Your Wealth Reserve: This is how Jared avoids his fair share of taxes

This is how Jared avoids his fair share of taxes

Like papa, Jared uses other people’s money to buy commercial real estate. He pays himself well to create losses. He adds the phantom expense called depreciation (building use and aging). The losses mount up over the years and are added to this year’s loss. He earns $millions but never pays tax. We taxpayers actually give him a refund. Here’s an example from 2015. W-2 income: $198,000. Taxable interest: $536,000. Dividends: $1,000. Capital gains: $974,000. Deductions: Tax losses from real estate and other partnerships: $3.5 million. Tax losses carried forward from previous years: $4.8 million. Total adjusted gross income: Negative $6.6 million. Tax refund $4,000. A new Jared NJ property just so happens to be located on one of papa’s

Opportunity Zones for another tax subsidy in Jared’s future. We have to pay Jared’s share of taxes too.

Use your own legal tax shelter: https://www.amazon.com/Trump-Tax-Shelter-Avoid-taxes/dp/1985448300

Prepay your 2019 tuition to maximize your tax credits

If you paid less than $4,000 of tuition for your college student, you can pay for the first semester or quarter of next year's college tuition in December and use that tuition for this year's American Opportunity Credit. However, you want to do the exact opposite if you've already paid more than $4,000 for your college student who qualifies for the American Opportunity Credit. You get no additional benefit from the American Opportunity Credit (max $2,500) if you pay more than $4,000 in tuition each year. In this case, you'd want to wait until January to pay tuition. That way you might increase your American Opportunity Credit next year since you've already maxed out the allowed credit this year. Be sure to show a Form 1098-T from your college or university to your preparer. Credit is partly against tax and partly refund if you owe nothing.

Use all your tax credits: https://www.amazon.com/Tax-Credit-Class-your-credits-ZERO/dp/1539462382

Are you tempted to move your nest egg to gold?

Before you buy gold or its ETF, GLD, compare the fall it made in 2012, losing more than HALF its value over 10 years. Meanwhile over the same 10 years, the stock market index IVV, grew 129%. Use perspective to judge your investment accomplishments. Of course they all go up and down but did you and your broker KNOW to get out of gold on July 1 2012? I doubt it. Market timing is a sure way to lose money—you must be correct getting in and getting out. Over time your best bet (unless you have insider information like our Congress people do, is to hold, NOT to use a professional ‘gambler’. Compare broker /advisor-assisted accounts to a stock index (S&P 500): 3.79% vs 11.04%. Would you rather earn 11% over time? (most fund fees <0 .04="" o:p="">

Forget the ‘professional’ salespeople: https://www.amazon.com/You-Beat-Wall-Street-professionals/dp/1986031373

Is final expense ‘senior’ life insurance right for you?

‘Premium never goes up and coverage never goes down.’ ‘You can’t be turned down.’ ‘Don’t leave your family with expenses.’ ‘Only $13.40 a month.’ Let’s look at the caveats for these plans. Coverage is limited for first 2 years and $13.40 buys only a $2,000 benefit at age 60 if you are female. Average age at death is 81 female, 76 male. So $13.40 for 20 years is $3,216. A $2,000 benefit (costing $3,216 or more) will be worth $1,000 in 20 plus years (inflation). You can buy more but the cost goes up at each age when you buy it. If you want to cover funeral and medical expenses for sometime in the future, this is the worst way to do it. No medical means the rate is the highest possible. If you invested your premium in a saving account or CD, you might have $4,400 not $2,000. Bank POD accounts serve this purpose. Clearly this account is for someone who responds to emotional TV appeals. A cost-effective legacy would provide an IRA which pays the beneficiary immediately. This could include funds for the funeral AND help the grandchild. Besides, after you pass, your debts are not owed by your relations.

Pass on your legacy: https://www.amazon.com/Give-your-Grandchild-Lifetime/dp/1456433105

Need help starting to save? How’s 5%?

This credit union will pay you 5% on your money to get you started in a regular savings plan. This plan includes a checking and savings account plus certificate of deposit earning 5%. The requirements make it a perfect savings starter for a young person. This is the first step to using the IRS approved tax-FREE account—the Roth IRA. You earn great rate and you pay no taxes on the interest. WOW 5% without paying taxes on interest. Later when you feel comfortable, you can experience tax-FREE growth on a securities account at a low-cost mutual fund provider. Then you can earn 10-12% on your retirement investments and pay no tax now or later when you take the money out. You can take out contributions anytime tax FREE. However, if you keep investing automatically in this account, you could reach $1 million later—Compound interest and earnings without taxes EVER. Compounding is what keeps the rich, rich.

It is a miracle: https://www.amazon.com/Miracle-Compounding-Turn-$9-a-

day-into/dp/1470176513

Is this tax shelter right for you?

You can save/invest up to $500 a month and never pay tax on your earnings. This tax shelter is approved by the IRS! You don’t have to hide your money overseas. You don’t need a lawyer to set up the trust. You don’t need an advisor to manage your earnings. You don’t need an accountant to prepare your return for this shelter. You can set up this shelter on the phone or online in about 1 hour. You can have the trustee put the same monthly amount in automatically. You can have the unbiased trustee manage the securities at little cost. Tax-FREE earnings means you are not paying 10%, 12%, 22%, 24%, 32%, 35%, or 37% on your money after you accumulate $500,000 or a $1 million or TWO. (You can earn 10-12% a year over time.) There is no penalty if you need to take out the amount you put in so far. You may even be able to put your 401k in this shelter.

Buy before Congress changes terms: https://www.amazon.com/Trump-Tax-Shelter-Avoid-taxes/dp/1985448300

How can you avoid home buying mistakes?

No 1 rule: get mortgage first so you can pounce. Write down your absolute needs. This will NOT be your only house. Be practical—walk around neighborhood at night and day—looking for noise and pollution. Never buy a home with a shared driveway. Consider the nearby activity—your street used as detour from main road when school in session? Do research: Look at the neighborhood tax records—are taxes jumping in recent years? Consider estate sales—study internet listings for private sales—for real bargains. Make sure you have $5,000 on hand for immediate repairs or new inside painting—costs less BEFORE you move in. Buy lawsuit insurance too.

Make a plan: https://www.amazon.com/Homeowners-Insurance-Beware-Coverage-Policy/dp/1480100870

Is the IRS saver’s credit right for you?

Yes, you can receive a credit for saving worth up to $4,000. The amount of the credit is 50%, 20% or 10% of your retirement plan or IRA or ABLE account contributions depending on your adjusted gross income. The maximum credit amount is $2,000 ($4,000 if married filing jointly). The Saver’s Credit can be taken for your contributions to a traditional or Roth IRA; your 401(k), SIMPLE IRA, SARSEP, 403(b), 501(c)(18) or governmental 457(b) plan; and your voluntary after-tax employee contributions to your qualified retirement and 403(b) plans. Let Uncle Sam help you get rich.

Use your tax refund to fill your account: https://www.amazon.com/Tax-Refund-Millionaires-Let-Uncle-Help/dp/149595644X

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