Let Uncle Sam help you reach your goals Use your IRS-approved tax shelter-Pay 0% on asset gains. Accumulate $55,000, $250,000, even $1,000,000 tax-FREE. Use your Tax Credits: Working people pay about 33% total taxes. The Tax-Credit Class like Warren Buffett, John Kerry and Mit Romney pay less than 17%. Tax credits are the difference. America taxes work more than non-work. Most of the income of wealthy people is dividends, capital gains and interest. It is taxed at 15 or 20%. This is why rich people advocate a consumption tax. They know they will pay less tax since they can only eat so many steaks and escargot (snails) while we spend most of the money we earn and would pay higher rates. The Tax-Credit Class uses hundreds of tax credits and deductions to offset income. Some use their businesses to reduce their taxes because anything you do to further your enterprise is deductible, even when your business loses money. You can make a business with anything you like to do, just keep good records. For instance, a client liked to travel and several members of his congregation asked if they could go with him on his next trip. He arranged everything for a tour of Brazil's youth centers run by the churches there. All his expenses for that vacation were deducted from his taxes, offsetting his savings, pensions and Social Security benefits. This client also liked to trade securities and declared himself in business as a trader. He deducted all his research and fees from his income tax. On a little bigger scale, Donald Trump claimed losses from his failed casino, airline, yacht and Plaza Hotel deals in 1995 and used the loss of almost a billion $ -915,729,293 to avoid taxes for years. You can claim losses for 20 years. Many wealthy people use "net operating loss," according to his accountant. He also said that Don did not show much interest in tax details. So let's get smart! We can use some of the same tax credits and strategies he uses. For instance, in 1978 and 1979, he paid no tax on at least $3.4 million revenue. How did he do it? Based on what we know from those early returns, real estate operations can be a great way to offset income. In fact, Congress allows you to deduct the money you borrowed to do the failed real estate project. Most of us are not going to be real estate developers but are we using all of our tax credits as business owners and homeowners?
About the Author: Dan Keppel has been helping people find financial services that fit their lifestyles since working in a securities firm, an insurer, two banks and his own "money coach" service. His book, The Insiders' Guides to Buying Discount Financial Services: Buy Direct and Save $3,000 Every Year, shows you how, what and where to buy financial products like industry insiders do-directly from the highest rated companies for less. He edits TheInsidersGuides.com and was an adjunct at a local college. He lives in Montclair, NJ with his wife, daughter and two cats, Anu and Katze.