Episode Summary: In this episode of "Financial Advisors Say The Darndest Things," host AB Ridgeway, also known as Mr. Christian Finance, delves into the often-overlooked but crucial topic of taxes from a Christian perspective. He emphasizes the importance of understanding the tax system as responsible stewards of wealth and provides practical insights into managing taxes effectively.

Key Takeaways:

Understanding Tax Basics: Taxes are compulsory contributions to state revenue imposed by the government on various income sources and transactions. Knowing the basics, including tax brackets and marginal rates, is essential for financial literacy and planning.
Biblical Perspective on Taxes: Referencing Romans 13:7, Ridgeway underscores the Christian obligation to render taxes while also advocating for prudent financial stewardship. Paying what is owed is commanded, but learning to minimize tax implications is also part of responsible wealth management.
Importance of Tax Planning: Ridgeway stresses the significance of proactive tax planning, urging listeners to review past taxes and project future liabilities. Preparation is key to leveraging available tax benefits and minimizing overpayment.
Average Tax Rate vs. Marginal Tax Rate: Understanding the difference between average and marginal tax rates is crucial for optimizing tax strategies. Lowering the average tax rate through informed decision-making and tax-efficient practices should be a primary goal.
Seeking Professional Advice: While the episode provides valuable insights, Ridgeway emphasizes the importance of consulting with tax professionals for personalized advice. IRS resources, like the tax estimator tool, can also aid in understanding individual tax situations.

Quotes:

"As a good Christian investor, we will pay what we owe. God commands it. But we will not pay more than we have to."
"The benefits of taxes and some of the things that you can do benefit more the business owner, the landowner, and also the investor as well."
"Lowering your adjusted gross income should be your ultimate goal... But the idea here is that if we can lower the average tax rate consequently, we do that through the adjusted gross income."

IRS. GOV

(https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2023)

IRS.GOV and go to the tax holding estimator (https://apps.irs.gov/app/tax-withholding-estimator)