Trump only paid $750 in federal income taxes. The even BETTER news is, those same rules apply to you too, and there are loopholes a-plenty for you too!
October 1, 2020
By: Bobby Casey, Managing Director GWP
But…..it was hilarious.
It was the best thing on tv this week. I cannot recall any stand up comedy show or sitcom that made me laugh so hard and so often. Even my teen son got in on the fun.
But aside from the political theater from this week, Trump’s tax return showing a mere $750 payment has been blowing up in the news and social media.
The democrats are crying foul that Trump had a patriotic and a moral obligation to pay millions.
Some democrats are saying that this exposes Trump as a fraud and he isn’t nearly as wealthy as he claims.
Meanwhile, many republicans are cheering him on as a bastion of crony capitalism while ironically still fighting for border controls to keep those “illegal” immigrants out of the country since they don’t pay any tax….
Let us not forget that the tax code that allowed Trump to get to nearly zero taxes owed was all implemented during previous administrations and congress.
That’s right, Biden enabled all of this…..bwahahahahahaha.
The hypocrisy on both sides is amazing. I think I’ve pulled a stomach muscle this week between laughing at the tax hypocrisy and the debates.
But let’s move on to the meat and potatoes of what I want to discuss: tax loopholes.
There are tons of tax loopholes you can take advantage of right here, right now.
If you are a non-American, the US is by far the largest tax haven in the world. The US also has not — and will not — sign the CRS directive which means they will never share your financial data with other countries.
For example, a German citizen can easily open a US LLC, bank account, and brokerage account, trade stocks all day long, and pay zero or near zero US taxes…..all 100% legal.
Or a Russian citizen who runs a virtual company can, depending on the nature of the business, use a US LLC to open a US bank account and merchant processing to run his business all with zero US tax owed.
Americans have their own set of loopholes, albeit not as lucrative as using US structures for non-Americans, and they are quite extensive.
If you are an American expat or digital nomad, it is easy to earn about $150,000 tax free using the Foreign Earned Income Exclusion (FEIE). There are two ways to qualify. One of them allows you to actually be in the US up to about 4 months per year. If you properly structure your business, you can completely eliminate your self-employment tax saving you up to $18,000 per year alone.
For Americans who ARE NOT expats or digital nomads, there are ways to outsource parts of your business offshore and lower your corporate tax rate from 21% to 10%. To sweeten the deal, if you pay yourself a lower salary from your corporation, you can pay yourself a dividend that is NOT TAXED AT ALL.
So imagine your business earns $250,000 per year. At this level you are likely structured as an LLC. Including self-employment, state and federal tax you are paying around $100,000.
If you took advantage of some of these loopholes I’m talking about, you could restructure your business and be paying a $25,000 corporate tax plus about $5,000 in personal tax. That’s 70% in tax savings in your pocket.
And these are just a few options available to minimize, or possibly eliminate, your tax burden.
If you are a die-hard patriot who believes you have an ethical obligation to pay as much tax as possible, by all means, delete this and forget you ever read it.
If you are like me, and think people should keep as much of what they earned as possible, entrepreneurs and investors are the economic growth engine of the world, and we all have the right to take advantage of every single legal tax loophole offered around the world, reach out to us to schedule a consultation.
Better yet, join our membership program, GWP Insiders, by clicking here! Members get unlimited free consultations, discounts on company structuring, invitations to our private events, plus tons of content on internationalization strategies.
Until next time, live well.