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

IRS Has Handed Out More Than $100 Billion in Refunds so far

As with every tax season there have been some mistakes that have caused problems for some taxpayers, as well as the usual battle with tax scams that pop up every year. However for the most part, the refund process has gone well to this point. In fact, at the end of February, the IRS reported…

There Is a Bright Side for Early Filers Victimized by Obamacare Gaffe

There’s been no shortage of complaints and problems with Obamacare since the nations new health care coverage law went into effect. In fact, the debate continues to rage on and another major decision from the U.S. Supreme Court is forthcoming in the months ahead. However, for the time being, Obamacare has been a problem for…

Should You Pay Estimated Taxes?

For most people tax time only comes once year. However, for anyone who has to pay estimated taxes a large tax bill could be due several times a year. Again, most people do not have to worry about paying estimated taxes, but there are several circumstances that will put you in that category. The most…

Do not Be the Victim of a Tax Scam

As the tax season continues to be in full swing we here at GROCO continue to hear of more and more tax scams making the rounds. We’ve discussed tax scams before, but it never hurts to repeat this important information, especially at this time of year when tax scammers are so prevalent. In fact, several…