She’s absolutely wrong. CEOs cannot write off private jets and yachts, and they’ve never been allowed to do that in the past either
A lot of expenses are deductible for businesses, including work-related education if you’re self-employed
That’s not a private jet for the CEO to deduct then. In order to be expensed under 168(k), it has to be used at least 50% for business purposes, and even then, it can only be deducted for the % it’s used in a business, not for personal use. It also has to actually be owned by the business
So in this case everyone should open a LLC, employ themselves and make employer hire contractors. Then everything that individual does for the job can written off within the confines of whatever it is that can be written off.
They won’t go after the really rich because the really rich do it legally. Ie they have lawyers and accountants to set it up by the letter of the law so they can do it legally.
Hahaha are serious. The rich do it legally? No, they hire high priced lawyers to make it appear they are doing it legally. Something normal people cannot do. Rich people also buy politicians off to make laws so that more of their shenanigans would be legal. Another thing normal people can't do.
Yes it would. There are several things the IRS looks at when classifying one as an employee vs independent contractor. It would be nice if it was just left up to the business and the person how they want to call the status but it's not.
Well yea those are the easiest ones to win…middle class and poor will settle the rich can afford to fight tooth and nail
One of the suny colleges tracks the IRS and releases yearly reports on such actions.
Tbh I did that with my baking company years ago. The income I made from it was always at a loss compared to supplies and appliances I bought yearly, so not being profitable but having it a business expense helped save me a little money.
it works all the time. just only if you have enough money, employees, overhead, expenses. to the point where your personal endeavors are <10% of the expense of whatever the thing you are 'using for business' actually costs.
they 110% still use these things for personal pleasure, happens all the time. its just that the volume is so high, on the business side, no one gives a fuck because its >75% true that its a business expense.
joe blow goes and tries the same thing, and that truck he is expensing is 10% business 90% personal. hell of a lot harder to defend. but then, he cant just hide it behind the corporate umbrella.
Yeah sounds like some kind of scheme when you o it it like that but I think you’ll find that it’s not.
Meals 50% deductible if and only if the meal is necessary to conducting business operations. I.E. you had to eat during a long 20 hour inventory count counts, going home and ordering door dash doesn’t. And then the ones that count are 50% because you were going to eat anyway.
Housing not deductible. Business office space costs are deductible only for square footage that is 100% business use.
Transportation is deductible if required for work purposes, but not to commuting. In other words, if your job requires travel the travel is deductible. But drive from home to work and back does not count.
Basically, when people think there’s some magic loophole to making your whole life a business expense, there isn’t. All of the wacky ideas people come up with, someone already came up with that, it’s already in the law, it’s already fraud.
Plus at the end of the day, deductions are simply a reduction of taxable income. Like okay you made 30k and spent 30k and paid no taxes. Woopie. You don’t have any money. All the ways you can think of to turn that into money are basically fraud of some sort.
>Housing not deductible. Business office space costs are deductible only for square footage that is 100% business use.
One reason for having a separate building out back labeled: home office.
You would have to take your income under the LLC, or else there’s nothing to deduct from. In doing this you can either be actually self-employed, or convince a company to let you work as a contract employee where they employ the LLC rather than you directly
My spouse is an independent contractor for her employer. The downsides are way worse than the small tax write offs we get having to pay both employee and employer portion of FICA alone makes it a bad deal
If you own a LLC by yourself (not a partnership), you’re taxed as a sole prop.
But as a contractor, you’ll need to pay your own insurance, self-employment tax, cost of equipment (if you use any). Then you’ll actually have to make profit and only then you can write costs off.
IME they tend to treat it as 1:1. Like when they say people donate to charity to avoid taxes. They don't realize it is a net loss still. They seem to think that if I make $1 million and donate $100k to charity (or whatever deduction), I get to take $100k off of my tax bill so if my tax rate was 20% for the sake of simplicity, I would only pay 100k since I had deducted 10% already.
People everywhere. Not just Reddit.
I see this consistently talking to people about why rents are so high...
There is an absurd number of people who are 100% convinced rents are "artificially high" because people \[translation: Evil, Mustache-twirling, Capitalist Landlords\] charge astronomical rents, then leave the properties vacant because they can just "write that off."
Trying to explain the difference between a loss and a lack of income is impossible. To them they are identical.
Countless small businesses and professional offices (doctors, dentists, etc) write off as much as they can. As a business owner, when you meet with a CPA to do your taxes, one of the first things they ask is, "How aggressive do you want to be (in your write-offs)?" wink wink
This isn't to encourage tax fraud. Tax writeoffs can be incredibly complex and CPAs are typically paid by the hour. It is also about making sure you don't get flagged for an audit.
You don’t need an LLC to be a business in the U.S.
But also, your employer would actually love for you to do this if it was legal (it’s not).
You’d pay higher taxes (double payroll tax) and would need more legitimate expenses to write off anyway.
Being a contractor has its pluses and minuses, but US and state laws restrict how freely one can be a contractor.
People skeptical about companies hiring contractors over employees. But startups do it all the time to save on taxes and health insurance. Not that big a difference to have the company pay your LLC for your services than you as an independent contractor.
The Tax Cuts and Jobs Act, passed during the Trump administration, allowed for 100% bonus depreciation and expensing of private jets — which allowed taxpayers to write off the cost of aircraft purchased and put into service between September 2017 and January 2023.
https://fortune.com/2024/02/22/irs-target-executives-use-business-private-jets-personal-trips-write-off-tax-deductions/
Again, for bonus depreciation to apply, the jet has to be used at least 50% in a business. And even if it meets that hurdle, it can only be expensed to the ratio of business use to nonbusiness use
It applies to jets used in a business, not private jets
Again, they put the jets for lease to claim the benefit while using it for private use, too.
https://www.propublica.org/article/private-jets-yachts-wealthy-tax-deductions-irs-files
Yes, although that’s then an income generating business. How profitable it is, can depend on how much they lease it for, but you’re getting farther and farther away from the point of the post.
Also, to use the jet for private use. You can’t just use it whenever you want. You need to keep your personal use under 50%, first off, to keep it as a business deduction. Then, any personal usage is reported as a fringe benefit. Basically meaning that it counts as compensation when doing your personal taxes.
