A Quick Summary of the Tax Free Wealth By Tom Wheelwright

A Quick Summary of the Tax Free Wealth By Tom Wheelwright - Makantony

This 10-minute summary is for you if you:

• Hate taxes.
• Feel like there`s nothing you can do about them.
• Fear the tax season every year.
• Are looking for ways to pay little to no taxes.
• Want to use your tax savings to grow rich fast.

Without further a do, lets get into it.

But before then, here is a foreword by Robert Kiyosaki.

He writes about the four types of people in the world of Money.

He says that those in the E and S pay the highest taxes while those in the B and I pay the lowest, sometimes zero.

So, he advises focussing on the B and I to do well financially.

Now, its time to dive in.

How the Tax Law Can Be Your Friend

Here are quick tax-free wealth tips from all the sections of this book.

Tax Free Wealth Strategy #1 — Include Tax Planning in Your Wealth Strategy

With taxes as your most significant expense, it makes sense to look at every return on every investment after taxes.

When you do, you may find that you are making a lot less on some investments than you thought and are making more on others in comparison.

Tax Free Wealth Strategy #2 — Invest Where you Travel

Invest where you visit more often, keep going there repeatedly, and turn your travel expenses into deductible expenses.

Tax Free Wealth Strategy # 3 — Elect How Your Limited Liability Company will be Taxed

Your LLC can be whatever you want it to be — a sole proprietorship, a partnership, a C Corporation, or an S Corporation.

This flexibility gives you the best of the tax and asset protection worlds

Tax Free Wealth Strategy #4 — Deduct your Meals

Discuss business while eating and turn your meal expense into a deductible expense.

Tax Free Wealth Strategy #5 — Put Your Family to Work in Your Business and Investing

Make your business a family business. Then when you travel for business, your family’s travel is deductible.

And you can shift income from your higher tax bracket to their lower tax bracket. This creates permanent tax savings.

Tax Free Wealth Strategy #6 — Document, Document, Document

The more thorough and accurate your accounting, the better business and investment decisions you’ll make, and the less likelihood you will have difficulties in an audit.

Tax Free Wealth Strategy #7 — Cost Segregations of Business and Rental Properties

Cost segregation is pulling personal property out of real property classification to allow for quicker depreciation.

Or it’s a change from an incorrect method of accounting to a correct method of accounting

Tom argues that when you don’t do a cost segregation, you are doing your depreciation incorrectly

And when you start doing it, its like changing your method of accounting.

Tax Free Wealth Strategy #8 — Manage your business or real estate investments to get passive income losses and gains.

Tom has ways of offsetting losses from passive income gains. Move to chapter 8 to find out more.

Tax Free Wealth Strategy #9 — Make Your Parents Your Business Partners and Reap the Tax Benefits

Form an LLC and have your older parents become members. You can give a portion of your LLC to your parents and then pay income taxes at their lower tax rates.

Tax Free Wealth Strategy #10 — Saving for Your Child’s Education with Maximum Tax Benefits

Tom suggests you can contribute the money you pay your children to work for you in strategy number 5 to an LLC, limited partnership, or S corporation that owns a business or investments.

Here are the benefits:

• No tax on the cash flow from the investment with good planning.
• Full control over the investment
• You can take it out any time you like for any of your child`s expense except for support, like food and clothing.
• There are no penalties for distributing the money or accumulating a huge amount over a lifetime.
• You receive a deduction when you pay your child a salary.

Tax Free Wealth Strategy #11 — Reduce the Wages You Take from Your Business

Tom says that suppose you own a corporation where you are an employee.

You should pay yourself a reasonable salary but low enough to keep your employment tax rates down.

Tax Free Wealth Strategy #12 — Reduce Your Sales Tax Burden

A quick take home on this point is here: if you don’t collect tax on products you sell, and the state later audits you and assesses the tax, the tax burden shifts from your customers to your business.

For this reason, you should always collect sales tax unless you are sure that no sales tax is due.

