Financial Literacy: Budgeting to Capital Gains Tax

• The 50/30/20 budget: https://docs.google.com/spreadsheets/d/1w6GAYupcMDNYN9g0bbKDGiC7N5Cxc_H6Q6440h4Bd1U/edit#gid=0

Cost of Living Calculators

• https://www.payscale.com/cost-of-living-calculator

• https://smartasset.com/mortgage/cost-of-living-calculator

• https://www.nerdwallet.com/cost-of-living-calculator

Tax Calculators

• https://smartasset.com/taxes

Budget Templates

• With Google Sheets

  • Easy Version (most aesthetically pleasing): https://docs.google.com/spreadsheets/d/1K_yGiihCzg1ukGEafujZyG8v_2HFRQ653TRGdnEUkiQ/edit?usp=sharing

  • Version 2 (my favorite in terms of practicality): https://docs.google.com/spreadsheets/d/13Vt6YOBMuBtez7PPbnPqg9V6zSz-Elc0oKsg7epIPR4/edit?usp=sharing

  • Version 3 (for tracking everything): https://docs.google.com/spreadsheets/d/1c14DjNgZE9NPmPaHsQWaU2rz0AteROeeBQcE_-HLT2Q/edit?usp=sharing

• Automation

  • https://www.personalcapital.com/ OR mint.com

    • website and mobile app

More Sources/Optional Reading

• https://www.nerdwallet.com/article/finance/nerdwallet-budget-calculator

• https://wellkeptwallet.com/recommended-budget-percentages/

• https://www.pcworld.com/article/3239266/personal-capital-software-review.html

• https://www.i1.creditdonkey.com/image/1/1200c/mint-budgeting.png

• Phone Plans

  • Hello Mobile: http://hellomobile.com/

  • Q Link Wireless: https://qlinkwireless.com/signup/g-6-717/?A=209&B=209&SubAffiliateID=8673213001&ag=88729269324&dv1=&dv2=&lo=9013758

  • Click here for more information on low income phone plans: https://www.thefrugalgene.com/low-income-phones/?utm_source=rss&utm_medium=rss&utm_campaign=low-income-phones

  • Mintmobile $15 credit referral link: http://fbuy.me/qUur7

    • 35 gb throttle, 5 gb on hotspot

  • Dial *#06#

  • Bring your own phone and number

  • Make sure unlocked

    • Call or google “network unlock”

    • att.com/unlock/

  • IMEI # blacklist lookup: https://www.imei.info/

  • More plans: https://www.whistleout.com/CellPhones or https://www.redpocket.com/plans/ebay

• U.S. Bank® Cash+ Credit Card: https://www.usbank.com/credit-cards/cash-plus-visa-signature-credit-card.html?ecid=PS_22264&ds_e=GOOGLE&ds_c=Cash%2B_US+Bank+Cash%2B+CC_Brand_Prospect_ALL_ALL_NAT_OA&ds_a=Cash%2B_US+Bank+Cash%2B+CC_Brand_Prospect_ALL_ALL_NAT&ds_k=u.s.+bank+cash%2B+credit+card&ds_kids=p35461514113&c3apidt=RPS-p35461514113&gclsrc=ds&gclsrc=ds

• Aspiration Plus: $15/month or 150/yr (12.5/month) or just sign up for their free plan. Either way: $50 sign up bonus when you join Aspiration bank and spend $250 with their debit card (Venmo counts)

  • Plus plan offers

    • 1% APY interest

    • 10% cash back on Arcadia

• Compare US Bank VS Arcadia/Aspiration here: https://docs.google.com/spreadsheets/d/1_uWv-A5gqqvbpdkCmtXzx6U6w3g6DRmX/edit#gid=320139252

More Sources/Optional Reading

• https://www.reddit.com/r/NoContract/comments/bjbeh9/the_catch_with_hello_mobile_25_sprint_unlimited/

• https://coveragecritic.com/2020/09/09/mint-mobiles-unlimited-plan-has-limits/

• https://www.bankrate.com/insurance/car/savings/when-i-turn-25/

• https://riskology.co/negotiate-your-bills/

• Low income wifi

  • $20/month Verizon version: https://www.verizon.com/info/low-income-internet/

  • $10/month AT&T: https://www.att.com/internet/access/

• Car and Home Insurance

  • Easily compare plans here: https://www.quoteble.com/

    • After finding a plan, you may want to open in a separate browser a direct link rather than an affiliate link to the insurance company; I also put in a fake email and phone until I know I really want to purchase this insurance to avoid ads.

