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.
Seven Signs Your Noncompliance Will Be Considered Willful
Seven Signs Your Noncompliance Will Be Considered Willful There are many ways taxpayers can get the attention of the IRS. Although a lot of people make innocent mistakes when they file their tax returns, there are others who willfully look for ways to skip out on the taxes they owe. The IRS does treat those…
Make Sure Your Heirs Inherit What You Want
Make Sure Your Heirs Inherit What You Want. The saying goes that their only two things that are certain in life: death and taxes. While people can generate endless amounts of money when they’re alive, they can’t live forever and they can’t take that wealth with them when they die. However, they can have a…
Will Taxing the Rich Even More Improve Inequality?
Will Taxing the Rich Even More Improve Inequality? It’s been the cry of democratic lawmakers and many of the less fortunate for years: “We need to tax the wealthy even more.” “The rich have to pay their fair share of taxes, too.” The problem is the rich already pay a huge portion of the country’s…
It Pays to Be Rich for These Five Tax Breaks
It Pays to Be Rich for These Five Tax Breaks Although it’s true that the ultra-wealthy are heavily taxed, and in many cases unfairly, there are also some tax break advantages that favor the upper class more than those in the middle. Let’s take a look at some of these breaks. Most common and first…