Tax Free Wealth Strategy #13 — Reducing Your Estate Taxes through Charitable Trusts

In this strategy, Tom discusses the Charitable Remainder Trust, where you get all the income until you die, and then the asset ownership goes to the charity.

Also, he talks about the Charitable Lead Trust, where the trust gets all the income from an asset when you are alive, and then the ownership of the asset goes to your family when you die.

Tax Free Wealth Strategy #14 — Being Taxed in Multiple States or Countries Can Seriously Reduce Your Taxes

In this strategy, Tom says that every country has tax benefits for business.

All you have to do is work with your tax advisor to determine which countries offer the best ones for your business.

Tax Free Wealth Strategy #15 — Use a Combination of Entity Types to Reduce your Taxes

Have a business partner? Form your own entity taxed as an S Corporation and have that entity be the partner in your business rather than you personally.

This structure will reduce your self-employment taxes and provide maximum flexibility to you and your partner

Tax Free Wealth Strategy #16 — Include Asset Protection Planning When You Create Your Tax Strategy

The right entities for tax protection are trusts, limited partnerships, corporations and limited liability companies.

Tax Free Wealth Strategy #18 — Turn Your Business Into a Passive Investment

Tom suggests you convert at least part of your business income into passive income.

All you have to do is to give part of your business to a member of your family who doesn’t work in the business.

When you do this, their share of the income from the business is passive income.

Then, you also give them a part of the real estate that has passive losses.

Now, their share of the real estate losses will offset the passive income from their share of the business.

Tax Free Wealth Strategy #19 — Change Your Residence Every Few Years

Here, Tom suggests you buy a house that needs improvements, make it look better while living in it for two to five years then sell for a tax free gain.

However, the gain should be less than $500,000.

Tax Free Wealth Strategy #20 — Do Your Stock Trading inside a Self-directed Roth IRA

In a self-directed IRA, you direct which assets the IRA buys and which assets it sells.

You can also direct when to buy and sell an asset.

The gains from this type of trading are non-taxable according to the book.

Tax Free Wealth Strategy #21 — Avoid the Passive Loss Rules on Oil and Gas Investments

Passive losses on oil and gas investments are deducted from ordinary income and not passive income.

Tax Free Wealth Strategy #22 — Purchasing an Audit Defense Plan

An audit defense plan won’t insure you against the taxes and interest you might owe, but it will protect you against the cost of defending yourself against the tax man.

Tax Free Wealth Strategy #23 — Hire the Right Tax Advisor

Here Tom advises you hire a tax advisor who understands the tax law well, is experienced, and can save you money.

Tax Free Wealth Strategy #24 — Build Massive Passive Income through Your Tax Savings

In this strategy, you learn how to generate wealth by compounding, leverage and velocity.

Chapter 1: Taxes Are Stealing Your Money, Your Time and Your Future

Tom starts the book by stating that taxes don’t just take your money — they steal your time — because money is time.

He goes on to say that the average person in a developed country spends 25–35% of their life working to pay taxes.

That is more than two hours of each workday and 3–4 months per year.

It feels like a prison sentence to work for almost 20 years to pay the government.

And it won’t get better soon with the inflation rates going up daily.

The key point from this chapter is to:

• Learn to trade your money for time and engage in activities the government uses to shape the economy. Remember, the tax law is a series of stimulus packages for entrepreneurs and investors.
• Taxes are based on your facts and circumstances — changing your facts will change your tax.

However, Tom warns you to be aware of tax advisors who:

• Promise they can lower your taxes and who are really tax cheats.
• Focus on postponing or “deferring” taxes to a later year. Real tax planning is permanent so you never have to repay the taxes.

Chapter 2: Taxes Are Fun and Easy to Understand

In life, taxes and death are the only sure things.

Worldwide, the average person pays 30 to 50 per cent or more of their hard-earned income in taxes through income, sales, value-added, payroll, estate, or property taxes.

Think about that. Bad news, right?

Taxes don’t have to kill your dreams. Ninety per cent of entrepreneurs and investors can reduce their taxes simply by learning the basics of tax law.

