When it comes to paying Uncle Sam, America’s wealthiest aren’t just rich — they’re clever.
From purposely losing money to hiring their kids, the rich have an entire playbook for slashing their tax bills and keeping their fortunes fat. Here’s how they do it — and why the average Joe might want to take a page from their book.
1. They Lose Money — On Purpose
Believe it or not, the wealthy want to lose sometimes. It’s called tax-loss harvesting: selling off investments at a loss to cancel out gains elsewhere. It’s like taking a financial “L” today so they can win big at tax time.
2. They Roll Losses Like High Rollers
Start a business and tank it? No problem. The rich simply carry forward their losses to future years, knocking down their taxable income when it’s most strategic. Failing forward never looked so good.
3. They Stuff Their Cash Into Tax-Free Hideouts
Why pay taxes on investment gains when you can hide them in retirement accounts or private placement insurance policies? Wealthy investors stash cash where it grows — and they can borrow from it tax-free, too.
Bonus: If they ditch the policy, they walk away with their money and still avoid taxes.
4. They Pay Themselves Peanuts
Small salaries, big perks. Jeff Bezos famously drew just $81,000 a year from Amazon (before stock riches rolled in). A tiny paycheck means a lower tax bracket — while stock options and investments quietly build empires.
5. They Write Off the Good Life
Private jet? Business expense. Fancy yacht? Deduction. As long as they can claim it’s used for business, the rich turn luxury into a tax write-off. It’s not just office supplies and printer ink for these moguls.
6. They Put Their Kids to Work
Nepotism? Maybe. Tax savvy? Definitely. Wealthy business owners hire their own kids, skipping payroll taxes if the kid’s under 18. Plus, their wages become a business write-off — keeping more money in the family.
7. They “Give Back” — and Get Paid for It
Sure, it looks good when billionaires write seven-figure checks to charity. But behind the generosity is a smart move: charitable donations slash their taxable income and sometimes even wipe out entire tax bills.
Bottom Line:
While these loopholes sound out of reach, regular folks can play some of the same games — with smart investing, savvy deductions, and a little financial finesse.