Tax Loopholes do not exist

Discussion in 'Politics' started by Wyldgusechaz, May 11, 2009.

  1. Wyldgusechaz

    Wyldgusechaz New Member

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    I see this mentioned here all the time. What tax loopholes are left in our tax code? I make over $250k and I know of one loophole that saves me a few $1000. I am personally incorporated such that can avoid the Medicare tax on all monies earned over $100000. Thats it.

    Real Estate offers no tax loophole. Depreciation schedules are long and tiny.

    Oil and gas is a total crapshoot.

    You could have used insurance to shelter some income but its really convoluted and the IRS has been working hard to close those doors.

    Where are these nefarious tax loopholes?

    Flashy, do you know of any tax loopholes that can really shield income? I do not.
     
  2. B_starinvestor

    B_starinvestor New Member

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    you can load up on a profit sharing contribution, but you would need to make the same percentage contribution to all your employees; also sock $16,500 into your 401(k). The max on both contributions for yourself is $49,000 for 2009.

    Aside from that, there isn't much going on.
     
  3. pym

    pym New Member

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    This is just too rich!!! HAAAhhhahaaaaahhhhhaaaaa!!! trolling a penis website for financial advice!!!!! HHHAAhhhahhhaahaahh!!!!!
    Goosey......really now......if you were earning even half as much as you say.....and i very much doubt that......kinda like penis inches here.....Couldn't you at least afford a financial advisor? Shit, you could go to a H&R block and plonk down 100 bucks and get your taxes done and surely get as much financial advice as here? Jah? Cuz when STAR speaks......the whole room just goes breathless with anticipation. Nice try....i'm so in awe of your bull-shit. Did you take my advice and get the Tag-Huer watch for the reasons i described? I hope so.:wink:
     
  4. B_Nick8

    B_Nick8 New Member

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    Interesting, Goose. Star has an idea of my tax bracket and while I have a good accountant, I'm not wildly casting about for every last way to 'save' a dime legally or, more questionably, morally possible. I don't mind paying more taxes as long as they're funding programs I believe in. Even in an economy where everyone's hurting.

    On the other hand, there are ways the rich can always protect their money and tons of loop holes to do that with. If you don't believe me, ask my mother.

    Oh, and before anyone jumps on me, I won't live to benefit from it much. Neither will the kids I won't have. Just the charities I like. That's how it works sometimes.
     
  5. Wyldgusechaz

    Wyldgusechaz New Member

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    No watch. I bought a couple Colt Pythons.

    I have noticed repetitively that posters here think there are these *tax loopholes* for the rich. They do not. Frustration comes from not understanding the world around us. If you realize there is no one getting any real breaks, maybe we would not be so angry like you.
     
  6. Wyldgusechaz

    Wyldgusechaz New Member

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    I am curious: How does she do it? Look at my search for tax loopholes.

    Tax Loopholes

    Anyone can do those pretty much and they don't save that much cash. We can all start a home business. His other advice on a 2nd home can be fraught with risk. Anything earth shaking there that only the rich have access to?
     
  7. B_Nick8

    B_Nick8 New Member

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    Sorry. I was talking about estate taxes for the most part. But if you've got a good accountant there are tons of very legal ways to avoid taxes and no, I'm not an expert on it. I just know that while my mother would absolutely never do anything that was even marginally outside the letter of the law, and she complains about every dime she sends the government, that's why she pays her guys the big bucks. If I hear any good tips, though, I'll pass them on.
     
  8. Bbucko

    Gold Member

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    As someone who chooses not to go on disability but who earned about 110% of FPL (you look it up) last year and still paid taxes, I find this topic obscene. And I do not use that term lightly.

    Go fuck yourself, Chaz. You make me want to vomit, but you're not worth the effort.
     
  9. midlifebear

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    Yeah, this topic is one that isn't especially interesting, even for those who haven't been forced into working poverty. Frankly, if the Goose Chaser can't figure out legal ways to deduct from his personal and, (supposedly, he now claims to serve on the board of his own corporation) corporate taxes, well . . . they guy is the flaming dumb ass fool as he's always proven himself to be. I doubt he even knows what kinds of corporations are legitimate in his part of 'Mericuh, their purposes, or how they function.

