These Tax Breaks Are a Big Boost to the Wealthy

shutterstock_216949882

 

Even though the new presidential administration has already made several tax cut promises that would greatly benefit the wealthy, the fact is, high net worth individuals already benefit from several tax breaks that favor the rich. In fact, there are numerous ways that the wealthy can, and are already saving on their tax bill.

Let’s take a look at three of the most tax-friendly laws for high net worth earners currently in the tax code. The Social Security earnings cap is one way the wealthy save on taxes. Because the government caps this tax at $127,200, those who earn $128,000 and those who earn 12 million will pay the same Social Security tax rate. That is a huge savings for the nation’s highest earners, which amounts to $62,000 in savings on every million dollars earned above the cap.

Next up is the capital gains tax rate, which favors the country’s highest earners as well. Because this rate is much lower than the personal income tax rate and most middle-income workers don’t earn their money through capital gains the middle class often pay a higher tax rate than high net worth individuals that earn all their money through capital gains.

Lastly, the mortgage interest deduction also helps the wealthy save on their taxes. Although this tax break clearly helps anyone that carries a mortgage, the wealthy usually receive a much greater benefit because the amount they pay in mortgage interest is typically much higher. Therefore, they receive a much higher deduction amount. Plus, if you don’t have enough itemized deductions to exceed the standard deduction amount you won’t get to claim the mortgage deduction anyways.

https://www.fool.com/retirement/2017/02/25/3-tax-breaks-that-hugely-benefit-the-rich.aspx

Posted in
Ten Ways to Involve Your Children in Philanthropy

Ten Ways to Involve Your Children in Philanthropy

Ten Ways to Involve Your Children in Philanthropy Derek Ferriera and Martin Johnson Updated: 5/23/2013 Through your own philanthropic generosity—whether volunteering, supporting a charity as a benefactor, attending fundraisers or setting up a family foundation—you are educating your children about your values and teaching them to be generous. While you may identify your philanthropic values…

Business Law | Gautam Dutta

Business Law | Gautam Dutta

Business Law | Gautam Dutta Transcription: Announcer 0:00 Welcome to American Dreams keys to success with your host, Alan Olsen. Alan 0:06 Welcome back. We’re here today visiting with Gautam Dutta. And formerly an SEC attorney practicing law here in the Bay Area. And we’re talking about your days at the SEC. And during the…

LATE FILED I.R.S. FORM 5471 – AUTOMATIC PENALTY OF $10,000 IS A REALITY!

Late Filed IRS Form 5471 – Automatic Penalty of $10,000 is a reality!

IRS Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations, has been a filing requirement for many decades if a U.S. taxpayer owns a significant amount of a foreign corporation. The form has gotten ever longer over the years and is now long and difficult to complete, and in some cases,…

Should You Invest in Residential or Commercial Properties?

Should You Invest in Residential or Commercial Properties?

Should You Invest in Residential or Commercial Properties? Most people in Northern CA started investing in real estate by buying their own homes. And most have made money as real estate in Northern CA has continued to appreciate in value. So when they move up, they decide to rent out their first homes. And then…