How to escape tax and save money? Tax Planning | Personal Finance | Income Tax Video

money saving tips! personal finance 101! ways to save money! how to save money! This knowledge I'm giving to you for free, cost me over 5 figures. I hope it helps you or help you plan for the future.
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[@andy_wong]

Love this quote! “Rich people see solution, poor people see problem”

[@sagenose1082]

This isn't a solution, just creates a bigger problem when it comes round to filing your tax return. It's illegal!

[@sebastianstormorken3000]

@@sagenose1082 Might work in countries with low tech levels, where government cannot easily do controls. In modern countries, not advisable. You are right. I also responded to the "top" comment about the "genius quote"... A genius that needed to pay "more than 5 figures" for such basic knowledge that is available online, PLUS that he can't even apply progressive tax system to income figures... He informed GBP 20,000 wrong on his example about the taxation in UK...

[@Fitnessdealnews]

If only life was so simple : 1) you can not deduct your rent fully for tax purposes. Only a very small % 2) you can not deduct all car expenses 3) you can’t deduct any entertainment under the new tax laws (last 2 years) At least in the US this is not that simple

[@basmatibam]

The same for Italy. Everything for personal purpose is not tax deductible

[@truthseeker8658]

You are right. I don’t think he understands the tax system of U.S. he is saying you will be taxed 22% on 40,000 and be taxed 8,800. This is wrong. You will only be taxed 6,200. This is because you are only taxed 22% on some part of the 40,000

[@provolone5336]

“I’m not an accountant I’m just a genius” Legendary quote

[@sebastianstormorken3000]

A genius that needed to pay "more than 5 figures" for this basic knowledge? This information is practically publicly available information on internet of how to run businesses and do "tax optimization". May I say, that "escaping" or evading taxes is known as fraud and tax evasion, and that claiming personal expenses as business expenses is a VERY slippery slope (doable, but extremely dangerous if you live in a modern country)? Add on top of this, that although he says he isn't an accountant, the dude has ZERO knowledge of how to apply "progressive tax system" to income figures he showcases in this video?! Earning GBP 150,000 doesn't mean you pay GBP 67,500 in taxes. You need to apply each tax bracket to the amounts earned. So that means for the GBP example: 0 - 12,500 = 0 12,501 - 50,000 = (50,000-12,500) * 0.2 = 7,500 50,000 - 150,000 = (150,000 - 50,000) * 0.4 = 40,000 This means, earning up to GBP 150,000 as the example given in video, you would pay 47,500 GBP in taxes. That is GBP 20,000 wrong in this example stated in video... And saying that "remaining" from business account is now in your personal savings account... Again, very misinformative and a slippery slope to tax fraud court cases if you mix business and personal accounts. If you are an independent contractor that might be possible, but then you cannot claim business tax levels in most countries. Other rates would apply then... Sorry, I don't often dislike a video, but this is one of them...

[@elektrotehnik94]

@@sebastianstormorken3000 His methods are severely flawed, yet his main message is clear; taxes matter a lot & there are ways around them, if you manage to swim the "grey area". Not easy, but VERY worth paying attention to.

[@George_Perez]

LOVE THIS, people always thinking about how to make more money but never think about how to reduce their biggest expense, TAXES 🤑🔥🚀

[@henrikvendelbo1117]

For this reason many countries don’t allow companies to run with a single customer in a whole accounting year. In many countries having a company adds additional social costs or insurances, so the benefit is limited. You also forget the added cost of doing admin/accounting with a company, which you have to do for it to remain legal. Finally in many countries the companies don’t want to hire you as a contractor, they just want one type of staff. But yes it’s pretty much the approach for anglosaxon economies

[@TheMinishKid]

This is my favorite channel right now. I’m so excited every time a new vid comes out! 😆

[@frederickwe]

Facts!

[@Ibtu369]

Yup😌 sure did just rewatched this video

[@Zues64]

as a business owner, you'll need to pay both the employer and employee payroll taxes (about 15.3% of gross wages)

[@funitoo]

@Chicken Genius, you misunderstood taxation. In the UK for example if you earn £150k you don't get taxed 40% (or 45% as in your example). Only £100k of that money gets taxed 40%, £37.5k gets taxed 20% and £12.5k doesn't get taxed at all. That's £47.5k of tax on a £150k income. For the first £12.5k you pay £0 tax, for the following £37.5k you pay £7.5k tax and on the last £100k you pay £40k tax. Anything above £150k will be taxed at 45%. I hope that helps ;)

[@funitoo]

a small correction - if you earn £150k or more you pay 20% tax on you first £37.5k and 40% on the following £112.5k. Anything above is 45%. So the example above for £150k is wrong. The total tax would be £52.5k.

