There is a lot of misinformation and confusion about the "no tax on overtime"

Let me break it down exactly how it works (with real examples and tax impacts): The President officially signed the tax bill into a law on Friday.

A new deduction is created equal to the qualified overtime compensation received during the year.

This deduction should not exceed $12,500 (or $25,000 filing jointly).

🚨Trump just signed a $4.5 TRILLION tax cut into law.

I reviewed every page, so you don’t have to.

Here’s exactly how it will impact your taxes: 1. Extension of the rates

The tax bill makes the tax rates enacted in 2017 permanent.

As a reminder, if this tax bill didn’t pass, they would have increased to:
12% -> 15%
22% -> 25%
24% -> 28%
32% -> 33%
37% -> 39.6%

"Don’t put more than the match in your 401k! You’ll never get it out early!”

That’s what many financial gurus say. But they’re wrong.

Here are 4 ways to access your retirement accounts early without 10% IRS penalty: First of all, you shouldn’t touch your 401(k) until retirement.

But plenty of people want to retire early.

Most finance influencers tell them “Just get the match. Put the rest in a brokerage account (after Roth IRA)"

But this advice is often tax inefficient.

Mega Backdoor Roth strategy allows married couples to invest $80,000+ a year into a Roth IRA.

It’s one of the most powerful tax strategies to avoid taxes on investments, but 99% of people have never even heard of it.

Here's how to take advantage of it: First, make sure to bookmark the first post for reference and share it with a friend.

Your 401(k) plan generally has 2 options:

1. Before-tax (traditional)
2. Roth 401(k)

Most people don't know how to read their paycheck.

FICA, SIT, FIT, SDI... What does it all mean?

Here's how to make sense of your take home pay:
🧵 When you look at your paycheck, the gross pay shows your total income before taxes.

If you’re paid hourly, it will show your hourly rate.

Gross pay also includes extra earnings like bonuses or other types of income you receive during the year.

Sarah and David can withdraw $126,700 from their investments in 2025 and pay $0 in federal income tax.

That’s the equivalent of earning $165,000 in W-2 salary.

Here's how it works: Since Sarah and David are married, the standard deduction for filing jointly in 2025 is $30,000.

So, the first $30,000 they withdraw from investments or earn from salary is totally tax free.

Bank of America, Chase and Wells Fargo are paying you 0.01% while earning billions off your cash.

But there are plenty of ways to make 4%+ safely and not get robbed.

Here are 5 better options: 1. High yield savings accounts (~4%)

There are plenty FDIC insured accounts that pay around 4%:

- CIBC
- MyBakingDirect
- CIT Bank
- E-trade
- PNC
- Ally

Research these options and choose one.

The Senate released a 549 page tax bill yesterday.

I read it all so you don’t need to.

Here’s what’s inside (and how it impacts your taxes): On May 22, the House passed the “Big Beautiful Bill”

Yesterday, the Senate released their own version of the tax bill.

Before it goes to the President, they’ll have to align on the text.

Let’s dive into some of the similarities and differences:

Every piece of personal finance advice I could come up with after reaching $500K net worth at 25:

1. If you can't pay cash, don't use your credit card. If you can pay cash, use your credit card. 2. You shouldn't invest (besides getting a 401k match) if you have debt > 8%

3. There is a 100% chance of you making money by investing in index fund ETFs if you hold for at least 20 years

4. You don't need to buy individual stocks, index fund ETFs will build your wealth

John and Arielle decided to retire at 50.

With smart tax planning, they'll pay $0 in taxes for 15 years, while converting $40K/yr from their traditional IRA to a Roth.

Here’s exactly how they’re doing it: They are married. They have a son who is 18 and entering college.

Both of them did well in their early years.

John was an engineer for 29 years, working for a big publicly traded firm, and eventually rose to a principal rank.

Arielle was a personal finance teacher.

The IRS just released audit data for FY24.

They closed 505,514 audits.