You will pay 10 to 40 per cent less in taxes by learning how the tax law can work for you — instead of working for the government and paying high taxes.

So here is a tax tip: Invest where you travel.

Do you have a favourite destination? Consider investing in the area.

It gives you a great reason to keep returning, and you turn your travel expenses into deductible expenses, keeping more money in your pocket.

To understand taxes, Tom suggests you find a good tax advisor who:

• Understands the details of the tax law.
• Can help you create and implement sound tax strategies besides doing your tax returns.

Chapter 3 — Most Important Rules for Making Tax Free Wealth

#1: It’s your money, not the government’s.

#2: The tax law is written primarily to reduce your taxes.

A whole list of 22 tax rules is at the end of this post. Read on.

“Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury. There is not even a patriotic duty to increase one’s taxes.” — Judge Learned Hand.

Tom suggests that playing CASHFLOW 101 is an excellent way to learn the Rich Dad principles on money and investing.

So you know, Robert Kiyosaki invented the Cashflow 101 game to teach the basics of investing through real-world scenarios, allowing you to test your financial knowledge and learn from your mistakes — all without losing your money.

Not taking advantage of the aspects of the law that are there to help you means you are stealing from yourself, your family, and your future.

And here are the main key points from this chapter.

• Some of us are trained to believe we owe the government OUR money (it’s just not true).
• The tax code is set up to help us reduce our tax burden — and to do so legally.
• Nearly all — 99.5 percent — of the tax code exists solely for the purpose of saving you money.
• All of the so-called complexity of the tax law is aimed at reducing your taxes, not increasing them.

Chapter 4: Put Money Back in Your Pocket — Now

RULE #3: The fastest way to put money in your pocket is to reduce your taxes

By reducing your taxes, you reduce the amount of money that goes out of your income.

And if you are an investor or entrepreneur, you reduce your quarterly tax payments.

RULE #4: Everything you do either increases or lowers your taxes.

On this point, Tom shares two points.

First, year-end tax planning is important but year-round tax planning is better

Another one is every day, you could be reducing your taxes.

Every dollar, pound, or euro you earn can increase your taxes, and every dollar, pound, or euro you spend can decrease your taxes.

Here is a tax tip from this chapter: Eat while you work and save taxes.

Business meals are a great way to spend time with employees, clients, and customers.

You can discuss business and turn your meal expense into a deductible expense.

If you change your expenses to business expenses, the government will pay for 20 to 30 per cent of your purchase in the form of a tax deduction.

Sounds great, right?

Keep moving.

Chapter 5: Entrepreneurs and Investors Get All the Breaks

The government gives entrepreneurs tax breaks and subsidies to encourage them to create jobs.

Also, it gives real estate investors tax breaks and subsidies to encourage them to build affordable housing.

According to Tom, the government sometimes specifies the type of houses investors should build and the kind of jobs entrepreneurs are to create.

In some cases, the government gives tax breaks for agriculture, green energy, investments in oil and gas and low-income housing to encourage job creation in those sectors.

It is not like the employees and the self-employed get punished; they fail to get the rewards that business owners and investors get for doing what the government want.

Here is a key tax tip from Tom: Put your family to work.

Make your business a family business. Then when you travel for business, your family’s travel is deductible. And you can shift income from your higher tax bracket to their lower tax bracket. This creates permanent tax savings.

He also argues that as an employee or a self-employed person, if you can make most of your revenue from businesses or investments, you can benefit from the tax subsidies available to entrepreneurs and investors.

With an exciting story here, Tom encourages you to put your family to work in your business.

One of Tom’s clients put his 9-year-old daughter to do bookkeeping for his real estate investment.

Of course, under the supervision of her mother, who manages the real estate.

She earns $4000 per year, which is deductible to her parents. Her parent’s business is in the 40% tax bracket, which translates to $1600 in tax savings.

