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> Most people want to follow the law, they just want to optimize taxes. How does the average person avail these optimisation schemes? Do they also get to lobby
by yunohn 4y ago
> Most people want to follow the law, they just want to optimize taxes.
How does the average person avail these optimisation schemes? Do they also get to lobby for the loopholes?
- xiphias2 4y agoLearn languages (Duolingo), change countries depending on your income type, ask ChatGPT, set up companies for yourself. There are lots of ways to do it, and many average people are doing it already in different ways. For example for me just moving to Switzerland made both my tax percentage lower and more legal, salary much higher, and cleaner streets from those lower taxes than anywhere else I lived before. Somehow the government was able to afford professional cleaning machines from those lower taxes.
- yunohn 4y agoI’m not sure you understood my point. Moving continents isn’t an average person solution. In fact it exposes another problem - companies can easily register anywhere and restructure their finances for lower taxes.
- pineaux 4y agoIts interesting that you put so much value on clean streets? My observation is that in many European countries its very uncool to throw trash on the floor outside. People still do it, but its usually done hidden. Also people take offense when they see someone throwing trash on the street.
- Madmallard 4y agowhat works in tiny countries does not work in large countries
- WalterBright 4y ago> How does the average person avail these optimisation schemes? The Wall Street Journal often runs articles on various aspects of the tax laws, like how to do a Roth IRA conversion. I'm sure there are plenty of books on the topic, too, just check Amazon.
- yunohn 4y agoRoth IRA != Global Tax Evasion
- WalterBright 4y agoTax avoidance is perfectly legal.
- refurb 4y agoThere are plenty of tax optimization scheme available to the average person. Find a good accountant who can help. None of them are easy and usually require taking on financial risk, but they are there if you want them.
- MechanicalTim 4y agoCan you share some? I've spent a lot of time looking into this, reading and posting on boggleheads, talking with accountants, advice only financial advisors, etc. and the general consensus is that there isn't much you can do as a high W2 earner besides pay your taxes and be grateful to be in such a position.
- refurb 4y agoIf you define "average person" as W2 income only, then yeah, there aren't many. If you're married and your spouse can put enough time in to be a "qualified participant", you can you offset W2 income with rental losses (including depreciation). But for the "average person", you're looking more at investment opportunities - real estate using a 1031 exchange, investing in Opportunity Zones, etc. You may not be able to avoid taxes on W2 income, but you might be able to shift around when that income is recognized and reduce your overall tax rate.
- MechanicalTim 4y agoPoking around online it looks like over 90% of the country is filing only W2 income so that feels like a fair classification for "average person". I've gone pretty deep on the real estate research front. We have short term rentals but (fortunately) they do well enough that we can't show paper losses even with depreciation. We're both well employed so real estate professional status is off the table (which is why we started with short term rentals - schedule C vs. E) 1031s and opportunity zones don't do anything to change when your W2 income is recognized or reduce your overall tax rate, the only tax benefits are around the capital gains with the property. Both require upfront investments with post tax money. It just feels a little disingenuous to say there are "plenty of tax optimization schemes for the average person" because showing paper losses on real estate with one spouse getting real estate professional status, is the only strategy I've seen consistently mentioned.