“TRAPPIST – 1 to ground control, TRAPPIST – 1 to ground control, we have flight.”
Are you lost yet? If you aren’t lost then it is probably because you heard about NASA’s recent discovery of a potentially habitable sister solar system, “The TRAPPIST-1 System” and you are envisioning yourself, with a huge grin on your face, sitting within a spacecraft that just took off for this new system with the sole objective to avoid taxes forever. [Suddenly] BOOM! Your main engine just blew and as you are spiraling back down to Earth you suddenly awake…
Welcome back to real life… where we all pay taxes.
I mean if this was a real scenario, you may have escaped paying taxes, because I highly doubt the IRS is going to chase you when you’re in a spacecraft headed about 39 light years away give or take… at least not anytime soon! Can you imagine never having to receive/deal with an IRS notice ever again!? Or even better yet, not having to pay taxes ever again? What would you do for that?
Fortunately there are several ways to legally avoid taxes out there, you just have to plan accordingly and find out which ways you can qualify (“Can” and “qualify” being the keywords).
- Are you moving out of the country? Have you heard about the foreign income exclusion? Do you qualify? What would it take to qualify?
- Do you have children? Do you qualify for the Child Tax Care Credit? Earned Income Credit?
- Are you eligible to contribute to an IRA?
- Are you a student taking advantage of the education credits?
- Do you know ways you can avoid estate taxes?
Taxes are unique to each individual, although you realistically can’t avoid ALL taxes, you can avoid some. You don’t have to go searching the solar system for tax advice either. This is what we (your tax advisors) are here for. Make sure to consult with your tax advisor, plan accordingly and may be you can reduce or eliminate tax avoiding nightmares such as this one.
Chris Morrison, CPA