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.
Which Tax Extensions Will Affect Your 2014 Return?
Are You Ready for Your 2014 Taxes? Although many people might answer yes to that question, the fact is taxpayers can only do so much as long as Congress is dragging its feet on several expired tax extenders. The fact that these extenders are still sitting in limbo is nothing new. It happens almost every…
So-Called Temporary Recession Tax Not So Temporary
Remember the great recession of 2009? Although the recession may now be a thing of the past, some so-called “temporary” taxes are having a harder time fading into the background. That’s because many states throughout the country are still collecting on tax bills that were enacted solely for the purpose of refilling public reserves. Fourteen…
Congress Not Looking to Pass Internet Sales Tax Anytime Soon
Ever since the Internet became a worldwide sensation, there have been those who think it should be taxed, especially Internet sales from state to state. Taxing the Internet would be a huge source of extra revenue for the government, but for those who use the Internet to shop (which is just about everyone these days),…
NBA Stars Losing Hefty Amounts of Their Salary to the Taxman
Just about everyone knows that professional athletes make a ton of money. Whether you agree with athlete salaries or not, the fact is those hefty numbers you always see reported when an athlete signs a new deal aren’t really all that they’re cut out to be. Oh sure, they are making a lot of money,…