Personal Finance Tidbits

I was in a conversation in the August meetup with a few attendees talking about the tax implications of living off of bitcoin and discussed some lesser-known facts:

• If you are married and living off of bitcoin alone, you can sell more than $116,950 worth of bitcoin in 2023 and pay $0 in federal capital gains taxes.
  • This is due to the $27,700 standard deduction and $89,250 bracket with 0% rate. It's about half for single filers.
  • "More than" is because you are taxed on earnings, not what you specifically sell.
  • Note that California will still tax like regular income, so you're incentivized in moving to a state like Tenessee, which doesn't tax capital gains.
• You can invest in a pre-tax 401(k), take money out prior to age 59 1/2 without taxes or penalties thanks to the Roth Coversion Ladder (here's a great video).
• You can create a private trust ensuring your loved ones get your bitcoin after you die, without relying on lawyers or probate court (thread).

Have any other tips? Send them my way!