    What I find so amusing is that he has repeatedly decried that I hate the USA, which I don't. I have no problem paying all the taxes the IRS maintains that I owe. And I gladly pay it. He, however, is looking for ways NOT to pay his fair share of taxes for the country which he supposedly LOVES. I guess that's another example of how much I hate the USA in the fantasy world of the one who chases after geese. I hope he catches a few of them. They are mean and protective animals that are easily provoked and draw blood.

    Colt Pythons? This is a person who seriously needs to be avoided.
     
  10. sparky11point5

    sparky11point5 New Member

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    Actually, my firm can tell you how to do this, Goosey. We'd charge you approximately $250,000 a year.
     
  11. B_starinvestor

    B_starinvestor New Member

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    One other suggestion - just pay yourself $50K or so in W-2 income, and take the rest as an income distribution from your corporation (I'm assuming you're an S-Corp). You'll avoid social security taxes/FICA on the entire income distribution.
     
  12. sparky11point5

    sparky11point5 New Member

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    OK, here is one simple counter-example to Goosey's 'question'.

    Taken from a recent press release regarding Raytheon. (I decided to pick on a Massachusetts company, home of all liberal socialist tree-hugging peaceniks.)
    -----
    Raytheon Reports Strong First Quarter Results; Increases Full-Year Guidance

    Highlights

     Net sales of $5.9 billion, up 10 percent
     Operating income of $712 million, up 17 percent
     Earnings per share (EPS) from continuing operations of $1.11, up 21 percent
     Solid bookings of $5.2 billion; backlog of $37.9 billion
     Increased annual dividend by 11 percent to $1.24 per share, as previously
    announced

    WALTHAM, Mass., (April 23, 2009) – Raytheon Company (NYSE: RTN) reported first
    quarter 2009 income from continuing operations of $457 million or $1.11 per diluted share compared to $401 million or $0.92 per diluted share in the first quarter 2008.
    -----

    Now, last year, Raytheon paid $456 in state taxes.

    Got it yet, amateur-money-dudes?
     
  13. Wyldgusechaz

    Wyldgusechaz New Member

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    How do they do that? This is the corporate tax rate for america:

    The Tax Foundation - U.S. States Lead the World in High Corporate Taxes

    We have the 2nd highest in the world. How did Raytheon pay so little to the state?
     
  14. Wyldgusechaz

    Wyldgusechaz New Member

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    I do that now as stated in my OP.
     
  15. B_Nick8

    B_Nick8 New Member

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    I hear you. I don't feel well either and I particularly do not like having to make my point as I did.

    People can make unfounded assumptions sometimes but dem's the risks you take.
     
  16. sparky11point5

    sparky11point5 New Member

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    OK, Goosey, I'll try to answer at the high level. I am actually a M&A guy, and only know enough about corporate taxes to be dangerous, but here is my take.

    You are focused on personal taxes, and there are a number of ways to minimize the amount due. Most of these are straight forward -- shifting income to capital gains, well-timed losses, trusts, etc. Yet, any government (not just the US) has a huge advantage in taxing personal income or consumption. The reason is that they "know where the money goes". Income has to end up in your hands, so it is much easier to find and tax consistently. This is why it seems to you that there are no loopholes. (I actually support consumption taxes and reduced income taxes, as long as these can be made progressive and not unfairly burden low-income and working families.)

    That said, really good accountants (not me) do know these tricks and help people like Nick's mom.

    Serious money, real money is about corporate income, before it gets into the hands of executives and shareholders. After 60 years of peace and relative prosperity, money is essentially without borders. Capital flows to where taxes are lowest for multinationals. Minimizing corporate taxes is all about allocating income/expense to where a company can effectively pay zero taxes. This is a lot worse now than when I started my career 16 years ago. And, it is almost all legal.
     
  17. B_starinvestor

    B_starinvestor New Member

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    I thought the OP stated you were only saving medicare over $100K. Everybody gets out of paying FICA over $100K even without planning. That's the limit for Fica withholding on all W-2 employees (no limit on medicare) but my point is drop W-2 from $100k to $50k and you'll save another $3,000 in Fica withholding.
     
  18. midlifebear

    Gold Member

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    sparky11points5:

    You are far too magnanimous and kind, which is probably why I'm so fond of you and always read your posts. If you've been paying attention, I've gone out of my way to be less than tolerant of the usual posse of the über righteous cons who post in the political threads. Hence, I regard helping he who chases the geese tantamount to helping him hold the gun as he tries to shoot you. You're too kind.

