The Propeller – AI Tax Help – 12-29-2024

Here are 7 Microsoft Copilot prompts to simplify your tax planning and save money. To access Microsoft Copilot for free, use this link: https://copilot.microsoft.com/ These prompts can also be used in ChatGPT (But of course, my preference is Microsoft Copilot!)

Expense Categorizer
Here’s a list of my business expenses: [insert expenses]. Categorize them for tax purposes and highlight which ones are deductible.

Tax Deduction Finder
What are the most overlooked tax deductions for [specific industry, e.g., freelancers, small businesses] in [country/region]?

Estimated Tax Calculator
Based on my income: [insert income details], calculate my estimated taxes for this year and suggest how much I should save monthly.

Home Office Deduction Simplifier
I work from home and use [square footage] of my home exclusively for work. Calculate how much I can deduct under the home office expense.

Tax Filing Checklist
Create a checklist of everything I need to prepare and file my taxes efficiently, including documents and deadlines.

Business Structure Comparison
I’m considering changing my business structure from [current structure] to [proposed structure]. Compare the tax implications of each.

Penalty Avoidance Plan
What steps can I take to avoid common tax filing mistakes and penalties as a [type of taxpayer, e.g., self-employed]?

Be sure to add-on any other details to these prompts about your individual situations.

The IRS announced many changes for tax year 2025.

Here’s everything that’s changing (and how it impacts your paycheck):

Standard Deduction

In 2024, the standard deduction for a single taxpayer is $14,600 ($29,200 for married filing jointly) In 2025, the standard deduction is increasing by $400 – $15,000 (single), $30,000 (mfj)
 

Brackets
2024 brackets:
10% for income $11,600 or less ($23,200 or less for MFJ)
12% for income over $11,600 ($23,200)
22% for income over $47,150 ($94,300)
24% for income over $100,525 ($201,050)
32% for income over $191,950 ($383,900)
35% for income over $243,725 (487,450)
37% for income over $609,350 (731,200)

In 2025, the ranges are:
10% for income $11,925 or less ($23,850 MFJ)
12% for income over $11,925 ($23,850)
22% for income over $48,475 ($96,950)
24% for income over $103,350 ($206,700)
32% for income over $197,300 ($394,600)
35% for income over $250,526 (501,051)
37% for income over $626,351 (751,601) 

So, if you are single and make $100,000 W-2 in 2024, you will pay $13,841 of federal taxes. In contrast, in 2025, you will pay $13,614, a decrease of $227 in federal taxes due to inflation adjustments.

Capital Gains Tax
In 2024, you pay 0% capital gains tax if your taxable income is $47,025 (single) or $94,050 (married filing jointly). In 2025, the 0% capital gains tax will apply if your taxable income is $48,350 (single) or $96,700 (mfj)

Earned Income Tax Credit (EITC)
In 2024, the maximum EITC for 3 or more children is $7,830. In the tax year 2025, the maximum Earned Income Tax Credit amount is $8,046.

Annual retirement contributions limits
In 2024, the 401(k)/403(b)/457 limit is $23,000. In 2025, the limit is increasing by $500, to $23,500.

In addition, the total annual amount you can contribute to a 401(k)/403(b) plans is increased to $70,000 in 2025 from $69,000 in 2024.This amount includes all of your typical contributions + employer’s match + Mega Backdoor contributions.

Roth IRA income limits
In 2024, the maximum income limit to contribute to Roth IRA directly is $161,000 ($240,000 if MFJ) In 2025, the income is increasing to $165,000 and $246,000 (for married filing jointly)

The limit on annual contributions to an IRA (Roth or Traditional) is $7,000 in 2024.Unfortunately, the contribution limit remains unchanged for the tax year 2025.The catch‑up contribution limit for individuals aged 50 and over also remains at $1,000 for 2025.

Annual gifts
Currently, the annual gift exclusion is $18,000 per person. The annual exclusion for gifts increases to $19,000 for the tax year 2025.

HSA
For 2025, participants who want to contribute to an HSA must have a deductible that is not less than $2,850 (a $50 increase from 2024), but not more than $4,300 (an increase of $150 from 2024).

Others
In 2025, the Child Tax Credit remains unchanged at $1,700. The lifetime learning credit also remains unchanged (20% of first $10,000 of qualified education expenses or a maximum of $2,000 per return.)
 

Charlie Munger, Warren Buffett’s legendary partner and one of the greatest minds in investing, has shaped the way many view not just business but life itself. His insights are as transformative as they are practical, blending sharp logic with deep wisdom.

Here are 10 invaluable lessons directly from Charlie that continue to guide many in achieving success, building wealth, and pursuing a meaningful life.

Be Humble – True Wealth Whispers, It Doesn’t Shout
Charlie taught me that the richest people often aren’t the ones flaunting it. Wealth is most powerful when it’s understated, allowing you to focus on opportunities instead of appearances. Humility also fosters learning, as it keeps your ego from blinding you to valuable lessons.

