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How to not pay your taxes legally, apparently
- amai 1y agoNot paying taxes and then complaining about the state of nation (alternatively education, healthcare, security, infrastructur, etc). That is what the elites of our country are doing. Facepalm!
- msgodel 1y agoEducation and healthcare get insane amounts of money already. They're not struggling because they're underfunded. If anything they're good motivation to not pay taxes.
- amai 1y agoThe life expectency in the US goes down. It seems the money spent on healthcare is not enough. Also in a democracy the government is as smart as the average person. Given that we need much more education. What gets an insane amount of money in the US is the military. Half of silicon valley is financed by the military. All those IT billionaires wouldn‘t exist if not for money from the Pentagon.
- msgodel 1y agoSure cut that too. Throwing money at stuff doesn't make it better, often it just attracts people who are good at working over administrators for money. I think you're seeing a lot of that, especially in education. It's so bad now I think pretty much all the federal education resources are just a net loss and we'd be absolutely better off without them.
- amai 1y agoThrowing money at stuff doesn't make it better? Tell that all those investors who say "think big" and throw hundreds of billions at AI.
- deleted 1y ago[deleted]
- madaxe_again 1y agoSimilar mechanisms exist in the U.K. - entrepreneur’s relief/BADR allows you to pay a flat 10% on the full or partial sale of a business you founded, up to £1M - was £10M until 2020. You can of course do similar shenanigans with family to use their allowances too. You can also of course emigrate to Portugal under the NHR scheme and between the fifth and seventh year sell whatever you fancy and not be liable for CGT anywhere.
- trollbridge 1y agoThe headline is a bit clickbait-y. If your business turns a profit, it’s quite challenging to not legally pay taxes on the profits. Not to mention taxes owed on a salary you pay yourself. If your business just has losses, I suppose it’s true you can eventually find someone else to sell to who apparently wants to spend a lot of money to buy your money-losing business?
- jimhi 1y agoThis article is literally only about legal means to not pay tax when your company makes a profit
- coliveira 1y agoIf you cannot do what the article says, the only reason is that you're not rich enough. > pay taxes on the profits There are techniques to show zero profits, or to get tax breaks on these profits. Some of the most successful companies do this. > taxes owed on a salary you pay yourself. You don't need to pay anything to yourself. Some of the richest founders proudly say they receive a $1 salary.
- swat535 1y agoAnd yet, a trillion dollar corporation like Apple pays little tax.
- v5v3 1y agoSo they can return maximum dividends to shareholders. Who also won’t pay tax.
- msgodel 1y agoMost investors know how to read a financial statements, selling such a business isn't the hard part. The hard part is keeping the IRS from coming after you for claiming it's a business and not a "hobby."
- SoftTalker 1y agoWhat on earth is wrong with not paying taxes legally? What taxes does anyone pay other than those that they must pay? If the government wants a tax to be paid they need to make it simple and unconditional. If there are loopholes or ways to legally avoid it, they will be discovered and people will take advantage of them.
- deleted 1y ago[deleted]
- webdevver 1y agoi think the latest term is 'tax optimisation'... you could make an argument that in order to optimise your taxes, you have to be quite wealthy to begin with (hiring a tax guy, etc.) - otherwise you don't have any time left in the day to run your business. so in practice, the little guy winds up just paying the 'sticker price' so to speak, while the big guy has pros who can make their big profits even bigger.
- f4c39012 1y agoIf everyone had access to the same kind of tax advice that minimised taxes for the rich, I bet a bunch of loopholes would get closed pretty quickly. Some publicly available templates and simple to follow guides would encourage governments to act when they see a general shortfall in revenue. When new loopholes emerge, rinse & repeat. Maybe everyone would pay their fair share then
- smallmancontrov 1y agoNo, because most loopholes cost $$ to set up so they only break even above a certain income that few people have. You must be this rich to play.
- anthonypz 1y agoI’m curious to know: what are some of the things that need to be set up? Specific bank accounts to route money around?
