In this episode of the Pilot Money Guys, we are joined by the Professor, Kevin Gormley CPA & CERTIFIED FINANCIAL PLANNER, to discuss the latest proposed tax changes.
Although these are subject to change, there are things that you need to know to be prepared. Some changes we discuss:
1. Capital Gains tax increases.
2. Roth Conversion changes
3. Child Tax Credit Changes
We would love to discuss these tax changes with you! If you have any questions for us, please send them to firstname.lastname@example.org. Or visit LeadingEdgePlanning.com to schedule a 1-hour consultation.
we interrupt your regularly scheduled programming to bring you this ad hoc special edition charter flight 16.5. Of the pilot money guys, where we cover some airline news and of course, a financial topic we're going to talk today, especially about the tax proposals. Uh, in 2021, we aim to educate and bring some lighthearted financial fund dear day.
I'm your host, Rob Eckland, your flight crew today is the professor. Of course, we need a CPA to talk about this stuff. Certified financial planner, Kevin Gormley. Hello, Gormley here. And of course our very own Mr. Cabell, the Bendeka is in welcome, Ben. Thank you. Good to be here. Also present. Yes. Present today.
We're going to cover. The potential tax changes coming right around the corner. We're recording this just to kind of give you a buffer here. So if we make any mistakes, this is the 24th of September, 2021. All of that, we're going to talk about the tax proposals, at least is all subject, subject to change.
It's still going through Congress and who knows what could happen. So this is just a kind of a pre cursor of what could come. Things can change, but some of this is likely to pass. Enough of that. Let's jump into some aviation news. I've got the first one we're talking about the air force, KC wide bridge tanker, which is going to print.
Yeah, it's another tanker. I know. We thought we had enough of those with the KC 46, all you, uh, air refueling geeks like myself out there. Uh, but the KC tens going away. And they really don't have much to replace it with. So they're coming up with this, this next tanker Lockheed Martin has joined forces with Airbus and they're going to produce a Airbus three 30.
That's called the LMX T, which stands for the Lockheed Martin next tanker. And apparently it's going to be bigger, better, um, you know, batter than the KC 46, be able to go more places. And do kind of the stuff that the KC tin could do that the KC 1 35 could do at least that's my perception. It could go to more airfields because it's got a, you know, bigger wings and more useful load and all kinds of good stuff.
So kind of cool. Uh, for the case 10 folks out there, I was really questioning why they were getting rid of the KC 10 when the KC 46, wasn't all up to speed. Uh, and I could geek out about that for a long time, but I won't. Kevin and Ben, the professor with this, I can see glazed over luxury right now. Yes.
You raised your hand. I mean, how many kids, uh, you know, right now, or a 10, 12 years old and their dream is to fly a KC 10. I mean, probably, probably a lot of them. Right. Is that something that you dreamed of doing Rob when you work with. I turned to flying. I don't know, per se the KC tip, but you know, all of the impact I've had around the community here, at least one wants to fly KC 10 or they used to doing after seeing you fly there.
Right. You got to get some video footage of you flying it. I mean, oh yeah, for sure. That would be exciting to upload that. It's pretty good. Now that I'm retiring.
You think you can do a barrel roll gas station in this guy?
Absolutely. Okay. Let's get into the inspired. The next piece is inspiration for I've got my special copier. Failure's not an option in recognition of the first all civilian space flight and they did awesome. I think they landed. They went around the, the earth several times and the first civilian. It's baseline as far as I know, right?
Yeah. So can you say, uh, first civilian space flight, um, those other two civilian groups that went up, uh, they were, they were kind of in space, but this was the first time a craft orbited. The earth is that. I think so you're challenging. My, my, my, uh, this is not great as fuck, you know, headline says first all civilian crew goes to space.
I think those other crews had, uh, you know, military folks on. Right. Even though it was billionaires that grabbed all the headlines, you know, still the military folks doing the work. Oh yeah. We're going to make sure Ben puts that in the show, but. Whatever. Yeah. Yeah, yeah. Whatever the right answer is. We'll put it in there.
We'll find it and throw it in there. I did find out something interesting though about this. Maybe some, some drama about inspiration for. Which is that they had some toilet issues on the plane. This is a direct tweet from Elon Musk. Definitely need to upgrade toilets. We had some challenges with it on this flight.