Here's who they're targeting (and how to stay off their radar): For FY 2024, the IRS closed 444,014 audits of individual tax returns.

Do you know who gets audited the most?

People who make between $1 and $24,999 in positive income.

Bob made a $430,000 tax mistake.

He gifted his house to his son before he passed away.

If he had waited, his son could've owed $0 to the IRS.

Here's how the step-up in basis works: Bob gifted a $2,000,000 California house that he purchased for $50,000 back in 1970 to his son.

The son decided to sell the house and paid ~$430,000 of federal taxes.

This is because the son received a "carryover basis" for the house, and had to pay capital gains.

HSA wealth hack:

Don't pay medical expenses with an HSA card. Use a credit card and reimburse yourself 10-15 years later to benefit from untaxed growth in your HSA.

But 99% of people don't know how to execute this properly. Let me explain 🧵 If you're unfamiliar, HSA provides a triple tax benefit:

- tax deduction
- tax free growth
- tax free withdrawal for medical purposes

It's also exempt from FICA if contributed through employer payroll deductions.

32 pieces of tax strategies I could come up with:

1. Married couples can withdraw $126,700 from investments and pay $0 in federal taxes in 2025 if no other income. 2. Tax refund is not free money. You just overpaid your taxes to the IRS and got a 0% interest yield from it

3. The tax code favors business owners due to flexibility. You get many deductions you wouldn't get as a W-2 employee

65% of U.S. households own their homes, but most have no clue how homeownership taxes actually work.

If you own a home (or plan to), here are the tax rules that could save you thousands: 1. Mortgage Interest

If you have a mortgage, you can deduct the interest you pay on loans up to $750,000 (or up to $1M if the loan was taken before December 16, 2017).

But this deduction is only available if you itemize your deductions on Schedule A.

When you sell stocks or ETFs at a gain, you have to pay capital gains tax.

But there are 9 effective strategies to lower or even eliminate what you owe to the IRS.

Here's how: 1. Holding period

If you hold assets (stocks, ETFs, real estate, etc) for more than 365 days after acquisition, you qualify for long-term capital gains treatment.

This reduces the tax rate from a maximum of 37% (ordinary income rate) to a maximum of 20%.

Every piece of investing advice I could come up with since I started investing at 18 (bookmark this):

1. Most people shouldn't buy individual stocks. Stick to index funds/ETFs 2. If hedge funds can't beat the market by trading individual stocks, what makes you think that you can?

3. Use broad market, low-cost index funds/ETFs to invest

4. Start investing as early as possible. Let time do the heavy lifting

Instead of investing in an S&P 500 index fund, you could own 500 companies individually to harvest losses.

This strategy is called "direct indexing" and it can generate a ~1% tax alpha.

Here's an in-depth thread on how it works: Direct indexing is a process of buying individual stocks that track an index fund, instead of buying index funds directly.

In return, you can tax-loss harvest significantly more.

(p.s. make sure to bookmark the post above for reference!)

Yesterday, the House released a 389-page tax bill that includes trillions in tax cuts.

I read every single page so you don’t have to.

Here’s everything you need to know:

🧵 The Ways and Means Committee is expected to vote on this today.

Lawmakers could change it there, and also before the plan hits the chamber floor.

But the majority of these changes will go through.

Let’s dive in...

🚨 The House Ways and Means Committee on Friday night released a partial version of the new tax bill.

I reviewed it all and the changes are significant.

Here’s everything you need to know: The Ways and Means Committee released a 28-page proposal on some of the tax changes.

These changes would be the basis of the tax changes, and more tax changes will very likely be added to the finalized version.

Let’s dive in..

Does Pope Leo XIV owe taxes to the IRS?

It's pretty complicated...

Here's how U.S. tax law applies even inside the Vatican walls: The new Pope Leo XIV reportedly holds dual citizenship in the US and Peru.

From a tax standpoint, the US taxes its citizens on worldwide income no matter where you live.

But it gets complicated...