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I get that people can have capital gains and pay taxes on that and skip "income" taxes, but are folks here doing fine without paying any taxes at all? How do you all do it? I think people create tax shelters or can lower their taxes with write-offs. Please share your techniques? I think much of it involves real estate. Also, I guess alternative minimum tax does not apply to these individuals. Once again, how do you folks do that? I'd like to get involved with not paying taxes. I bet you folks get others to pay your taxes. Clever, very clever.
I guess if you lived in a State like WA State with no State income tax, are renting and all of your income is from a Tax Free Source such as Municipal Bonds... and you Shop in Oregon, a State without sales tax and did not own a car... your tax liability could be close to zero...
I guess if you lived in a State like WA State with no State income tax, are renting and all of your income is from a Tax Free Source such as Municipal Bonds... and you Shop in Oregon, a State without sales tax and did not own a car... your tax liability could be close to zero...
Very good!! That took you time to gather all those possibilities!! Love it!!
Excellent, another alternative is to have no income. But perhaps that was not the answer you were seeking?
Anyhow, there really is no way to avoid tax without having a low income and being very strategic about how you do things. For a family you can make up to 50k a year and get away with no tax if you do things very strategically, I can give you some examples if this is the sort of thing you are interested in hearing.
I get that people can have capital gains and pay taxes on that and skip "income" taxes, but are folks here doing fine without paying any taxes at all? How do you all do it? I think people create tax shelters or can lower their taxes with write-offs. Please share your techniques? I think much of it involves real estate. Also, I guess alternative minimum tax does not apply to these individuals. Once again, how do you folks do that? I'd like to get involved with not paying taxes. I bet you folks get others to pay your taxes. Clever, very clever.
Single people with less than $8450 of income generally are not required to pay ANY tax...married people with less than $17,500 generally aren't required to pay either.
So if you make below those levels, you'll have no tax to pay.
If you are self-employed and report net business profit then there is no way to avoid social security and medicare taxes (around 14.13%).
However, if you are frugal with your income and generate savings, there are many legitimate and useful deductions you can take to reduce your, strictly speaking, income tax either very significantly or to zero.
First among these are the standard deduction and personal exemptions. Then there are various pension plan accounts, the most significant one being the personal 401(k). Then there are health savings accounts and health care premiums. If you earn income abroad, there are foreign exemptions and foreign tax credits.
I have not mentioned itemized deductions or deductions relating to real estate and other types of investment.
My understanding is that for married couples the ATM calculation does not kick in until $130,000 in gross income, I believe.
Finally, it may also be worth noting that one could reasonably expect to receive back around 10%-15% of one's social security/medicare contributions, maybe less or more depending the real rate of inflation, the rate of taxation (social security income is taxed - actually double taxation) and how long one lives.
I am thinking that by no taxes you mean FEDERAL taxes... its easy. All you have to be is have about 10 M dollars which puts you in the top 0.01% and put everything in tax-free government bonds. Stop working and use the interest from those government bonds to live on which should net you a "free" salary basically. Unfortunately that only works if you are uber-rich but then America seems to think the "wealthy" all are able to do this... but then you have to figure how to give your heir that "money" so they never have to work... I think McCain is working on that right now... Its great when the uber-rich get away with everything whereas the top 10% pay all the burden..
I am thinking that by no taxes you mean FEDERAL taxes... its easy. All you have to be is have about 10 M dollars which puts you in the top 0.01% and put everything in tax-free government bonds. Stop working and use the interest from those government bonds to live on which should net you a "free" salary basically. Unfortunately that only works if you are uber-rich but then America seems to think the "wealthy" all are able to do this... but then you have to figure how to give your heir that "money" so they never have to work... I think McCain is working on that right now... Its great when the uber-rich get away with everything whereas the top 10% pay all the burden..
That is life. But if it is a federal bond than the fed can still tax that, right? If it is a state bond than the feds can't tax that but the state can? Or would that be the point in not working? What about if you put all your money in stocks that pay good dividends and stop working. Is that a way you can avoid paying income taxes?
If you are self-employed and report net business profit then there is no way to avoid social security and medicare taxes (around 14.13%).
Unless you happen to trade stocks for a living.
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Originally Posted by 60-minutes-II
But if it is a federal bond than the fed can still tax that, right? If it is a state bond than the feds can't tax that but the state can? Or would that be the point in not working? What about if you put all your money in stocks that pay good dividends and stop working. Is that a way you can avoid paying income taxes?
Municipal bonds are federal tax-exempt. They're also state tax-exempt if purchased within that state. Dividends from stocks are normally taxed...except for some folks in the lower tax brackets who will pay ZERO tax on qualified dividends from 2008 through 2010.
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