Chapter 6: You Can Deduct Almost Anything

RULE #6: You can deduct almost anything given the right circumstance

As long as the purpose of the expense is to produce more income, it can be deductible

Your first step to increasing your deductible expenses is to become an entrepreneur or investor

The good news is that you don’t have to quit your job.

You just have to start acting like an entrepreneur or an investor.

That means the first thing you need to do is to increase your financial intelligence by investing in financial education

Here is Tom`s advice on becoming an entrepreneur or investor

• Start small or part-time. Set aside a room in your house for your business. He strongly discourages on spending money on a nice office and lots of advertising. Instead, he advises you start small and think big.
• Offer services using skills you already have.
• Take a course in real estate investing or entrepreneurship to increase your financial intelligence.
• Then, he advises you to spend carefully. Not on stuff that your business does not need. He says that spending money in your line of business and making it count becomes deductible.
• Invest for passive income. He suggests you read Robert Kiyosaki’s Unfair Advantage: Why the Rich Get Richer, Even in A Financial Crisis. (Plata Publishing, 2011)
• Find a mentor and a good team of advisors. Here is one of the resources he suggests for mentorship.

A good team of mentors and advisors should consist of the following:

• Document Everything. The more thorough and accurate your accounting, the better business and investment decisions you’ll make, and the less likelihood you will have difficulties in an audit.

When you start a business, your options for deductible expenses increase.

And making most of your expenses deductible is easy — make sure that when you spend money your intention is to make even more money.

Chapter 7: Depreciation Is the King of All Deductions

Depreciation is like magic.

You get a deduction for something that doesn’t cost you any money. You create money out of thin air.

Here is how:

When you buy an asset that produces income, you can deduct a portion of it each year you own it.

Nothing will explain it better than a mathematical example.

Pierre buys a commercial building for $1 million to house his restaurant business in the US.

The cost includes land valued at $220,000. According to the book, the US depreciates commercial buildings over 39 years.

That means Pierre will deduct $20,000 as building depreciation expense annually.

$780,000/39 = $20,000.

Chapter 8: Earn Better Income

In this chapter, Tom discusses the different types of income and how they are taxed.

A) Earned Income.

This is the employment income. It is subject to high employment and income taxes.

Here is how:

That leads us to the next type of income.

B) Ordinary Income.

Ordinary income is the income from pension schemes, retirement benefits and any other income that does not belong to any other bracket.

As much as it does not get hit hard with employment taxes, it still suffers high income tax rates.

But it is better than the earned income.

Here is an illustration of how it is taxed before you receive it.

There is more.

C) Investment Income

It includes income from dividends, interest and capital gains.

In some countries, it will include the income from businesses and real estate investments.

See how it is taxed below:

Here is the next type of income.

D) Gifts or Inheritance

I hope this type explains it self.

See how it is taxed below:

Then, here is the last type of income.

E) Passive Income

This is income from a business or real estate that you do not personally manage.

It is taxed at regular tax rates but there are many ways of reducing the tax burden.

You should manage your business in a way that you generate both passive income gains and losses.

A good example of a passive income loss is depreciation which can be offset against income from the real estate investment.

See how passive income is taxed below:

Chapter 9: Take Advantage of Your Tax Brackets

RULE #7: It’s not how much you own that matters, it’s how much you control.

In this chapter, Tom writes about reducing tax burden by owning your business through trusts and corporations.

He mentions his client, George, who had two levels of control over his business. On one level, a limited liability company (LLC) owned his business, where he was the manager. He controlled how the money was used and distributed.

On another level, each of his six children had interests in his company through trusts, of which George and his wife were trustees.

Here is a tax tip by Tom: Partner with your Parents’ lower after-tax dollars. Form an LLC and have your older parents become members. You can give a portion of your LLC to your parents and the income will be taxed at their lower tax rates.

He also says that you can do great tax planning using franchises.

And then brings us to the next rule.

RULE #8: Treat your business just as you would if it were a big public company.

In this rule, He suggests outsourcing work such as marketing, human resources, billing, accounting, and more, to other corporations that you own.

RULE #9: All tax planning must have a business purpose other than reducing taxes.

