The Top 5 Investments that Reduce Your Taxes

🏠Real estate investments can reduce current taxes, provide tax free income, and offer tax free growth through strategies like short-term rentals, active participation, and being a real estate professional.

⛽Investing in oil and gas can provide significant tax deductions through intangible drilling costs, and a portion of the revenue may be tax free due to depletion allowances.

🏦Traditional retirement plans like IRAs and 401ks offer tax deductions for contributions, allowing you to save for retirement with pre-tax dollars.

🌆Investing in municipal bonds can provide tax-free income, as the interest payments are exempt from federal taxes and in some cases, state taxes.

💊Tax-free health savings accounts (HSAs) allow you to save for medical expenses with pre-tax dollars and withdraw the funds tax free when used for qualified medical expenses.

How can real estate reduce my taxes?

—Real estate investments can reduce your taxes through deductions for expenses like mortgage interest and property taxes, as well as depreciation of the property.

Are oil and gas investments risky?

—Oil and gas investments can be risky due to fluctuations in commodity prices and operational risks. It's important to conduct thorough research and consult with professionals before investing.

What are the advantages of traditional retirement plans?

—Traditional retirement plans offer tax deductions for contributions, allowing you to lower your taxable income and save for retirement with pre-tax dollars. However, withdrawals in retirement are subject to taxes.

Why are municipal bonds tax-free?

—Municipal bonds are issued by state and local governments to fund public projects. The interest payments on these bonds are typically exempt from federal taxes, and in some cases, state taxes, making them a tax-efficient investment.

How does a tax-free health savings account work?

—A tax-free health savings account (HSA) allows you to contribute pre-tax dollars into a savings account that can be used for qualified medical expenses. Withdrawals from the HSA for medical expenses are tax free.

00:00In this video, Toby Mathis discusses the top 5 investments that can reduce your taxes.

02:54Real estate investments can lower your current taxes through strategies like short-term rentals and active participation.

06:11Investing in oil and gas can provide tax deductions and a portion of the revenue may be tax free.

09:36Traditional retirement plans offer tax deductions for contributions, allowing you to save for retirement with pre-tax dollars.

11:59Investing in municipal bonds can provide tax-free income as the interest payments are exempt from federal taxes.

12:24Tax-free health savings accounts (HSAs) allow you to save for medical expenses with pre-tax dollars.