Tuesday, April 12, 2016

Vital Tips On How To Avoid Paying Taxes Legally

By Edward Baker


There is always that pinch that taxpayers feel when paying their levies. This pinch actually is worse for people who a lot of money. PAYE commonly known as pay as you earn seems to oppress those earning more than those people who earn peanuts. This seems to reduce the gap between those people earning more and those earning less hence bridging the gap between the rich and poor people. But some rich people have found a way to avoid paying taxes legally.

As the end of tax year approaches, it is vital that one takes stocks of all their savings and also investments they have accumulated simply to ensure they can take advantage of tax free allowances available. Tax avoid has in recent years become something that is dirty while tax free ISas, for instance, are considered a means of avoiding taxes.

One of the ways or method of how to avoid taxes includes using Isa allowance. Each and every person has tax-free Isa allowance that is granted annually. While the rates of Isa basically are not very good compared to high street savings rates, they are good because of their complete tax free. Some rich people and also a few corporations are using legal and even quasi legal tricks generally to cling onto their hard earned money.

This has been a significant corporation asset to dodge paying heavy taxes. Apart from the corporations, there are quite a number of popular celebrities who have numerously taken advantage of their global travels and also relocations to simply avoid remitting income tax. Some of these celebrities include the rolling stones and David Bowie among others.

Another great tactic is simply to take a small portion of compensation or income as stock options. The options are only taxed when they are being exercised. Tax deferral can be used to avoid paying levies. Some wealthy people enjoy same tax-deferred advantage or benefits of program for retirement like IRAs among other. Because of wealth, these people are able to max them out yearly hence benefiting entirely from the limits basically allowed by law.

Capital gains management is basically one of the ways used by rich people to save on tax. Assets classified under long-term capital gain that is if they are held approximately for more than one year are generally taxed at a flat rate of 15% and for rich people their rate is 20%. So these wealthy people take advantage of this and classify their short-term assets under long-term assets.

Some of these shady businesses include selling brand good for supermarkets without actually impacting value of the major or main brand. Another way is through equity swap which is basically a tax evasion method. It is actually an official agreement between two parties who have common interest that is reducing their taxes and agree to exchange their gains and losses of set of assets but without actually ownership transfer.

Gains are timed so as to bring greatest tax advantage. Losing ventures which have resulted to capital losses can actually be used purposely to offset capital gains. This tax-loss harvesting also known as strategy of simply selling off investments that are poorly performing at strategic times so as to use the losses basically to cut down capital gains, it actually optimizes positive tax effects. Income modification can also be used wisely to avoid paying a lot of tax.




About the Author:



No comments:

Post a Comment