However, he warns that all transactions must have economic sense. And owning other corporations to save taxes is a poor move. They have to help your business to be more profitable.

Chapter 10: Do What the Government Wants and Get Tax Credits

In this chapter, Tom talks about the different versions of tax credits and how to take advantage of them.

He talks about the refundable credit, which you receive even if you do not have a tax due.

And the non-refundable credit, which you receive only when you have tax due.

Other samples of tax credits that Tom discusses in this book are as shown below:

However, Tom warns you not to ever invest in a project solely for the tax benefits. Always look at the profit opportunities first.

Chapter 11: Conquer Your Employment Tax Troll

In this chapter, Tom encourages you to lower your employment tax.

He says things like: As an employee, there is minimal, if anything, you can do to reduce your employment taxes.

This includes your Social Security, Medicare, or other national insurance contributions.

But you can reduce these payments if you are self-employed and plan correctly or in business.

And in many countries, investment income is not subject to these taxes.

He takes us to the next rule of reducing your tax burden permanently

RULE #10: When you want to reduce a tax, reduce the base on which it’s measured.

Tom says that once you understand the tax base or measure of the tax, you can find ways to reduce that base to reduce the tax.

He gives an example of how he reduced the tax base of Mike, his client, by forming a company to own up Mike`s medical practice instead of him being self-employed.

Mike was an owner of the newly formed company and an employee.

As an owner, Mike got his share of income through dividends and salary as an employee.

However, if you do this, He advises you to pay yourself a reasonable salary like you would pay a professional to work for you.

Here is what Tom says: Don’t pay yourself too much or too little.

Too much salary may mean overpaying payroll taxes.

But with too little salary, your company could be a target for an audit.

Reduce your chances of audit by paying a reasonable salary. It can save you over $4,500 in annual employment taxes and reduce your audit chances.

Chapter 12: Lower Your Property, Sales and Value Added Taxes.

Here Tom says that when in doubt about sales tax, collect it, remit it, and file a tax return.

The cost is minimal but the result is substantial, because it significantly reduces your exposure.

He also says that unreported sales tax could get you out of business.

Coming to property taxes, Tom divides it into Real estate property tax and Personal property tax.

Real estate property tax is levied on the value of your real estate.

Here is how to reduce it.

Chapter 13: Estate Planning is Good Tax Planning.

Estate planning comes down to two things: making the financial aspect of your death as easy as possible for your family to handle and making sure all, or at least most, of your assets go to your family, your charities, and others you choose — and not to the government.

Tom highlights three steps of estate planning as follows:

• Placing assets in trusts.
• Creating a will.
• And avoiding the estate tax

When avoiding estate tax, Tom suggests following the following rules:

ESTATE TAX RULE #1: The lower your assets’ value, the lower your estate tax.

ESTATE TAX RULE #2: There is a portion of your assets that are not taxable (this is called an exemption).

Next is how to reduce your taxes in other locations you invest in.

Chapter 14: Reducing Your Taxes in Other Locations

In this chapter, Tom states that a business has to pay taxes in all the places it has customers.

And if it doesn’t, the tax collector will demand back taxes, penalties, and interest.

Also, he states that you’re taxed where you have property, an office, employees and contractors.

He further warns that you could be taxed double on the same income if you don’t understand the rules of different locations.

On that note, you get a foreign tax credit when you report the tax you paid in a foreign country in your home country.

When going offshore, tax planning is very essential to building tax free wealth.

That marks the end of part one and the beginning of part two.

Part Two: Your Strategy for Tax Free Wealth

Chapter 15: Plan to Take Control of Your Taxes Through Business Entities and Retire Rich, Not Poor

In this chapter, he starts with this rule: RULE #13: Taxpayers with long-term, flexible tax strategies will always pay less tax than those without strategies.