    I've been able to live abroad by being careful not to take or "receive" any distributions or anything the IRS could remotely consider as a profit or personal income. All profits fold back into the Sociedad Limitadas that have been formed to manage the property purchased with post-taxed US Dollars. (Notice my use of the passive voice, there's a legal reason for using it.) Those SAs are not exempt from city, provincial, and federal taxes in the countries they exist. I oversee and authorize the payments of lots of taxes including strange varieties of IVAs (or valued-added taxes) to the governments of Spain and Argentina. And I am being much more honest than large US corporations that hide profits in off shore accounts. Trust me. The IRS knows EXACTLY where I live in Spain, Argentina, and Nevada and all I have to do is be stupid to think I might get away with bending the rules just one time and I'll be screwed. I'm not that stupid. Although my CPA insists I am because, in his opinion, I pay far more taxes than he believes I need to.

    But thanks for the heads up on your firm's ball park figure of a $250,000 annual retainer. Once again I feel warm and fuzzy regarding my CPAs (one in each country and my favorite who works for a large accounting firm in Nevada). There have been years I've paid more to my USA accounting firm than I have owed in taxes owed to the USA, but not more than three or four times. A knowledgeable CPA is a good person to have in one's life.

    I know of many retired US citizens living in retirement communities in México. Because of Méxican law they cannot own their homes or the property upon which their homes sit precisely because they are US citizens. Instead, they have created Trusts managed by local Méxican banks. Their Trusts own the property to which they pay monthly, bi-annual, or annual maintainence fees. And they maintain US Dollar accounts as well as Méxican Peso accounts into which they divide their retirement incomes from the USA to pay local taxes and other stuff, like buy food. Despite the weirdness of the global economy, there is still a big market for US citizens looking to buy an existing Méxican trust. The Méxican Pesos stretches their fixed incomes an extra 20% -- often more. When the trust is sold, the Méxican bank retains a small transaction fee (much less than the usual 6 points Realtors in the USA insist upon raking off the top of a real estate transaction).

    I remember being told how stupid I was for taking "incredible" risks investing in property overseas. In lieu of how many hard working families are facing losing their homes in the USA, I'm amazed at how I've been able to remain "mortgage free" since 1977. And without the help of throwing money down the gaping throat of Wall Street upon the recommendation of folks such as those who post to this forum and insist that dullards such as myself cannot possibly understand how "the real financial world" works. And I've done it without buying some asshole's get rich quick scheme for $30 on a late night infomercial. Just imagine!

    Anyway, it's good news to hear you've got your advanced accounting degree. AS for helping out those evil-doers who post on these threads, you're a better man than I am.

    Remember, always treat your clients nice. :smile:
     
    #18 midlifebear, May 12, 2009
    Last edited: May 12, 2009
  19. D_Tully Tunnelrat

    D_Tully Tunnelrat New Member

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    I'm no accountant, but even with my rudimentary knowledge, I can get it. The notion of a "loophole" is due to a tax code that is too voluminous for anyone to fully know, or precisely comprehend. It is the difference between your stated rate, and what rate you actually paid, whether individual, or corporate.

    Hence Raytheon can be subject to the 9.5% Mass Corp. rate, which should have resulted in a tax due of $67M per quarter, based on a $712M quarterly NOI, per Sparky's example, but ended up paying only a tax bill of $456 for the year, due to the way in which depreciation, tax credits, and off-shore earnings, etc. are accounted for. It is immoral, but unfortunately totally legal, since many tax laws are actually written, in large part, by lobbyists.

    By nature, if you give a human way around something painful (e.g taxes), many will try and take it. When you create a tax law that is simpler (flat, consumptive, etc.), and hopefully based it on some means tested level of fairness, you remove the ability to circumvent the tax. Perhaps then more human ingenuity can go into creating something of value, rather than figuring out ever more complicated ways of tax avoidance.
     
  20. sparky11point5

    sparky11point5 New Member

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    MLB - Karma, bro, Karma. Plus, I believe we should all value facts over blowhardism, so I just try to do my part.

    Thanks, fellow traveler!

     
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