One thing that everyone in the world has in common is that they all pay taxes. It doesn’t matter whether you are a billionaire or make 20k a year, everyone has to pay taxes. And, almost every single person wants to find a way to cut their tax bill. The problem with your tax bill is that it is expensive and mandatory. So, people with very little money want to keep what they have while the rich don’t want to throw away their wealth. Thankfully, you can if you know the tricks of the trade. Here are the legal ways to cut your tax bill.
Trust A Spouse To Reduce Your Tax Bill
Are you married or in a long-term relationship? If the answer is yes, your partner or spouse can help you avoid tax. The reason is that everyone has a tax threshold. Some people pay the lower rate or tax while others pay the higher rate. If you pay the high rate but your partner pays the low rate, you can distribute your wealth. Depending on how much you transfer, they will only pay a small amount of tax on your income. This is a great way to stop the government from hitting you with the top rate of tax.
Invest In Your Kids
Your spouse or partner is one avenue, but your kids are another avenue. The reason is that everyone has a tax threshold with regards to their savings. As long as you don’t go over that threshold, you won’t have to pay tax on your earnings. The problem is that the amount it quite low for an individual. However, it isn’t as low when you have a number of people at your disposal. And, if you have kids, you have at least two or three people that can help. All you have to do is set up a trust fund in their name and transfer the funds to their account. What’s even better about this is that you can set parental controls so that they can’t touch it until they are of age.
Consider Real Estate Opportunities
The odds are high that you will need a place to live. Sure, you might already have one, but you can never have too many if you have the money. After all, you can leave your additional properties to your loved ones or rent them out for steady profit. What you don’t want to do is sell them outright. Any sale, and therefore the money, is subject to tax. So is rent, yet rent is a lot smaller amount. As a result, you will only pay a small amount on a steady income every month instead of a large chunk. Also, you can cut your capital gains tax bill if you have some expert help. What you need to do is figure out how to calculate capital gains tax and ask for their advice. And, their advice could save you a fortune.
It is important to remember that you will have to pay some tax because it is a legal requirement. Still, you don’t have to pay as much as you might imagine. With these tips, you might be able to slash your tax bill in half.