He also says that if you are saving money in government-sponsored retirement schemes, you are planning to retire poor because of the following:

• Higher Tax Bracket with Same Income
• Shift 15% Capital Gains to 35% or Higher Ordinary Income Tax Rates
• Lose all Tax Benefits of Real Estate and Business
• Inflation Creates even Higher Tax Brackets

Proper tax planning should be permanent, not temporary, as shown below:

Here, he states the disadvantages of tax deferral plans as shown.

Chapter 16: Protect Your Wealth from Pirates, Predators, and Other Plaintiffs

You must maintain control of your assets at all times and in all circumstances.

You should have three goals for protecting your assets:

• Prevent a lawsuit.
• Stay under the radar so that you are less likely to be sued.
• Win any lawsuit

Tom suggests you set up your business and investments so that you lose no money if sued.

He also suggests reading Garrett Sutton’s book, Start Your Own Corporation, for a complete analysis of asset protection strategies.

Use the following entities for asset protection:

• Trusts
• Limited Partnerships
• Corporations
• Limited Liability Companies

I have covered chapter 17 and chapter 15 together, so we jump to the next one.

Chapter 18: Businesses Can Be Your Best Tax Shelter

TAX TIP: Turn your business into a passive investment. When you do, you can use your real estate losses to offset the income from your business.

A business gets many tax breaks from the government when it add value to the economy by creating jobs.

Tom summarizes the chapter with the following business tax strategies:

A) To get tax credits as a business, do the following:

• Lease or buy a building in an enterprise zone
• Hire people to work in an enterprise zone
• Hiring specific types of people
• Increase your employee work force
• Buy business equipment
• Do research and development

B) The following expenses are deductible:

• Travel
• Meals
• Entertainment
• Auto expenses
• Medical expenses
• Depreciation
• Salaries and wages paid to employees

Chapter 19: The Magic of Real Estate

RULE #16: The single best tax shelter in most countries’ tax law is investing in rental real estate.

The key to building tax-free wealth in real estate, of course, is to continue buying more and more real estate

More Real estate investments + depreciation = zero taxes

One of the biggest benefits in real estate is that loans aren’t taxable.

He finishes the chapter by suggesting you change your residence every few years.

Here is what he says: buy a house that needs improvements, make it look better while living in it for two to five years then sell for a tax free gain. However, the gain should be less than $500,000.

Chapter 20: Stocks Can Lower Your Taxes Too

In this chapter, Tom discusses the tax advantages of stock trading.

The tax benefits of active stock investing include:

• Capital gains from active stock trading are taxed when you sell your stocks.
• In New Zealand, capital gains are not taxed at all.
• In the US, you get lower capital gain tax rates when you hold your stocks for over a year.
• Dividends from stocks are taxed at lower tax rates in many countries including the US.
• Losses from stock trading can be deducted from gains in many countries.
• If your gains from stock trading are not enough to deduct losses, then, capital losses can be carried forward to the future.

There are also tax benefits of option trading as summarized below:

• You deduct your business expenses from your income before being taxed at capital gain tax rates.

He also warns that mutual funds are one of the few places where you can lose money and still owe tax on your investment

Chapter 21: Commodities Like Oil,Gas,Minerals and Precious Stones Can Be Your Tax Friends

Here are the benefits according to the book

Oil and gas tax benefits are as follows:

• Deduction of intangible drilling costs, usually the first year of investment of drilling operations.
• Deduct 15% of the gross income from the well each year (called depletion).

Here are the four types of oil and gas investments and their tax benefits:

Tax benefit of mining operations include:

• You get depletion on the gross income from selling the minerals, and there is special treatment for the mining operation development expenses.

Renewable energy tax benefits include:

• Investment tax credits for investing in wind turbines (windmills), credits for buying solar panels, and credits for buying electric cars or even for buying hybrid gas/electric cars.

Tax Benefits for Investing in Agriculture

1. Deduction of expenses for running the farm, orchard, or ranch.

2. Using the 1031 or like-kind exchange rules.

3. Depreciation.

4. Special treatment for estate tax.

5. Special tax breaks for certain crops.

Chapter 21: Don`t Fear The Reaper Audit

In this chapter, Tom talks about how to get ready and survive a tax audit.

