Hi,
Lest say a hedge fund employee had a great year and is to get a huge bonus (in the ballpark of millions). I assume that if it is paid as a lump sum they would have to pay more than 50% taxes on it.
Are there any tricks people/companies use to pay less taxes, like paying to offshore accounts or fancy investing schemes?
Thanks!
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What? No there aren’t schemes like this. It is ordinary income and will be taxed as such. If you are a partner then there are differences.
not exactly a "fancy loophole" but the quant firm I work for has deferred comp structure that accrues interest and is invested alongside other funds but vests slowly (to spread out tax burden). also the option to put in additional comp as necessary into funds (again to defer/spread out tax burden into retirement/the future).
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