AB Tax Law Tax Attorney Adam Brewer joins Wealth! to discuss the top three tax traps that are prevalent on social media and what taxpayers should avoid.
The first trap he highlights is the 6,000-lb vehicle deduction. While this opportunity can save tax dollars, Brewer cautions that for most individuals, you do not want to be "tying up" a majority of your funds in such a vehicle. Instead, he recommends better alternatives for year-end tax savings, such as maximizing pre-tax retirement contributions.
The second trap involves the misconception of writing off everything. Brewer plainly states, "Just cause you have an LLC, it doesn’t mean it’s a write-off." He advises individuals to "do the work" and carefully investigate the legal deductions they actually qualify for.
The final trap relates to charitable donations. "Before you go all in and write a big check, make sure you factor in will that save you tax dollars," he warns, noting that higher standard deductions are now in play.
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