Now, can you, I'm just trying to envision this right here. No low gravity, very low gravity. What that thing is, that's not sinking down there. I wonder what kind of issues they had this, you know, there's going to be some stuff floating around. Yeah. Yeah. It must've been pretty bad for that to become an issue, um, especially with it for some side effects in there, for sure.
Um, but Rob isn't that usually on a commercial aircraft, isn't the toilet, usually the most drama on any flight from what I've heard, uh, flushing, uh, paper towels and stuff like that and leaving it a mess I supposed to put down yeah. Smoking in the bathroom. It's. Just a, what would you call that? Something show?
Yeah, it's a lot of fun. Lot of fun for all you, uh, airline passengers out there. Let's just get a couple of ground rules right now. If you're going to go, number two, you go to the back of the airplane. Don't don't come up to the front where the pilots are. Let's just go to the back. I have some calm first-class toilets are so nice.
Come on. Well, that's a good point. We know Southwest is all first class ban. Okay. Yeah, you guys get the nice, nice, comfortable seats. They're really contour. All right. We can cut that one out.
Gotcha. All right. What else? Anything else? Uh, for aviation news, you one. Did you have a top 10 list? You want to go over real quick? I can go through it really quick. If we want to go through this. It's I think it's a pretty good top 10 list that I think people will be interested in. Um, I sure was entertained.
So this one right here is the top 10 weirdest airplanes of all time. And, uh, I'll just burn through this really quick. Add some comments about these. The first one is the number 10 and it does look pretty weird. It's the Boeing X 48, which is currently under construction, has a 21 foot wingspan. And, um, it is being developed as an unmanned aerial vehicle.
So it's kind of a weird plane. Uh, next we got the, the Horten ho 2, 2, 9 airplane. This was a, uh, world war II German fighter bomber. Um, and it, it, it looks pretty futuristic. It looks like it's out of the Jetsons. Pretty cool. You got to, have you heard of. Uh, you know, I saw a picture that way back when I think it, it almost looks like something out of, you know, captain America, the crashes, you know, similar it does.
It's got a nice bubble in the front, you know, we'll have to do is let's put all these pictures. Well, yeah, we, we definitely will cause these are, these are great and they start to get more and more familiar here. The next one is the Airbus balloon. Making it on the list I knew beyond here, I wasn't sure where it's the 8300, 600 wide body aircraft.
Uh, and it is used to carry the aircraft parts and cargo, uh, that are either too large or arguably are awkwardly shaped and it came, uh, took it to maiden flight in 1994. Weird looking airplane. Honestly, one of my favorite looking airplanes, it kind of looks, it just looks like a beluga, but it looks ridiculous.
So, and they even paint it most of the time to smile to make you have to that thing go if you're not sure what the beluga is, look that up. That thing looks exactly like that. Um, number seven, super Guppy airport. Uh, yeah, I mean, come on. Like, uh, it's basically the original beluga, uh, came out in 1965, uh, and operated by NASA.
Loved that one. Um, let's see. Number six, the dream lifter. So this is the Boeing seven, the 7 47 dream lifter. Is that, is that sound right? It's a 235 feet long and a cruising speed of 474. 211 foot wingspan. Uh, number five, the flying pancake airplane. This one intrigued me the most when I saw that. Cause I did not know that this plane existed.
Uh, this was when did this come out? I think this came out in the thirties, I believe, but, uh, it looks like a giant stingray. Uh, it was used by the Navy. It's called the Vaught X five F U plane X F five-year. Uh, maximum speed of 550 miles per hour in maximum takeoff weight of 18,800 pounds. Quite impressive.
Nice. Pretty weird. All we needed one pilot as well, and it looks like that's an ugly airplane that looks like a crab. It really, it really does look like it's meant to fly. And now do not know. . All right. Uh, number four. Um, Callanan K seven airplane. This one, to me, it looks like it's out of star wars or star Trek or something. It is, uh, one of the it's also called the Russian flying fortress developed in 1930.