    • Discounts can include having car insurance before, being in the military, good grade discount, driver’s ed, good credit score, …

  • Auto only here: https://insurify.com/

  • VIN # lookup for car identification and trim

    • https://www.faxvin.com/vin-decoder/

    • https://vincheck.info/check/vehicle-specification.php

• https://go.asktrim.com

  • Fee: 33% of any savings

More Sources/Optional Reading

• https://www.bankrate.com/insurance/car/savings/when-i-turn-25/

• https://riskology.co/negotiate-your-bills/

• ACA/Healthcare.gov/Obamacare

  • See eligibility: https://www.healthcare.gov/lower-costs

  • Great overview on how to compare plans and healthcare jargon here: https://www.healthcare.gov/choose-a-plan/comparing-plans/

  • See cost of different plans here: https://www.daveramsey.com/blog/compare-insurance-plans

  • More info on STM and Associations here: https://www.ehealthinsurance.com/resources/individual-and-family/self-employed-health-insurance

• Self-employed or if employer does not offer health insurance info here: https://www.thebalance.com/membership-organizations-and-health-insurance-2645660

• HSA plan information from the IRS such as eligible HSA withdrawals here: https://www.irs.gov/publications/p969

• See Cheaper Alternative to Health Insurance in next lesson for more tips

More Sources/Optional Reading

• https://www.healthcare.gov/glossary/premium-tax-credit/

• https://www.daveramsey.com/blog/hsa-contribution-limits#:~:text=In%202021%2C%20the%20maximum%20annual,2021%2C%20that%20number%20is%20%247%2C200.

• https://www.thebalance.com/the-key-benefits-of-health-savings-accounts-3192991

• https://olui2.fs.ml.com/Publish/Content/application/pdf/GWMOL/ContributionLimitsTaxReferenceGuide.pdf

• https://www.merrilledge.com/ask/investing/open-health-savings-account-on-my-own#:~:text=Yes%2C%20you%20can%20open%20a,deductible%20health%20plan%20(HDHP).&text=And%20withdrawals%20for%20qualified%20health%20care%20payments%20remain%20tax%2Dfree.

• https://blog.healthequity.com/the-cares-act-just-made-your-hsa-more-powerful

• https://blog.bernieportal.com/cares-act-coronavirus-changes-hsa-fsa-hra

• https://www.daveramsey.com/blog/hsa-contribution-limits#:~:text=In%202021%2C%20the%20maximum%20annual,2021%2C%20that%20number%20is%20%247%2C200.

• https://www.nbsbenefits.com/hsa-frequently-asked-questions/#:~:text=Most%20employers%20offer%20a%20payroll,on%20a%20pre%2Dtax%20basis.&text=You%20can%20also%20contribute%20to,Money%20comes%20out%20tax%2Dfree.

• https://gamba.cogsima2018.org/hra-hsa-fsa-comparison-chart-2019/

• https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/areemployercontributionstoehsahsaconsideredtaxableincometothee.aspx#:~:text=Generally%2C%20contributions%20made%20by%20an,Social%20Security%20or%20Medicare%20taxes.&text=Contributions%20made%20in%20excess%20of,taxable%20income%20to%20the%20employee.

• Check FDIC insurance here: https://banks.data.fdic.gov/bankfind-suite/bankfind

  • Some banks may use a partner bank to insure deposits.

• Federal Reserve Bank of St. Louis Fed rate: https://fred.stlouisfed.org/series/FEDFUNDS

• Brick and mortar + Online Bank

  • https://www.hmbradley.com/ 3% interest on first $100,000 if save at least 20% of deposits

  • Credit card adds 0.50% APY.

• Other (national vs regional): https://www.doctorofcredit.com/high-interest-savings-to-get/

• First Financial Bank https://www.ffb1.com/personal/personal-checking/compare-accounts.html

  • Open to Mississippi and Arkansas residents

• Referral link: http://refer.discover.com/s/rrsfjk Become a Discover Cardmember and get a $50 Statement Credit when you make your first purchase within three months. No annual fee and easy to apply for beginners with no credit scores.