[@ChickenGeniusSingapore]

thanks TAD for sharing.. yea it helps.... it differs country to country. People Doing this needs check with a registered tax accountant. Cheers

[@truhunk1]

Sounds good, but many employers would not play ball, and our tax system in Canada would not accept many of these deductions.

[@funitoo]

bad advice in this video, doing this would land you into trouble in most countries.

[@eleganthavoc]

Hi Chicken. Just one small thing. In the UK if you earn £150k your tax will not be £67,500, it will be £52,500 as you are only taxed 45% on the money your earn above 150k, 40% on what you earn between £50,001 to £150,000 and 20% for what your earn under £50k. (Also, people who earn under £100k pay no taxes on their first £12,500 in the year). Thanks for this video. Love your videos.

[@dalerekus]

You cannot deduct 100% of your housing cost as a business expense in the US. You can write off the portion of where you live that is devoted exclusively to your business. And you have to prove it because a lot of people were doing this in the past (writing off 100% of housing expense as a business expense) and the IRS cracked down on it. However, a lot of this can be applied to us in the USA if we can convince our employer to pay our salary to to a company we have formed. Thanks for another good value video.

[@lexkent6366]

Also, in America we have a standard deduction of $12,200 now. That will reduce your taxable income even further.

[@xMrJanuaryx]

How am I supposed to: A) Convince my company to pay my business instead of me and B) Claim food? You can't just claim whatever you want.. they will audit you and then ask: "How exactly is your food a business expense?"...

[@TheDKblaze]

if you look you can see he doesn't actually claim food, that comes out of the salary he pays himself. In terms of Question A, that is something you need to work out for yourself

[@xMrJanuaryx]

@@TheDKblaze I can think of maybe 3 or 4 industrious out of millions that would allow A.

[@matthias2257]

can’t wait for more videos on square (sq) from you;)

[@FunkMasterUFC]

As an MMA fighter, I find a TON of value in your channel! I'm glad I found it yesterday. I'm already subscribed, and going through a lot of your content. I really wish a lot of ppl were smart/wiser before this crisis, and had saved up cash for moments like this where everything is crashing. Prime time is coming to snatch up some good stocks, and/or possibly time to snatch up prices at a cheaper price point 'IF" the market affects people that badly. Which I believe it will because a lot of these jobs will be dead due to the Corona Roni Virus. Its sad to say but a lot of small businesses many not recover... Stay safe folks!

[@ChickenGeniusSingapore]

wow! I love MMA! you too, take care

[@jacques2397]

Thank you so much!! As a Small Business owner I can confirm this and have also learned so much from you!! Thanks for giving so much valuable information for free. People like you will make this world a better place!

[@tingjunxien6089]

This is what we call quality KZbin content creators. Thank You so much for the precious Info!

[@gzbg21]

Nice in theory but would not work in Australia. You would also lose out on job security, Super, holiday pay, sick pay, maternity leave, long service leave and you can’t claim all your rent/expenses only a portion.

[@ThePuttercross]

If you are married and own a business create a board of directors and put your spouse on the board. Now you can expense meals, vehicles, almost all expenses to your business. Took me a while to get my wife on board with this until our CPA pushed her too and now she is all about limiting our tax liability. Great video!

[@ashleyspencer3664]

Best way to save tax in U.K. is to push as much as you can (up to £40k per year) into your pension and buy commercial property with it. You will need an additional ltd/llp to supplement you main income stream. You pay 0% income tax and 0% CGT in a pension. Also slight amendment to your tax quote for U.K., the tax you pay on £150k is £50k as you benefit from the lower % taxes up to each threshold. Still a lot to pay.

[@AN-we9il]

Still one of my favorite videos on KZbin!!!!! Can’t wait for tomorrow’s video!

[@tho464]

In the US, they are cracking down on this setup and this will end in one way for most who try it....AUDIT!

[@dazz_online]

We have this rule: "Those who only get orders from one client are usually not self-employed. The tax authorities can see the situation as a disguised salaried employment, so you are actually an employee." If we are being "hired" by the (only) company you actually work for now, how are we able to sidepass this?

[@sagenose1082]

he didn't think this through and the advice is BS.

[@giuzu_]

I love your energy man. I am a young entrepreneur and I love any advice I can get on how to use money for my startup. I can see the value in every video and I am entertained by your content. Keep up the good work!

[@pakchiu1879]

thank you Ken.

