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

Could These Tax Deductions Save You Big?

Could These Tax Deductions Save You Big? It’s tax time. Of course, you know that already, unless you’ve been hiding under a rock for the last several weeks. Tax time means refund time, right? Not for everyone, but in most cases, yes. But so far this year, refunds are down and many taxpayers have been…

Top Ways to Cut Taxes in Retirement

Top Ways to Cut Taxes in Retirement

Top Ways to Cut Taxes in Retirement When you think of retirement you tend to think of pleasant things. Perhaps you dream about living out your days on a sunny beach or sailing around the world in your luxurious yacht. Maybe you plan to travel the world or maybe you just want to relax and…

Asking for Help Is Not a Sign of Weak Leadership

Asking for Help Is Not a Sign of Weak Leadership

Can leaders be strong and humble at the same time? Is it possible for a leader to command respect if he or she has to ask for help? For many years, asking for help was considered a sign of weakness. Leaders were expected to know everything and be capable of doing anything. If a leader…

Latest Trends in East and West Coast Family Offices

Latest Trends in East and West Coast Family Offices

Latest Trends in East and West Coast Family Offices Key Takeaways from this Video • Luxury Investments such as cars and gems can be positioned in such a way that family offices are not required to pay sales tax upon purchasing the item. (2:01) • A lot of the wealth creation in for family offices…