Question : What does tax shelter mean?
- asked by zissou
All Answers:
Answer #1
Tax Shelter is anything you can write off on youtaxes to reduce your liability.
- answered by Gizmo
Answer #2
These are places you can store/invest your withouthaving to pay taxes on it. They come in twoclasses, legal and one of the Federal Prisons. Thelegal variety include 401K retirement funds, thereare several others. Long term investments thathelp humanity such as investing in charity causesthat will re-pay later. Some insurance cashpolicies. Investments in business with a longterm turn around. The kind that creates a knockon your door at some GOD awful hour of the morningare found all over the Internet and usuallyinclude Swiss Bank accounts, Off-Shore investmentsand such. Normally I would say check with the IRSbefore investing but they have a law that if theygive you bad advice or answers and in following ityou do something wrong it is your fault.Vaya conDIOS
- answered by chrisbrown_222
Answer #3
Tax Guru's first law of taxation: It is better tohave the income than to save the tax on it.TaxGuru's second law of taxation: It is even betterto have the income AND save the tax on it.Hence, atax shelter is something that allows you to haveeconomic income without paying tax on it --currently.Nearly all tax shelters operate on theprinciple of deferral, i.e. deferring the tax onthis year's income until a later year. Thus, whatmany people fail to appreciate is that there willusually be a "day of reckoning" when you will haveto pay tax, but will NOT have the current incometo pay it with. Some tax shelters are legitimate,many are not. You need a very skilled tax advisorto tell you which is which.Most important rememberthat there ain't no such thing as a free lunch. If it seems to be too good to be true, it is.
- answered by TaxGuru
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