And um, had 11 members, 140 miles per hours. Its max flying speed could carry 120 passengers and 15,000 pounds of mail. Oh. Or 50,000 pounds of mail. So that one, yeah, it looks crazy as well. Uh, number three, the Northrop tacit blue airplane. Uh, it was developed by the us air force in 1982. And it was considered the best technology on the planet has a gross weight of 30,000 pounds and can fly 290.
Now that you guys are going to look that one up. That one's pretty interesting as well, that Russian, just to back up the, uh, so the dream lifter was made because of the Dreamliner. The parts were too big. And so they had to make those specimen special seven, 14. Aircraft to haul the parts, but that Russian flying fortress is something out of a, out of a movie.
For sure. Yeah. That one will definitely put this one on there, but you're going to have to look that one up.
Um, number two, the pregnant Guppy airplane. So I got a lot of guppies bigger. This one flew from 1962 to 1977 wide body cargo plane used by NASA to transport components of the Apollo moon program. Um, so very interesting playing there could a load capacity of 141,000 pounds and a max wind speed of a 320 miles per hour.
It does. It just looks like a big pregnant fish, I guess that's why they named it. That, uh, the spruce goose has comes into number one. I think this one, this one was coming and Howard Hughes, uh, uh, it's an all wood airplane built in. What does it only flew once in 1947 carried 700 passengers and it's the largest flying transport ever.
The wingspan was that LA was longer than a football field. The spruce goose was actually a flying boat and could hold up to 150,000 total pounds, uh, including two 30 ton in four Sherman tanks. Uh, also known as the flying lumberyard. And today is in the evergreen aviation museum in McMinnville, Oregon.
That's from McMinnville. Yeah. Beautiful. That Guppy, if you ever fly into El Paso, a lot of times you'll see that super Guppy, the NASA one. Oh, yeah. I've never actually seen this. Yeah. Yeah. The super well, is it the, I don't know why the color, right. It might be the pregnant Guppy. Yeah. But it can, I think it can carry T 30 eights in it, which is they have four or five top gun, top gun fans out there.
Nice. Where did you get that top 10 list? I got that top 10 list from arrow corner.com. We'll link to it in the show notes. Yeah, absolutely. Check it out. . . , I mean, that was super great. Let's give them even something more exciting, right? Yes. Taxes tax. Why calming. That's why we got the man, the myth, the legend, Kevin, the professor, the professor. All right. These tax changes are common.
Kevin, you want to walk us through some of this stuff? Yes. So I'll tell you this, Rob, when, uh, whenever we hear about tax changes coming and were doing tax returns, where a CPA or where a tax professional, uh, immediately we try to disregard because we have last year's tax return. In our mind, we have this year's, uh, what's happening with taxes.
And then we hear about all these. Projected taxes that are coming. And most of the time they don't come true. So usually, uh, we're very skeptical or, or maybe we just. We just wait and see what's past. But you know, this time around, uh, especially in the world of social media, things happening so fast, a number of clients have actually mentioned that they know tax changes might be coming.
So really that's really, the focus here is to discuss what, what, what probably will happen, what could happen. And also some of the things that a lot of people have heard are going to happen, which are really bad, which probably are not going to happen, Rob. Yeah. Well, fantastic. So the first one. I think a lot is on a lot of people's minds.
There's just the regular tax rate. The marginal tax rate is increasing from 37% up to 39.6%. Right. And that's for married, filing jointly folks above $450,000. So the, the 400,000 and the four 50, um, you know, one of the things that I do, like, uh, like might be the wrong word, but, uh, that at least I'm relieved with Rob is that they are focused more on people that make more than 401,000, if you're single and four 50 and $1, if you're.
$450,001. That is, but the issue that, that I find is that people that make more than that amount of money still don't feel rich, still don't consider themselves rich. So if you're in that, uh, area where you're above 400 or four 50, uh, it still can be painful, but you're right. For the most of the pilots that we work with, um, you know, they, they do get around the 400, 4 50 mark when they're captain.
But for most people, uh, the, uh, tax changes will not affect them, which is great news. And even if you did make $450,000, $450,001 that 39.6% is only taxed on that $1. That's exactly right. Clarify that, uh, it's only the amount over $450,000, uh, that, that applies to let's kick it off. Sorry. Kicking off is not the right word.