- lucianbr 1y agoIf I understood correctly, it's "how not to pay taxes when selling your company". At least some of the advice requires preparation years ahead. What happens if the company does not become as valuable as you expect it to, or at all? Or way more valuable, for that matter?
- niklasbabel 1y agois the author writing this article from the future? Peter Thiel is 57 years old (2025). ‘Peter Thiel famously bought his Paypal shares (which were valued at a few cents when he founded the company) into his Roth IRA account. When he turned 65, he was able to access the billions that the Paypal equity was worth with 0 tax on it.’
- jekwoooooe 1y agoI would bet it’s LLM generated like most content these days
- jimhi 1y agoThe entirety of my blog was written pre-chatgpt and pre-scheduled. You can even check the images I use for all blog posts which were the first generation of ai images from 2021 which are quite bad looking now. LLMs were too awful to use nor would I use them.
- jimhi 1y agoWow for some reason I thought he was 65 already, thanks for the correction
- missedthecue 1y agoOne can access their Roth IRA penalty free starting at 59.5, no need to wait to 65
- jekwoooooe 1y agoA good way to get audited is to follow this advice An llc is not a tax entity also
- withinboredom 1y agoWhen you create your tax id for an LLC, you get two choices on how you want to be taxed. You can choose to tax it as an individual or as an S-corp. There are tax implications and it affects how you do taxes.
- jimhi 1y agoI wish. I know several people in person who do this. Read some of the other commenters saying how this is their standard mode of operation and they don't see any problem with any of this.
- edoceo 1y agoClickbait? This is how to avoid a tax event. It's different than not paying what's due. It's known, clever method to change the tax class of some of your money. We teach this method in my angel group.
- sheiyei 1y agoThis article comments on how tax deductions/exemptions should not exist in the form demonstrated, but way too subtly to be understood by someone so deep in the bullshit.
- gist 1y ago> This is the Qualified Small Business Stock Tax Exclusion. Basically as long as you wait 5 years before selling the business, you won’t be taxed on the first $10 million dollars. This isn’t some loophole, this is exactly what it was intended for so that people are encouraged to take risks. First this doesn't work for a Sub S only a 'C' corp. https://carta.com/learn/startups/tax-planning/qsbs/ https://carta.com/learn/startups/tax-planning/qsbs/ Second, this wouldn't work in many cases when someone only wants to acquire the assets of the business and not the actual corporation in order to avoid liability going forward. https://www.brickbusinesslaw.com/blog/should-i-buy-the-company-or-the-assets-of-the-company-2/ https://www.brickbusinesslaw.com/blog/should-i-buy-the-compa... Note that typically the buyer would decide the issue (sure you with your 'small' business could say 'has to be corp' but that would potentially limit companies that would want to buy) My point is the OP makes a broad statement "Business owners have the most flexibility of everyone to not pay their taxes. I personally think these things are questionable but its what I have seen others do over the last few years and what has been recommended to me by every top accounting firm in New York." and the benefit (like anything else is specific as far as the exact situation). Edit: Want to make clear the liability is more than the money liabilities it's also potential lawsuits that hold over to the company acquiring.
- bgnn 1y agoFor start-up founders: There are countries, like the Netherlands, where there is no capital gains tax. Move to such a country.
- tecleandor 1y agoNo thanks, I'm OK paying taxes at home.
- diggan 1y agoTechnically, if you move to Netherlands, that becomes your new home, so you'd be OK with paying taxes there too then :)
- piperswe 1y agoDoesn't the Netherlands have a wealth tax in lieu of capital gains?
- bgnn 1y agoIt works differently as it is after you make the gain, not at the moment. You can have a start up, buy the inital shares for 1k, sell it for 1M, pay no weakth tax (or close to 0) if your valuation during filing a tax return wasn't above a certain amount, get the cash and move somewhere else. If you stay here you will be taxed slowly every year but the rich doesn't do that as they put their money in LLCs etc.
