Which Tax Breaks Help High Net Worth Taxpayers the Most?
It’s no secret that the United States government generally taxes high net worth individuals at a much higher clip than those in the lower- and middle-income brackets. However, despite that fact, there are still many provisions in the tax system, if used properly, can help wealthy earners save on their taxes. So what are some of the best breaks afforded to the wealthy?
High net worth individuals use several tax breaks to ease their tax burden, and most of them use the skill and experience of a trusted accounting firm to help them maximize the tax breaks available to them. For example, the wealthy often save a bundle on taxes because tax rates are smaller for qualified dividend income and long-term capital gains. In fact the capital gains tax is probably the biggest break the wealthy employ.
Another big tax break the wealthy receive is the “wage cap” on Social Security payroll tax. The government automatically deducts 6.2 percent from employees’ paychecks, but that is only applied to the first $118,500 someone earns. After that the wealthy don’t pay any more payroll taxes.
Lastly, the estate tax offers another way for the wealthy to reduce their tax bills. That’s because the lifetime exclusion has risen from $2 million in 2008 to $5.45 million currently. In addition, heirs will now also receive a step-up in basis on the assets they inherit.
So, while the nations’ wealthiest individuals do pay more in taxes than everyone else, there are some nice tax breaks available to them that can at least help reduce their bill. Contact GROCO to learn how we can help you hold onto more of your wealth. Call 1-877-CPA-2006.
If You’re Using Airbnb for Some Extra Cash Don’t Forget About Taxes
Have you heard about the latest craze in hospitality? It’s the idea of renting out your home for a night or two, or perhaps even slightly longer, to someone looking for a place to stay other than a hotel. The leader in the industry is Airbnb, which works much like Uber, the personal cab driver…
If You’re Going to Argue About Taxes Your Argument Better Be Good
Lets face it a lot of taxpayers make mistakes on their tax returns. It’s also true that there are plenty of other taxpayers that willfully falsify their returns in order to save on their total tax bill. Some people even go as far as to simply skip out on filing a return all together. You…
Another Tax Scam Is Upon Us – Beware of Back Taxes Bullies
No one likes a bully. Bullies can wreck havoc on their victims. From swirlies to stealing lunch money, bullies are a big problem. The same can be said for tax bullies, except they want to steal a lot more than your lunch money. There have been several recent reports from different locations around the country…
Consider Taxes and Choose Your Retirement Location Carefully
Last week we discussed the best and worst states to retire in when it comes to taxes. So what kinds of factors actually play a role in coming up with those numbers? Choosing a place to call home when you retire is important and there are many factors that can play a role in where…