Click here to Download Tax Free Wealth PDF Book by Tom Wheelwright having PDF Size 2 MB and No of Pages 270.
It hasn’t always been this way. In the early years of the income tax, only the very rich were subject to the tax. There are great tax benefits for you, huge educational benefits for them, and you have someone in place to take over when you are ready to retire. It was believed that since the rich had more income than they needed in order to live comfortably.
Tax Free Wealth PDF Book by Tom Wheelwright
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|No of Pages||270|
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About Book – Tax Free Wealth PDF Book Download by Tom Wheelwright
They could afford to pay some of this back to the government. And because they had earned this income under the protection of their government, certainly it was fair that, in time of war, they could pay back the government some of their excess in order to maintain their freedoms and the protection afforded by the government.
This all changed after World War II. The governments of the world found that the income tax was a useful revenue-raising tool that could be used to rebuild an economy that was ravished by war. So the governments began taxing the middle class. At first, it was only the excess earned by employees over the average cost of living that was taxed.
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The government provided exemptions for the first income earned so that the average person could live on their regular earnings and only pay tax on the excess that would otherwise go to investments. Tax Free Wealth PDF Book Download As they watched the behavior of the people who were now paying income tax, the government began to tinker with the tax law to see how it would affect the activities of the taxpayers.
What they found was that a minor change to the tax law could have a profound effect on the behavior of the people. If the government gave a tax incentive to invest in business, more people would invest in business. If they gave a tax benefit to those who invested in oil and gas, more people would invest in oil and gas.
As a child, I was always looking for ways to make money. I started my first business venture with a buddy of mine when we were nine years old. We noticed that the marigold flowers had died and gone to seed. Those of you who aren’t green thumbs may not know this, but marigold seeds are some of the easiest things in the world to harvest.
All you have to do is rip the top of the flower off and dump a whole slew of seeds into your hand. Tax Free Wealth PDF Book Download My buddy and I thought it was pretty cool how easy it was, and we came up with the brilliant idea of collecting all the seeds in the neighborhood, packaging them, and selling the seeds back to our neighbors. It worked like a charm.
The same neighbors who allowed us to take the seeds from their garden in the fall bought them back from us in the spring, which proves that business isn’t always about doing something other people can’t do for themselves; it’s doing something they haven’t thought to do for themselves.
On top of this, later in the summer one of my former graduate students came to me looking for work. She was a good student, and I thought she’d make an excellent employee. We took the advice of Jim Collins in his excellent book, Good to Great, to put the right people on the bus and find them seats later, and despite having more workers than work, we hired her.
The end result was that we had far more people to do work than we had actual work to do. Tax Free Wealth PDF Book Download So I started looking for a practice to acquire. One day, a card came in the mail from a business broker indicating that he had a couple of practices for sale in the Phoenix area. I called the broker and soon learned that one of the practices was a good fit for us.
The practice did a lot of high-end tax planning and had some high-quality clients. One of the clients was a good friend of mine, Kim Butler. Another client was Robert Kiyosaki. I hadn’t previously heard of Robert Kiyosaki or The Rich Dad Company, but wanting to be well versed on my clients, I immediately went out and purchased his best-selling book, Rich Dad Poor Dad. I loved the book.
Then I had lunch with my friend Kim Butler who I knew had been doing some work with Robert and asked her about him. She had nothing but good things to say about Robert and his organization. About the same time, I received a notice in the mail from one of my friends, George Duck, telling me that he had just changed jobs. Now, for the best part.
My client’s daughter is learning how to do bookkeeping and becoming part of their business. She is gaining a skill that will benefit her for her entire life, and she is beginning to understand real estate investing. Tax Free Wealth PDF Book No wonder Congress allows this type of planning. In fact, Congress not only allows it but also encourages it.
My friend gets a tax break on Social Security taxes as well for employing his daughter instead of employing someone else to do the bookkeeping. He doesn’t have to pay any Social Security taxes on her wages. So don’t hesitate to put your children to work in your business. After taking all of his deductions and personal exemptions, he had a loss for the year.
What an incredible exit strategy! It’s one that the rich have know about for years and years. That’s how they keep their money in the family, and keep the business going after they are gone. Tax Free Wealth PDF Book Of course, you don’t only get depreciation deductions for buildings. You also get them for equipment. In many countries, this includes your car so long as you use it primarily for business.