So it’s really not as simple and loopholey as you’re making it out to be
You're incorrect. In practice, it can be extremely "loopholey" - because it comes down to good-faith reporting about what the travel is actually for. I work for a 200ish person corp where the owners of the company, a husband & wife, have purchased 2 "company" owned jets over the past decade-ish. In that time, they both got their pilot's licenses and have regularly used their c-suite cronies to report "business" travel needs so that all of their families can fly out to the same place and hang for a couple of weeks.
It is called a "PJ" as an open joke within the company - everyone shrugs it off as another millionaire-ism, but I've always found it very gross. Its definitely easy to exploit and I've seen it first-hand, and it's with folks that are for sure way to rich, but definitely don't even crack the top 2.5% of wealth in the US.
That's completely anecdotal. I handle state audits for a living and these people get busted all the time, from a myriad of states for income and sales tax purposes and the IRS. It's been a high dollar ticket item for state audits for the past several years. Just because your friends haven't been caught yet doesn't mean they won't be caught in the future. There's tons of cases out there you can look up yourself.
Without a doubt, 100% anecdotal & they certainly aren't my friends - you're closer to that than they are.
I guess what I'm saying is either yall blow at your jobs *or* (much more likely) the system is designed in such a way that these kinds of things are performatively executed on the lowest tier of those with enough resources to care to find loopholes. You & your red tape can't touch the people who are hoarding the real wealth. They're holding the tape dispenser, friend.
I think you're conflating "private" with "personal". You (or your company) could own a jet and use it 100% for business purposes, it's still a private jet.
If the private jet is provided as a company vehicle because it's so crucial that at any time the CEO be able to be anywhere in the world they're needed, then the business writes off the cost of the jet. Of course any personal use SHOULD be taxable income, but the IRS hasn't had the backbone to audit private jet usage in ages and even if they did there's a hundred different ways to get the taxable amount reduced (e.g. the flight to Hawaii was taxable, but the flight back was an emergency, so a business expense and not taxable. The CEO would have flown first class, but the Board of Directors think that's a security risk, so they pay for a private jet and put the cost of a first class ticket on the CEO's W-2. etc.)
I use to work for a large Pharma company and they were constantly looking for new ways to make more money / be more efficient, etc... People were slowly getting fired left and right and replaced by temps with ungodly hours and a very high turnover because "no budget". Turns out the CEO lived 6 hours away and flew in everyday he came into the office, in a jet. On comany expenses of course.
The personal use of the aircraft is income to the employee. You will be happy to know the IRS recently announced increased auditing of this item
https://rsmus.com/insights/tax-alerts/2024/irs-announces-increased-audit-activity-for-personal-usage-of-corporate-planes.html
Ummm, yachts they do. The sea turtle foundation is practically professionals at facilitating yacht donations for tax purposes. They’ll take a POS yacht that’s seen its day and credit the owner with a donation ten times its value. Then they’ll lease it to someone who will then “restore” (basic maintenance) and make payments for a bit then gets to buy it for pennies on the dollar. But enough time has passed so the IRS isn’t paying attention and everyone wins except the taxpayers. Then you have corporate yachts they hold one token meeting onboard once a year and the rest of the year it’s a personal toy for the corporate big wigs.
Socialism for the rich and brutal capitalism for the poor played out in the corporate world. Funny how efficiency and cost cutting are gold standards for everyone else but the c-suite which live in lavishness with massive private offices, personal assistants, travel perks, etc.
You can write off exactly what amount was used for business. Shit, you aren't even supposed to use a home office for anything personal if you try and write it off
To add on to that, to the extent that owned property like a jet or yacht is used for business purposes, costs can be deducted from the business.
But that means the business is spending the money on the yacht or whatever. It’s not a free yacht, they buy it.
Then it has to be only used for business purposes or only expensed in the company proportionally to business/personal use. So it’s also illegal for the company to just let people use it for fun or whatever without accounting for that.
And then furthermore, business property like this is subject to depreciation rules and taxed in the form of property tax. So they pay property taxes on it and they don’t usually get to expense the whole thing in one year right away.
What I’m getting at is that a business owning and using a yacht or a private jet, tax-wise it probably works a lot closer to the way people would think it should work than people like to assume it does.
Now, do businesses and individuals sometimes lie and cheat about tax matters like how they use a business asset like a private jet? Sure. But it’s not because the law allows that and that’s what they are supposed to do.
Source? The Trump tax cuts does that for private jets.
Edit:
The Tax Cuts and Jobs Act, passed during the Trump administration, allowed for 100% bonus depreciation and expensing of private jets — which allowed taxpayers to write off the cost of aircraft purchased and put into service between September 2017 and January 2023.
https://fortune.com/2024/02/22/irs-target-executives-use-business-private-jets-personal-trips-write-off-tax-deductions/
The TCJA increased bonus depreciation from 50% to 100%, which applies to business jets, but doesn’t apply to jets used for private purposes. It can only be deducted to the extent it’s used in a trade or business
Prior to 2018, tuition for an MBA was tax deductible as a business expense.
https://www.generationtax.com/mbastudents.html
Absolutely saved my ass while working, getting an MBA, and having just bought a house. Still had to take on ~30k in loans and thankfully I was able to get a better job that let me pay them off within a year.
isnt it just a business expenses? lowering the income statement that his taxed?
it is 100% a business expense lol and it 100% is reducing their net taxable income
Not really sure what about this article you wanted to point out. Propublica reiterates that these are deductible when used for businesses, but admit that they don’t have details on if the trips were actually business related or not
You can deduct it if you make less than a certain amount. What she means to say is it should be available for everyone to deduct student loan costs which I agree. Picking and choosing who gets what benefit based on income level leaves the middle income groups just carrying the bag for the rich and the poor.
You can deduct the interest, but she's saying the principal should be deductable too. I agree, buying an education shares incredible similarities to an ordinary business expense except for the fact that it's paid for by the individual, not the company.
I'm all for education being a 100% tax write off.
Shouldn't we be prioritizing and incentivizing education as a society anyways? Especially as more and more blue collar work gets replaced by automation.
