Discussion

How To Not Pay Your Taxes

kg: > Defer US taxes by reinvesting your taxable income into the economy as business expenses, depreciating assets, etc.Be really careful when doing this. Make sure you have a great accountant - if you go more than a few years without turning a measurable profit, your risk of being audited apparently goes up. My accountant personally cautioned me about this since my business has been in an R&D phase for 5 years so we've been showing a small loss every year. The last thing you want is for the IRS to decide you've been cheating on your taxes.

WarmWash: If what was supposed to be your tax dollars is instead going towards giving more people work to do (and hence generate more taxes) the government will be happy.

hirako2000: I'm not sure to understand how deferring taxes is a better deal than paying it here and now.Since I'm not a financial adviser, someone asked me take on which 4k projector to buy last Xmas.I explained that the tech has improved so much lately, they've become somewhat affordable, I recommended a model and pointed ou that he would certainly get a better device next Xmas, for half the price. I thought he would follow suit given his budget was a bit below the retail price. That would just wait.His response was he would rather go ahead and up the budget a few hundred dollars to get it right away. That projectors will surely get much better by next year, but that he, certainly, will not.

singron: Deferring taxes is essentially an interest-free loan from the government to you. You can take that money, invest it, and then keep most of the earnings when you eventually pay the taxes.There are also some loopholes where capital gains taxes deferred until after death just don't get paid at all. This is the "step-up basis" where your inheritors get to reset the basis of capital assets and neither you nor they has to pay taxes on the capital gain.

jeffreyrogers: Pretty good overview of how/why these deductions reduce your taxable income. Couple of things to note.Depreciation is recaptured if you sell an asset for more than its depreciated basis. People sometimes get into trouble with this if they rapidly depreciate real estate and then sell it. Even if you sell for less than your purchase price it is possible to owe taxes.You also aren't going to be able to pay no taxes since you do need to realize some income to pay for mortgage/rent, food, transportation, etc. I guess if you had assets you could borrow against it would be possible to pay for these using the loan proceeds (which are not taxable).

bombcar: This is true for most businesses (they will reclassify it as a "hobby" where expenses aren't deductible, though you can fight that in tax court or real court if you want to) - but for rental properties you can go for decades with no profits (because of depreciation).

brcmthrowaway: The projector prices are a scam except for Christie and Barco

josefritzishere: This feels like a great way to get audited by the IRS. It does not feel like sound advice.

elliotec: I don't know if you're right or wrong, but it is an incredibly common tactic and done all the time by many businesses and people. There are of course ways to do this that are less noticeable by the IRS (as acknowledged in the article) and it doesn't seem like they have the capacity to investigate and audit the vast amount of this practice. My understanding is they are typically focused on fraud and/or folks simply not filing.

dgb23: I'm getting very strong sarcastic vibes from the article.

jimt1234: Highly recommend: https://www.youtube.com/@taxleverage

dleslie: That's a great deal more complicated than our TFSA and RSP programmes, here in Canada.

jt2190: Can you elaborate? As a business owner in the U.S. I can opt to reinvest all revenue back into the business, thus would show zero net profit but (presumably) increase my company’s value. (And remember there are other taxes and fees paid to various governments, not just tax on income/profit, so it’s not typically like nothing gets paid.)

anon291: As a business owner, if you provide labor to the business, you have to pay yourself a salary.

gautamcgoel: The thing I don't understand with these loan arguments is: don't you eventually need to pay taxes in the income you use to repay the loan? It seems to me that folks who take out such loans are just kicking the can down the road.

