EP287: How Taxes Make Earning $100,000 Feel Poor

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Here’s a number that might make your stomach drop:  $524,625.

That’s how much the average American will pay in taxes over their lifetime.

Let that sink in for a moment.

That’s 34.7% of your hard-earned money—gone. A third of your life’s work, handed over to Uncle Sam.

But if you’re a high-income earner, it gets even worse.

In 2021, the top 5% of earners—those making $252,840 or more—shouldered a whopping 66% of the national income tax bill. Stretch that to the top 10%, and you’re looking at 76%.

Here’s the kicker: not all income is taxed equally.

Two people earning $100,000 might look the same on paper, but what they keep could be drastically different.

Why This Matters

If you don’t understand how to shift the balance, you’ll stay stuck.

Frustrated. 😤
Exhausted. 😫
Heartbroken. 💔

Because it’s not about how much you make.

It’s about how much you keep.

And if building a legacy is your goal, this is where you draw the line in the sand.

The Income Quadrants That Change Everything

“All else being equal in life and taxes” is a nice thought, but it’s dead wrong.

Robert Kiyosaki nailed it with his Cash Flow Quadrants:

✔️ Employee (E)

✔️ Self-Employed (S)

✔️ Business Owner (B)

✔️ Investor (I)

Each quadrant comes with its own tax reality—and the sooner you move into the Investor quadrant, the better.

Let’s break it down:

Employee (E): The Hardest Hit

• Federal taxes range from 10% to 37%.
• You work hard, but the system isn’t designed to reward you.

Self-Employed (S): The Grind is Real

• You pay federal taxes plus around 15% payroll tax.
• Unless you’re creating jobs or massive value, the tax code isn’t cutting you any slack.

Business Owner (B): The Rewarded

• You create jobs, innovate, and drive the economy.
• The result? Tax incentives galore—deductions, depreciation, and credits.

Investor (I): The Golden Ticket

• Investors fuel growth and get rewarded with capital gains rates as low as 0%.
• Tax deferral tools mean their tax burden is practically nonexistent.

Why Real Estate is the Investor Quadrant’s Crown Jewel

Let’s talk about bonus depreciation—the ultimate tax hack for real estate investors.

Here’s the deal: bonus depreciation lets you front-load tax deductions, giving you massive savings upfront.

A Real-Life Example

Investor “A” puts $100,000 into a multifamily syndication in Ft. Worth, Texas.

At tax time, their K-1 statement shows a $112,000 depreciation deduction.

Yes, $112,000.

What does that mean?

• They can offset $112,000 of passive income.
• If they’re a real estate professional, even active income gets offset.
• Fast forward 27 months: they sell the property. By using the K-1’s paper loss, they offset their gains—legally.

No splitting profits with Uncle Sam.

Just amplified wealth.

The Clock is Ticking on Bonus Depreciation

Right now, bonus depreciation is phasing out:

• In 2025, it drops to 50%.
• Eventually, it disappears altogether.

Does this mean it’s over? Not at all.

Even at 50%, bonus depreciation remains one of the most powerful tools for multifamily investors.

And if President Trump’s second administration brings back 100% bonus depreciation? Game on.

Avoid the Tax Traps

Here’s the thing: even the best strategies won’t help if you fall into these common traps.

1️⃣ Tax Strategies Aren’t “Set It and Forget It”

The rules change. Laws shift. What worked last year could cost you this year.

2️⃣ Overlooking Your Entity Structure

Your LLC or S-corp isn’t just paperwork—it’s a weapon. The wrong choice? It could drain thousands from your bottom line.

3️⃣ Trying to DIY Your Tax Strategy

This isn’t a DIY project. Your taxes are a battlefield. You need experts who specialize in real estate.

Take Action Today

If you’re ready to stop losing a third of your earnings to taxes and start building generational wealth, it’s time to act.

👉 Move into the Investor quadrant.

👉 Leverage bonus depreciation while it lasts.

👉 Build a team of experts to protect and grow your wealth.

Because keeping more of your money isn’t just about today—it’s about creating a legacy for tomorrow.

You’ve got this, and we’re here to help you every step of the way.