15 Ways Rich People AVOID Paying Taxes

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Hello welcome back to what might be, one of the most important because by the end of this piece, you’ll understand how to keep more of your money than ever before. The rich have very expensive accounting experts that help them minimize just how much money they pay in taxes. Here are 15 Ways Rich People Pay little to no taxes and we believe it’s valuable for you to know about it. This isn’t financial advice, this is what we’ve seen the rich use to grow their wealth.

15 ways rich people Avoid paying taxes

# 1: Invest all of it: The rich don’t sit on cash unless they need it for something specific. Reinvested profit is not taxed if you invest it back into the business to grow it even more. If your company was about to make 5 million dollars in profit and before the end of the fiscal year you choose to invest that money, you don’t have to pay taxes.

#2: Everything you use is owned by a business: If a business needs anything to function, the money you spend isn’t taxable. The more things you can deduct, the less money there is to be taxed. Even going out to eat is a deductible expense for rich people.

Number 3: Move to Dubai, Monaco, the Cayman Islands or the Bahamas as your main residence. These countries have no income tax and don’t require you to pay any tax on the money you’re making. But there is a catch: it’s usually really expensive to move there, hence why the rich get an unfair advantage.

#4: Send it overseas: Facebook, Google and Apple set up companies in Ireland because of its tax friendly environment. The US company needs to pay a licensing fee to the Ireland company every year to keep developing and selling products in the US. This created a deductible expense for the US company. Through this scheme, they’re taking money out of the US economy and moving it to Ireland where they pay only 1%.

Number 5: Charitable donations 5th rule of taxes: Every rich individual owns a foundation of sorts. You can donate land, vehicles or other assets to a charity you own and it still counts as a charitable contribution. As the head of the charity group, you can still use the same car that you donated on paper.

Number 6: Instead of a salary they take equity As queen Bey put it: Elon Musk’s yearly salary is between $0 and $23,000. Elon’s net worth is skyrocketing and at this rate, it’s just a matter of time until he most likely will become the richest man in the world. The Tesla CEO gets new minted stock instead of a salary.

Number 7: Buying art here’s something only the rich know: The art trade is the last major unregulated market! When you buy a piece of art, it counts as an expense and a good portion of expenses can be deductible. You won’t have to pay any taxes if you decide to sell the picture for $6 million, making a profit of $5 million on a trade that would ordinarily be taxed. The government arrives.

Number 8: The shadiest and most perplexing option on the list is having multiple nationalities with no fixed location, yet people have done it successfully all around the world. Some super wealthy individuals choose not to have a home country, despite owning properties all over the world – from Monaco to Bhutan. Although we recommend having more than 1 nationality so you can reap the benefits of multiple passports, we don’t think that going full off the grid is a long-term solution.

Number 9: Gift money away: You can gift money to people and the gift is non-taxable. There is a $15,000 cap on the gift but you don’t have to tell the IRS about it. As of 2021, the lifetime gift exemption is capped at 11.7 million dollars in the US, as long as each gift is less than 15k. That translates to a damn lot of Rolex watches.

Number 10: Hold it in privacy coins: Crypto is changing the game in terms of wealth transfers and wealth security. With the rise of blockchains, a new breed of technology currencies known as PRIVACY COINS has emerged. These can be secretly traded, saved, and transferred. Although privacy coins are not unlawful, their legality varies by jurisdiction. If all of this seems fascinating to you, check out our Bitcoin Essentials course at alux.com/bitcoin.

Number 11: You have no money but you have assets: Rich people walk into banks and say: Look at how much stuff I own, the cars, the assets, the stocks. If it came to it, I’m good for the money, so give me a loan. The bank examines the portfolio and provides affluent individuals with access to cash at any moment. Because this is legally a loan, it isn’t their money, thus you aren’t required to pay tax, only to return it.

Number 12: Filing for bankruptcy: Filing for bankruptcy is expensive, tiresome and complicated, unless you’re super rich and know how to get over it. If you didn’t need the bank, paid it all out in cash, the financial loss would still count as a tax deductible, lawyer says. Bankruptcy laws prevent the bank from taking away the lawyer’s house or syphoning off his wages.

Number 13: Claim your yacht as your second home: taxtherich is trending all around the internet right now. People claim their yachts as secondary homes to get better taxation rates. As long as the boat has sleeping, cooking and toilet facilities, then the IRS treats the boat as a second home. Motor-homes can also be used in the same way – but how many super-rich people are buying them anyway?!

Number 14: Using a trust to avoid paying: estate tax among the rich there’s a funny saying that goes like this. A person doesn’t know how much he has to be thankful for until he has to pay taxes on it. Unless you’re rich you might now be aware of this. If you’re rich and you die, the state taxes up to 45% of the wealth you want to pass down to your children. The way rich people are structuring their wealth in order to keep the state from taking it away is by using TRUSTS. If you put things into a trust then, provided certain conditions are met, they no longer belong to you, so it’s not yours to pass them down onto your kids.

Number 15: Depreciating assets on paper to outweigh: Taxation was meant to help the poor, but since everything is privatized and optimized for profit it doesn’t work the way it was intended. If people knew how to optimize their money, their businesses would grow at much faster rates, allowing them to hire more people and create better products. What do you pay in taxes in your country? Let us know in the comments!

Bonus: Taxes are high because of inefficiencies: In really everyone wants to pay their fair share, the problem arises in the management of those taxes and the variation in terms of how much one should pay. Blockchain is a new technology that lets you control where your money goes through an app on your screen. It removes the need for middle men to make decisions on your behalf and allows you to choose where it goes. The Swiss people are actually fine with the high level of taxes they pay, it’s because the government does with the contribution what a government should do.

The way we pay our taxes will change this decade and we can’t wait for the system to be optimized. There can be a smart-contract where a small percentage of your income gets automatically attributed to the causes you care about with full transparency and control. We have a large audience from everywhere around the world so we’re curious to know: What% do you pay in taxes in your country? Let us know in the comments, it will make for an interesting conversation!

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