Top Tax-Saving Moves Used By High Net Worth Individuals
One of the biggest complaints certain groups or individuals have against the wealthy is that they can take advantage of too many tax breaks and loopholes to lower their tax bill. So what are some of the top tax strategies that high net worth individuals use to keep their tax rates down, and could anyone else use them?
One of the top tricks used by the wealthy is that they make the most out of their investment income. Compared to the top income bracket that is taxed at a 39.6 percent rate, capital gain income on stocks held longer than a year is taxed at a top rate of 20 percent, which is almost half of the top income tax rate. The good news is that anyone can take advantage of this rule.
Another tax strategy used by the wealthy is to use their retirement plan accounts to invest in high-growth start-ups before they hit it big. This can pay huge dividends because, if you use a Roth IRA for example, any gains you make from your initial investment are tax-free.
High net worth individuals also avoid getting paid in cash as much as possible. One example is taking stock options instead of huge salaries. A person who does this doesn’t have to report these stock options as income right away. When they do exercise or sell them they will have to report them but any gains in stock value are taxed at the capital gains rate.
While not everyone makes enough to capitalize on these strategies, those who can and do are able to save considerable amounts of money in taxes. Contact GROCO to learn more.
Revisiting Your Will
[vc_row][vc_column][vc_column_text] Revisiting Your Will The importance of having a will cannot be overemphasized. It’s not simply the way that you direct the distribution of your financial and personal assets. Your will also enables you to designate an executor (or personal representative) who will act in your stead to meet your obligations and steer your assets…
Tax Tips for New Ecommerce Entrepreneurs
Tax Tips for New Ecommerce Entrepreneurs New ecommerce entrepreneurs can find them confused and confounded by the tax and accounting requirements of their venture. And that’s a shame: If someone’s spotted a great new category and successfully built a web presence, heck, that someone shouldn’t find themselves bogged down with the accounting minutia. The entrepreneur…
HERO Act Expands IRA Options for Military
HERO Act Expands IRA Options for Military Members of the military serving in Iraq, Afghanistan and other combat zone localities can now put money into an individual retirement account, even if they received tax-free combat pay, according to the Internal Revenue Service. Under the Heroes Earned Retirement Opportunities (HERO) Act, signed into law on Memorial…
Dealing with IRS Collections
Dealing with IRS Collections There are times when taxpayers are unable to pay amounts owed the IRS on a tax return or as a result of an audit. Presuming there is no disagreement about the tax liability, just a lack of funds to pay, the taxpayer is best served by avoiding the collection process. There…