tax avoidance
Hey all, here to talk about tax avoidance, NOT tax evasion π. What are the best ways to minimize your tax contributions. For example the guys making 500k + paying over 40-45% in taxes. What write offs can you do as a non business owner? All and any info is helpful.
Ask your lawyer / tax accountant. If you don't have one then you're not making 500k+ anyway.
Here are some of the most powerful things in the Internal Revenue Code. This is the start of an above-average understanding of the most powerful techniques:
1. Qualified Small Business Stock (QSBS): this is a shockingly powerful provision which provides for the tax free sale of a C-Corp that you found if it operates within certain industries and you make a certain election. This one can save taxes on $10M dollars.
2. Defined Benefit plans: basically taking a present-year deduction for making a pension for yourself. This one is great for older professionals like doctors in their 40s-60s who can take advantage of the actuarial calcs.
3. 1031 like-kind exchanges: tax-deferral provision that allows you to reinvest proceeds from a real estate sale into other real estate through a trust fund that is held in escrow by a trustee called a qualified intermediary. You can save millions here
4. Qualified real estate professional status to get around passive activity limitation rules (there should be a dating app for this one)
5. Real estate cost segregation studies (the dating app would also tie in with this one)
6. Grantor retained annuity trusts (GRATs), particularly zeroed-out or Walton GRATs, which allow wealthy people to transfer massive sums of money to the next generation estate tax free
The best part? Basically 1, 2, 4 & 5 don't work unless you have business income of your own or have a spouse who qualifies for the other provisions of the Internal Revenue Code. 6 is estate tax and not income tax. W2 income is the suckiest kind of income, and everyone knows it.
thanks man!
Lmfao OP confirmed to be mentally deficient
My other advice is to go to The White Coat Investor and read all the tax stuff. You are basically in the same boat as doctors. Mega-Backdoor, all that stuff.
I thought everyone can take advantage of 3 (1031 exchanges), not just those with business income.
Edited to match this. I overlooked that one on the list. Thanks
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