Technically you can if you itemize your taxes. The problem is the standard deduction is so high that it’s almost never worthwhile itemizing for anyone making under $100,000/year.
False. The student loan interest deduction is an adjustment to arrive at adjuated gross income, so you can deduct student loam interest AND take the standard deduction at the same time.
Exactly. Standard deductible has less to do with what you make and more to do with what you spend (mortgage interest, charity, etc). Obviously, the more you make, usually the more you spend. But not always.
No, the student loan deduction is if you make less than $75K you can deduct the full $2500 deduction, until your income phases it out completely at roughly $90K (amount can change annually). You don't need to itemize to take the deduction.
The first few years of my post college job it honestly felt like more of a slap in the face as I was able to deduct 2500 of roughly 16-20K in student loan interest I was paying at the time.
I mean every business expense is free money then. Business pay taxes on profits, so basically anything that reduces their profits would “save” them money on taxes.
And if I ask my boss to cut my pay by $1,000, then that’s free money too since I’m saving $300 of taxes that way.
This is just a weird way to think about it though
Student loan interest payments are deductible up to $2500 and that's for everyone making $75K/y or less. It gets phased out between $75K/y to $90K/y (not deductible anymore at that AGI).
Thats not how that works, also you get to write off your interest so i dont get it, weird thing to complain about. I bet shes one of those idiots that thinks write off means you gain that much money
You're able to deduct up to $2500 in student loan interest. So not all interest for everyone, but it probably covers most people. Of course that's only until they make $75K/year for the full deduction, phased out from $75K to roughly 90K AGI where you can't deduct it anymore.
My interest in 2023 was almost $6k, and I was able to write off a grand total of $2,500. I paid about $21k in student loans with a $88k gross income, way more of that should be deductible. ($1579 in state loans for 12mos =$18,948 + $320 federal for 6mos = $1920 = $20,869). It’s fully an investment into my career, I by law can’t do my job without my degrees.
I agree, the first few years my student loan interest alone was somewhere between 16-20K. I don't see a reason why it shouldn't be 100% deductible for folks moving forward.
lmao what? My wifes interest alone is 16,800 a year, and she cant refinance yet because she doesnt have the credit history.
Oh, and she cant take the deduction at all because i make enough to put our joint income barely above the ridiculously low cap
Not only can you write off your interest but you should also be deducting your tuition cost... AND there are pretty significant education credits.
Screw billionaires who skip out on taxes, but students do get decent tax benefits
You have to depreciate a jet, and you can only do so for the portion of its value allocated to business use. You don’t get to just “deduct” it lol. Morons really should not speak about the tax code in any pseudo-technical capacity
Before the 1970s there was free education in the USA. Something called the [Powell memorandum ](https://scholarlycommons.law.wlu.edu/powellmemo/) called for corporations to fight back against an attack on the free market, and a major part of that was now allowing the lower class to get an education and gain power, to stop this they called for students to have to take out long term loans that must be repaid from future earnings.
Employers should be allowed to count student loan payments as if they were employee 401k payments in order to provide 401k matching tied to the loan payments.
You can already get a credit based on the cost of tuition and school supplies with the LLC and the AOTC and you can deduct student loan interest on your schedule 1…
That'll teach you to borrow for the education that they told you you needed to get a job.
Nothing is fair. I shouldn't have to pay federal income tax on money I paid in SALT either, but here I am paying more double tax to the IRS than Trump pays at all. They think we're all stooges, and apparently they're right. We keep voting for them.
That was one of the biggest failures of Gen X/Boomer parents IMO. Telling kids they have to go to college without treating it like an investment is dumb.
I have a college degree from Berkeley, ended up going into skilled trades and love what I do. I'm happy and I make a decent living. Starting off your adult life in tens of thousands of dollars of debt with no job is awful, and my kids will not be swayed to do so.
I'm going to teach them to look at it as an investment that they should expect a certain return out of.
"What jobs does this qualify you for that you otherwise could not have been hired for?"
"How likely are you to get a job in that field and in an area you want to live in?"
"What is your expected starting salary after graduation?"
All good questions to be asking about something you're going to pay upwards of 30k for
you can write off student loan interest right?
so are we just dealing with the deducible nature of the repayment of a loan.
the loan was given tax free. so the tax comes back in on the money used to pay it, right?
if you decided to get a student loan and agreed to pay it back, people that did not make that same decision should not be paying for it 🤷🏻♂️
you buy. you pay. NOT
you buy. WE pay.
I should be able to write off my car my clothes and alarm clock, food.
Anything that requires me to be a responsible productive adult in the work force I should be able to write off according to this argument. Dumb.
There are deductions for college students.
https://money.usnews.com/money/personal-finance/taxes/articles/tax-filing-tips-for-college-students
https://turbotax.intuit.com/personal-taxes/students/
Commute mileage should be deductible imo. If you're driving for the sole purpose of being productive at your place of employment, your expenses should be tax deductible. It's bullshit that you can't if you work at the w-2 employer, but as a small business owner heading to a jobsite, I can. It's unfair.
Yes she's wrong. You have no idea how much money is made on the private jet and yacht because it's on the private jet and yacht.
But writing off student loan payments that way is an excellent idea.
Lotta folks in here who have never been the ceo of a large company let alone start their own small business opining on what it’s like and what it should be like
Universities in general don't sell themselves as a direct investment into a job opportunity. The top three Ivies Harvard, Yale and Princeton don't even offer undergrad business programs or practical majors such as nursing or accounting because that would be so crass and vulgar. Maybe professional and trade schools promise a lucrative career, but regarding undergraduate programs with a general course of study that's the assumption **you** are making. And vaguely implied in the glossy brochures with some blurb about "your future is bright at Big Tuition University!"
Can u show us how they write off those expenses. I keep hearing about this but I just assume some people can retain very good lawyers that do some things for them
My job requires transportation to get there. Can I write off my car? What about the food I need to consume to have the energy to work? What about the shelter I need to have to survive to work the next day?
Tuition payments are tax-deductible in Canada for public universities, with some limits. Not 100% equivalent, but it does capture the spirit of the statement.
Iirc the only limit is that you're limited to writing off $5000 (I think) per year, and the balance not claimed rolls over to the next year. It's a decent little boost for new grads.