- StrandedKitty 1y agoFrom what I understand, you are taxed on the unrealized gains from your assets, so you are effectively paying ~2% of the value of all your assets every year. Even if you simply own a stake at a startup, you still have to pay the wealth tax regardless of whether your stake ends up having any real value at all (most likely it won't).
- bgnn 1y agoIt depends. I have been in this situation several times. The benefit of the current regulation is that you can pay 0 income tax over stock options if you exercise them at the value of FMV. This is extremely beneficial for early employees. The disadvantage is that the tax service treat them as any other asset and if the company valuation skyrockets your shares might worth more than the 100k or so threshold they have for Box 3 tax. Ecen in that case you do pay a fractional tax over potential income they calculate over this. This might be tough but a very privileged position to be in as a good lawyer can come to an agreement with the tax service if the prospects are looking good (a potential IPO or acquisition). You will not pay ANY income tax over the profit you made in this scenario. The same applies to house ownership too for example. I did pay 0 income tax over 150k profit I made over my previous house when I sold it. When the money was on my account the wealth tax started to kick in, but it is after you make the capital gains not at the moment you make it.
- daft_pink 1y agoThe problem with your article is that it’s extremely difficult to turn a company into a >$10 million asset value company for the founder and outside of the silicon valley VC world a company that doesn’t generate any net income isn’t worth $10 million. It’s not that simple to conjure up a $10 milliion company out of thin air. So in the real world choosing QSBS stock results in electing into double taxation, so if you are starting a company to that will make net income that company is going to Also, just to clarify, the article says save $10 million in tax in at least one place, but what you really mean is $10 million in capital gains taxable income, so really it is saving about 2.38 million in Federal tax (20% plus NIIT) plus the state if the state recognizes QSBS. In my experience, most people benefit from QSBS after building a company for 10-15 years and selling for $3-7 million.
- HenryBemis 1y agoHow not to pay your taxes: 1) be rich (or even better filthy rich) 2) go to PWC/EY/etc, pay them handsomely, let them work their magic 3) they got offices all over the planet and are updated on every single legislation/regulation around the planet 4) they (PWC/EY/..) make sure you use the very best ways, tailor-made to not pay taxes. This could mean thwt you need to move and live to some random village in Switzerland (IKEA dude, the writer of the Alchemist (Paulo Coelho)). 5) never pay taxes
- sailfast 1y agoThe problem is not that folks aren’t paying their taxes. It is that wealthy individuals have lobbied to make the tax laws what they are. The quieter and larger the exemption the better.
- giarc 1y ago@jimhi - might need to update your article. See this other article on the front page now. https://www.mintz.com/insights-center/viewpoints/2906/2025-06-25-qsbs-benefits-expanded-under-senate-finance-proposal https://www.mintz.com/insights-center/viewpoints/2906/2025-0...
- jimhi 1y agoI saw, I will be keeping a watch if it becomes law.
- idontwantthis 1y agoAnother way for Americans is to qualify for the FEIE by working a remote job in a foreign country that isn't good at collecting taxes.
- eli 1y agoWouldn't claiming an exemption for foreign taxes that you didn't actually pay be fraud?
- coredog64 1y agoYes, but I’ll give a concrete example: I was an expat in New Caledonia. They have (or at least had) no income tax. The salary was below the amount that the US taxes for folks who are legitimately living outside the country, with a fair portion coming from a difficult to quantify housing subsidy.
- eli 1y agoSure but the premise is "legally" not "can get away with it" (Though, to be fair, I guess those two things aren't that different in practice)
- idontwantthis 1y agoYou don’t have to claim to pay taxes. It’s not the same as reciprocation.
- jimhi 1y agoThat is "only" ~100k or a so a year and if they aren't in the USA more than ~30 days a year. Small potatoes and arguably makes some sense.
- eli 1y agoThe hard part is identifying a stock you acquire for cheap or free now but will be worth much more than $10 million in five years.