He says that by being prepared, you can eliminate your fear of a tax audit.

Here is how to prepare for a tax audit:

Step 1: Maintain organized bookkeeping records.

a. Use good accounting software.

b. Record your business income and expenses.

c. Prepare income statements (timely updates).

d. Prepare balance sheets (timely updates).

e. Record your personal income and expenses.

f. Create budgets and forecasts.

g. Create reports.

h. Compare income and expenses between years.

Step 2: Maintain and organize receipts.

a. Keep receipts for deductions you intend to take on your tax return.

b. Scan receipts into organized files in your computer.

c. Or create separate paper file folders for each type of receipt.

d. Maintain receipts for 7 years (United States), 6 years (Canada), 5 years (Great Britain and Australia).

Step 3: Be prepared with other documents.

a. Legal contracts or agreements

b. Copies of tax returns

c. Corporate books (for your business) that include:

i. Articles of Incorporation or Organization

ii. Operating or Partnership Agreement

iii. By-Laws

iv. Minutes

On handling an audit, Tom advises to let the tax advisor do it for you because an audit can get emotional sometimes.

He goes on to say that handling the auditor is the most important part of an audit.

And you can’t handle an auditor well when you’re emotionally involved in the audit.

Chapter 23: Choose the Right Tax Advisor and Preparer

The more passionate you and your advisor are about reducing your taxes, the lower your taxes will be.

In this chapter, Tom advises you choose a well informed tax advisor to reduce your taxes and build tax free wealth fast.

Here are levels of tax education that tax advisors fall:

Tom says that you measure your tax advisor’s level of tax education by how much tax savings they make for you but not how much they charge for their services.

With that said, here are qualities you should consider when hiring a tax advisor:

• Fully educated about the tax law
• Passionate about reducing your taxes
• Embraces the law as an opportunity
• Focuses on permanent tax savings
• Uses creativity in applying the law in your favor
• Considers the entire law when reducing taxes, not just a single rule of law
• Cares more about you than himself or herself
• Asks you questions about your specific situation
• Willing to teach you the tax rules

In Conclusion,

Here is a summary of all the rules you should follow to reduce your taxes and build tax-free wealth from the book.

1: It’s your money, not the government’s.

2: The tax law is written primarily to reduce your taxes.

3: The fastest way to put money in your pocket is to reduce your taxes.

4: Everything you do either increases or lowers your taxes.

5: The tax law is a stimulus package for entrepreneurs and investors.

6: You can deduct almost anything given the right circumstance.

7: It’s not how much you own that matters, it’s how much you control.

8: Treat your business just as you would if it were a big public company

9: All tax planning must have a business purpose other than reducing taxes.

10: When you want to reduce a tax, reduce the base on which it’s measured.

ESTATE TAX RULE #1: The lower your assets’ value, the lower your estate tax.

Then there is the next rule on estate tax planning:

ESTATE TAX RULE #2: There is a portion of your assets that are not taxable (this is called an exemption).

11: Every location has different tax rules, and paying tax in several locations can result in paying less total tax than you would if you did business in only one location.

12: To receive the foreign tax credit, the same taxpayer (entity) who pays the tax in the foreign country has to report the income in the home country.

Here Are More Tax Rules From Part Two of the Book

13: Taxpayers with long-term, flexible tax strategies will always pay less tax than those without strategies.

14: You must maintain control of your assets at all times and in all circumstances.

15: Never ever put a tax shelter investment inside another tax shelter.

16: The single best tax shelter in most countries’ tax law is investing in rental real estate.

17: Mutual funds are one of the few places where you can lose money and still owe tax on your investment.

18: The better the tax benefits, the more complicated the rules.

19: You can eliminate your fear of a tax audit simply by being prepared.

20: Never try to handle a tax audit yourself. Always enlist the assistance of your tax advisor.

21: The more passionate you and your advisor are about reducing your taxes, the lower your taxes will be.

22: It’s not how much your tax preparer charges you that matters; it’s how much your tax preparer costs you.

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