  1. If you prefer the Student Cash Back version, you can use my referral link to get the Discover it® Student Chrome’s $50 bonus and then call on phone to easily switch that card to Student Cash back after you get your $50 bonus credited to your account...switching cards like this will not affect your credit score. Takes about 6 months to get your first credit score.

• Personal Credit Card Comparison: https://docs.google.com/spreadsheets/d/1_uWv-A5gqqvbpdkCmtXzx6U6w3g6DRmX/edit#gid=378067739

  1. Compare Business Credit Cards: https://www.comparecards.com/business/best?&source=adwords&campaign=279474168&grp=17963009928&content=479760194154&medium=search&kw=best%20business%20credit%20cards&kwid=kwd-24578363&kmt=e&ext=&pla=&tar=&pos=&acqs=prospecting&net=g&dev=c&geol=9013758&intl=&c3=&bdst=cpc&esourceid=6272126&mtaid=80411&ad_group_id=17963009928&ad_id=479760194154&keyword=best%20business%20credit%20cards&keyword_id=kwd-24578363&keyword_match_type=e&ad_extension_id=&placement_name=&ad_position=&network_name=g&experiment_id=&campaign_id=279474168&gclsrc=ds&sessionid=a5fb5194-755b-4aee-96c9-2a0109ec441e&mta=1

• Google “credit card churning” if interested in maximizing rewards and sign up bonuses

• Free credit monitoring and taxes: Creditkarma.com

  1. https://www.annualcreditreport.com

• Freeze credit: https://www.nerdwallet.com/article/finance/how-to-freeze-credit

• FICO score 8 was introduced in 2009 and is the eighth version of the FICO credit score, but there are other less used versions: https://www.myfico.com/credit-education/credit-scores/fico-score-versions

  1. https://www.wsj.com/articles/want-a-higher-credit-score-soon-your-cash-could-help-1540123200

More Sources/Optional Reading

• https://www.royalfixmycredit.com/services/

• https://www.mybanktracker.com/credit-cards/credit-score/how-credit-score-calculated-33877

• https://www.creditcardinsider.com/learn/how-paying-a-credit-card-works/

• Google “credit card churning” if interested in maximizing rewards and sign up bonuses

• Free credit monitoring and taxes: Creditkarma.com

  1. https://www.annualcreditreport.com

• Freeze credit: https://www.nerdwallet.com/article/finance/how-to-freeze-credit

• FICO score 8 was introduced in 2009 and is the eighth version of the FICO credit score, but there are other less used versions: https://www.myfico.com/credit-education/credit-scores/fico-score-versions

  1. https://www.wsj.com/articles/want-a-higher-credit-score-soon-your-cash-could-help-1540123200

More Sources/Optional Reading

• https://www.royalfixmycredit.com/services/

• https://www.mybanktracker.com/credit-cards/credit-score/how-credit-score-calculated-33877

• https://www.creditcardinsider.com/learn/how-paying-a-credit-card-works/

• Debt Repayment Calculator: https://docs.google.com/spreadsheets/d/1NUG134pA06fBvpfOv9Y1wS61E9KLDBFP/edit#gid=1046708927

• Version 2 with estimated times: https://docs.google.com/spreadsheets/d/1WMOi1fl8HHCR3je9YAGbXZ6CjowXN8uDuDfY9W6XUms/edit#gid=0

  • Limited to first 10 rows

• How to negotiate a lower credit card interest rate by squawkfox: https://www.squawkfox.com/negotiate-credit-cards/

• Annualcreditreport.com

• Tips on paying debt collection agencies: https://www.creditkarma.com/advice/i/how-to-pay-debt-collection-agency

• Getting Debt Collectors to Remove Negative Information From Your Credit Report: https://www.nolo.com/legal-encyclopedia/getting-debt-collectors-remove-negative-information-from-your-credit-report.html

• Should you pay an old debt collection (statute of limitations)? https://www.thebalance.com/should-you-pay-an-old-collection-960595#:~:text=If%20the%20debt%20is%20still,card%20or%20loan%20approval%20odds.&text=8%EF%BB%BF%20On%20the%20other,and%20let%20it%20fall%20off.

