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

How to Avoid Tax Preparation Scams

With so much to do and so many other important things to worry about, many people will be looking for help over the coming weeks and months with their income tax returns. While some people might just choose the first name they see to file their taxes, whom you choose can actually make a big…

What Steps Lead to an Effective Estate Plan?

Do you have an estate plan? A lot of people don’t, for a lot of different reasons. Some people would rather not discuss their death under any circumstances, other people think they are too young to worry about an estate plan, while others just don’t know, or aren’t, sure where to begin. However, it’s a…

Will Your Tax Refund Be Delayed?

It’s only January, but because the calendar has turned to 2015, that means the tax season is officially here. While most people don’t file their taxes in January, there are a few early birds who go after the first worms of the year, so-to-speak. Although it’s often a good idea to make sure the IRS,…

Are You Looking To Invest for Growth?

What kind of investor are you? There are many types of investment strategies and each person will follow the strategy that best fits his or her plan. At GROCO, we can help all kinds of investors, including those who are investing for growth. When it comes to long-term growth, the total return on your investment…