It could even include the portion of your house that you use for an office. There are tons of possibilities. Depreciation really is free money from the government, because if you’re a smart investor or businessperson, you’re going to make money from the buildings and equipment you purchase.
And even though you’re profiting from your purchases, you still get a tax deduction for them. How cool is that? This is why I call depreciation the king of all deductions. In essence, the government pays you for making money and being productive. The magic of like-kind exchanges is that if you replace a new property with yet another property and continue to do so until you die, you may never have to pay any taxes.
You get all of the depreciation deductions allowed under the law without ever paying a tax when the property is sold. In the case of real estate, the new property doesn’t have to be exactly like the old property. Tax Free Wealth PDF Book You can move from single family homes to apartment complexes to commercial property to land and back again without ever having to pay tax.
The buckets are important not only because of the different tax rates but also because of the deductions that may be available only to a certain bucket of income. For example, capital losses can only offset capital gains. And, in some countries, including the United States, interest expense on an investment loan can only be deducted against investment income.
So it’s just a matter of making sure that your losses and income in each bucket match up. This is where a good accountant and tax advisor can really help. There’s no need for you to keep track of this all by yourself when help is only a phone call away. Having a specialist take care of this work will free you up to focus on making more money through your business or investments.
Let’s say that you have a bad year in your business or investing and you lose money. You or your spouse may have a job, but overall, your income is a lot less than normal. Tax Free Wealth PDF You could end up losing the benefit of low tax brackets and even lose deductions that you can never get back.
That’s because if you don’t have enough income during the year to use your itemized deductions or personal exemptions, then you simply lose most of those tax benefits. You don’t get to carry them over to a later year as you do with a loss from a business. For example, my friend Joe had a down year a couple of years ago.
The result was that he was about to lose a bunch of deductions and the benefit of his low tax brackets. So we did something that you may not normally think of. We created income. Actually, we just postponed some deductions and caused some income to be recognized that year that would normally have been recognized in a later year.
How we did this is a little too complicated for the scope of this book. Tax Free Wealth PDF But if you find yourself in this situation, sit down with your tax advisor and figure out how you can have income taxed in your low-income year instead of a later, highincome year. And be sure you don’t lose any of those precious deductions. It’s not difficult.
It just takes a little attention and realizing where you are financially during the year. I’m the youngest of six children. So growing up, I always had five people, plus my parents, telling me what to do. That doesn’t even count schoolteachers and church leaders. When I was young, this wasn’t really a challenge.
It was nice to have someone else directing my life. But by the time I was eight or nine years old I was getting pretty tired of being told what to do all the time. If you have older siblings, then you understand that they have a way of telling you what to do in a not-so-nice way. One of my brothers liked telling me what to do at dinner by kicking my leg under the table.
So if I put my elbows on the table, chewed with my mouth open, or said something he didn’t like, I’d get a sharp one to the shins. Pretty annoying. Of course, it also meant that Pinnacle West wouldn’t have to pay income taxes for years to come. My job as tax advisor seemed a lot less important. So I looked for other ways I could help the company.
I discovered that there were many other taxes that the company was required to pay that weren’t offset by the loss from the savings and loan. These consisted mostly of sales taxes and property taxes. Tax Free Wealth PDF At the time, public utilities in Arizona paid huge property taxes, much more than many other taxpayers.
And since Pinnacle West operated several coal-fired electric generating plants and one of the largest nuclear energy plants in the world, the company paid a lot of sales taxes on its purchases. From that experience, I learned that property tax and sales tax could be reduced almost as easily as income tax. Just as income tax, all it took was learning the rules and then applying them to reduce the taxes.
This was great for me. It was a free education. I discovered two new taxes that I’d known nothing about before joining Pinnacle West, and the company gave me all the resources I needed to learn about them and then reduce them. There are as many exemptions and tax benefits in the sales and property tax rules as there are in the income tax law.
These are taxes that many times are simply ignored by business owners and their tax advisors. We just come to accept them as normal. We have a tendency to complain a lot less about sales tax in particular than we do about income tax. Yet the dollars involved are enormous. Let me show you just how important these taxes can be.