Let's talk about capital gains rates, which is right after the marginal tax rate. A lot of people start thinking about the maximum capital gain rate is going to move from 20% to 25%. Yep. So the rumors were out there, Rob, that it was going to go to 39.6% for people that made more than a million dollars.
Um, which, uh, you know, again, we, we have a few people that make more than a million dollars of income. Uh, most, most of the tax that we're talking about is income. It's not really wealth or where the rich, uh, and I used the rich in quotes. So that's right. Um, if you make more than again, 400,000 or four 50, Uh, then your capital gains will be taxed at 2,500.
Yeah, that four hundreds for the single filers and the four 50 is for married filing jointly, just to make sure everyone knows that that's, that's the amount you're we're talking about for the capital gains. Ben, I got something I've heard a rumor going around that they are planning to tax unrealized capital gains.
Is there any truth to that in this plan so far? All right, Ben. Um, did you see that on, uh, one of your Snapchat? Um, you mean my tic-tac yeah, I saw it on. Yeah. So, so I think that, I mean, that's a good point, you know? The people will ask us well, should I hurry up and sell my investments and get my capital gains?
Um, so that's called realized capital gains when you realize it is when you sell it. So if they ever taxed unrealized capital gains, uh, I'm not going to say something like I would eat my hat or something like that, cause, or leave the country because I don't feel like eating the hat or leaving the country, but that would be, that would be really hard to tax unrealized, capital gains.
Um, But, uh, who knows the creativity of the Congress. It's always possible Ben, but I've, I've not heard that. Okay, good. I, I, you know, I, I definitely don't want that to happen, but I've been hearing those rumors and I honestly just wanted to dispel that because I have, I feel like that is kind of going around, but interesting.
The other, the other thing with this capital gains is, um, you know, most of the tax laws, as far as I can tell. Uh, with this legislation, it can bounce back and forth is my understanding, you know, way more about this than I do Kevin, but it, most of the time, at least on this legislation will go into effect one January, 2022.
However, this is one piece that may be backdated, I guess, to the time, uh, that the legislature. It was proposed, which was be September 30th, 2021. So you wouldn't even be, even if you sold right now, in theory, if that holds which it may not may or may not, you know, you, you wouldn't be able to get around that anyways.
Any thoughts on that? Yeah, Rob. So, you know, when we say that people might not make 400,000 or whatever the figures are, sometimes people will sell a second home or a rental home and they will be pushed up into these high, you know, people can make $800,000 in a year because they make a problem. Five $600,000 on a home.
That's that's happening now. So yeah, the, the strategy a couple of weeks ago, might've been to hurry up and sell it, but, but you know, again, that's really hard to do so, but there is, uh, there is a date right now, which the Congress has says said, if you sell after this date, you will still get hit with the higher capital gains.
So you're absolutely correct. So any capital gains after September 14th, 2021 may be taxed at a higher. Fantastic. That's that's big. That's big to know that. That's interesting. Um, moving along here, we've got the 3% surtax and for all of our individuals out there making more than $5 million a year, and what we used to call Majaila modified, adjusted gross income.
You're going to be taxed at whatever you make over to the 5 million of 3%. Is that right? Did I say that right? Yeah. Yeah. Let's, let's have some fun here since none of us make over 5 million, no anyone that makes over 5 million of income per year. But if you take, if you take the 39.6, add the 3% and you live in the state of California, well, then your tax rate would be 59 points.
59.7. So you'd be sending in a, almost 60% of your money to the local and federal government. And that's the reason why, w what was that golfers name? The left-handed golfer that left the state of California. Oh, Phil was that Phil. Phil. So Phil left, Phil Mickelson left California. Yeah, he left because, uh, because he didn't want to pay those high tax rates and some people, uh, really hammered them on social media.
But, uh, can you imagine if you're someone like him making 10, $20 million a year and now all of a sudden you get to keep 40% and you get to be told you're not paying your fair share. I'm sure. Yeah. That's great. And how he got to that is the 39.6%. You know, if you're over the forfeit. Plus a 3.8 net investment income tax.