- jimhi 1y agoIf you read what I wrote, it doesn't even need to actually be 5 years if the person does some creative stuff with options which I have personally seen.
- eli 1y agoSure, to delay the "sale". A surefire way to go from minimal value to multiples of $10 million in fewer than 5 years is even rarer.
- FreakLegion 1y agoThere's no legal 'creative stuff with options' to get around the five-year holding requirement. QSBS can be rolled over into other QSBS without restarting the clock, or you can agree to delay the actual sale (including payment) until you've met the holding requirement. At the end of the day, though, you have to hold the stock for five years, and any early payment you take (e.g. for writing options) is taxed normally.
- analyte123 1y agoQSBS has to be issued directly from the qualifying company. Stock sold on a secondary basis does not qualify.
- rob_c 1y agoFunded twice with nothing to show and offering better than realistic financial advice. I'll just leave it at that.
- anonymousiam 1y agoThe IRS sucks. They're staffed with dishonest grifters. I dealt with them when my dad was still alive, and hadn't paid his taxes for 11 years. They would send him a bill and he would just pay it without filing. They would continue to bill, assuming that he was hiding something because he never filed. Unfortunately, I was never able to get most of that money back. One time, the IRS "lost" the cost basis for my investments during a year of heavy trading. They sent me a bill for $400k. After fighting with them for over two years, I eventually had to pay them ($180 for something else I had overlooked and never got the records for). I went back and forth with them three times, and they kept claiming that I owed them smaller amounts, but still much larger than anything I actually owed. Most recently, I accidentally over-withheld on my 2024 income. They owe me about $30k and they're in no hurry to pay me. Fortunately, I learned that they must pay interest (7%!) on my over-payment. Hopefully I'll get this settled before next April 15th, but if I don't, I'll be sure to under-withhold on some of my deferred income this year to balance it out. What I've learned from all of this is that the IRS is less concerned with what is legal than with how much of your money they can grab. If you're wealthy enough to afford a good tax attorney, you can usually fight them and win.
- burnt-resistor 1y agoStep 0. In America, be rich to receive all of the legalized tax dodges to pay less than ordinary workers. Also note that US citizens who leave the country and pay foreign income taxes elsewhere still have to pay federal income taxes just like the only other country that does this, Eritrea. The only way out is to renounce citizenship and be doxed in the Federal Register, pay lots of legal costs, and risk arbitrary demands for $10k fines for "not paying back taxes" and also being denied entry should it be determined for it was "economic reasons" any point in the future.
- v5v3 1y agoDave Chapelle sums it up: https://youtu.be/YAJCvt9tOYE https://youtu.be/YAJCvt9tOYE (The donors to the politicians use these loopholes, so why would a politician end it...)
- HWR_14 1y agoI don't understand how Thiel was able to buy his PayPal shares using a Roth. I thought you aren't allowed use your Roth to invest in a company you work for. Can someone who knows more than me explain where I am wrong?
- jimhi 1y agoHe was originally a big investor not a founder (or at least set it up to look that way)
- gamblor956 1y agoYou can't anymore because of Thiel. He's the reason they closed the loophole.
- HWR_14 1y agoThat makes sense. Thanks.
- gamblor956 1y agoThis advice is generally good. Used to give variations of this when I was still at a firm. The most important one if you really want to avoid paying taxes on the sale of your business is to move to Puerto Rico and establish domicile there before discussions for a sale have commenced.
- readthenotes1 1y ago'When he will turn 65* (thanks niklasbabel* he is not 65 yet!), he able to access the billions that the Paypal equity was worth with 0 tax on it. ' Pretty sure it's 59.5, as long as the principal has been in 5 years.
- IAmBroom 1y agoIn this thread: ~100% of the posters use "loopholes" to refer to tax exemptions they feel are bad, and should be eliminated. and ~100% of the posters believe some tax exemptions are good. These are not "loopholes". Not in this thread: any objective rule by which these two ideas may be differentiated.