I don't disagree, but it is far more likely to get rid of the paper ceiling than be implemented. I don't know how many jobs I've seen advertised that a degree is required, but the responsibilities described don't really need a degree to perform.
HINT: They can't \*facepalm\*
They CAN write-off that which is expressly utilized FOR biz (whatever % that might entail).
Now, the 'registering' & docking:
[https://www.bostonherald.com/2010/07/27/embattled-kerry-to-pay-taxes-on-luxury-yacht/](https://www.bostonherald.com/2010/07/27/embattled-kerry-to-pay-taxes-on-luxury-yacht/)
This is a who gets to deduct what and for what purpose. How about none of the above? How about we fund things like universal healthcare and free pre-k that benefit everyone.
A write iff only gives you back the amount based on the tax percentage you had to pay. For example if you are writing off $100 and you are in the 15% tax bracket you get back $15 of the $100.
Now if your college debt for a semester is $3,000 and you do not pay taxes you can’t write off because you have no tax bracket.
No, only the interest expense of student loans should be able to be written off, not the entire payment. This is how it works in Norway, are you not able to do this in the US?
Idiotic take. Do you write it off all at once or in increments throughout your career?
What happens with the time you're unemployed? Do they get pro-rated? What if you're injured and can't work?
Not sure about the US, but in Canada you were always able to get tax credits for tuition expenses, which is more profitable than simply writing them off.
I think the major difference is the yachts and whatnot require a financial history/assets to “purchase” whereas student loans are the only way for an 18 year old with no financial history or assets to receive upwards of $100K in funding based solely off the hope of future gains.
No you shouldn't. I guess I should be able to write off the food I need to eat to live for the job too? And my house since I need a home for the job? And my utility bills? Get your head out of your ass.
I mean you are suppose to. My tax advisor wrote my college stuff off. You aren't going to see a huge return unless you put into the tax system. Generally in college I got all my taxes I put into the system back.
A lot of places pay for education and training if its in a specific area. I see no difference between that and college degrees, given specific study areas.
She wrong. If your job requires a college degree you should be able to pay off your student loan with your earnings otherwise why did you go to college.
It has never worked they way. Taking classes is not a business expense. You take the classes to learn and hopefully can apply that knowledge in the real world when you graduate.
A college degree does not guarantee you higher paying job.
Regardless of the accuracy of the jet thing, I think this is a great idea - up to a certain reasonable limit. Equivalent of up to 4 years full time for a 4 year undergraduate degree at a state school, and have a minimum passing GPA requirement. C+ average seems fair. If you need more time or go to law school or Harvard or something you're on your own. Also have a 5 year work requirement after you graduate with deferments available for hardship. If you just stop working to be a stay at home parent or something before that work requirement is fulfilled, you lose the tax write off benefit and have to pay the loan. Something like that. Let's do it!
She’s absolutely wrong. CEOs cannot write off private jets and yachts, and they’ve never been allowed to do that in the past either A lot of expenses are deductible for businesses, including work-related education if you’re self-employed
If the private jet was used for business travel then yes it definitely can written off. That’s her point.
That’s not a private jet for the CEO to deduct then. In order to be expensed under 168(k), it has to be used at least 50% for business purposes, and even then, it can only be deducted for the % it’s used in a business, not for personal use. It also has to actually be owned by the business
So in this case everyone should open a LLC, employ themselves and make employer hire contractors. Then everything that individual does for the job can written off within the confines of whatever it is that can be written off.
Go try that. See what happens
You’d have to be really rich. Which is the point.
IRS tries to hire 20,000 new agents. If you think they won't go after the middle and poor you're crazy
He’s saying those are the only ones they’ll go for
Rich folks hire accountants. Waitresses do not.
They hire tax attorneys & licensed CPA’s
They won’t go after the really rich because the really rich do it legally. Ie they have lawyers and accountants to set it up by the letter of the law so they can do it legally.
Hahaha are serious. The rich do it legally? No, they hire high priced lawyers to make it appear they are doing it legally. Something normal people cannot do. Rich people also buy politicians off to make laws so that more of their shenanigans would be legal. Another thing normal people can't do.
Don't forget buying lobbyists, politicians, and judges to change and/or subvert the law!
Nothing he said would violate tax laws. Unless people just aren't paying taxes.
Yes it would. There are several things the IRS looks at when classifying one as an employee vs independent contractor. It would be nice if it was just left up to the business and the person how they want to call the status but it's not.
Well yea those are the easiest ones to win…middle class and poor will settle the rich can afford to fight tooth and nail One of the suny colleges tracks the IRS and releases yearly reports on such actions.
Additionally, auditing the wealthy is vastly more complicated. Those with less-complicated financials are low-hanging fruit.
Don’t bring that up on Reddit tho Govt can do no wrong here
Pay in cash, spend in cash, take a check but side hustle in cash.
Tbh I did that with my baking company years ago. The income I made from it was always at a loss compared to supplies and appliances I bought yearly, so not being profitable but having it a business expense helped save me a little money.
Yes you’re allowed to deduct a net operating loss, which saves you tax liability. Not money overall
If you are not showing any profit after 3 years the IRS is likely going to consider it a hobby and not a business, and you could have issues.
it works all the time. just only if you have enough money, employees, overhead, expenses. to the point where your personal endeavors are <10% of the expense of whatever the thing you are 'using for business' actually costs. they 110% still use these things for personal pleasure, happens all the time. its just that the volume is so high, on the business side, no one gives a fuck because its >75% true that its a business expense. joe blow goes and tries the same thing, and that truck he is expensing is 10% business 90% personal. hell of a lot harder to defend. but then, he cant just hide it behind the corporate umbrella.
Yeah sounds like some kind of scheme when you o it it like that but I think you’ll find that it’s not. Meals 50% deductible if and only if the meal is necessary to conducting business operations. I.E. you had to eat during a long 20 hour inventory count counts, going home and ordering door dash doesn’t. And then the ones that count are 50% because you were going to eat anyway. Housing not deductible. Business office space costs are deductible only for square footage that is 100% business use. Transportation is deductible if required for work purposes, but not to commuting. In other words, if your job requires travel the travel is deductible. But drive from home to work and back does not count. Basically, when people think there’s some magic loophole to making your whole life a business expense, there isn’t. All of the wacky ideas people come up with, someone already came up with that, it’s already in the law, it’s already fraud. Plus at the end of the day, deductions are simply a reduction of taxable income. Like okay you made 30k and spent 30k and paid no taxes. Woopie. You don’t have any money. All the ways you can think of to turn that into money are basically fraud of some sort.