[@thebluechipinvestor]

Will be stepping into the working world soon. Will definitely remember this going on. THANKS for the info

[@andrewnicolas4839]

Not sure with overseas but in Australia u can outsource personal excretion income! Also u can claim full cost of rental/car expenses etc as there is a private element that needs to be reduced. If ur company does pay for ue private expenses then it pays fringe benefits tax at top marginal rate! Basically I’m saying the govt have wised up to this arrangement.

[@MultiPurpledude]

Engagement engagement engagement. Keystrokes keystrokes keystrokes. Keep doing you, boo boo.

[@dr0bert]

In UK this is no longer possible after the IR35 regulation extended to private companies (with the corona crisis they postponed it until apr 2021). Practically if you are an employee ‘in disguise’ you pay tax as an employee and corporation tax for your company.

[@Odello2701]

Thanks

[@MsCorydorus]

Always suspected that. Thanks for mentioning in detail !

[@elmachoelsenor3401]

Good quality videos

[@fannyramirez9380]

I found your channel just a few days ago and I love it!! Thank you so much for making the world a better place! I look forward to meeting you once I apply your advises and “DO NOTHING” :-)

[@rhoelg]

Most employers won't accept paying a permanent staff as a company rather than wage unless it s short term employment as contractor... also be aware of extra tax called Fringe benefit tax if you are claiming food and personal use of car.

[@lovegenderless]

Thank you

[@justforthehackofit]

As you say, the situation will differ from country to country. In our country, it is prohibited as an entrepreneur to have only one customer (like your former employer) to prevent exactly this; semi entrepreneurship. Then, where this is allowed and you do this, your customer may have little qualms to 'let you go' when problems occur like, I don't know, Corona. In our country the employer pays part of your pension, medical insurance and unemployment benefits insurance. This can then of course become part of the package that they pay you, which would increase your income even more. Up to you to decide to spend tyat money on insurances with 3rd parties or put it into stocks, possibly because a special opportunity presents itself like, I don't know, Corona ;-) Thanks for making us all think a bit more mr Genius :-)

[@ChickenGeniusSingapore]

thanks for sharing! yea need to check with registered tax advisers =)

[@muindoe]

It is a bad habit of mine to click like bottom before viewing the video - but - after viewing it - you were right - you're "just Genius."

[@chrismd00]

Obviously having a business instead of being a wage earner means a lot less taxes because you deduct business expenses. However, you cannot automatically deduct th car unless there is a business use (does not include driving to work) and you cannot deduct your home rent for your business. That would be for an office rent. Are you going to live in your office? I've seen that done. Having a business in the US is key. I'm envious of your Singapore income tax, as it is much more fair and business friendly. Another key is to maximize your retirement contributions as these are pre-tax.

[@jamesmacris5600]

Great breakdown! One thing to add is the cost of running a business e.g registration and setting up costs for the company/business, tax accounting for the business entity etc

[@ChickenGeniusSingapore]

yes! thanks for adding... too much variables in every country

[@Ognahx]

Helping the algorithm here! I'm subscribed and I always hit the Like button. Keep the videos coming brodah!

[@Cyrodine]

Bro, in Singapore, all the big expense items are not tax deductible in Singapore for a individual i.e car and home based business. Gahmen got very smart scholars, will close off loop holes.

[@stephanebaudin6382]

Thank you, I’ve been thinking about this theory for a bit and everyone was telling me that it is only valuable if you make a lot of money. You explanation is clear thanks you, so much. Love you content

[@FunkMasterUFC]

They are wrong!!

[@KikoWasabi]

I love you man... keep it up! I wish they teach you this stuff in school.

[@markbooth]

In UK you have to be careful with IR35 and not look like your B2B contract is disguised employment

[@soncha5331]

Hands down my favourite KZbinr now. All your videos are of great quality ! ❤️

[@CLXH]

You forget to add that if you work as an employee in Singapore, you get about 10% more from your employer in terms of CPF contribution. Also employee CPF contribution is tax free. Also, an employee enjoys medical, insurance, annual & sick leave.

[@Graciasportodomessi]

You content is so trustworthy that I like your videos before they even start. Keep it up man and thank you for the effort you make in providing value :)

[@matmc8100]

Nice

[@alexandreasen333]

The suggested move will just tie up most of your money in the company you have or create. This means that it wont belong to you personally but to the company. You cannot buy anything you want with company funds for private purposes, at least in some countries you cannot. In many countries you will have to justify how this is indeed a company expense and it cannot be seen as for private use.

[@Joshuasuua]

Wow this pretty clear and helpful, thanks for making it simple and easy to understand. Thanks for what ur doing!

