4 ms·
If you're an employee, you generally can't optimise much. Perhaps you can take some basic deductions, but that's in. If you take two people earning $1M a year,
by charlesdm 9y ago
If you're an employee, you generally can't optimise much. Perhaps you can take some basic deductions, but that's in.
If you take two people earning $1M a year, the employee will in most jurisdictions (both relative and absolute) pay significantly more in taxes than the self employed person.
- walshemj 9y agoAt the $1M you have much more options to optimise your tax eg in the UK ESI and VCT's become practicable investments which they would not really be at say $70k Just being able to max out your Pension and ISA at $27k is a big win for those earning enough - basically you can put £20k a year beyond the reach of CGT and Dividend Tax per year
- charlesdm 9y agoVCTs are generally high risk, though. You might not want to make investments that way, even if you're on £1m a year. Same applies to SEIS and EIS. And while putting £20k a year in your pension pot is nice, it's hardly a massive saving on £1m.
- walshemj 9y agoYou can put more than 20k into pensions its 20k for ISAs -though you do have to watch the max limit imposed by Red Osbourne yes but if your on £1M a year you can risk 20-50k on EIS and VCT's don't foe get you get some very nice tax perks for VCTs (which are collective investments) et all unless your a rock star and snorting all the £ up your nose And moving dividend paying equites into an ISA is decent tax saving esp for higher rate tax payers.