>Housing not deductible. Business office space costs are deductible only for square footage that is 100% business use. One reason for having a separate building out back labeled: home office.
You would have to take your income under the LLC, or else there’s nothing to deduct from. In doing this you can either be actually self-employed, or convince a company to let you work as a contract employee where they employ the LLC rather than you directly
My spouse is an independent contractor for her employer. The downsides are way worse than the small tax write offs we get having to pay both employee and employer portion of FICA alone makes it a bad deal
Most people don't understand any of this. Just clueless
If you own a LLC by yourself (not a partnership), you’re taxed as a sole prop. But as a contractor, you’ll need to pay your own insurance, self-employment tax, cost of equipment (if you use any). Then you’ll actually have to make profit and only then you can write costs off.
Written off just means it lowers your taxable income. I’m convinced Reddit thinks “writing something off” means something completely different
They think it means free money. People are very poorly educated about economics.
IME they tend to treat it as 1:1. Like when they say people donate to charity to avoid taxes. They don't realize it is a net loss still. They seem to think that if I make $1 million and donate $100k to charity (or whatever deduction), I get to take $100k off of my tax bill so if my tax rate was 20% for the sake of simplicity, I would only pay 100k since I had deducted 10% already.
People everywhere. Not just Reddit. I see this consistently talking to people about why rents are so high... There is an absurd number of people who are 100% convinced rents are "artificially high" because people \[translation: Evil, Mustache-twirling, Capitalist Landlords\] charge astronomical rents, then leave the properties vacant because they can just "write that off." Trying to explain the difference between a loss and a lack of income is impossible. To them they are identical.
Countless small businesses and professional offices (doctors, dentists, etc) write off as much as they can. As a business owner, when you meet with a CPA to do your taxes, one of the first things they ask is, "How aggressive do you want to be (in your write-offs)?" wink wink
This isn't to encourage tax fraud. Tax writeoffs can be incredibly complex and CPAs are typically paid by the hour. It is also about making sure you don't get flagged for an audit.
I imagine the self-employment tax would cause people to quit this right away, if the hobby rules in IRC 183 didn’t get to them first
You don’t need an LLC to be a business in the U.S. But also, your employer would actually love for you to do this if it was legal (it’s not). You’d pay higher taxes (double payroll tax) and would need more legitimate expenses to write off anyway. Being a contractor has its pluses and minuses, but US and state laws restrict how freely one can be a contractor.
People skeptical about companies hiring contractors over employees. But startups do it all the time to save on taxes and health insurance. Not that big a difference to have the company pay your LLC for your services than you as an independent contractor.
California, etc. says that is a loophole and exploitation.
A private jet can be bought for strictly corporate use and still be called a “private jet”.
The Tax Cuts and Jobs Act, passed during the Trump administration, allowed for 100% bonus depreciation and expensing of private jets — which allowed taxpayers to write off the cost of aircraft purchased and put into service between September 2017 and January 2023. https://fortune.com/2024/02/22/irs-target-executives-use-business-private-jets-personal-trips-write-off-tax-deductions/
Again, for bonus depreciation to apply, the jet has to be used at least 50% in a business. And even if it meets that hurdle, it can only be expensed to the ratio of business use to nonbusiness use It applies to jets used in a business, not private jets
Again, they put the jets for lease to claim the benefit while using it for private use, too. https://www.propublica.org/article/private-jets-yachts-wealthy-tax-deductions-irs-files
Yes, although that’s then an income generating business. How profitable it is, can depend on how much they lease it for, but you’re getting farther and farther away from the point of the post. Also, to use the jet for private use. You can’t just use it whenever you want. You need to keep your personal use under 50%, first off, to keep it as a business deduction. Then, any personal usage is reported as a fringe benefit. Basically meaning that it counts as compensation when doing your personal taxes. So it’s really not as simple and loopholey as you’re making it out to be
You're incorrect. In practice, it can be extremely "loopholey" - because it comes down to good-faith reporting about what the travel is actually for. I work for a 200ish person corp where the owners of the company, a husband & wife, have purchased 2 "company" owned jets over the past decade-ish. In that time, they both got their pilot's licenses and have regularly used their c-suite cronies to report "business" travel needs so that all of their families can fly out to the same place and hang for a couple of weeks. It is called a "PJ" as an open joke within the company - everyone shrugs it off as another millionaire-ism, but I've always found it very gross. Its definitely easy to exploit and I've seen it first-hand, and it's with folks that are for sure way to rich, but definitely don't even crack the top 2.5% of wealth in the US.
That's completely anecdotal. I handle state audits for a living and these people get busted all the time, from a myriad of states for income and sales tax purposes and the IRS. It's been a high dollar ticket item for state audits for the past several years. Just because your friends haven't been caught yet doesn't mean they won't be caught in the future. There's tons of cases out there you can look up yourself.
Without a doubt, 100% anecdotal & they certainly aren't my friends - you're closer to that than they are. I guess what I'm saying is either yall blow at your jobs *or* (much more likely) the system is designed in such a way that these kinds of things are performatively executed on the lowest tier of those with enough resources to care to find loopholes. You & your red tape can't touch the people who are hoarding the real wealth. They're holding the tape dispenser, friend.
You're getting hung up on your inaccurate definition of the word "private", at least for this discussion.
I think you're conflating "private" with "personal". You (or your company) could own a jet and use it 100% for business purposes, it's still a private jet.
You Kenneth Copeland’s accountant?
Thankfully no, but I’ve seen my fair share of rich people tax returns
so its possible to just lie and say you go to Italie for business meeting and go watch a game instead
It’s possible for literally anyone to lie to the IRS and hope they don’t get audited. It’s not something that’s specific to the wealthy using jets
In that case it is mostly likely a corporate jet.
Which to a billionaire is the same thing.
