Introduction
There are many ways to deduct taxes on your wealth legally so today we are going to discuss some of them.
1) Divide and Rule
The first rule is divide and rule which means you can add one of your family members as a worker in your business and decrease your earning and pay less tax.
2) Expences
The second rule states that you can decrease taxable income through an increase in expenses as your goal and the goal of your business align you can add your expenses as the expenses of your business, and you know the first rule to decrease more taxable income.
3)Rich People Hide Their wealth in Stocks
This rule states that rich people won't take out cash from business until it's a necessity and when the size of the business increases their wealth also keeps increasing.
4) Reduce tax in other locations
The next point is you can reduce tax by opening your business in countries with lower tax rates, and increase your income of the business.
5) Depreciation and Amortization
The next point states that any asset buildings and software can be used to decrease tax for example you build a hotel of 10 million dollars on which 2 million is the cost of the land and 8 million is the cost of the building, you can get a tax rebate in the cost too but not in 10 million dollars only in 8 million dollars of the building so for the next 10 years you can cut off 10% of the building cost from your taxable income, you can use the technique in software too called Amortization for more information you can see the article of Investopedia here.
6) Use Loan as the Leverage
In May 2011 Mark Zuckerberg bought a house in Palo Alto for 7million dollars in loan in which time he was the 40th richest person on the planet and as Elon Musk also took a loan of 61 million dollars for his house the reasons he did this was because they can gain high returns of the same money when invested in their own business and they can get loans at less interest rate as they are getting interest rate less than of the inflation rate so its technically free money.
Conclusion
These are the ways to pay less tax from your business and as an employee, you can't use any of them you can check more ways to be financially free at Our blog.