Use Money as a Resource – Money Is a Tool, Not an End Goal
Munger emphasized that money is best seen as a means to an end, not the end itself. Whether it’s investing in education, starting a business, or giving back, wealth should be used to enhance life and create opportunities – not as a scorecard for validation.

Curiosity Feeds the Mind—and the Wallet – Always Ask Great Questions
Charlie’s voracious appetite for knowledge is legendary. He reminded me that curiosity is a superpower—it keeps you sharp, adaptable, and ahead of the curve. Asking the right questions, especially in business and investing, can open doors to insights others miss.

Life Is Long, Prepare – Constant, Forward Momentum
Patience and perseverance are key themes in Munger’s philosophy. Life isn’t about quick wins; it’s about consistent, steady progress. Whether compounding wealth or building a career, small, deliberate steps lead to monumental success over time.

Buy a Business Run by Idiots – Simple Businesses Are the Best Investments
Charlie’s humor often carries profound truth. His point here is that businesses with simple, sustainable models can thrive even under poor management. Complexity invites risk, while simplicity stands the test of time.

Know Your Strength – Are You an Investor or an Operator?
One of Munger’s core teachings is to know your role and excel in it. Are you someone who thrives on analyzing and investing in businesses, or are you better suited to running one? Understanding this distinction can save you years of frustration and align your efforts with your strengths.

Good Price for a Good Business – Avoid Bargains for Bad Businesses
Charlie often warned against the temptation of chasing “cheap” investments. A mediocre business at a great price is still mediocre. Instead, focus on acquiring good businesses at reasonable prices—quality always pays off in the long run.

It’s Hard to Be Simple – Simplicity Is Often the Hardest but Most Effective Path
Munger’s clarity of thought comes from an ability to distill complex issues into simple truths. He believes that simplicity is the ultimate sophistication, whether in investment decisions, communication, or life. Complexity might look impressive, but simplicity drives results.

Money Equals Freedom – It’s Not About Ferraris; It’s About Time and Choice
For Munger, the true value of wealth isn’t material possessions—it’s freedom. Money gives you the ability to spend your time on what truly matters, whether that’s family, passions, or giving back. Success isn’t about owning more but about controlling how you live.

Just Because You Can Afford It Doesn’t Mean You Should Buy It – Less Is Often More
Charlie’s frugality is a lesson in discipline. Just because you can have something doesn’t mean it will add value to your life. Restraint isn’t just about saving money; it’s about focusing resources—financial and mental—on what really matters.

Munger’s wisdom transcends business. It’s a roadmap for living thoughtfully, making deliberate choices, and achieving a life of substance. Whether you’re building wealth, navigating career decisions, or simply looking for greater fulfillment, these lessons can serve as guiding principles to keep you on track.

Every January, millions of us set ambitious New Year’s resolutions, promising ourselves that this will be the year of transformation. And why wouldn’t we? The clean slate of a new year feels like the perfect time to aim high.

But here’s the hard truth: most resolutions fail. Statistics show that 91% of people abandon their goals long before they’re achieved.

How do you make sure you’re in the 9% who succeed? You don’t need bigger resolutions – you need better habits.

Rethink Resolutions as Habits (Or for those that have read my book – Habitudes)
Your achievements are simply a reflection of your daily habits. Resolutions can feel overwhelming, like trying to climb a mountain in one leap. But when you break them into small, repeatable habits, you create a system that works for you, not against you.

Here’s how to get started:

Write down your goals. Be specific about what you want to accomplish this year.

Ask yourself: What habits would someone with this goal practice? For example, if your goal is to lose 20 pounds, think about habits like meal prep, staying hydrated, or consistent bedtime routines to support your efforts.

Focus on consistency, not perfection. Pick habits you can stick to every day, no matter what.

Why Systems Matter More Than Goals
Take the weight loss example. It’s easy to say, “I’ll hit the gym every day.” But willpower alone isn’t enough when life gets busy. A smarter habit might be to focus on getting quality sleep by putting your phone down by 11 p.m. every night. Good sleep fuels willpower and keeps you energized, making it easier to stick with nutrition and exercise plans.

This isn’t just about weight loss. Whether you want to save money, grow your career, or improve relationships, small habits that reinforce consistency will take you further than vague resolutions ever could.

The Year of Systems
As James Clear puts it, “You do not rise to the level of your goals. You fall to the level of your systems.” Build systems – habits and habitudes – that support the life you want.

So this year, start small. Stay consistent. And watch those habits stack up into something extraordinary. Welcome to the 9%. Let’s make 2025 truly different.

If you want to learn more about how to build habitudes, check out my book Winning Habitudes: 99 Habits and Attitudes of Leaders, Visionaries and Achievers.  It is available in Print, Audiobook, and E-Book on Amazon, Barnes & Noble, and Audible. https://amzn.to/2O0Zh2y and https://www.winninghabitudes.com
 

“The easy, conversational tone of good writing comes only on the eighth rewrite.”
 

Entrepreneur and investor Paul Graham reminds us how much work is required to make something look effortless.