What's popping you beautiful people, what's up what's up, what's up, what's up youtube, welcome back to trace trades? How are you doing it's your boy tray? I think that's what they call me coming back for a little short video here. I just want to talk about an important topic regarding amc, and that is taxes. It is not a fun topic to talk about giving your money to freaking uncle sam, but we do need to talk about it because i do think the squeeze is very close on the horizon and i'm trying to give you guys some resources and things to think About for how to manage your wealth, your newfound income, once the time comes, and one of those things includes taxes. The last thing that i want is for you guys to go: buy a freaking lambo, a million dollar house, a bunch of cool toys and not have the money to pay uncle sam when tax season comes around the following year, so we're just gon na go through.

Briefly, uh my understanding of taxes and what you need to know about paying your taxes but, like i i always say in every video, i'm not you know a freaking tax expert, i'm not a financial expert, i'm not a financial advisor, so take what i say with A grain of salt nonetheless i'll give you my brief understanding and some some things that i think are important to talk about, and that is the long-term versus short-term taxes that you will pay on any sort of gain that you have in the stock market, including amc. Now, one of the things we need to talk about is long-term versus term taxes. Now long term is considered capital gains tax, while short term is considered income tax right long term gains can be thought of as anything that you hold for more than a year. So if you've got an amc back in, let's just say that this squeeze is freaking.

Tomorrow, right, you would have been in amc today is may 13th and you would have had to be in amc may 13th of 2020 for you to be able to tax yourself in the long term. Capital gains tax, terror, uh territory, right that specific category, and you do get you know, tax breaks benefits for that where you don't pay as much tax. However, i think the majority of people are going to be in the short-term bracket, meaning that you held your security for less than a year, which means you're going to pay a little bit more taxes right now, there's two specific brackets that i think are going to Apply to the majority of people - and that is these two right here, so if you make somewhere between four hundred and eighteen thousand and six hundred twenty eight thousand you'll get taxed about thirty five percent with an asterisk right now we're gon na go over the actual Bracket itself and show you what i mean by an asterisk and if you make anything over 628 000 as of 2021, this number might go up with the biden uh he's planning on raising you know: income tax and capital gains taxes for 43, or so this number Would go up but as of now it is 37 now i say an asterisk, because if you look at the actual tax brackets, it's a little bit complicated right. But it is these two numbers right here.

So 418 is 628 000. You get taxed 35 of the amount over 418 000 up to the next tax bracket, right 628, grand so it's 95, 686, 000 plus 35 of the amount over 418 000.. So the 95k is what you get taxed on before entering that 418 000 tax brackets. If you made 418 thousand uh 850 right, you would get taxed 90, uh or 851 right, just let's just say square on the nose.

The minimum of that tax bracket. 95. 686. 000 for everything underneath this tax bracket and then 35 percent of the amount anything over.

That exact number right so 35 of one dollar would be 35 cents. You get the whole picture, 628 000 right plus, you would get taxed 168, 993 and 50 cents, plus 37 percent of the amount over 628 300 bucks right. So let's just drop a hypothetical right. Now, let's say that you made one million dollars on your amc, you know gains and you didn't hold that security for more than a year, which means you fall into the short-term tax bracket.

You would get taxed uh, 168, 993, so 168k right plus 37 of the amount over 628 000.. So if that was a million dollars right, we're just gon na do some quick math one million minus six hundred and twenty eight thousand three hundred and one dollars. That's 371 grand right so 371 000 and you get taxed 37 on that right. So 37 of 371, 000 is 137k, so you can tax 168, 000 plus 137 000, which ends up coming out to about.

Let me just do some quick, math, 137, 000 plus 168. 305 k so 305 000 is what you would end up getting taxed on out of your one million dollar gain. So you need to make sure that you set aside that 305 thousand dollars at the end of the year in order for you to make sure that you're not getting dinged by uncle sam or the irs. You definitely don't want a freaking irs call being like hey where's, my freaking money, man where's, my money, where's, my attendees.

You got your attendees, we need ours. You know so make sure that you're setting aside that money and if you don't want to do the math right, what you can do - and i think it's very simple to do - is just take that simple. 37, if you were making over 628 thousand dollars and take that times, 1 million, which would come out to about 370k, obviously right - and that is what you want to set aside at the end of the year, so that you can just pay that up straight forward. To uncle sam, when the time comes, we do not want you to get stuck paying a bill that you can't afford to pay.

So, like you need to plan this into your budget, for when the time comes, right, do not default on taxes. You really really really really really really don't want that to happen. It's never happened to me, but it can be freaking devastating. You can get stuff repo.

You can get stuff repossessed right. You don't want that to happen. You don't want to lose your freaking car. You don't want to lose your landlord.

You don't want to lose your million dollar house. You need to pay these taxes, and it's really that freaking simple. Now one last thing that i want to talk about. If you don't want to manage this stuff at all, which is very easy to do, and i think worth the money is hiring a tax attorney when you make this much money, it's easy to make a mistake and put yourself in a situation there where, where you Actually end up paying uncle sam or the irs uh less or more than you're supposed to pay, which is why i think it's a good idea to pay a tax attorney to manage this whole situation now.

This is coming straight from thurbo.com. If you want to use this as a resource, however, what i found is this most after the tax attorney will charge a flat rate or an hourly fee in exchange for their professional services. Hourly. This is the most common pricing structure.

Although each tax attorney will charge their own hourly rate, you can expect to pay anywhere between 200 and 400 per hour. If you hire an attorney from a large firm located in a major city, you can pay up to a thousand dollars an hour flat. There's also this opportunity as well, but this differs from attorney to attorney. I think it is worth it and personally i plan on hiring a tax attorney, since i'm mostly unfamiliar with how the entire tax system works outside of what the percentages and the brackets look like right.

It's worth it to pay a couple hundred bucks to a thousand two thousand three thousand dollars for a tax attorney to manage your tax situation, so that you don't put yourself in a bad situation right. This is just something that you need to think about. More than anything, i just wanted to present you the information so that you know that this is something to pay attention to. I know the majority of people out there are going to know they have to set aside money in the year for the for uncle sam.

For your taxes, but if you didn't know now, you know right, this is equally as important as a whole huddling process and equally as important as what you do with your money after you have made it right, are you going to reinvest into smart things? Are you going to are going to buy real estate? Are you going to buy some dividend? Stocks are going to buy some blue chip stocks right? This stuff is just as important because your money is not going to be worth anything if you have to give it all up at the end of the year to uncle sam and typically, you kind of get slapped a little bit slap you on the wrist and Say: hey man, since you didn't file your taxes right, you didn't pay your taxes right, the first time we're gon na charge, you basically some fees and you don't want to get slapped with those fees at the end of the year, because you're gon na end up Paying more money than if you just done it right the first time. So, if you're not familiar with taxes, i do think it is a good idea to hire a tax attorney. They are literally licensed professionals that know how to do that stuff. I'm not a licensed professional i'll.

Tell you that right now these guys are a lot more about taxes than i do so personally, i do plan on making that happen for myself, and i think it's worth it. If you don't know much about taxes for you to do as well, that's what i've got for this short little video, guys blah blah blah. I know the host people drop a like consider, subscribing. I just wanted to give you guys a rundown on something that i think is equally as important as this whole process.

It's not sexy. It's not fun to talk about, but it is important. So that's what i've got for you guys today, thanks for watching my friends, my family, my fellow girly gang catch, you on the next one, much love and peace.