• Balance Transfer Calculator: https://docs.google.com/spreadsheets/u/4/d/1_uWv-A5gqqvbpdkCmtXzx6U6w3g6DRmX/edit#gid=1338875981

More Sources/Optional Reading

• https://www.creditkarma.com/advice/i/how-to-pay-debt-collection-agency

• https://www.nolo.com/legal-encyclopedia/getting-debt-collectors-remove-negative-information-from-your-credit-report.html

• https://www.thebalance.com/should-you-pay-an-old-collection-960595#:~:text=If%20the%20debt%20is%20still,card%20or%20loan%20approval%20odds.&text=8%EF%BB%BF%20On%20the%20other,and%20let%20it%20fall%20off.

• https://www.nerdwallet.com/article/credit-cards/balance-transfer-3

• https://www.experian.com/blogs/ask-experian/how-long-does-a-credit-card-balance-transfer-take/#:~:text=A%20credit%20card%20balance%20transfer%20typically%20takes%20about%20five%20to,days%20to%20complete%20the%20transaction.

• Write down your goals: Template (download as excel): https://docs.google.com/spreadsheets/u/4/d/1NZSUWZcvmZgEC-DiGMYzFz2KrWhpymgN/edit?usp=drive_web&ouid=106126136376238695250&rtpof=true

• 2021 Contribution Limits and Tax Reference Guide here → Google for other years “2022 Contribution…merrill”: https://olui2.fs.ml.com/Publish/Content/application/pdf/GWMOL/ContributionLimitsTaxReferenceGuide.pdf

  • Taxable withdrawals from retirement account are not investment income but rather taxed at ordinary income rates (sad)

• Backdoor IRA steps: Traditional to Roth: https://www.investopedia.com/how-to-set-up-a-backdoor-roth-ira-4584775

  • Be wary of conversion fees

• Good brokerage for opening retirement accounts: fidelity.com

• Guide to different types of retirement funds here: https://money.usnews.com/money/retirement/articles/retirement-accounts-you-should-consider

Sources

• IRS Rules on IRA Deduction Limits https://www.irs.gov/retirement-plans/ira-deduction-limits

• What Is a Good 401(k) Match?

  • About 71% of companies with matching contributions contribute 50 cents for every dollar employees contribute up to 6% of their pay. https://www.investopedia.com/articles/personal-finance/120315/what-good-401k-match.asp

• According to the Bureau of Labor Statistics, the typical or average 401K match nets out to 3.5% in 2010.

  • If you need cash, you can borrow from your 401k or more restrictively, from an IRA.

  • Ask employer if they offer a matching 401k and make sure to pay attention to the vesting period as in how long you have to stay with the employer before receiving the funds. If you leave/quit before the vesting period, you may not receive all the matching contributions from your employer.

• Do you offer a 401k, retirement fund, Roth 401k, or the like with matching employer contributions? If so, when could I sign up? What is the minimum investment per month? How much freedom do I have in choosing the specific investments in terms of index funds, stocks, and bonds? What are the fees, if any?

• Read the paperwork terms if they offer matching employer contributions

• Early withdrawal exceptions and penalties here: https://money.usnews.com/money/retirement/articles/retirement-accounts-you-should-consider

  • Tip: Just don’t withdraw early

  • 401k vs roth ira here: https://www.bankrate.com/investing/ira/roth-ira-vs-roth-401k/

• Just google “basics of roth ira” OR “basic of roth 401k” …

• https://20somethingfinance.com/401k-match/#:~:text=According%20to%20the%20Bureau%20of,with%20401K%20plans%20match%200%25

• Check Social Security here: http://ssa.gov/

• Tax transcripts/returns here: https://www.irs.gov/individuals/get-transcript

• Medicare information here: https://wehelpsolvethepuzzle.com/medicare-enrollment/

  • Medicare is for those 65+ and disabled while Medicaid is for low-income.

• Update: Have a trust and a will with a pour-over clause

  • https://www.danalegalhelp.com/why-you-need-both-a-will-and-a-trust/

  • https://www.investopedia.com/terms/p/pour-overwill.asp

Sources

• https://wehelpsolvethepuzzle.com/medicare-enrollment/

• https://estate.findlaw.com/probate/probate-process-and-timeline.html#:~:text=A%20typical%20probate%20process%20will,for%20a%20typical%20probate%20process.

• http://www.encompasslawmn.com/will-vs-revocable-trust/

• https://www.investopedia.com/terms/s/stepupinbasis.asp

• https://smartasset.com/taxes/all-about-the-estate-tax#:~:text=For%20tax%20year%202017%2C%20the,now%20%2411.7%20million%20for%202021.

