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.
Top Tips for Becoming More Productive
Top Tips for Becoming More Productive Unless you happen to be a sloth, everyone wants to be more productive. Productivity is one of the keys to personal and career success. The problem is, many people just aren’t willing to do what it takes to become more productive. Thus, being productive is easier said than done.…
Where Do Most Americans Fall With Proposed Tax Reform?
Where Do Most Americans Fall With Proposed Tax Reform? Tax reform is coming. At least that’s what we’ve been led to believe for the better part of a year now. Ever since Donald Trump won the election last November, most of the nation has been expecting tax reform. Here we are a year later and…
What’s the Biggest Mistake By People Who Work a Side Job?
What’s the Biggest Mistake By People Who Work a Side Job? Everyone wants to make more money. For many that mean picking up a side job to earn a little more cash. There are literally hundreds of side jobs out there but most are only good for a few extra dollars. However, there is a…
Senate’s Tax Bill Would Raise Taxes on Stock Sales
Senate’s Tax Bill Would Raise Taxes on Stock Sales Capital gains have long been a controversy when it comes to taxes. Many high net worth individuals use capital gains to make the majority of their money. Because the tax rate on gains from stock sales are much lower than taxes on personal income, this is…