3 tax secrets of the rich you can use, too

The wealthy have access to tax breaks that most Americans will probably never enjoy. But that doesn't mean we can't take a few tricks out of their playbook.

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207Comments
Feb 10, 2014 9:52AM
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Well at least the rich are paying their own way. If someone else is rich that does not bother me. What does bother me is generational welfare. It seems that the ones that are bothered the most about folks taking legal tax deductions are those living off the government. This growing group is worried that if the government is shorted then those living off it can not live up to the standard they are used to.

The three fixes for those on the dole are: 1. don't have kids you can't afford to raise; 2. educate yourself; 3. get a job.

There, now everyone has the road map to success and we can now concentrate on the Olympics.

Feb 10, 2014 10:30AM
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If I were rich I would hide as much of my money from the current socialist government as I possibly could.
Feb 23, 2014 5:04PM
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What a load of crap this article is.  I'm a tax advisor, and let me just clear something up... there are no "tax breaks for the rich"  There is not a single tax deduction that kicks in when your income is a certain level or higher.  However, personal exemptions, itemized deductions, student loans, tuition expense, Ira deductions, and just about any other credit  or deduction you can find is reduced or eliminated for the highest tax brackets.


Notice that the author says something like "this rich probably have access to break the rest of us will never enjoy" ... yet the article  doesn't mention any.  the reason?  there aren't any!


True, one of the great ways to transfer wealth is thru handing down real estate... but these rule apply to anyone, not just the rich.  the only other area I know of that tends to benefit wealthy people is that  some private equity funds get taxed at a lower rate than the normal marginal income tax rates.  However, you are talking about a miniscule fraction of people in the highest tax bracket that run a private equity fund.

Feb 9, 2014 11:46AM
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The biggest "secret" is not to live above your level of income. 

 

I'm surprised that this article did not list that divdends from common stock investments are only taxed at a maximum of 15% except for the very high income persons.  Anyone can get in on this break by just saving some of their income and investing it in mutual funds that hold dividend paying common stocks like Exxon, Chevron, Coca Cola and Pepsico. 

Feb 10, 2014 10:54AM
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Absolutely worthless article.  All people have access to 401K or IRA accounts and they have now for decades. Most people don't inherit enough money to even have to pay any taxes. Donating stuff doesn't provide a significant write off at all.  This article must have been written by Obama himself or some other liberal fool.
Feb 7, 2014 9:18PM
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Most of the tax breaks are gone now for the average worker, taken away by the squirrels in DC... Now Obama-Care has placed penalties on retired people collecting money from their 401's and other savings and plans over a certain amount.....makes you pay more for your Medicare and prescription meds on insurance premiums. Nothing right about this and it is a new tax for people who have saved money over a lifetime for retirement and now the lying, laughing POTUS wants a deeper cut of that.....
Feb 23, 2014 5:20PM
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One tax secret of the wealthy and powerful.  Run for public office even on the state level, promise the world, get in and then vote yourself a 62% pay raise to bring  in about 53,000 yearly for a two month job.  That leaves you most of the year to work another job or to think of other ways you can swindle the taxpayers.  Then, be even greedier.  Pass legislation on yourself allowing you to hide about 4100 dollars monthly into an "expense" account and avoid taxes on about 92% of your state salary.  No, not in America!  This doesn't really happen, does it?  In what state? If anyone else, without the power to vote it legal,  invented ways to avoid taxation, would they not be accused of iax fraud or laundering money?  Has this really happened?
Feb 10, 2014 1:54PM
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so why are we told about the rich not paying their fair share if they are "getting around" taxes by differing them, or by donating lots of money/items?  And getting around taxes via estate planning should be unnecessary.  why am i taxed when i earn money, spend money, invest money, and again on anything i have left over when i die? (assuming the minimum of course)
Feb 23, 2014 6:47PM
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So if someone lives way above their means, big house they can hardly afford, 60" flat screen TV, new cars, boat, motorcycle, camper, and everything is on payments I'm suppose to fell sorry for them? I've worked hard all my life, saved my money, drove used trucks until the wheels fell off, invested my money in rentals and land. I would lay in bed half the night thinking of other ways to make money, NOT spend it. When it came time at the end of the year and I'd think back how I had worked 7 days a week, didn't spend every weekend night in a bar spending my money on booze, driving a fancy new truck or watching the "game" on Sunday. Yea I'd do every trick in the book to keep MY money in MY pocket!! Funny how I'm greedy for wanting to keep my money, but, it is not greedy for someone else to want to take MY money!
Feb 23, 2014 4:39PM
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Most big tax breaks come at a hefty price.  Most people don't seem to grasp that concept.  If you donate millions to a charitable organization it lowers your taxable income but that money is gone forever (from the donor).  Other types of tax deductions come in the form of things like depreciation of an asset.  That asset might be a building, airplane, etc - some capital equipment that the beneficiary has to purchase to begin with.  You still may have shell out big bucks to maintain it - while providing jobs to do so.  You don't get more in tax breaks by investing as such - you get some offsets to encourage that investment. 
Feb 23, 2014 4:30PM
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Not sure you'll save 1,000's on your taxes by cleaning out your closet.  Remember the fair market value of your used clothing is next-to-nothing.  See what it's selling for at your local Goodwill store.


