Feeling the hit at tax time? That must mean you're not a member of the 1%, since the upper-upper crust is skirting $160 billion in taxes each year, according to the Treasury Department — and it's perfectly legal.
@johnsfinancetips How to pay less in taxes, understand how the tax code works and work it. Now if you don’t know, then find yourself an accountnt who does. Many of these “hacks” are not exclusively meant for the rich. The 1031 Exchange is a great method to defer paying capital gains tax on your real estate. In fact, you can keep rolling it up until you pass. Then you can pass off your assets to your kids at a stepped up cost basis. #taxes #1031 #realestate #fintok #moneytok #johnsfinancetips #personalfinance ♬ original sound - John Liang
Starting foundations, creating a family office, or moving to a state without an income tax are just a few legal ways for the megarich to reduce tax bills.
Though President Biden's campaign pledge to tax the wealthiest hasn't happened yet, California, Connecticut, Hawaii, Illinois, Maryland, Minnesota, New York, and Washington are introducing proposals to tax the rich. Each state is approaching the issue differently, but strategies include taxing assets and lowering the threshold for estate taxes.
Gallery: Surprising Things Your State Taxes
Or the states could follow in the footsteps of Canada, which instituted a luxury tax last year targeting expensive planes, boats, and vehicles manufactured after 2018.