Another garbage article.
Some things, even if already mentioned above, bear repeating:
Because of a change in how her company, ABC Supply Inc., the country's largest distributor of roofing, windows and siding, is structured, Hendricks reduced her personal state income tax burden from $2.3 million in 2009 to zero in 2010, according to records the state Department of Revenue released to the Journal-Sentinel.
Oh no! A rich woman got out of taxes!
Oh really? Read below:
In Hendricks' Wisconsin case, ABC Supply switched from an "S" corporation, which passes all of its profits and losses through its owner to be taxed under personal income, to a "C" corporation, which stands independently of its owner and whose income is subject to corporate taxes.
So they switched it from the woman paying all the taxes on the company's net income so that now the company itself pays all the taxes on it's income. Err, what's the problem?
Why isn't the title of this article something about a company's state tax burden ballooned under Obama? That would be just as fair and accurate.
And the utter horror of this bit:
So how does someone in the top 3 percent of America's income earners finagle their income tax burden down to zero? For the majority of them, it's all about donating to charity, investing in local and state governments, earning money overseas and writing off doctor bills.
My god, they had huge doctors' bills, donated to charity or had to pay tax in (high-tax) foreign countries where they earned the income. So, what's the problem?
(BTW: Charity can't drive your tax to zero. There's a limit on how much you can deduct, the excess is carried over to future years.)
As a tax professional I have an interest in these type stories and usually try to drill down to the details of such tales to see if I'm missing any new 'trick' in cutting taxes.
So, what does this article recommend I tell clients about how to get out of federal income tax?
1. Get cancer or some other catastrophic illness such that you will pay more in uninsured medical expenses than you actually make in that year. Or,
2. Go earn your income in a foreign country that will charge you even more in tax than the US govt will.
I'm emailing all the CPA tax publications to make sure everyone becomes aware of these awesome tax planning strategies.
Fern