claythearc: There are a bunch of strategies here, but one people oft repeat is the "buy, borrow, die" approach. Where, they are kicking the can down the road, but the magic happens at the die step. When the borrower dies:Your heirs inherit your stocks, with their cost basis reset to the current price. This means that they have zero appreciation of your purchase of $RIVN at $67, despite it being at $420. They can then sell the shares, to pay the loans, and not owe capital gains, because there are no gains. Additionally, at this step cash can be extracted for no gains as well if desired.So you avoid taxes while alive by taking loans (not income), avoiding capital gains (never selling), and then gains evaporate through a stepped up basis. There are some exceptions here - estate taxes, etc with ways around them like trusts, but this is the general mechanism.Its worth noting though, that its not ironclad. In a significant downturn you can be forced to liquidate and it will hurt (see the news on Musk right after X purchase). Additionally, while people talk about this as being super popular, realize that in practice people who take advantage of these strategies also still have millions in cash flow, so its not a true borrow only $0 tax lifestyle, they will use already taxed money to manage them as well.

munk-a: Nah, the maximally sarcastic advice for tax avoidance is "become president" then you can just refuse to prosecute yourself for tax evasion and sue yourself for a ridiculous sum of money when someone leaks your tax avoidance.

some_random: This is touched on briefly, the number one reason is that if you can keep deferring your taxes indefinitely then you never have to pay them. Your tax burden is wiped away on death so not only does it not matter to you but your heirs won't be affected either.

anon291: A margin loan typically does not require any payments at all other than interest. Many loans are like this. Amortization for principal repayment is usually something you only find in personal or real estate loans

3rodents: How to Not Pay Any Taxes: don’t be American.Living tax free is easy enough for everyone except Americans.

unclad5968: Where are you living that you don't have to pay taxes?

SoftTalker: It seems to me that I'm running into more people who just don't file their taxes. They wait for the IRS to send them a letter saying how much they owe, and they just pay that.I can't figure out the thought process of someone who finds this sensible. Maybe there isn't one.

celeritascelery: That seems like a terrible idea. A good tax accountant will help you find ways to lower tax burden and save money. The IRS has no such incentive, and will probably just tax you at the standard rates for your gross income.

something765478: Well, frankly, that's exactly how it should work.

avemg: I'm familiar with this strategy but there's one thing about it that I don't understand: After death, the loans are an estate liability, right? Doesn't the estate need to be settled before heirs get their inheritance? If i had an outstanding $1MM loan, wouldn't the estate need to liquidate some of that $RIVN at the $67 basis in order to pay the loan? and then whatever $RIVN was left over would go to the heirs at a stepped-up basis?

jeffreyrogers: The step up in basis happens when you die, so the estate has no capital gain. Then the debts are paid, then the heirs get whatever they're supposed to get.

codemog: > If you aren't actually reinvesting capital, pay your damn taxes. Don't be an asshole.Why? So my government has more missiles to blow up children? No thanks.

buellerbueller: Or, just pay your taxes. We collectively benefit from them.

racingmars: Is there really any correlation between tax revenue and spending at the federal level anymore? It seems the U.S. government is willing to spend at huge deficit levels. If everyone stopped paying federal taxes I suspect nothing would change.

jeffreyrogers: Minor nitpick. The step up in basis actually happens when you die (not when your heirs receive the assets), and your estate has to pay off creditors before distributing assets. So the debt is paid off first, then your heirs get whatever is left over. Net result is the same though.

jaxefayo: I’ve never heard of anyone doing this, but now I kind of wish everyone did. Maybe it would force the IRS to just give us a bill instead of having us try our best to calculate what we owe, submitting that, and then hoping that we don’t get an angry letter when the IRS calculates it themselves and their answer doesn’t jive with ours.

oxqbldpxo: It is a good thing for life, money and health, to be clear how much is enough. In money frugality always wins. These billionaires they're very miserable. Their faces show stress, worry and animosity. People say money does bring happiness. It is BS. It holds true only if there is health.

gamerdonkey: The strategy is called "Buy, Borrow, Die"https://www.theatlantic.com/economy/archive/2025/03/tax-loop... (viewable by disabling JS)

xienze: What if I live for, say, decades before dying. Surely the lender expects some some amount of repayment before then.