[@ageekio]

There are some downsides of working freelance, depending on the country, where i'm now for example the law says contract can be no longer than 3 months, so it gets renewed every 3 months, which means lots of stress that you contract might not get renewed and another downside is free time/time off/vaccation, which you can't really have unless you risk of not getting a contract back and you'd have to burn cash that you saved, which might set you back to zero. But having work aside to begin with, something like Fiverr or Upwork and when you get to a certain point of savings maybe its an option.

[@banker9player9]

I already clicked the like button before you said anything. Thanks so much!

[@astroboom8049]

this is awsome content, simple, efficient, entertaining and TREMANDOUS VALUE, THANKS!!!

[@skimaticsnz]

good man.

[@michellexinyi]

Great tips. I will monitor it. Thanks for your great help always. Like your channel. Unlike others who keep selling courses. 👍

[@dbealby]

Love my s corp here in the US. Huge reductions in tax liabilities, plus can create own 401k which raises maximum yearly deposit from $19.5k to $56k. Dont forget it costs more money for business incorporation, tax filing, and general costs. If not making much to start check the revolving costs. I paid over $2.2k in tax filing this year just for the business plus $600 incorporation fees.

[@ChickenGeniusSingapore]

awesome.. agreed! thanks for your input. Have a friend, a nurse in CA, earning over $80K.. at that level, this will help.

[@dbealby]

@@ChickenGeniusSingapore thatnks for response! Forgot I pay $106 a month for my accountant to do payroll for me to be paid by the business. I started making $60k in year 1 of business, so the business costs were little steep versus the benefit. But now the business is over $500k a year with one employee. Put $56k in 401k and $77k in a pension. Was able to reduce 2019 taxes significantly, plus the 15.3% not paid in payroll taxes (taken just as Distributions). Running own 401k and pension costs 2.5k to start up and 2.5k a year to do paperwork and filing. I run all investments by myself in Vanguard keeping management costs at .04% with SP500 Mutual Fund.

[@SF-mx5xp]

Have to admit glad I subscribed and listen ! Awsome job on your part! Thank you!

[@g3ultra]

"... I'm just a genius" 🤣 best quote ever!

[@ChickenGeniusSingapore]

😂

[@cweqchannel]

holy. shit. amazing, thank you!

[@walikhaled7739]

Good hearted guy. Take care sir.

[@SpiderPriestess]

Most US companies are unwilling to make their employees subcontractors. Also there are laws that make being able to call yourself a subcontractor impossible.

[@mattsaba9609]

You channel is heavily under rated... I see you at 1mm

[@SteelWallis]

This is great but (my big but) is if you want to them apply for s mortgage it will look like you earn very little money and bank won’t be interested in lending you very much. This is from personal experience in U.K.

[@ChickenGeniusSingapore]

true.. if you game is the property game to leverage, this is not the route.

[@sangeethsushmakonumuri8298]

As a non-immigrant worker, I unfortunately am not legally allowed to set up business in the US.

[@rickaranda2259]

Awesome channel... thank you for the valuable information!

[@sungoku6575]

You are the man of words , brother

[@alphawealth8]

Thank you very much for your teaching. I appreciate.

[@loopbloke]

Wish it was that easy. If you claim yourself as S Corp, the biggest risk is you wont be able to make payment to social security and Medicare and hence wont be able to have anything left when you retire. Thus, unless you have a growing business as individual and make a lot of money (which is why only rich people can afford s corp) it is hard

[@ChickenGeniusSingapore]

agree... it differs country to country. Do check with a registered tax accountant. Cheers

[@bos3707]

Love this channel! Very useful information! Thank you

[@LemonmilkMusic]

You have a great spirit man.

[@CorruptControl]

If you think your UK employer wouldn’t go for this, think again. I would say especially if you work for a small/medium business. Along with salary, pension and National Insurance contributions are another expense to your employer. By paying a company you negate all this, while any VAT can be claimed back. Of course all the responsibility then falls to you to maintain company accounts and file tax returns to declare any earnings. However, an accountant can set that up for you with little trouble. Pay yourself a minimal salary, claim expenses that can be justified as necessary to work (travel, car, food, accommodation etc.) through your company (record and keep receipts) and then pay any “profit” in dividends to yourself which is also taxed differently. Of course, by not being an employee, your rights are not protected from an HR perspective but if there is a contractual agreement and proper terms of termination set out this can protect you.

[@jerardlee9366]

Thanks for making such an awesome video. I’m a loyal subscriber and hope that you continue to create quality videos with great content. Stay safe and invest safe! :)

[@RuelMorales]

Great video and explanation. 👏👏👏 I'm a professional musician of 15years in Vancouver, Canada. As an independent contractor I am essential my own business. The write offs are really helpful to bring my taxes down, though for me to take it a step further I would consider incorporating and paying myself a salary to reduce my taxes even more legally. Your video has sparked my curiously in this again. Thanks for sharing! Also, I look forward to your analysis on SQ. BTW, I'm also an investor in real estate and stocks. Been long on Tesla since Dec. 2019.