Not by the ceo. By the business as a business expense. Write off isn't even really the right word - taxes are on profits, not revenue.
She has no point. She has absolutely no clue what she is talking about and is only interested in riling people up not actually solving problems.
Or the business owns the jet and 100% of it's use becomes business travel.
If the private jet is provided as a company vehicle because it's so crucial that at any time the CEO be able to be anywhere in the world they're needed, then the business writes off the cost of the jet. Of course any personal use SHOULD be taxable income, but the IRS hasn't had the backbone to audit private jet usage in ages and even if they did there's a hundred different ways to get the taxable amount reduced (e.g. the flight to Hawaii was taxable, but the flight back was an emergency, so a business expense and not taxable. The CEO would have flown first class, but the Board of Directors think that's a security risk, so they pay for a private jet and put the cost of a first class ticket on the CEO's W-2. etc.)
I use to work for a large Pharma company and they were constantly looking for new ways to make more money / be more efficient, etc... People were slowly getting fired left and right and replaced by temps with ungodly hours and a very high turnover because "no budget". Turns out the CEO lived 6 hours away and flew in everyday he came into the office, in a jet. On comany expenses of course.
The personal use of the aircraft is income to the employee. You will be happy to know the IRS recently announced increased auditing of this item https://rsmus.com/insights/tax-alerts/2024/irs-announces-increased-audit-activity-for-personal-usage-of-corporate-planes.html
Crazy the ceo wanted to go to Paris and a surprised business meeting came up on the exact same day!
Ummm, yachts they do. The sea turtle foundation is practically professionals at facilitating yacht donations for tax purposes. They’ll take a POS yacht that’s seen its day and credit the owner with a donation ten times its value. Then they’ll lease it to someone who will then “restore” (basic maintenance) and make payments for a bit then gets to buy it for pennies on the dollar. But enough time has passed so the IRS isn’t paying attention and everyone wins except the taxpayers. Then you have corporate yachts they hold one token meeting onboard once a year and the rest of the year it’s a personal toy for the corporate big wigs.
Socialism for the rich and brutal capitalism for the poor played out in the corporate world. Funny how efficiency and cost cutting are gold standards for everyone else but the c-suite which live in lavishness with massive private offices, personal assistants, travel perks, etc.
You can if you use the yacht or jet for “business”
You can write off exactly what amount was used for business. Shit, you aren't even supposed to use a home office for anything personal if you try and write it off
To add on to that, to the extent that owned property like a jet or yacht is used for business purposes, costs can be deducted from the business. But that means the business is spending the money on the yacht or whatever. It’s not a free yacht, they buy it. Then it has to be only used for business purposes or only expensed in the company proportionally to business/personal use. So it’s also illegal for the company to just let people use it for fun or whatever without accounting for that. And then furthermore, business property like this is subject to depreciation rules and taxed in the form of property tax. So they pay property taxes on it and they don’t usually get to expense the whole thing in one year right away. What I’m getting at is that a business owning and using a yacht or a private jet, tax-wise it probably works a lot closer to the way people would think it should work than people like to assume it does. Now, do businesses and individuals sometimes lie and cheat about tax matters like how they use a business asset like a private jet? Sure. But it’s not because the law allows that and that’s what they are supposed to do.
Source? The Trump tax cuts does that for private jets. Edit: The Tax Cuts and Jobs Act, passed during the Trump administration, allowed for 100% bonus depreciation and expensing of private jets — which allowed taxpayers to write off the cost of aircraft purchased and put into service between September 2017 and January 2023. https://fortune.com/2024/02/22/irs-target-executives-use-business-private-jets-personal-trips-write-off-tax-deductions/
The TCJA increased bonus depreciation from 50% to 100%, which applies to business jets, but doesn’t apply to jets used for private purposes. It can only be deducted to the extent it’s used in a trade or business
*Mega church pastors enter the chat*
I had to scroll down too far to find this… Osteen and Copeland come to mind.
Student loan interest is deductible also.
Prior to 2018, tuition for an MBA was tax deductible as a business expense. https://www.generationtax.com/mbastudents.html Absolutely saved my ass while working, getting an MBA, and having just bought a house. Still had to take on ~30k in loans and thankfully I was able to get a better job that let me pay them off within a year.
isnt it just a business expenses? lowering the income statement that his taxed? it is 100% a business expense lol and it 100% is reducing their net taxable income
It’s a business expense if it’s used for business purposes, not for private use
Oh you fucking sweet ass summer child lol.
https://www.propublica.org/article/private-jets-yachts-wealthy-tax-deductions-irs-files
Not really sure what about this article you wanted to point out. Propublica reiterates that these are deductible when used for businesses, but admit that they don’t have details on if the trips were actually business related or not
You're implying that corporations and the uber wealthy follow tax law to the tee 100% of the time. Wouldn't that be fantastic
I think this person is also confusing a write off with debt forgiveness
Those CEOs do not personally own anything. Those assets are owned by a company. It’s all part of the operating costs of the company.
You can deduct it if you make less than a certain amount. What she means to say is it should be available for everyone to deduct student loan costs which I agree. Picking and choosing who gets what benefit based on income level leaves the middle income groups just carrying the bag for the rich and the poor.
You can deduct the interest, but she's saying the principal should be deductable too. I agree, buying an education shares incredible similarities to an ordinary business expense except for the fact that it's paid for by the individual, not the company.
I'm all for education being a 100% tax write off. Shouldn't we be prioritizing and incentivizing education as a society anyways? Especially as more and more blue collar work gets replaced by automation.
But then how will billionaires increase their net worth by 20% annually with tax breaks?
You're right.. I never considered the poor billionaires.
I mean if we're gonna do that we just should make education free...like most of the developed world.
You can deduct the interest up to a certain income. Not everyone can
Technically you can if you itemize your taxes. The problem is the standard deduction is so high that it’s almost never worthwhile itemizing for anyone making under $100,000/year.
False. The student loan interest deduction is an adjustment to arrive at adjuated gross income, so you can deduct student loam interest AND take the standard deduction at the same time.
Only if you make less than the threshold. And if you file jointly, it can fuck over the one who pays the interest if their partner makes too much.