• Retirement/Savings Calculator V1 as shown in powerpoint: https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator

• Adjust monthly contributions: Calculator V2: https://www.daveramsey.com/smartvestor/investment-calculator

• Accounts for tax: Calculator V3: https://www.bankrate.com/calculators/retirement/investment-goal-calculator.aspx

• Goal Setting Steps to Retirement here from https://imgur.com/u0ocDRI

Sources

• https://www.valuepenguin.com/banking/average-savings-account-balance#median-savings-balance-by-age

Referral Codes

• https://share.robinhood.com/bailiz

  • Free stock using referral link

  • Stock market trading with free commissions

• https://a.webull.com/iq6MlHmZPQ5VTRLEQJ

  • Two free stocks: 1 for opening and 1 for depositing $100 or more

More Sources/Optional Reading

• https://www.pinterest.com/pin/68046644340883451/

• Simple Capital Gains Calculator -> Scroll down to 2020 Capital Gains Tax Calculator: https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates

  • See interest/yr calculator: https://smartasset.com/investing/investment-calculator

Sources

• https://www.financialsamurai.com/short-term-long-term-capital-gains-tax-rates-by-income-for-single-and-married-couples/

• https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates

Referral Codes

• https://share.robinhood.com/bailiz

  • Free stock using referral link

  • Stock market trading with free commissions

• https://a.webull.com/iq6MlHmZPQ5VTRLEQJ

  • Two free stocks: 1 for opening and 1 for depositing $100 or more

• Compare Portfolios Calculator (1985-Current): https://www.portfoliovisualizer.com/backtest-portfolio#analysisResults

  • Compare if better than VTI

Sources

• https://www.investopedia.com/terms/c/cagr.asp

• https://www.investopedia.com/terms/s/sortinoratio.asp#:~:text=What%20Is%20the%20Sortino%20Ratio,standard%20deviation%20of%20portfolio%20returns.

• 2.4 Investing Strategy: https://docs.google.com/spreadsheets/d/1UUHyRN7LjK67SbVINJnrrEi5WXk1h_KMt87JAktzvuI/edit#gid=0

  • We touched on crypto here, but more information can be found at Fundamental Secrets (disclaimer: I’m working for FS) and am making some great gains (>100% gains). Affiliate link to sign up for FS: https://www.thefundamentalsecrets.com/a/25848/dELo92sL

Sources

• https://investor.vanguard.com/etf/profile/VTI

• https://www.investopedia.com/ask/answers/061715/what-qqq-etf.asp

• https://investor.vanguard.com/etf/profile/VXUS

• Tax Extension: Form 4686: https://www.irs.gov/forms-pubs/about-form-4868

• Tax Terms: https://www.bankrate.com/finance/taxes/10-key-tax-terms-to-know-1.aspx

• S corp vs LLC Overview: https://fitsmallbusiness.com/llc-vs-s-corp-vs-c-corp/

  • Comparison Calculator: https://beforetax.co/s-corp-tax-calculator/

• Check the status of your tax refund here, usually refunds process within 21 days with direct deposit (on average: 7 to 14 days): https://www.irs.gov/refunds

Free/Cheap Tax filing

• Free federal and only $12.95 for state https://www.freetaxusa.com/freefile/

  • Google for promo codes: FREETAXUSA10 (for another 10% off), ROYCE25

• http://creditkarma.com/ is completely free if you live and work in the same state

• MS free state if under 36,000 https://www.dor.ms.gov/Individual/Pages/On-Line-Filing.aspx

• More free/cheap sites: https://slickdeals.net/article/list/best-online-tax-service/

  • https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free

• Portfolio Tracker/ Crypto Tax Software: https://koinly.io/?via=2EC4996A

  • Receive $20 off your first order. Both free and premium plans are available.

• Apply to Awesome Cryptocurrency Course: https://www.thefundamentalsecrets.com/a/25848/dELo92sL

Email financialfreedombaili@gmail.com constructive criticism.

• Please include in subject line: “FF Suggestion for XX”. For example: “FF General Suggestion” or “FF Suggestion For 1.2”.

Sources

• https://www.investopedia.com/terms/b/backupwithholding.asp#:~:text=Backup%20withholding%20is%20the%20method,taxpayer%20identification%20numbers%20(TIN).

