This Just In. Paying Taxes Is Optional.

By John Heller

Recently someone asked me: “Can people really plan how much tax they have to pay?”

I gave him my standard response: “Paying taxes in a self-assessment, bail-out levered and stimulus-incentivized economy is a choice and philanthropic. It is not a requirement.”

Then, after the guy picked his jaw up, I gave him the simpler, but no less profound answer: “Yes.”

Depending on a person’s willingness to spend the effort and make tax-incentive investments, there are many, many ways to reduce one’s taxable income and tax liability.

Let me give an example.

A $100,000 investment in a (successful) start-up company involved in new research—let’s say in the Purdue Research Park—could provide the investor with more than $64,000 in income tax reduction benefits. And, when this “successful” company is sold, the gain on the sale can be tax-free or tax-deferred, if certain planning opportunities are followed, such as if the investor reinvests in another start-up company.

And, again, that’s just one example. So, absolutely, yes. People really do have the ability to plan how much they pay in taxes.

Sound like a plan for you? Give me a call or send me an email.

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John W. Heller, CPA, JD, Partner

John joined Huth Thompson LLP in 1978 and became a partner in 1981. He received a Bachelor of Arts degree from Duke University and law degree from Indiana University. John worked for Arthur Andersen LLP for five years before moving to Lafayette. In addition to general tax and accounting work for clients, John works in various specialized tax areas including start-up companies, private foundations, energy partnerships, family limited partnerships and high-end estate planning. He also heads up the Huth Thompson Help Desk at Purdue Research Park, offering accounting and business services to the 180 companies affiliated with the Purdue Research Park. John is a charter member of the Lafayette Daybreak Rotary Club. He is a former elder and current member of the men’s ministry team at Covenant Presbyterian Church. John can be reached via email or by phone at (765) 428-5000