tootie: Most tax money goes to social programs. Especially at the state and local level.

celeritascelery: What would change is the government would need to greatly increase their debt. In 2025 the government got about $5.23 trillion in tax revenue and spent about $7 trillion. So most of the government spending is financed by taxes. Remove that and the rate of debt quadruples (and by extension inflation).

charcircuit: We collectively benefit if you give me $1000 and I give you $1. That doesn't mean it's a good deal.

yonixw: > For your leveraged investments, pay yourself in refinanced cash when your investments appreciate and/or credit rates drop.In other words: Gamble that (1) your investments appreciate, or (2) that you will find credit rates drop when convenient.In 1 word: Gamble.So, either you are rich and have spare money to gamble, which sure, might be beneficial against taxes. But you could also gamble against any other sector (stocks, housing, startups...)Or, if you are not rich, just put it in the 401k (or eq).

mcmcmc: You know that’s not the entire budget right? You’re being an asshole by denying funding for disaster relief, schools, healthcare, roads, scientific research, all the public goods and services that don’t work on a profit driven model.If you want to play concerned citizen get out and protest, vote with your dollars by not throwing them at big tech companies who kowtow to politicians and fund their campaigns. But if you think you’re sending kind of message by withholding your taxes, it’s really just that you’re a selfish asshole.

__MatrixMan__: > vote with your dollars by not throwing them at big tech companiesAbstaining is not voting. If you want to vote with your dollar, spend it actively undermining big tech companies. Get out there and blind some cameras or something.

throwaway667555: Lenders have an amount of capital that they need to invest and earn returns -- they're generally not in the business temporarily so they don't want their capital back. And when the loans are secured by hard assets, e.g. publicly traded stocks, there's little risk of default so long as the price stays up. In times of rising stock prices, there's little to no reason for a debt holder (lender) to exit their positions at maturity. Rather roll and continue taking the return (interest).

3rodents: That’s the trick. Don’t live anywhere. Every other country taxes based on residency rather than citizenship. If you’re not a U.S. citizen you can just wander around the world living tax free regardless of your income. Don’t stay anywhere long enough to become a tax resident.

fer: Sorry but that's been a meme and a house of cards for since the Common Reporting Standard.The fact is that the country whereever you carry any legal activity will require you to prove you're taxed elsewhere not to tax you in place.To carry out economic activity you'll need a presence, if it's a company it's corporate tax, if you're freelance you'll need a registered address.Most banks will freeze you without a TIN and and address.Plus the whole can of worms of the centre of vital interests or source-based taxation systems.In the moment you input an address in the financial system, the tax administration will know, and they will knock your door for any significant income, plus arrears, pulling one of the cards from your house, and it's not going to be pretty.

3rodents: You are categorically incorrect.Picking a random country: Italy. Please explain under what legislation or mechanism an Italian citizen who spends 3 months in Japan, 3 months in South Korea, 3 months in the U.S., 3 months in Norway and then repeats the loop for the rest of their life would owe any taxes to any tax authority?Almost every country except the United States only taxes their residents, not citizens. Almost every country follows the typical 180 day rule for tax residency.

phkahler: This is what they call "buy borrow die" or some such. Buy an asset, borrow against it, die to reset the basis. Your estate will still have to repay the loans, but... that one part I don't really understand. Do they just refinance, taking a new loan against the newly valued asset?This all seems to benefit from low interest rates. Was it a thing in the 90's? Or even the 80s when rates were much higher?

dminor: It's a strategy that's only really available to the ultra wealthy, because the banks are willing to give them a bespoke loan with a much lower interest rate that's payable after they die. There's also a complex trust setup to pass the asset to their heirs.

hparadiz: These laws are the way they are so that if a kid has their parents die they aren't facing an immediate giant tax bill on cap gains. It applies to basically anyone inheriting even a normal house. The difference in cost basis could be 90% of the value.