From the Desk of: Pedram Abraham Mehrian, Chief Financial Architect
This past week has been so interesting for all of us… The Hot-Topic discussed by the media, our families, friends and even teenagers is that President Trump is a “Tax Cheat” because he pays only $750.00 in Federal Income Tax. The following video by Mr. Tom Wheelwright, one of five leading CPAs in the country, breaks down our Tax Laws and his perspective along with Summary Highlights by Mr. Jose Villalpando, CEO of TaxBRIDGE Advisors, Corp.
From the Desk of: Jose Villalpando, CEO of TaxBridge Advisors, Corp
The New York Times has reported that President Trump recently paid $750 in federal taxes. How you may ask?
Well ask yourself this:
How does the government incentivize people to make a lot of money and pay very little tax? As told by Tom Wheelwright in his latest video “Trump’s Taxes – How does President Trump pay so little & is it legal?”, this is the most misunderstood topic for everyone. For most individuals, people make an income have expenses and in the end, they pay tax.
The tax law is not only used to generate a revenue for the federal government, it also incentivizes people to do certain activities like:
Homeownership. Encourages people to own homes.
Social. For example charity and education.
Economic Incentives. Start a business, Creation of Jobs & Risk. If you take a risk, the government will share the risk. Now for example, President Trump may have earned money with a business in the amount of $400 Million. Then Trump invested the same $400 Million on a new business, let’s say another golf course. The incentive here is to create more jobs. Why? Because the employees have to pay taxes from their wages. The more jobs, the more revenue the government collects.
Real Estate. With real estate, the reason why it is so being because the government does not want to build houses, or housing projects. It provides the incentives so that the citizens can build them.
Depreciation. Depreciation is the ability to deduct the cost of an asset throughout a period of time. Any asset can be depreciated, and with the current laws in place, the period of time to deduct the cost of an asset has been reduced.
Debt. When someone takes on debt, the risks that someone takes for the risk is enormous. Debt is not free. Debt as an incentive and it can also be a deductible.
Losses from Previous Years. Losses from a business can be carried forward to future years. This will lower your taxes by lowering your income because of losses of your business from previous years.
Energy. For example, when you purchase an electric car, you receive credits on your tax return.
One thing to remember is that the tax law favors business and real estate. If you earn your money through a job and spend that personally, there is not incentives there. Anyone can have this, its just a matter of how can you apply this to your benefit.
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