[@ChickenGeniusSingapore]

thanks for sharing and the comment =)

[@mathew4074]

Saving this for when I start working, super content as always ❤️

[@elyakimlev]

Great video as always, Chicken. But how do you report $3,000 a year as entertainment expenditure for the business? How do you classify entertainment? Going to a concert? Buying video games? Sporting events? Wasting money on women? You can't report these as business expenses.

[@ChickenGeniusSingapore]

for example, a simple dinner you could keep the receipt. Your accountant will advise you to keep records for the meeting and the purpose of it.

[@peterc8021]

First I’d like to take and thank you for taking time to try to help others. My questions are now that you are “self employed” most employers will not allow you on their health insurance, or to participate in their 401k, or be in any short term disability. Those 3 items can easily blow all of those savings. Am I missing something here? Just checking

[@nicholasciacca1201]

you are awesome man, my new finance teacher.

[@xaxaxaxxx]

You’re a good dude, really appreciate you brother.

[@rorymc2000]

Great video and you are helping so many people

[@readinesstoreceive]

Very helpful! and I truly love your energy and videos! keep going, you have a follower for life! Thank you! :)

[@Price-qd1cd]

Another great video my friend.

[@andrewcjw08]

Thanks for sharing Ken!!

[@thomasnk9489]

I always understand Amazon is spending zero in Texas.

[@loveandllife]

I love your videos, thanks man

[@valunomics738]

I have a crush with your contents.

[@KarthikLakshminarayanan]

Hi, I think you need to update your model slightly. All the tax structures are marginal. So any tax is applicable above a given number. So 22% of the tax may be applicable to the amount above 36500$. So you need to take that into account. I hope you release an updated video with the correction.

[@ChickenGeniusSingapore]

yea... it changes all the time.. but the concept

[@KarthikLakshminarayanan]

@@ChickenGeniusSingapore Agreed. BTW, My comment was not meant to offend you. I am a big fan. I really appreciate what you are doing here!!

[@teslaonly2136]

Never regret to support you! Thanks for your great sharing!

[@ChickenGeniusSingapore]

hi bro! thanks for being here from the start

[@OK-Computer]

I like your videos dude but this one was sloppy. You cannot deduce your rent from your business expenses. Same with car, food, entertainment. You also have other costs of paying yourself as an employee. Not to mention other different types taxes in a business. Also it is very unlikely that an employer agrees to pay your company instead of you as an employee. All the obligations regarding social and health insurance fall apart. At least in Germany it is like that, but I’m pretty sure it’s also similar in the US and UK.

[@MrShonky01]

Why is my accountant not doing this ? Not getting payed until I have an explanation !!!! oh yeah, tsla hit $2001.00 today :)

[@ImBananas4]

This sounds good but paying less tax is worst for your retirement. You have to have a plan to then get extra money when you can't work like investing

[@imZoox]

I love your videos. Thank you for your awesome content! I`m hyped for your next video about Square!! :-)

[@dafinadesigns8135]

Now i see why elon doesnt get any salaries from his own companies

[@michellexinyi]

Smart guy.

[@williamq5627]

Yup you're the greatest genius 👍👍

[@johnroberts5225]

I love you man

[@Cheechorito]

Mindblowing accounting! If only individuals are taxed based on our 'profits' :p

[@ThaoPhuong-ln9vc]

The way you calculated tax (in the U.S.) is wrong. Here is how progressive income taxation works: "Each tax rate applies only to income in a specific tax bracket. Thus, if a taxpayer earns enough to reach a new bracket with a higher tax rate, his or her total income is not taxed at that rate, just the income in that bracket. For example, a single filer with $60,000 in taxable income falls into the 22 percent bracket but does not pay tax of $13,200 (22 percent of $60,000). Instead, he or she pays 10 percent of $9,875 plus 12 percent of $30,250 ($40,125 - $9,875) plus 22 percent of $19,875 ($60,000 - $40,125) for a total of $8,990."

[@holynadahjl]

Love your contents. Just what I needed :)

[@andrejjames1730]

Nice , Thanks

[@eck0wns]

hell ya another video , thanks for the content brother

[@raygrenade1697]

amazing content, i really hate taxes, especially how they are being used to price gauge my own states!

[@raygrenade1697]

its amazing, simply creating an LLC has saved me SO MUCH MONEY.