy): Everyone has access to a Roth IRA

You can put in up to $7,000 a year in after-tax money and invest it in anything you like

Your dollars compound tax-free and you will owe ZERO taxes on the balance in retirement

No matter how high tax rates go in America!

A buddy of mine will earn $500K+ this year as a one-person business in a high tax state

If they don't do anything, they would have to pay a tax bill of ~$250K between federal, state & self-employment taxes

Here's what I told them to save 6-figures in taxes this year alone: 1 - Choose to file your taxes as an S-Corp

This bifurcates your salary into a fair W-2 income you pay yourself & the rest is distributed as profits

You only have to pay self-employment taxes (social security & medicare) on the W-2

This alone saves many thousands of dollars

No one pays more in taxes in America than W-2 employees with a high salary

But, there are still lots of tricks in the tax code you can use to pay less

Here are 12 strategies an employee with a high salary can use to reduce their tax bill before the end of the year: 1 - Donate to charity

Use a Donor-Advised Fund (DAF) to donate money to charity - this gets you a big deduction upfront & you can give to charity on your own timeline

Instead of contributing cash, donate appreciated assets like company shares for an even bigger deduction

There is a special type of retirement plan almost no one knows about

You could use it to stash away literally hundreds of thousands of dollars every single year

Here's how a cash balance plan works (& how we used it to save a business owner $100K+ every year): Most people are familiar with a 401k plan from work

These plans are great, but are capped at a maximum contribution of $69K / year

That can be a lot of money if you're making $150K a year.. but for super high income earners, that's not enough!

Enter the cash balance plan

A common misconception:

Money in your 401k and IRA's are locked away until you retire

Let me show you FIVE powerful strategies to access dollars in your retirement account any any age at all:

(bookmark this post for later) 1 - Borrow up to $50K from your 401k (or $100K if married)

You can borrow money from your 401k for any reason, at any time at all

Even though you have to pay a market interest rate, the interest goes right back into your 401k account!

Very powerful esp. with a Solo 401k

Nobody pays more in taxes than employees with a high W-2 salary

If you fall into that bucket, see if your company offers a "Non-Qualified Deferred Compensation Plan" (NQDC)

Here's how these work and how they can save you millions of dollars in taxes: If you are a high earner, you can use a NQDC to defer part of your salary, which brings you two big tax benefits:

1 - You reduce how much money you pay at the highest marginal rate

2 - You can invest the entire pre-tax deferred amount which lets you compound from a higher base

The single biggest perk of being self-employed:

You can set up a private 401k plan for yourself & your spouse and get a $138K tax deduction

And then use it to invest in absolutely any asset class

Here's why the Solo 401k is the most powerful retirement account in America: 1 - Up to a $69K tax deduction, or $138K if you add your spouse

It's super hard to max out a corporate 401k plan because you can only contribute $23K as an employee

With your own company, you can max out the "employer" contribution to hit a $69K tax deduction per spouse

One of the most remarkable loopholes in the US tax code:

If a married couple earns $240K+, they cannot contribute directly to a Roth IRA

But, they can instead use their 401k to get $100K+ into their Roth IRA every single year

Here's how the "mega backdoor Roth" works: Roth accounts are very powerful

You contribute post-tax dollars, but then never pay any taxes in retirement... no matter how high tax rates go

These accounts are so effective that the government imposed income limits that disallowed couples earning $240K+ from contributing

No group in America pays more in taxes than employees with a high W-2 salary

But, that doesn't mean you can't optimize it to pay less

Here are 15 strategies for employees with a high salary to reduce their tax rate: 1 - Max out your 401k at work

Contribute the full $23K pre-tax you are allowed to as an employee & get your full employer match

Total contributions are capped at $69K / year so see if your plan allows you to do the rest as "mega backdoor Roth"

Max it out every single year

A weird skill I learnt a few years ago that has dramatically improved the my quality of life (& for my family):

Learning how to use credit card points to travel in style

This thread will teach you everything you need to know (& 1 very important thing to avoid): I know what you're thinking... Ankur, you can afford to travel without using credit card points

Why go through the bother?

1 - Being good at using credit card points barely takes any time

Plus, it's a strangely fun game to try and "beat the system" with real-life prizes

Everyone should open a Roth IRA

A Roth IRA is so effective at lowering your taxes that the government doesn't allow anyone earning $160K+ to contribute to one directly

However, here's THREE loopholes that let high earners get thousands of dollars into a Roth IRA legally: With a Roth IRA, you do not get a tax deduction when you contribute dollars in

In return, you then never have to pay a single dollar of taxes when you finally get access to the money in retirement

No matter how high tax rates go!