That's the knit that we that's, that's been around for a while. Plus the 3% surtax that gets you to 46.4 and then the California state tax is 30.3 that's 59.7%. That's a lot of tax, but you're making a lot of money. Uh I'll I'll just drop it. Yeah. Yeah. You're, you're rich. That's a lot. I'm joking by the way.
That's sarcasm. So don't get mad at me if you're, if you're making that money. Um, that's good stuff. We got the, uh, now we got the creation of a cap on the maximum amount of taxpayers, QBI deduction. And if you don't know what QBI is, it means it doesn't matter to you. So don't worry about it. But a qualified business income is.
Capped at the maximum deduction for that would be for joint filers, 500,000 single file or your 400,000 and a trust in the states. 10,000. Okay. Let's get on with the, whatever was been really talking about, at least in our circles is the disappearing, the disappearance of the backdoor Roth and the mega backdoor Roth.
Kevin, this is right up your alley. Take it away. Yeah. So those of you that have had it on two times speed, uh, so far that's okay. But, but slow it down now to maybe 1.25. And, uh, so the Capitol, or excuse me, the Roth conversions. I mean, that, that's a huge part of what we do as financial planners. Uh, people in our income thresholds do is they either, uh, do the backdoor Roth, um, or some people even Rob, they put money into their 401k as an after-tax and they do the mega backdoor Roth.
Uh, if you have after tax money, going into IRAs now going forward, uh, you can no longer convert those dollars. So I don't know exactly how that's going to work, but it basically takes away the backdoor. Uh, for people, and this is really important for people that maybe are, are married, filing jointly around the 1 98 to $200,000, because there might be some strategies here to allow you to put money into a Roth as opposed to a backdoor Roth.
Yeah. And this is one of those things. If you're using that strategy and talk to your financial advisor, call Ben Dickinson, right? Right. And ask him about this, but, uh, it's one of those things that if you're going to use that strategy, think about doing it this year, because it's, you can still do it in 2021, but again, January 1st, 2022, you won't be able to do that.
Backdoor Roth anymore is, is at least proposed right now. Again could change, but that's on the that's on the table.
, along with that, is there any changes that people need to take right now that are pretax going, doing the back door? Is there anything to think about for next year specific? Well, uh, for people that like that are near those income thresholds where you can't do the.
Contribution anymore. Um, maybe they should just go ahead and back. Do the backdoor Roth in 2021, because once, uh, you know, usually in 2022, we do 2021 taxes and we realize you made too much. So in that case, you wouldn't be able to do it anymore. So we really want to talk to those people that are in the income thresholds that maybe are doing the Roth contribution direct.
So that's, that's kind of the Roth and the mega backdoor Roth, which not a lot of people. Access to, uh, or I should say, not as many as we'd like, and that's again, just after tax dollars, going into your 401k that you can put into reach that 58,000, um, mark, if you will, if you're on the field, the only reason I'm happy Rob about this is I don't have to explain it anymore because it really makes no sense.
It really makes no sense to call it. I think we've we've, we've had a lot of people will ask us if it was even legal, uh, or what we were doing. Very confused, a few people, but now very common thing now let's go away. And one of the other things is important about since we're talking about IRAs, is there think about capping how much you can actually have in one of those, uh, accounts, retirement accounts before.
Uh, you can't contribute anymore. And the magic number there is $10 million, which sounds like, you know, a lot of money and not, we won't have a lot of folks right now hit that, but in the future, that's definitely a mark that quite a few people I think can hit. Well, it's just inflation continues. If inflation continues, we can all have $10 million IRAs.
All right. That's very sarcastic and mean. Sorry. Um, so, so you know, this is, uh, I think Thiel is the guy's name, who was the, uh, hedge fund person who had a, uh, and I forget the number bank five, five. I was gonna say the B.
So, so this, this, uh, you know, a lot of people might not think this affects them, but the whole idea of, uh, IRA, uh, limitations is a big part of the proposed changes. So, uh, if you have more than $10 million in an IRA, you have to take an RMD required, minimum distribution, a 50% of the amount over 10 million.
And I think over 20 million, it goes up even to a hundred percent maybe. My understanding is if it's in a Roth you have to take anything over 20 million out. So Peter, Teal's going to have to take over $4 billion and then, you know, then it goes into that above 10 million, 50%.