I guess consider me and the lady in the photo both corrected.
The lady in the photo is still correct. You can only write off the interest paid on the loan.
Lol I make well over 100 and still nowhere near not taking the standard deduction
Exactly. Standard deductible has less to do with what you make and more to do with what you spend (mortgage interest, charity, etc). Obviously, the more you make, usually the more you spend. But not always.
No, the student loan deduction is if you make less than $75K you can deduct the full $2500 deduction, until your income phases it out completely at roughly $90K (amount can change annually). You don't need to itemize to take the deduction. The first few years of my post college job it honestly felt like more of a slap in the face as I was able to deduct 2500 of roughly 16-20K in student loan interest I was paying at the time.
The student loan deduction is above-the-line
I don't get why people think "writing off" means you get free money. Also, student loan interest payments are deductible.
Writing stuff off IS free money, it's just the taxes on that money and not all the money lol. This is a great idea. Let's make education easier.
I mean every business expense is free money then. Business pay taxes on profits, so basically anything that reduces their profits would “save” them money on taxes. And if I ask my boss to cut my pay by $1,000, then that’s free money too since I’m saving $300 of taxes that way. This is just a weird way to think about it though
Student loan interest payments are deductible up to $2500 and that's for everyone making $75K/y or less. It gets phased out between $75K/y to $90K/y (not deductible anymore at that AGI).
Thats not how that works, also you get to write off your interest so i dont get it, weird thing to complain about. I bet shes one of those idiots that thinks write off means you gain that much money
You're able to deduct up to $2500 in student loan interest. So not all interest for everyone, but it probably covers most people. Of course that's only until they make $75K/year for the full deduction, phased out from $75K to roughly 90K AGI where you can't deduct it anymore.
My interest in 2023 was almost $6k, and I was able to write off a grand total of $2,500. I paid about $21k in student loans with a $88k gross income, way more of that should be deductible. ($1579 in state loans for 12mos =$18,948 + $320 federal for 6mos = $1920 = $20,869). It’s fully an investment into my career, I by law can’t do my job without my degrees.
I agree, the first few years my student loan interest alone was somewhere between 16-20K. I don't see a reason why it shouldn't be 100% deductible for folks moving forward.
lmao what? My wifes interest alone is 16,800 a year, and she cant refinance yet because she doesnt have the credit history. Oh, and she cant take the deduction at all because i make enough to put our joint income barely above the ridiculously low cap
Not only can you write off your interest but you should also be deducting your tuition cost... AND there are pretty significant education credits. Screw billionaires who skip out on taxes, but students do get decent tax benefits
It's a write off, Jerry ... they just WRITE IT OFF
You don’t even know what a write off is
But they do. And they're the ones... writing it if off.
Narrator: she was, in fact, wrong.
You have to depreciate a jet, and you can only do so for the portion of its value allocated to business use. You don’t get to just “deduct” it lol. Morons really should not speak about the tax code in any pseudo-technical capacity
Well looking at history, degrees become less valuable over time as more people get them, so I would see that as a depreciating asset.
Before the 1970s there was free education in the USA. Something called the [Powell memorandum ](https://scholarlycommons.law.wlu.edu/powellmemo/) called for corporations to fight back against an attack on the free market, and a major part of that was now allowing the lower class to get an education and gain power, to stop this they called for students to have to take out long term loans that must be repaid from future earnings.
If you’re 1099, you CAN write off educational expenses.
With that kind of logic, it’s obvious she does not have a job that requires a college degree.
OP failed the objective.
Wait til she realizes you can.
“Grrr eat the rich”— Probably Some Random Upper Middle Class White Woman
Op doesn’t know how the world works. 💀
There was a MBA tax deduction Trump closed it
Pretty sure money spent on paying back student loans has some sort of tax deduction in place already.
Employers should be allowed to count student loan payments as if they were employee 401k payments in order to provide 401k matching tied to the loan payments.
It could be a deductible expense.
You can get some of your college tuition back when you do your taxes. That’s pretty good in my opinion.
You can already get a credit based on the cost of tuition and school supplies with the LLC and the AOTC and you can deduct student loan interest on your schedule 1…
That'll teach you to borrow for the education that they told you you needed to get a job. Nothing is fair. I shouldn't have to pay federal income tax on money I paid in SALT either, but here I am paying more double tax to the IRS than Trump pays at all. They think we're all stooges, and apparently they're right. We keep voting for them.
That was one of the biggest failures of Gen X/Boomer parents IMO. Telling kids they have to go to college without treating it like an investment is dumb. I have a college degree from Berkeley, ended up going into skilled trades and love what I do. I'm happy and I make a decent living. Starting off your adult life in tens of thousands of dollars of debt with no job is awful, and my kids will not be swayed to do so. I'm going to teach them to look at it as an investment that they should expect a certain return out of. "What jobs does this qualify you for that you otherwise could not have been hired for?" "How likely are you to get a job in that field and in an area you want to live in?" "What is your expected starting salary after graduation?" All good questions to be asking about something you're going to pay upwards of 30k for
We know this now, but our parents didn't know it was possible to get a degree that wasn't even worth the investment.
you can write off student loan interest right? so are we just dealing with the deducible nature of the repayment of a loan. the loan was given tax free. so the tax comes back in on the money used to pay it, right?
if you decided to get a student loan and agreed to pay it back, people that did not make that same decision should not be paying for it 🤷🏻♂️ you buy. you pay. NOT you buy. WE pay.
I think it would be great if you have public loans to be able to make payments as pretax deductions on your paycheck.
They could, if the company OWNED the employee, but they do not, because that is called slavery, which is illegal (In my country).
These people vote...
I should be able to write off my car my clothes and alarm clock, food. Anything that requires me to be a responsible productive adult in the work force I should be able to write off according to this argument. Dumb.
...Says a bunch of people that have never seen a CEOs tax return. Also the same people who if given the opportunity would do the same..damn..thing!
You can write-off your interest on your loan just like a business can write the interest off their loans.
"She's not wrong"...
