No offense to my Mom and Dad for working regular jobs, but they have been pretty unhelpful with managing my multi-million dollar media empire. I was "Today" years old when I learned that all write-offs are not created equally. My accountant said hosting my company's annual "shareholders meeting" in the Cayman Islands is only partially deductible for the day(s) and expenses directly attributable to the meeting. Who is this clown? I don't even have time to fire them and start over.
My parents just don't get it. They're trihards who get all sweaty anytime they see a check for a few hundred thousand dollars. Just this week, a broadcaster asked me to host their annual New Year's Eve extravaganza. They want to ink the deal today. I was like, "...and pay taxes on this in 2025?" What kind of n00b do they think I am?
I told them: duh, fly my entourage to Tokyo or someplace cool. We'll execute the contract after 12:01 am local time on January 1. Bam! I'm onstage any time before the ball drops in NYC. My posse wilds out for the ball drop. I shift the taxable income into 2026 and give myself 12 months to burn the profit or reinvest. That's why they call YouTubers "creatives".
My dad was like, "you can contribute to retirement accounts all the way until tax day the following year". I mean, he's a great guy, but tell me you're poor without telling me you're poor. YOU can contribute to that because you're under the Income limit. That's cap, literally and figuratively. Why shouldn't I be able to deduct the same percentage as anyone else? The tax rates go up at higher income levels. What sense does it make that the deductions go down, too?
Anyway, I don't want to bring anyone down with my problems. This is just a reminder to bake time into the holidays for tax mitigation planning. Peace Zacolytes!
Ho, ho! It's heartwarming to see the youth catch the spirit of the Merry Mitigation season.
Pro tip: Section 179 Depreciation aka "the Hummer Loophole" allows business taxpayers to deduct the cost of certain property like when the property is first placed into service. Although initially for "heavy vehicles" like farm equipment, beginning with the Hummer automakers started making SUVs just heavy enough to qualify and stylish enough to be desirable.
Somewhere along the line a Grinch stole our deduction. These days, Santa can trade his sleigh for a new Porsche Cayenne Turbo, put it in service on December 31, and only write off the first $31,300 in the current year without a dollar out of pocket.
Your adviser will handle the minutia like the $2.5 Million deduction limit and phase outs. Cheers!