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Tax-Free Wealth: How to Build Massive Wealth by Permanently Lowering Your Taxes
After 31 years… Major Tax Reform — and what it means to you True overhaul of the tax law only happens about once every 30 years. In the past 75 years, the U.S. tax law has only seen three major revisions; one in 1954, the next in 1986 and most recently at the end of 2017. I have been fortunate as a tax professional to be heavily involved in the last two reforms. In 1986, I was a manager in the National Tax Department (NTD) of Ernst & Whinney (now Ernst Young). My primary responsibility during my three years there was to create, teach and administer tax courses to the Firm’s U.S. tax professionals. Just as I arrived in the summer of 1985, I discovered that much of NTD’s resources were being devoted to following the tax reform bill that had been introduced that year. This gave me, as a young tax professional, some amazing insight into the legislative process as well as the horse trading for tax reform. President Reagan wanted two things; simplicity (the 1985 act was call the Tax Simplification Act of 1985) and he wanted it to be revenue neutral (no net increase to the deficit). It took another year before bill was finally passed as the Tax Reform Act of 1986. (Simplicity took a back seat to other goals of the reform.) In 1986 the big winners from tax reform were individuals, with significantly lower tax rates, insurance companies (who got by relatively unscathed) and businesses. The big loser was real estate investors (the passive loss rules were used as a last-ditch effort to make a “revenue-neutral” bill. The result a few years later was the Savings and Loan debacle accompanied by a massive real estate depression and the government bailing out real estate through the RTC (Resolution Trust Corporation). Fast forward 31 years to 2017. President Trump had promised economic stimulus and had stumbled out of the blocks with the failure to repeal ObamaCare. Everyone thought tax reform would take two years to complete like it had in 1985-1986. Instead, the Republican-controlled Congress was able to use slick procedural rules to pass major tax reform in record time (less than three months from start to finish). The result was a bill the consequences of which and application of which are still largely unknown. Known are the clear winners and losers. Losers include employees with lost deductions for moving, investment expenses and reductions in home mortgage interest and state income tax deductions. Winners include big corporations, with a major tax reduction from 35% to big corporations, with a major tax reduction from 35% to 21%, small businesses, with a 20% net income deduction, and real estate, with major depreciation incentives and the 20% net income deduction given to other small businesses. The key to remember is that very few people had the chance to influence this legislation. Everyone has the same chance to take advantage of the windfalls given to the winners. Employees can choose to be independent contractors and receive the 20% small business deduction. Service professionals who were left out of the 20% deduction can now become C corporations and reduce their tax rate to 21%. Investors who received tax benefits from the costs of investing in the stock market can either begin investing in real estate, with its massive tax benefits, or invest through their Roth IRA or Roth 401(k) and avoid tax altogether on the income and gains from their investments. Tax-Free Wealth is about using the tax law the way it’s meant to be used – as a series of incentives to do what the government wants you to do. This Second Edition incorporates some ideas of how to use the new incentives. The reality is that the incentives don’t really change that much. The government still wants businesses to hire employees, so businesses receive tax benefits for doing so.
387 pages, Kindle Edition
First published February 7, 2012
1638 people are currently reading
8149 people want to read
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Displaying 1 - 30 of 208 reviews
December 26, 2014
The more I read content churned out from the Robert Kiyosaki brand publishing mill, the less impressed with it I become. It's too optimistic, feel-good, seminar/workshop type of inspirational financial literature. It pretends to be practical with details, but it's not.
March 17, 2018
I definitely recommend this book although I also have some criticisms of it. It’s an easy read, interesting and informative. As someone who has no background in business or accounting I found some useful information. I’m an entrepreneur and I made very little money last year - well under $20k and now that it’s tax season I found myself getting distressed by how much I may owe. I’m not sure how helpful this is for someone like me though. As the author says , if you fall into the categories of employed or self employed the tax code is not written to benefit you. It is written to benefit big business and investors. Well I also consider myself a real estate investor just starting out. I did sort of a live-in flip in a neighborhood that is up and coming and if all continues moving in the direction it is now, I could make a decent profit in a few years.