• https://fitsmallbusiness.com/llc-vs-s-corp-vs-c-corp/

• https://www.legalzoom.com/articles/s-corp-vs-llc

• https://www.ictaxadvisors.com/business-tax-services/sole-proprietorship-s-corp/

• https://www.personalcapital.com/blog/whitepapers/guide-to-file-taxes/?utm_medium=Email&utm_source=ExactTarget&utm_campaign=&utm_content=CASH-HOUSE-TAX-GUIDE_2021

• Tracking expenses online with Quickbooks, Wave Accounting, …

  • Manual worksheet (I used the same expense categories as listed on Schedule C): https://docs.google.com/spreadsheets/d/1qC_JQmBWGIOAKofKGxwbD_m_onxay3MQykreVxH9I1Y/edit#gid=0

  • Advertising, Car & Truck Expenses, Commissions & Fees Paid, Contract Labor, Depreciation & Section 179, Insurance Rent…*

  • Other Expenses

  • Read more: How Depreciation Works: https://www.katehorrell.com/understanding-depreciation-recapture-taxes-on-rental-property/#:~:text=If%20you%20sell%20for%20more,12%25%20when%20you%20depreciated.)

*2021-2022: Restaurant business meals are 100% deductible (vs normal 50%)

• Belarus:

  • Mining and investing in cryptocurrencies

• Germany, Hong Kong...

  • No tax on long-term holdings (>1 year)

  • ≤600 euros for short term gains

    • Different for businesses

• El Salvador

  • BTC exempt from capital gains tax

Crypto IRAs

• iTrustCapital Cryptocurrency & Gold IRA

  • 1% per transaction.

  • $29.95 monthly service fee ($359.4/year)

• BITIRA

  • $50 setup fee, $195 annual account maintenance, 0.05% per month for secure offline storage, unclear trading fee

• ForUsAll Inc., a 401(k) provider

  • Teamed up with Coinbase in 2021

• Choice

  • 1% per transaction (+ up to 0.26% Kraken Pro fee).

  • No monthly fee (with Bitcoin in Motion Tier)

  • More info here: https://www.thewaystowealth.com/reviews/choice-ira-review-by-kingdom-trust/

• Cons with self-directed IRAs:

  • Higher fees (trading and account fees)

    • But only higher by about 1% for the most cost-effective plans

  • Traditional and Roth will save you the same amount of money unless you can max out your contribution limit and income tax rates stay the same or increase during withdrawal

  • Can’t stake/gain interest (4-12% lost)

Correction: **Depreciation Recapture Taxes capped at 25%: https://www.katehorrell.com/understanding-depreciation-recapture-taxes-on-rental-property/#:~:text=If%20you%20sell%20for%20more,12%25%20when%20you%20depreciated.)

Sources

• https://www.forbes.com/advisor/retirement/self-directed-ira/

• https://blog.myleadsystempro.com/cashflow-quadrant?id=apaige

• https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions

• https://koinly.io/cryptocurrency-taxes/

• https://www.investopedia.com/articles/investing/060815/how-rental-property-depreciation-works.asp#:~:text=By%20convention%2C%20most%20U.S.%20residential,depreciated%3B%20you%20cannot%20depreciate%20land.

• https://www.calculatorsoup.com/calculators/financial/depreciation-property-realestate.php

• https://www.gpo.gov/fdsys/pkg/USCODE-2011-title26/pdf/USCODE-2011-title26-subtitleA-chap1-subchapN-partIII-subpartD-sec933.pdf

• Review the Part 1 Reducing Taxes Permanently lesson to understand what a self-directed IRA is.

• $50 in BTC In Your Self Directed IRA*

  • Brave users will receive $50* in free bitcoin if you open & fund your account before 7/31/21 and deposit at least $100: https://www.retirewithchoice.com/bravebonus?utm_medium=brave&utm_source=push&utm_campaign=bonus&utm_content=choice

• If the promotion has ended, you can still make the https://www.retirewithchoice.com/ for a low fee self-directed IRA. Staking/interest/mining may be coming soon within the Choice IRA: https://www.choiceapp.io/compass

• IRA Conversions for Backdoor Roth IRAs cost $75/conversion. 1% trading fees, IRA conversion fees, and other fees are not considered contributions, so adding a credit card to pay for those fees may be beneficial to maximize gains (in payment options).

