IRS Reveals How “High Income Earners Pay No Tax”

The IRS “Statictics of Income” division has just released the Spring SOI Bulletin. While we don’t expect it to challenge the latest Tom Clancy thriller on the best seller list, the Bulletin actually appeals to an even bigger audience- anyone who wants to learn, the secrets of reducing taxable income.

The big news in this issue was this: in 2007 4,535,623 Americans reported “ adjusted gross incomes “ of more than $200,000 or more. 10,456 of them paid zero federal income tax! I mean nothing, zip, zilch, nada!!!

Paying no tax is hardly remarkable. According to the Washington-based Tax Policy Center, this year 47% of Americans will pay no federal income tax. That’s because their income is so low, or because they qualify for enough exemptions, deductions, and credits to eliminate any liability. But making $200,000 and paying no tax-now, that’s an accomplishment. How did they do it? Where did they get the personal tax advice?

According to the IRS, here are the items that produced the largest effects on high income returns:

• Interest Paid (including mortgage and investment interest)

• Taxes Paid

• Charitable Contributions

• Casualty and theft Loses

• Partnership and “S Corporation” loses

• Plus five proprietary tax reduction strategies that the IRS hopes you never learn!

You probably don’t want to count on “casualty and theft losses” as a way of reducing taxable income. But you can count on one thing. Very few of those 10,456 lucky winners sat down to file their taxes and discovered their zero tax bill by surprise. Almost all of them did it through careful tax reduction planning.

Do we sound like a broken record with the “P” word. Sorry, that’s too bad. Tax planning is really the key to minimizing your taxes. So while we can’t promise tax planning will eliminate your tax bill entirely, we can tell you it gives you your opportunity to keep more of what you earn.

Are your friends , family, or colleagues grumbling about unhappy April 15th surprises/ You can be a hero by helping them avoid those surprises. Let them know that we can help, with the right tax plan and the right concepts and strategies for them. And if you don’t have a tax plan of your own…well, you know where to find us!

Call now at 610-945-1954 to set an appointment.