People always talk about these loopholes, and i would like to see some examples. Maybe rich individuals do have them, but since I started my MBA I have been looking at company's financials and they pay their 35 percent (effective tax rate is different given nontaxable investments and other things like that). Anyway, I was just wondering because i always hear all of this talking about loopholes and I dont know enough about tax code to know what they are and how big of a difference they make. Does anyone on here know about them?
Jordan Mills on choosing Tech:
“It’s a great experience seeing them play. It was a good atmosphere. The fans stood up the whole game and never sat down. They have a great fan base.”
The only way I know to generate income without incurring tax liability is (1) taking advantage of Roth IRAs (assuming your income is low enough to participate), (2) taking advantage of real-estate exclusions (like-kind exchanges, and sale of principle residence), or (3) don't make enough money.
Jordan Mills on choosing Tech:
“It’s a great experience seeing them play. It was a good atmosphere. The fans stood up the whole game and never sat down. They have a great fan base.”
Yeh, I know some of those, but like you said, it all still has to be paid. I always hear these liberal conspiracy theories about loopholes and how rich people dont pay taxes, and I need some examples. It just sounds like a liberal talking point to bag on the rich in which most have no idea what it is about.
I dont really consider that a loophole though. It is just a different form of income that is taxed at a different rate. It has always been spun that these people that make tons of money pay less on a percentage basis. Capital gains tax is totally different in my mind, but you could be right that the rich haters try to spin it.
But when it is said that the rich don't pay taxes I believe they are talking about income taxes. Yes the rich haters are the perpetrators of this misinformation. The so called loopholes are just as Guiss suggests only ways to reduce exposure. You can look at the percentages of whom is paying taxes and see plainly that the rich are paying plenty.
I know one thing, my wife and I make decent money, but I have been analyzing our tax situation for when we buy a house and we dont qualify for many of the benefits we could currently use. We make too much to write off any education expense or any of our PMI IF we are able to get a loan. I know 100K (most income cutoffs for these benefits) sounds like decent money, but it is not that great in Houston. Once again, more tax benefits that "normal people" could use that we are cut off from. I want to know some loopholes because apparently I make too much to take advantage of the poor man's loopholes, but too poor to take advantage of the rich man's loopholes. what is the deal?
This may not be what you are referring to but there are some great advantages of owning your own small business...
The most obvious is fuel and/or vehicle expenses. Lots and lots of toys can be paid for and written off as business expense. I could name several other things that my company paid for me (w/pre-tax dollars) that I miss since I am now a sole proprietorship, but I do have many less headaches than I did when I employed up to 20 people at times.
Things that I really hate after experiencing both worlds are FICA matching and AMT