• Different tax treatment for Commonwealth of PR: https://www.gpo.gov/fdsys/pkg/USCODE-2011-title26/pdf/USCODE-2011-title26-subtitleA-chap1-subchapN-partIII-subpartD-sec933.pdf

• Super helpful FAQ: https://relocatepuertorico.com/faq/#1524401589569-8e9645f0-0911

• Is it worth it to move to PR? Calculator: https://docs.google.com/spreadsheets/d/1__solClqKUZWZJt6MHl7N6hJsEXhx6hIvcYRliORD7Y/edit#gid=0

• Short Term/W2 income vs LT Capital Gains Tax

  • https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates

  • https://www.nerdwallet.com/article/taxes/federal-income-tax-brackets

Individual Benefits

• 100% tax exemption on

  • Dividends

  • Interest

  • Short and long term gains

  • Crypto

• Within 10 years of establishing residency = taxed at US federal capital gains tax rate

  • https://relocatepuertorico.com/individual-resident-investor-tax-incentive-puerto-rico-for-individuals/

    • 0, 15, 20% to 37% until 2025 (after: 39.6%)

    • + 3.8% net investment income ($200,000 single MAGI)

• After 10 years but before January 1, 2036 = taxed at 5%

• Personal presence test (5 options): https://www.sovereignman.com/tax/how-you-can-move-to-puerto-rico-and-pay-almost-zero-tax-free-guide-16368/

  • IRS Form 8898

• Driver’s license: hour-long drug and alcohol course (maybe online)

  • Spanish-Google Translate Chrome Extension: https://chrome.google.com/webstore/detail/google-translate/aapbdbdomjkkjkaonfhkkikfgjllcleb?hl=en

Sources

• Downsides for PR residents from increased foreigners: https://time.com/5955629/puerto-rico-tax-haven-opposition/

• https://relocatepuertorico.com/guide-to-puerto-rico-the-export-services-tax-incentive-for-businesses/

• https://relocatepuertorico.com/

• https://relocatepuertorico.com/faq/#1524401589569-8e9645f0-0911

• https://www.taxlawsolutions.net/puerto-rico-tax-saving-strategy-html/act-60.html#:~:text=Act%20No

• https://relocatepuertorico.com/individual-resident-investor-tax-incentive-puerto-rico-for-individuals/

• https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates

• https://www.schwab.com/taxes/net-investment-income-taxes

• https://www.sovereignman.com/tax/how-you-can-move-to-puerto-rico-and-pay-almost-zero-tax-free-guide-16368/

Eligible Businesses

• Service-based business that exports outside PR

  • Research and development

  • Advertising and public relations

  • Consulting services

  • Call centers...

    • https://www.approvedforwarders.com/act-60-puerto-rico-business-tax-incentives/

• Is it worth it to move to PR? Calculator: https://docs.google.com/spreadsheets/d/1__solClqKUZWZJt6MHl7N6hJsEXhx6hIvcYRliORD7Y/edit#gid=0

• Apply at the Single Business Portal of the Office of Industrial Tax Exemption (OITE) for a degree

  • https://ogpe.pr.gov/freedom/?lang=en

• 4% corporate tax on income that is sourced from Puerto Rico by eligible businesses (instead of ~21%)

  • 100% tax exemption on distributions to shareholders

  • 0% for LLC in Florida (corporate tax rate: 5.5%): https://floridarevenue.com/taxes/taxesfees/Pages/corporate.aspx

• 50% tax exemption on municipal taxes

  • https://relocatepuertorico.com/guide-to-puerto-rico-the-export-services-tax-incentive-for-businesses/

• 15-year grant period, subject to renegotiation for another 15 years.

• Is it worth it to move to PR? Calculator: https://docs.google.com/spreadsheets/d/1__solClqKUZWZJt6MHl7N6hJsEXhx6hIvcYRliORD7Y/edit#gid=0

  • Compare Entities Taxation Calculator: https://beforetax.co/s-corp-tax-calculator/

• Not sponsored but found their information and services helpful:

  • Schedule a quick free call with PRelocate. Check out their helpful FAQ

    • https://relocatepuertorico.com/contact-us/

    • https://relocatepuertorico.com/faq/#1524401589569-8e9645f0-0911

Sources

• https://relocatepuertorico.com/

• https://relocatepuertorico.com/faq/#1524401589569-8e9645f0-0911

• https://www.taxlawsolutions.net/puerto-rico-tax-saving-strategy-html/act-60.html#:~:text=Act%20No.,in%20Puerto%20Rico%20more%20effective

• https://floridarevenue.com/taxes/taxesfees/Pages/corporate.aspx

• https://relocatepuertorico.com/guide-to-puerto-rico-the-export-services-tax-incentive-for-businesses/

• https://www.grantthornton.pr/globalassets/1.-member-firms/puerto-rico/insights/kevane-grant-thornton-puerto-rico-tax-and-incentives-guide-2020.pdf

• https://www.escapeartist.com/blog/need-transfer-pricing-study/#:~:text=Transfer%20pricing%20studies%20are%20expensive,actual%20risks%20of%20getting%20audited.

