If you are a W2 wage earner who earn a lot of money through salary, RSUs, etc, could you please share your favorite tax saving strategies? What are some legal ways to save on tax and build wealth? Any references to articles, videos, podcasts?
I do a 401k (and investing in my businesses, but that's neither here nor there) plus whatever my accountant recommends.
I don't have any problem with the idea of paying taxes, so I don't put a large amount of effort into reducing my tax bill. There are more beneficial uses for my time and energy.
And max out that Roth IRA! Its growth potential is unreal, it's the best investment vehicle most salaried workers have in their lives and if it wasn't capped at $6500 a year or whatever it would be the financial equivalent of a game breaker.
I haven't done it, but am genuinely curious about the tax savings of moving to Puerto Rico. From what I understand, you only need to spend 183 days a year there, so you could leave for hurricane season.
I lived outside of the US for five years and claimed the FEIE. That’s about $120k deduction each year. Obviously comes with its own complications and I didn’t do it just for the deduction.
With large sums of Money you can play games on when taxes are due that can allow you to invest money that you will eventually owe for taxes and then do a step up basis when you die thereby never paying taxes but not really being able to use it.
There are other tricks to use the money where you take a loan and use the investment as a collateral but it’s all really complicated to manage and only makes sense at the 5-10mil range.
I don't have any problem with the idea of paying taxes, so I don't put a large amount of effort into reducing my tax bill. There are more beneficial uses for my time and energy.