How do you legally escape taxes?

Answer 1

It is impossible to escape taxes because everyone MUST file taxes. Whether you pay out a lot of your own money is a different story. Taxes cannot be avoided, however depending on where you are in the income brackets you may not have to pay a ton of cash to the IRS. Ben Franklin said two things are guarantees in life, death and taxes. Another answer: Ah, at last! A question on WikiAnswers that is WORTHY of being answered! First of all, nothing that is man created is "impossible" to avoid. This is a "polite fiction" that is indulged in by those who lack the interest to find solutions to their "problems". As far as the misinformation given about "everyone MUST file taxes", well, I can only say that the IRS has very specific guidelines about WHO MAY LEGALLY AVOID FILING, and the list is far from trivial! Look it up for yourself and decide what the truth of the matter is! Many presidents have availed themselves of some of the more egregious tax "loopholes" that are designed specifically for those who created the laws. It is NOT up to congress to start a huge educational campaign to show every Tom, Dick and Harry how to avoid paying taxes, otherwise, said congressperson might have to start chipping in and carrying some of the load THEMSELVES, after all... So, the FIRST thing you can do to "legally avoid taxes", is to move to a state that doesn't have STATE INCOME tax. A couple come to mind, Nevada (where the gambling casinos pay the income tax for the rest of the citizens, so that they don't have to), and Texas, where EVERY president in recent memory resides for AT LEAST ONE DAY A YEAR in order to qualify as a "resident". Texans don't pay state income tax. If you were as smart as a president, you'd copy what THEY do, and set yourself up a sweet deal and LIVE IN TEXAS for one day a year. Who knows, perhaps you wouldn't even have to suffer THAT long, check out the rules regarding "residency" for yourself! Next, you want to whack that pesky Federal Income Tax. Who doesn't have to pay any Federal Income Tax? Well, if you work for a job, and make less than $600 per month, you won't have to pay any Federal Income Tax. Why would you want to do a thing like this? Well, how would I know? I am just pointing out what you would need to do. If you have a genius mind, you might find a way to accomplish this and the next few things, without my having to POINT IT OUT TO YOU in black and white. There is a nifty thing called a Roth IRA, that is America's 2nd best kept secret way of avoiding paying income tax LEGALLY! Yep! If you pay income taxes on some income, and then stash some of it in a Roth IRA account, you 1: Don't pay any income taxes on the growth of the investments you make in that account. This is exactly the same treatment as the normal IRA, so it is no big deal, all by itself, but it IS pretty important! 2: You don't pay any income taxes on the withdrawals that you make from this account, as long as it is the money that you put into the account in the first place. That is, you can withdraw your contributions (since you ALREADY paid income tax on them in the first place), without any penalty, interest OR tax, and you may do so at any time that you need or want to! This would be a foolish thing to do, however, but it IS possible! 3: When you reach retirement age (59 1/2), and the account has been open for 5 years, you can WITHDRAW any amount of money (or no amount of money, if you want it all to keep growing, for as long as you are alive, unlike the standard IRA account), AND LEGALLY PAY NO INCOME TAXES! That's right, folks! If you can figure out a way to make a million dollars in your Roth IRA account, you won't have to pay uncle sugar a single, rotten nickel in Income Taxes Legally! Get yourself a "self-directed Roth IRA" so that you can invest in anything legally allowable by the IRS (real estate, notes, the usual junk from a brokerage house or bank, but stick with the things that actually pay you something, and that YOU have control over!), which does NOT include "collectibles", such as Persian rugs, stamps and coins (except for bullion type coins with little numismatic value, think pre '65 USA coins, marked 1964 and earlier and which contained 90% silver), and you can't invest in anything you ever owned or lived in, or that your family ever owned, (with the notable exception of things owned by your brothers and sisters, apparently the IRS thinks that siblings will rat on each other, and they specifically PERMIT you to do this), so always buy stuff from 3rd party strangers, and keep your tax exempt status on your account safe. You DON'T want to lose this over a trifle, such as a "sweetheart deal" your brother will give you on his condo in Florida! Thus, if you have the slightest bit of imagination whatsoever, you now have a 'TAX FREE INVESTMENT ACCOUNT"! Next, there is a lovely provision in the IRS tax code that allows you to receive something called "gifts". You may receive up to $10,000 per person (per year), from ANYBODY and neither you, nor the giver, have to pay any income tax on that money. I don't know about you, but if all you folks reading this decide to follow some advice and all send me a gift of 10 cents each, I'll be rich enough to quit working, AND neither you nor I will have to pay any more Federal income taxes! Leave a note on my message board if you want more details on this or other subjects too long to go into here. Next, we have to deal with the issue of sales taxes. These are commonly escaped, (but not legally), by purchasing things on the internet. There are currently no laws requiring people in one state to collect sales tax from people OUT OF STATE. So, buy all your goodies from people OUT OF YOUR STATE, and you won't have to pay any sales tax. Now, some places, such as California, actually have a law somewhere that says that you have to declare all purchases made "out of state" and pay your fair share of the sales taxes on them. I've yet to see anybody INCLUDING THE PEOPLE WHO WORK FOR THE BOARD OF EQUALIZATION follow this rule, and if THEY can ignore it, why should YOU be the first one to set a good example? Oregon doesn't charge sales tax. People over the border from Oregon often go for a "holiday" to their friendly neighboring state and purchase things for far less than they can in their "home" state. Is this legal? Of course, there is NO law against traveling and you can hardly be expected to eat nothing but air! Again, your own conscious must dictate whether or not you think paying 10% sales tax to your state government is "the right thing to do" when they can't even balance the budget on time, and waste all the money you've given them to date on stupid mistakes and frivolous social experiments! Now, the issue of property taxes is a bit more difficult, and I don't have all the answers here by a mile. It seems to me that various forms of property are exempt from taxation at the county level if they are owned by a church, and are USED FOR CHURCH SERVICES. So, if you have an intense aversion to paying property taxes, you can go through the work of starting up your own church, (land of religious freedom, remember?), and create your own form of worship worthy of your creator, and if you are so poor that in the beginning that you have to hold worship services in each other's homes (home worship groups are pretty common, actually), you might want to check out what percentage of use qualifies your residence for a property tax exemption in your local county. Don't take the first answer as gospel, as each tax official will be pained to the extreme to think that they are cutting their own throat (and pocketbook) by answering your questions truthfully, and completely, and accurately! Far better to say some negative sounding thing that isn't QUITE an open lie, and have you go away and forget all about LEGALLY AVOIDING PAYING TAXES! Now, as to the MORALITY and PATRIOTIC DUTY of a citizen when LEGALLY AVOIDING PAYING TAXES, allow me to conclude with a quote from a famous judge, who was quite respected in his time. It is HIS opinion (and he was HIRED SPECIFICALLY to give his opinion on law all the time), that: The classic description of tax avoidance was written by Judge Learned Hand in Helvering v. Gregory, 69 F. 2d 809, 810 (2nd Cir, 1934), aff'd 293 U.S. 465 (1935). [A] transaction, otherwise within an exception of the tax law, does not lose its immunity, because it is actuated by a desire to avoid, or, if one choose, to evade, taxation. Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; here is not even a patriotic duty to increase one's taxes.