I made money on the stock market last year($50,000) and I want to find out how I can avoid paying on my taxes?

Question

Is there anything I can do?

Answer 1

Why

Do you want to end up in a prison?

Answer 2

You're too late to do anything since 2006 is over. The Federal government will let you put some small part of it into an IRA tax free, but you're on the hook for the rest.

In the future you could always just donate all of it to charity. Then you won't owe any taxes on it.

Otherwise, be very very grateful that you did so well and pay your taxes like a man.

Answer 3

You will be required to pay taxes. However you are in a unique wonderful place. You can contribute money to the charity of your choice and off set the tax consequences. Consult an accountant to find out exactly how much money you will need to contribute to a charity to off set your gain. Better you decide where your money will be spent than the government. Congrats on the windfall !!

Answer 4

You might want to set up tax structures from now on, for future tax purposes. Consult a tax lawyer or tax accountant to help you set one up. A lot of investors tend to use trusts/hydrid trusts, holding companies, or trust and trust companies to invest, so as to reduce their tax liabilities.

If you are investing via your name, you will be required to pay income tax on profits as it is considered income. As an investor, I'm sure by now you know that income tax is the highest rate of taxes. Trusts, companies etc tend to pay a lesser percentage of taxes than do employees.

So, you are going to be paying capital gains tax, most likely at your marginal tax rate--depending on the laws of your country. I'm dual Aussie-American, so I only know about the tax laws that benefit investors in those countries.

Answer 5

Max out retirement contributions[401k,IRA]You have untill april 15.Check into income averaging you last 5 years of income,we did that with a fat re-enlistment bonus in the '80s.Or go lose it in Vegas,gambling losses are deductable.