03/20/24
Legally reducing taxes can be a faster and easier way to increase your income compared to working on increasing your earnings. Tax-Free Wealth, by Tom Wheelright is a treasure trove of insights and strategies to decrease taxes and keep more of your hard-earned money. Wheelright points out that only a small portion of the tax code is about how to generate revenue for the government, and the vast majority of it describes the ways to reduce taxes through deductions and credits. This is essentially a way that the government rewards people for doing certain things like starting businesses, creating new jobs, or investing in certain types of assets.
By better understanding the tax code, we can take advantage of the great financial opportunities it offers. Paying less tax on earned income makes it possible to invest more, and investing in tax-sheltered assets can turbocharge investment growth if we reinvest the tax savings. In addition, reducing estate taxes makes it possible to create a bigger financial blessing for people and causes we care about when we die.
I appreciate that Wheelright covers a lot of different areas of tax strategy with illustrative cases, but he doesn’t get too far into the weeds. He discusses strategies to reduce income taxes, capital gains taxes, property taxes, sales taxes, estate taxes, and more in a very accessible way. After reading this book, I feel more empowered to talk intelligently with our tax advisor about ways that we could implement some of those strategies. If you’d like to direct more of the money you earn toward people and causes that are important to you rather than giving it to the government, I highly recommend reading Tax-Free Wealth.