So. Yeah. So, so the, uh, so the thought process here, just to make sure that everybody understands the punishing of the rich, uh, idea here is we're going to raise taxes on the people that are quote unquote real. We're no longer going to let them defer the money into IRAs and build up big IRAs. We're going to tax them.
And this actually generates tax revenue for the next 10 years. Um, and then the third thing is if they decide to put it in capital, uh, put it in taxable accounts and get capital gains, we're going to tax that at a higher rate too. It's sort of the trifecta of, uh, going after the rich in, in air quotes.
Once again. Yeah, absolutely. And to think about it too, and not everyone can do this and it's not going to affect, obviously it's going to affect very few people percentage wise. But if you are in that, that, uh, situation where you're taking required minimum distributions and you are very, you know, you're in the rich, like you say, income category, Kevin, then think about it this year.
You know, you're at a 37% income tax rate this year when you're taking those required minimum distributions. Again. If you're in that tax bracket next year, you're going to have the 39.6% rate. If the all, again, caveat, if all this goes through and then you'll have another, you could have another surtax of 3%.
So you're up at 42.6% and that's before state taxes, that's a 5.6 negative rate arbitrage between 2021 and 2022. Meaning just the difference. If you wait between 21. And 22 is 5.6%. That's quite a bit if you're up there. Yeah. And Rob, the other part, I mentioned, uh, that the IRAs, uh, the laws have changed, uh, or they will change.
Uh, we think the, all the self-directed IRAs and all the people that had non-liquid companies, they start a company, they stick the company in an IRA. All of that stuff is, uh, is probably going to be nixed. So, uh, we get questions all the time. Hey, can I invest in a rental property with my IRA? And the answer is.
You could, but I wouldn't do it because the self-directed IRA is a PETA. And so I would not recommend it, but, uh, that looks like that that's going to be going away. Great point. That's important for a lot of folks out there that are, yeah. I feel like that's been a kind of a viral topic recently. A lot of people have been asking about that, I guess, with the housing market and people being able to do more, uh, research and have more time on their hands.
But yeah. Probably a good thing in the end of that, that one's getting knocked away. Yeah. Potentially, potentially getting he hasn't knocked away. The other part too, you know, this whole thing is the space. We're basically going to have the current estate and gift tax exemption. Right now it's 11.7 million.
And it's going to be replaced with an exemption of proxy, half that around a 6 million per person, you know, that's, uh, the index for inflation. But, yeah. So if you, if you, if you pass and you're trying to give away more than the estate and gift tax exemption of 6 million, you'll be, is that right? My understanding still remains the same at 40% is the tax rate of, of, uh, of money on that.
But, uh, it's going to be lowered to 6 million. So if you're, if you have quite a bit of money out there and you pass away giving it, passing it along to errors, won't be as. And Rob that that amount does include your property as well. Right? It's not just your, your investment accounts, right?
Well, it's your taxable estate, uh, whatever makes up that taxable state. And that's probably not something we want. Uh, get into, but, you know, w we, we have some clients that, you know, when we tell them the 11.78 or whatever, they would laugh, uh, you know, when you tell people it's more than 5 million, they don't laugh quite as hard.
So, I mean, there's a possibility that, that these numbers, uh, you know, if somebody has two or $3 million, even Rob, they may want to see a, uh, a tax attorney, you definitely want your team in place, your financial advisor, your tax attorney, you know, other attorneys, I guess if you're, if you need them, your airlines pilots, you're going to want those guys on your team at all times. And there were some, or if there's some nuances to that as well, or maybe some action steps that people could take now, potentially with gifting a little bit earlier, or maybe doing some, some things like that.
I know it is. Uh, not advice, but, uh, we'll throw out just some different ideas here. Definitely want to get, make sure it's right for you, but anything on that? Yeah. So in 2021, if you have $8 million, um, and you know, it's going down to five or $6 million, she could gift, uh, and use that, that 11 plus million dollar gift, uh, In 2021 now, is that what you're saying?