Peter Thiel allegedly has a $5B Roth IRA...

The single best thing you can do to save money on taxes in America is to start a business

Whether it's freelancing on the side or starting a venture backed startup

The US tax code is written to specifically favor business owners over everyone else

Here's exactly how: 1 - Business Expenses

If your tax rate is 25%, you can get an effective 25% discount on anything you need to run your business

Anything you buy specifically to run your business is automatically fully deductible

But, you can also deduct things that W-2 employees cannot!

I've hired hundreds of people at startups I've founded in the last decade

Here is my guide for any ambitious young person applying for a job at a tech startup:

Follow this playbook to differentiate yourself from 99% of candidates 1 - Quality > Quantity

It's better to send one, targeted high quality application to your dream startup than blasting your resume to hundreds of opportunities

Most applications to a rando applicant tracking system at a startup that's doing well are dead on arrival

Setting up a Solo 401k is the biggest personal finance win for anyone self-employed

- A $69K tax deduction per spouse
- Tax-free compounding
- Support for Roth contributions
- Invest in any asset class
- $1500 tax credit for setting one up
- Borrow up to $50K from your plan 👇 1) $69K Tax Deduction

You can contribute as an employer & employee and get up to a $69K tax deduction

If your spouse works at the business, you each get your own $69K upper limit & can double it

If you are over 50, this increases to $76,500!

I thought real estate was the most tax advantaged asset class to invest in

But my mind was blown when I learnt the economics of investing in commercial solar

Dollar for dollar, this is the biggest tax saving opportunity for business owners & W-2 employees

Here's how it works: Disclaimer:

This is a complicated tax strategy that only makes sense at mid-6 figures or more in income

And to unlock most of the magic, you need to qualify as an "active investor" & materially participate for 100 hours / year

But if you have the time, the savings are insane!

Most startup employees have no idea how to value their equity

This makes it hard to evaluate different job offers and even harder to negotiate your compensation

Here's my guide on how to think about the value of your equity:

(You may want to bookmark this for later) The most important rule: the quality of the business is the single most important thing

Most startups are worth $0, and only the very best companies are worth a lot of money.

It doesn't matter how big a percentage you own of a company that ends up being worth $0

One of my early investors at @teachable invested $10K in our seed round via his Roth IRA

When we sold the company, that was worth ~$200K paid to his Roth with 0 taxes

Here's a step-by-step guide on how to invest in any startup on @AngelList from your Roth IRA: 1 - Create a Self-Directed Roth IRA on @carryhq_

We support regular Roth IRA's (to invest in stocks + ETF's) along with self-directed Roth IRA's to invest in crypto, startups etc.

Make a deposit into the Roth IRA or transfer dollars from another account into it

We're almost at the deadline to set up and contribute to a Solo 401k to save money on your 2023 taxes

Here's a step-by-step guide on:

1 - Who is eligible for a Solo 401k
2 - How to set one up & contribute to save on 2023 taxes

Has to fully in place by April 15 so hurry up! If you have any self-employment income as a sole proprietor or a single-member LLC, you have until April 15 to set up & fund your Solo 401k

Even if you made money posting on Twitter that would count!

You can make pre-tax or Roth contributions as both an employee & employer

The best way to save money on taxes in America:

Start your own business

The US tax code is rigged in favor of small and large business owners, entrepreneurs and side hustlers

Here are my 15 favorite tax hacks for business owners: 1 - S-Corp

Consider setting up an S-Corp when you cross $100K+ in net income

This splits your income into a fair W-2 salary (on which you pay self-employment taxes) and profits on which you don't

Can save $5K+ a year even with additional complexity of payroll etc.

Peter Thiel grew his Roth IRA to $5B

Mitt Romney grew his Roth IRA to $100M

When they retire, they will get access to the entire amount without paying a dollar in taxes

Here's exactly how they did it and how you can emulate the same strategy: You put after-tax money in a Roth IRA but then pay no taxes as the money grows

When you retire, the entire amount is available to you with zero tax (no matter how high tax rates are)

In fact, a Roth IRA is so powerful the IRS limits high earners from using it!