You can legally pay no taxes if you earn under a certain amount. This amount is known as the standard deduction, and it is $12,550 for single filers and $25,100 for married couples. However, the standard deduction is not enough to cover a person’s expenses, which is why he or she should itemize deductions. These can include home mortgage interest, property taxes, and charitable contributions.
How Does Passive Income Affect Social Security?
Business taxes are not easy to calculate. However, a cupcake shop owner earning $100,000 might not be required to pay any tax Passive Income Planner Girl. A recent article by Fortune Magazine cited the example of Gawker Global’s Hungarian subsidiary.
The company transferred its revenue to the Hungarian subsidiary, which paid an effective tax rate of only 5% – compared to the 34% rate in the US. Considering whether you can avoid paying taxes altogether, consider the following strategies.
Many rich people avoid paying income taxes. The tax code is riddled with loopholes. Higher-income earners are more likely to use these loopholes, and wealthy individuals hire professionals to find them. However, this isn’t an overnight process, and requires years of planning.