• https://octopusventures.com/insights/how-to-guides/getting-transfer-pricing-right%E2%80%8A-%E2%80%8Ahere-is-why/

• https://relocatepuertorico.com/guide-to-puerto-rico-the-export-services-tax-incentive-for-businesses/

• https://relocatepuertorico.com/webinar/

• https://relocatepuertorico.com/guide-to-puerto-rico-the-export-services-tax-incentive-for-businesses/

• https://www.eisneramper.com/puerto-rico-tax-0321/

• http://www.mcvpr.com/practices-Puerto-Rico-Act-60#:~:text=The%20tax%20exemption%20period%20is,a%20grant%20of%20tax%20exemption.

• Private jet links:

  • https://www.stratosjets.com/jet-charter-flights/san-juan-puerto-rico/

  • https://www.evojets.com

• Crypto plan comparison document here: https://docs.google.com/document/d/1d_iMzVVJYDT7vchShPSIhoYl-PX03dIqBhmjlVyXrdQ/edit#

  • Tax software referral code: https://koinly.io/?via=2EC4996A $20 off first order

    • After using the referral link, you can also try 25% off: PAYM25

  • OR https://tax.crypto.com/ (FREE)

• Overview: https://koinly.io/cryptocurrency-taxes/

• Capital Gains Calculator: https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates

• Better Calculator (estimates state tax as well): https://smartasset.com/investing/capital-gains-tax-calculator#qxJ6F8hvXD

• Crypto to crypto/fiat exchange is taxable (Question 15) but transferring between wallets (Q37) is not.

  • https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions

  • Gas fees can be added to cost basis https://www.cointracker.io/blog/how-to-claim-tax-benefits-on-your-cryptocurrency-gas-fees#:~:text=Gas%20Fees%20On%20Selling%20Crypto,dispositions%20are%20deducted%20from%20proceeds.

  • 1031 exchange likely does not apply to crypto: https://www.mdmfinancialservices.com/cryptocurrency/cryptocurrency-and-like-kind-exchanges/

• Maybe a good site for doing crypto taxes: https://cryptotrader.tax/?fpr=o0s5u

• Traditional Tax Filing: Places to file state and federal free or cheap: https://slickdeals.net/article/list/best-online-tax-service/

  • Free federal and only $12.95 for state https://www.freetaxusa.com/freefile/

    • Google for promo codes: ROYCE25, FREETAXUSA10

  • http://creditkarma.com/ is free if you live and work in same state

  • MS free state if under 36000 https://www.dor.ms.gov/Individual/Pages/On-Line-Filing.aspx

• See “Other Income”, click Prizes, awards, or other miscellaneous income

  • Enter the description "Form 1099-G, Box 6" and the amount

    • Miscellaneous-Amounts Received

    • https://www.taxact.com/support/815/2019/form-1099-g-taxable-grants

  • 1099-Q taxable distributions (for taxable scholarships)

• Post 2017, after the Tax Cuts and Jobs Act was passed into law, many forms of casualty/theft/hacked losses that were previously deductible on form 4684, no longer qualify for deductions.

  • Sad but conflicting information below

  • Losses From Hacks & Thefts

  • Losses on cryptocurrency investments due to scams, hacks, or other thefts are not treated as casualty losses, but instead, as investment losses.

  • According to tax code 165 (c)(ii), even though the investment is not linked to any business, your investments have been put in for profit. This is why any loss that has occurred as a result of scams, theft, or fraud is tax losses. But how can you claim such losses when filing taxes?

  • Crypto losses as a result of hacks and theft can be claimed as $0 proceeds transactions on Form 8949. This implies that if you paid $15,000 for 1 ETH and it was taken as a result of an exchange breach, you might claim a loss of $15,000.