There were definitely some creative ideas in here that I will implement in the future. I am an “outside-the-box thinker so I definitely found this book interesting. I originally heard about this book on Natali Morris’ blog. I really like her approach to personal finance and found her advice original and Inspiring. However, let’s be realistic and look at the obvious. This type of advice is meant to benefit a certain class of people - those who come from privileged backgrounds. I was put off some when reading the book because the authors conservative political mindset comes through pretty clearly when he talks condescendingly about “entitlement programs,” and it is clear he comes from an entitled background- he mentions how he was given a job in his father’s firm while still in high school. (Of course, to be fair, accounting is a field that it must be pretty easy to get a job in as there is a high demand for accountants). This type of book does not look at the challenges some people face when trying to build wealth such as having no family support, no generational wealth, no social capital, or having health issues. If you are working a low income job and barely making ends meet you aren’t going to be able to become an investor.
I have a background in anthropology and I tend to be critical of some aspects of capitalism (though I’m not anti-capitalist), and am critical of many aspects of society, and see things that need the change. But I can’t change the fact that this is in fact, a capitalist society and to survive one is required to participate in it. Someone else created the rules to the game, and we are all forced to play it. So it’s best to learn how to succeed at it the best you can.
There were definitely some creative ideas in here that I will implement in the future. I am an “outside-the-box thinker so I definitely found this book interesting. I originally heard about this book on Natali Morris’ blog. I really like her approach to personal finance and found her advice original and Inspiring. However, let’s be realistic and look at the obvious. This type of advice is meant to benefit a certain class of people - those who come from privileged backgrounds. I was put off some when reading the book because the authors conservative political mindset comes through pretty clearly when he talks condescendingly about “entitlement programs,” and it is clear he comes from an entitled background- he mentions how he was given a job in his father’s firm while still in high school. (Of course, to be fair, accounting is a field that it must be pretty easy to get a job in as there is a high demand for accountants). This type of book does not look at the challenges some people face when trying to build wealth such as having no family support, no generational wealth, no social capital, or having health issues. If you are working a low income job and barely making ends meet you aren’t going to be able to become an investor.
I have a background in anthropology and I tend to be critical of some aspects of capitalism (though I’m not anti-capitalist), and am critical of many aspects of society, and see things that need the change. But I can’t change the fact that this is in fact, a capitalist society and to survive one is required to participate in it. Someone else created the rules to the game, and we are all forced to play it. So it’s best to learn how to succeed at it the best you can.
February 2, 2015
Before this book, I was under the impression that tax laws were black and white and that everyone who did remotely well in life was destined to take it up the ass. Not true! If you want an outside-the-box tax book, this is for you!
Wheelwright is passionate about tax laws and using them to your advantage. I learned so much from this book that I hired his firm to be our new accountants. I had not planned on that but after you see how this guy approaches tax law, you'd be crazy not to!
Wheelwright is passionate about tax laws and using them to your advantage. I learned so much from this book that I hired his firm to be our new accountants. I had not planned on that but after you see how this guy approaches tax law, you'd be crazy not to!
February 7, 2023
Make taxes your friend, and start building your wealth today.
The only two constants in life are death and taxes. We all know the old saying. And if you’re like most people, these things are equally scary – so you put all your effort into either delaying or ignoring them.
While you may have to come to terms with death in your own way, you’ll be happy to know that you don’t have to live in fear of tax season. Taxes can be understood by anyone, and the tax laws – while they can seem a bit complicated – actually exist to help you save money.
That’s right, taxes are your friend!
You see, taxes are the government's way of encouraging people to do what’s best to keep the economy running. If you’re doing what the government wants, then you’ll be rewarded by paying less in taxes.
Everything you do either raises or lowers your taxes – it all comes down to your facts. These are the circumstances related to how you do business, how you invest, and your personal activities. If you change your facts to be in line with what the government is encouraging, then you will save money on taxes. It’s as simple as that.
In this book, you’ll learn how to change your facts to greatly reduce your taxes and save money for yourself, your family, and your business. These tricks are all provided by the tax laws of most modern, first-world countries. Whether you’re from the US, Canada, Australia, or Europe, you can start getting these laws to work for you today!
Let’s find out how.
---
Make sure you’re earning the right type of income.
Did you use to earn pocket money as a kid? Maybe you got money from your parents for shoveling snow, or cleaning the windows. Chances are, you didn’t really care where the money came from – you were just happy to have it and spend it.
Well, you’re not a kid anymore, and you’re probably looking to earn a lot more than pocket change. There are different ways you can get money, and they are not taxed equally.
There are four types of earners: employees working for a salary, the self-employed, big business owners, and investors. It’s these last two – businesses and investors – that are taxed at the lowest rate.
Think about it. What does the government want? More jobs are good for the economy. New jobs are created by businesses and entrepreneurs, so the government rewards these people by lowering their taxes.
