Smart Strategies to Minimize Your Tax Burden on $70,000 Income

Here's a quick way to avoid paying taxes on 47% of your income this year. Let's break it down with a few strategic steps:

Assumed Income: We're starting with an assumption of $70,000 in annual income.
Traditional IRA Contribution: Contribute $7,000 into a traditional IRA. This will reduce our taxable income to $63,000.
401k Contribution: Next, we contribute another $7,000 into a 401k. This contribution is pre-tax, bringing our taxable income down to $56,000.
Health Savings Account: Additionally, we can put $4,000 into a health savings account, further deducting that contribution and resulting in a taxable income of $52,000.
Standard Deduction: But we’re not done! By taking advantage of the single filer standard deduction of $15,000, we can report our income to the government as $37,000. This strategy allows us to shelter all of our income from the 22% tax bracket, allowing us to pay only 12% on most of it.

If we follow these steps wisely, we could potentially become multi-millionaires in 35 years, without having to worry about healthcare expenses in the future.

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