Episode #190: The Truth About Tax Credits: Are They Too Good to Be True?

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This week on the Weekly Wealth Podcast, we delve into the often-overlooked world of tax credits and how they can significantly reduce your state income tax liability. Host David Chudyk is joined by Harris Sinsley, a corporate tax attorney turned tax credit expert, who explains the legitimacy and benefits of these credits. Listeners will learn about various types of tax credits available, particularly in South Carolina, and how even individuals who aren't developers can take advantage of them to save money. Harris shares insights on how to navigate the complexities of tax credits and emphasizes the importance of year-round tax planning. Whether you're an accredited investor or simply looking to keep more of your hard-earned money, this conversation provides valuable information to enhance your financial strategy.

Navigating the intricate world of taxes can often feel daunting, but this week’s discussion sheds light on a valuable tool available to individuals and developers alike: tax credits. David Chudyk, a certified financial planner, engages with tax expert Harris Sinsley to explore how tax credits can significantly reduce state income tax liabilities. Harris begins by demystifying tax credits, explaining them as a dollar-for-dollar reduction in tax owed, and highlighting their role as government incentives aimed at encouraging positive behaviors, such as investing in renewable energy or historic preservation. The conversation delves into specific types of credits available in South Carolina, including historic and low-income housing tax credits, and addresses common misconceptions surrounding their legitimacy. Listeners are encouraged to consider how they might leverage these credits to enhance their financial strategies, with insights into the requirements for becoming an accredited investor to participate in these opportunities.

Takeaways:

• Tax credits are a dollar-for-dollar reduction of tax liability, incentivizing positive behavior by the government.
• Developers can use state-level tax credits to reduce their tax liabilities significantly.
• An accredited investor can save substantially on taxes through participation in tax credit funds.
• Investing in tax credits requires a capital contribution, typically at a discounted rate.
• Many CPAs may not be aware of tax credits, leading to underutilization by clients.
• Tax planning is a year-round strategy, not just something to address during tax season.

Links referenced in this episode:

• www.weeklywealthpodcast.com
• david@parallelfinancial.com
• hsinsley@monarchprivate.com
• https://www.monarchprivate.com/
• https://www.linkedin.com/in/harris-sinsley-a99347116/