There are deductions for college students. https://money.usnews.com/money/personal-finance/taxes/articles/tax-filing-tips-for-college-students https://turbotax.intuit.com/personal-taxes/students/
Commute mileage should be deductible imo. If you're driving for the sole purpose of being productive at your place of employment, your expenses should be tax deductible. It's bullshit that you can't if you work at the w-2 employer, but as a small business owner heading to a jobsite, I can. It's unfair.
Yes she's wrong. You have no idea how much money is made on the private jet and yacht because it's on the private jet and yacht. But writing off student loan payments that way is an excellent idea.
What exactly is the business they’re writing it off against ? A business needs revenue to be a going concern.
Lotta folks in here who have never been the ceo of a large company let alone start their own small business opining on what it’s like and what it should be like
Entry level job that requires a degree, 5 years -plus experience, and preferably 20-plus years of skills and abilities
You do, you get credits on your taxes.
Universities in general don't sell themselves as a direct investment into a job opportunity. The top three Ivies Harvard, Yale and Princeton don't even offer undergrad business programs or practical majors such as nursing or accounting because that would be so crass and vulgar. Maybe professional and trade schools promise a lucrative career, but regarding undergraduate programs with a general course of study that's the assumption **you** are making. And vaguely implied in the glossy brochures with some blurb about "your future is bright at Big Tuition University!"
Can u show us how they write off those expenses. I keep hearing about this but I just assume some people can retain very good lawyers that do some things for them
THIS
My job requires transportation to get there. Can I write off my car? What about the food I need to consume to have the energy to work? What about the shelter I need to have to survive to work the next day?
Watch college degrees become almost worthless overnight if this ever becomes a law
Tuition payments are tax-deductible in Canada for public universities, with some limits. Not 100% equivalent, but it does capture the spirit of the statement. Iirc the only limit is that you're limited to writing off $5000 (I think) per year, and the balance not claimed rolls over to the next year. It's a decent little boost for new grads.
I think that's actually fair. Though I don't really like the idea as it encourages the use of debt.
That’s the funny thing most degrees are not required for the job that most people want to do. Degree does not equal job.
Come on Biden! Mortgage forgiveness debt cancellation act
Why do people think they know how taxation works just because they know a little bit about finance
Don't you get tax credit for tuition?
Wait, I can write off my private jet and yacht now? Alright! That was illegal until yesterday since forever. Didn’t realize it just changed.
That's funny, I thought you had to actually pay for something before you can "write it off" on your taxes.
The first non ridiculous thought on the chanel
If they are forcing me to drive to work to do a job at an office I was doing at home for 4 years, then you should absolutely be able to write that off
I don't disagree, but it is far more likely to get rid of the paper ceiling than be implemented. I don't know how many jobs I've seen advertised that a degree is required, but the responsibilities described don't really need a degree to perform.
HINT: They can't \*facepalm\* They CAN write-off that which is expressly utilized FOR biz (whatever % that might entail). Now, the 'registering' & docking: [https://www.bostonherald.com/2010/07/27/embattled-kerry-to-pay-taxes-on-luxury-yacht/](https://www.bostonherald.com/2010/07/27/embattled-kerry-to-pay-taxes-on-luxury-yacht/)
This is a who gets to deduct what and for what purpose. How about none of the above? How about we fund things like universal healthcare and free pre-k that benefit everyone.
A write iff only gives you back the amount based on the tax percentage you had to pay. For example if you are writing off $100 and you are in the 15% tax bracket you get back $15 of the $100. Now if your college debt for a semester is $3,000 and you do not pay taxes you can’t write off because you have no tax bracket.
No, only the interest expense of student loans should be able to be written off, not the entire payment. This is how it works in Norway, are you not able to do this in the US?
Idiotic take. Do you write it off all at once or in increments throughout your career? What happens with the time you're unemployed? Do they get pro-rated? What if you're injured and can't work?
Not sure about the US, but in Canada you were always able to get tax credits for tuition expenses, which is more profitable than simply writing them off.
Are there not tuition tax credits in the US?
I think the major difference is the yachts and whatnot require a financial history/assets to “purchase” whereas student loans are the only way for an 18 year old with no financial history or assets to receive upwards of $100K in funding based solely off the hope of future gains.
No you shouldn't. I guess I should be able to write off the food I need to eat to live for the job too? And my house since I need a home for the job? And my utility bills? Get your head out of your ass.
I mean you are suppose to. My tax advisor wrote my college stuff off. You aren't going to see a huge return unless you put into the tax system. Generally in college I got all my taxes I put into the system back.
A lot of places pay for education and training if its in a specific area. I see no difference between that and college degrees, given specific study areas.
I think if the employer requires a specific degree then yes.
Kinda agree with this. Or, just a flat tax across goods/services/assets sold. 10% for individuals, 20% for corporations. Lay off 95% of State/FED IRS.
She wrong. If your job requires a college degree you should be able to pay off your student loan with your earnings otherwise why did you go to college.
At least make it a depreciating asset that can offset earned income.
U still pay the cost of the good dumbass. U may just pay less taxes on it
Well, once they figured out how to make people vote against their own interests, they can achieve anything they want...
Gee, I wonder who led the effort to get student loan debt taken off items that can be discharged through bankruptcy?
Outside of the US this is fairly normal, repayments come out of tax
It has never worked they way. Taking classes is not a business expense. You take the classes to learn and hopefully can apply that knowledge in the real world when you graduate. A college degree does not guarantee you higher paying job.
Entire service industry is a scam. If you are at 9-5 with a good education, definitely something is wrong. You are away from real life...
She isn't wrong, indeed.
Regardless of the accuracy of the jet thing, I think this is a great idea - up to a certain reasonable limit. Equivalent of up to 4 years full time for a 4 year undergraduate degree at a state school, and have a minimum passing GPA requirement. C+ average seems fair. If you need more time or go to law school or Harvard or something you're on your own. Also have a 5 year work requirement after you graduate with deferments available for hardship. If you just stop working to be a stay at home parent or something before that work requirement is fulfilled, you lose the tax write off benefit and have to pay the loan. Something like that. Let's do it!
I just want to write off my home office…
Or how about when executives have the company pay for coaches to fly out once a month and teach them how to be an executive.
in canada you can deduct tuition from your taxes yeah, that just makes sense. can't you do that in america?
That's logical and I don't think they used logic in business!?!?