No, no, you can continue to live. Oh, okay. Yeah, you can continue to live because you're using the rules that are on the books, uh, as of 2021 point. Uh, and again, I don't know the exact number 11.8 or 11.9 million. So you could gift away a whole bunch of assets this year. Uh, with that L you know, 11 plus million dollar exclusion.
And then when you die with a, you know, under, under the $6 million, then none of it would be taxable. Gotcha. Awesome. And that's per person. So if you're married, LUN 0.7 for your wife, 1.7 for you, or vice versa for your husband. Um, okay. So moving along, the last thing I've got, I think is the child tax credit, the expanded child tax.
Kevin walks through that. So this is probably the biggest thing, uh, for, for our clients, Rob, um, because it's a, you know, $2,000 per child under age. Uh, I think it's under eight 17 for 2021 might even go up to 18. Um, but you know, $2,000 per child, if you, if you make less than a hundred and fifty one twenty five head of household, 75 single, uh, it goes up to $3,000 per.
So, you know, this can be some pretty significant amounts of dollars and the difference between, Hey honey, we're getting a refund and Hey honey, we owe tax money. So it can, it can be the difference. It can be the difference for sure. So, uh, so what I would suggest, uh, as a takeaway is if you're in those income areas, like if you're going to make 170,000, uh, in 2021, That might be an opportunity to put more money into an HSA or put more money into a tax deferral, a vehicle, a 401k, et cetera.
And I refer folks back to our child tax credit podcast, where we talked at nauseum on that. Um, hopefully not, but I think it's, it's important to realize for a lot of folks that are under those thresholds. You've probably been getting a check from the IRS every year. And again, go back and listen to that podcast and it'll walk you through why you're getting that check from the IRS, but you won't get it come tax refund time.
So just, just remember that. Yeah, that one is an easy one to forget. Just think it's free money and spend it away. And if you, for some reason are getting it and shouldn't be getting it, you're going to have to pay it back. So yeah. I think about that. What else?
What else did we miss? What did we get? What else you got Kevin Ben. Well, I think, uh, I think the major, uh, benefit here is that a lot of the things we thought were going to happen probably are not going to happen. So a lot of the clients that we work with are not going to be reamed, uh, from the IRS. Uh, maybe that's not a good word.
I don't know. Anyway, it was the word that came to mind. Yeah. So, you know, cause Rob, I mean, the thing is, I mean, I think this is really important to say that the people we work with, um, they're considered high income by standards, but, but most of the people we work with are they're paying health insurance, they're paying for college, you know, full price college.
Uh, we have a lot of people that don't get any, uh, you know, types of, uh, needs. So it's just really challenging for them and sorry, I'm getting, I'm getting choked up here. Uh, it's just really challenging for them. Uh, so, so I, I think that's all good news. Yeah. And I think it's important when you talk about that 450,000, . You're going to have to make about 480,000 to hit that four 50. Uh, mark to, to fall into that 39.6. So probably our, our ups pilots, FedEx pilots, maybe some of the pilots United American, you're going to watch out for it. You know, what makes the most money Rob?
Uh, somebody that works at another airlines, at least that's what every pilot tells us. Every pilot says they have it better. We don't have it. Good. I thought you were going to say like the flying pancake pilots or something like that, or maybe the, uh, Callanan case seven pilots flying fortress. That one deserves it should make over the heck.
Yeah. All 12 or however many people it takes to fly that thing. Yeah. All right. Anything else, guys? Okay. We'll wrap it up. Leave it with a couple of tax. Uh, a couple of funny ones here, kind of it's income tax time. Again, Americans time to gather up those receipts, get out those tax forms, sharpen up that pencil and stab yourself in the aorta de barrier.
That is courtesy of day Barry. This one's by John Baptist Cole bear, the art of taxation consistent. So plucking the goose as to obtain the largest amount of feathers with the least amount of hissing. That's it we've arrived at the final destination. Uh, this flight 16.5 to three ad hoc charter flight podcast.
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Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this Podcast will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Moreover, you should not assume that any information or any corresponding discussions serves as the receipt of, or as a substitute for, personalized investment advice from Leading Edge Financial Planning personnel. The opinions expressed are those of Leading Edge Financial Planning as of 09/07/2021 and are subject to change at any time due to the changes in market or economic conditions.