Trump’s New Tax Loophole Could Save You Thousands
If Trump’s tax reforms were to pass, he will end up creating a massive opportunity for everyone to save thousands on taxes. Only condition – you have to be part of 38% of the American’s who’re making more than $40,000 a year.
While it sucks to be part of the other 62%, this is Donald Trump after all!
Anyhow, the other 38% fortunate ones, read on.
Trump’s tax reforms will abolish an estate tax, expand your standard tax deductions, and lower corporate tax to 15% from its current 35%. But here’s where it helps you – it will also lower the tax rate to 15% for all owner-operated businesses.
So now, all you have to do is start your own one person company.
Ranging from a local pizzeria to an investment banking consultant, most businesses are eligible to fall under these new reforms, including Trump’s businesses *Surprise Surprise*!
Sole proprietorships, small-mid corporations and even partnerships qualify for this tax rate – provided they are generating over $40,000 in revenues.
Currently taxed in the same bracket as it would an individual personal income, the majority of which ends up going to the top 1% earners, with tax rates of up to 39.6%
These tax reforms would help many wealthy American’s, currently receiving their incomes from their own private law, medical and hedge fund practices. But it also helps create a loophole for many to claim their personal income as a business income in order to save on taxes.
So all good news so far yes?
Well no, not really. Not only are we not helping the other 62% who really need it, but as per the Tax Policy Center, the federal government stands to lose $650 billion in revenue over the course of the next 10 years. Even as Steve Mnuchin, the Treasury Secretary, looks to come up with rules preventing this sort of tax avoidance, policy experts are worried it would not be easy to stop people from abusing it.
Eric Zwick, a finance professor at the University of Chicago says, “You can always pay a high-priced accountant to find a way around it.”
Indeed Professor, Indeed.
Anyway, here’s what you have to do now –
- Stop being an employee
- Make your employer hire you as an independent contractor
- Save on your taxes
- Enjoy increasing the government deficit!
Image Source: Time Magazine