A far better idea is to donate highly appreciated stock to the charity.  You avoid capital gains since you didn't sell it and the charity doesn't pay taxes so they avoid the capital gains when they sell it.

Feb 23, 2014 7:15PM
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I am  not rich but I use all three of these. .Just FYI for the author , the average person making more than 250K pays 29% tax, the average person under 250K pays 19%. And then there Is the fact 47% of people pay nothing.

Obama is now proposing a new retirement tax on successful people (notice I did not say rich people). so what message are we sending to Americans? Being a government employee is the only way to retire young and have your way paid to the grave.

 Socialism has never worked but it appears we are on our way.

Feb 7, 2014 10:21PM
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With Obamacare, this Administration thinks everyone but the top 1% has to pay their fair share of taxes and penalties under the Affordable Care Act. Has anyone notice that even people who do not work have to pay taxes now? No one left behind is the motto for Obamacare. Why it is in the Affordable Care Act along with the one size fits all Americans but at a higher price. Do you think you are getting cheated here? You better believe it. Why do seniors have to pay more taxes than other people.? It is like this Federal Government wants a bite out of Social security. Social Security and Medicare are not entitlement programs and this and past Presidential Governments have borrowed money that has never been repaid for other programs with the promise that it would be repaid by the time the first baby boomers start getting their Social Security. Yeah right. Social Security was not designed for the US government to dip their greedy hands into. All they saw was this huge pool of cash that belong to baby boomers from hard labor.  Now this President wants all seniors to have nothing. You know what? One day soon this President will turn the age where he will collect his Social Security. The Social security Administration will send him a Dear Barack letter saying he has no money in his account or not enough fund are in the account, but we might scrape you up a $.50 and you can qualify for Medicaid and  Snap benefits. Then he will be lucky to get a whole $1.00. Kill the tax theme associated with Obamacare. 
Feb 23, 2014 8:35PM
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Since there isn't a flat tax the current system is UNFAIR...plain and simple. How dare you penalize someone for their hard work.
Feb 7, 2014 10:46PM
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High income over 204k, the SEP IRA and the Solo 401k don't have identical tax savings. Depending on the state you live, the Solo 401k is deductible whereas the SEP isn't. NJ the Solo 401k would save you around 4k. 


Feb 23, 2014 4:19PM
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Heres the biggest tax secret there is contribute heavily to your elected represenatives.Then use shell corporations to hide youre bribery like the koch brothers
Feb 23, 2014 5:30PM
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Well out of those suggestions I do one all the time which is give to charity. It is called  the U.S Government aka Uncle Sam. And it is real easy to do too since it is set up to be taken from my pay every week automatically. Ah yes Uncle Sam, he takes from the rich and he takes from the poor then he throws it away so he can take some more. 
Feb 23, 2014 7:42PM
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So how poor is poor,,,,

,Americans who live in households whose income is below the federal “poverty” level typically have cell phones (as well as landline phones), computers, televisions, video recorders, air conditioning, refrigerators, gas or electric stoves, and washers and dryers and microwaves, according to a from the Census Bureau.

In fact, 80.9 percent of households below the poverty level have cell phones, and a healthy majority—58.2 percent—have computers.

Fully 96.1 percent of American households in “poverty” have a television to watch, and 83.2 percent of them have a video-recording device in case they cannot get home in time to watch the football game or their favorite telephone show and they want to record it for watching later.

Refrigerators (97.8 percent), gas or electric stoves (96.6 percent) and microwaves (93.2 percent) are standard equipment in the homes of Americans in "poverty."

More than 83 percent have air-conditioning.

Interestingly, the appliances surveyed by the Census Bureau that households in poverty are least likely to own are dish washers (44.9 percent) and food freezers (26.2 percent).

However, most Americans in “poverty” do not need to go to a laundromat. According to the Census Bureau, 68.7 percent of households in poverty have a clothes washer and 65.3 percent have a clothes dryer.

Feb 23, 2014 5:33PM
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Does that mean the rich like Obama.
Feb 23, 2014 8:42PM
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What a bunch of crap this article is. The rich get to write off a larger percent on charity, they also get to pay a larger percent in taxes. What brain dead liberal wrote this article?
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