How the Wealthy Save on Taxes

man-laying-in-money-[Converted]

 

Whether you make minimum wage or you’re in the richest 1 percent of earners, every taxpayer likes to keep as much of his or her hard-earned income as possible. There are hundreds of ways to save on taxes and many of these strategies are universal to all taxpayers no matter which tax bracket they fall into. However, there are certain tax-saving tricks that are particularly useful for the wealthy.

One of the most common methods many high net worth individuals use to save on taxes is by using tax-deferred retirement savings plans. Of course, anyone can start a retirement plan, but because the wealthy have more disposable income they can put away large sums of tax-deferred money, which provides a huge boost in the so-called golden years.

Another tax-saving strategy employed by the wealthy is to use offshore companies. By creating companies in foreign countries the wealthy can store more cash reserves away from the high tax rates in the U.S. Although many decry this practice, it is perfectly legal.

While a lot of people complain about the wealthy, the fact is, many of the nation’s top earners are also some of the nation’s biggest givers, as in charitable donations. Donating large sums of money to charity is a great way to help others, as well as save on taxes.

Lastly, the “carried interest” tax is another common strategy employed by the wealthy. This allows investors to save on taxes because they can pay 20 percent less on “carried interest” compared to normal income.

http://www.care2.com/causes/4-ways-the-rich-are-avoiding-paying-taxes-today.html
/GROCO
Posted in

Have You Heard About These New Income Tax Changes?

February is almost over. Can you believe it? That means the annual income tax return deadline is fast approaching.  If you still haven’t done your taxes then there are some important changes you should know about. Hopefully, if you’ve already filed, then you were aware of these changes beforehand. If not, and you think they…

Tell Me Your Value Equation

Every company feels like it has what it takes to make a difference in its customer’s lives. No matter what product or service they offer their clients, all companies feel like they can do it better than anyone else. So what makes one company stick out from another? Is it how much money that company…

How to Handle Tough Decisions

Everyone has to make decisions in life and many of those decisions can be very difficult to make. The same can be said for businesses. Decision makers in the business world face a lot of tough choices and some of these choices can actually make or break their companies. So how do they make tough…

Using a Tax Shelter? IRS Says Beware

People look for many different ways to save on taxes, or even to avoid paying some of the taxes they really do owe. However, despite taxpayers’ best efforts, the IRS is always on the prowl and if you’re using unscrupulous means to avoid paying taxes there is a good chance you will get caught, including…