What else does the government want? Affordable housing. Once again, governments offer huge tax breaks to real estate investors, because they want to encourage that sort of behavior.
You may be thinking, That’s great, but what if you’re on the employee or self-employed side of the spectrum? It’s simple: if you want to get the tax benefits, you’re going to have to shift your income into one of the other areas. It’s not as hard as it seems – thousands of people all over the world take courses in business or investment and change the way they earn.
Now let’s look at the different ways you can receive income. Think of your income as if it were filling up one of five buckets – each with a different amount of holes through which money can be lost to tax.
The first bucket is earned income. This one has the most holes in it – you're going to lose a lot of money to income and employment taxes. Try to stay away from this bucket.
Let’s call the next one your ordinary income bucket. This is income you might be getting from your pension or retirement plan, or whatever income won’t fit into the other buckets. This still receives the highest income tax, but it doesn’t get the employment tax like the first bucket.
The next bucket is for investment income – things like capital gains, interest, and dividends. This income is taxed at a much lower rate, and in some cases, not at all!
The fourth bucket is for gifts or inheritance. In most countries, the tax is paid on the side of the person giving the money, so nothing is lost when it lands in your bucket.
Finally, you have the passive income bucket. This is money that you receive from a business or investment which isn’t managed by you personally. This is taxed at a regular rate, but there are many ways to reduce this amount.
That brings us to the topic of the next section – how to patch the holes in those buckets using a miraculous little thing called deductions.
---
Almost anything can be deducted.
Life isn’t fair, and neither are taxes. Sure, you can complain about it, but what’s that going to do? A better method is to join the side that’s receiving the benefits. As you saw in the previous section, that means becoming an entrepreneur or investor. Once you start a business or make some smart investments, a whole world of money-saving options opens up in the form of deductions.
You see, in the right circumstances – with the right facts – almost anything can be deducted. The government wants to encourage individuals who put money into the economy with the goal of producing, not consuming. This means that if the purpose of the expense is to produce more income, you can deduct it in your taxes.
Like going out to dinner? Invite a business partner and discuss growth opportunities, and it suddenly becomes a deductible expense. Love traveling to New Mexico? Invest in property there, and claim all your travel expenses. Get your family involved in the bookkeeping for the investment, and they can travel for free as well.
But there’s one type of deduction which sits above all the others. It’s the queen of deductions, and it’s called depreciation.
Depreciation is like magic. Say you own some sort of physical asset that produces income – this could be a building, or machinery, or even your car if you use it for work. You can actually deduct a portion of the cost of that building every year, for a certain number of years. It costs you nothing, so you’re making money appear from thin air. Magic!
To fully take advantage of the miracle of depreciation, make sure you’re deducting as much as you can. For example, when calculating the total cost of a building you own, don’t forget about any landscaping or improvement costs – car parks, fences, even the things inside it like floor coverings and cabinetry. These can be deducted separately, and because they depreciate faster, you will get a bigger deduction than if you treated the whole building as one cost.
There is one important trick to making sure that you get the most out of your depreciation and other deductions: document, document, document.
Every receipt or piece of evidence of a financial transaction should be carefully documented and filed. In the event of an audit, it’s invaluable to be able to quickly provide the required documentation to the IRS, or whatever government body is checking up on your deductions. Luckily, in the digital age it’s easier than ever to keep things properly documented. Just scan or take a picture of your receipt whenever you get one, and keep it stored on your computer or phone. Keep everything in order, and you can deduct and save on all your work expenses without a worry in the world.
---
Real estate is where it’s at.
Your options if you decide to go the investment route are extensive and varied. However, there is one area that can earn you a little bit extra in tax savings, in almost every country. In fact, if you invest properly and seriously in this area, you should never have to pay tax on your cash flow at all. What is this magical tax shelter? Real estate.
The trick is to always be buying more. Here’s how it works.
Say you begin your real estate investment by buying several single-family homes. You get a nice cash flow from these, you collect your depreciation deductions, and the houses increase in value.
However, as you take the depreciation, you reduce a thing called your tax basis – this is the purchase price of the property. When your tax basis reaches zero, you stop receiving depreciation.
When you sell the property, you pay tax on your gain – the difference between the tax basis and the sales price. The lower the tax basis, the greater this gain, and therefore the more you will be taxed. You essentially pay back your depreciation deductions in tax when you sell the property.
But you can avoid this tax entirely by simply buying another property for the same price as the one you sold. This process – called a like-kind exchange, or a Section 1031 exchange in the US – means you can continuously put off paying capital gains tax on a property. This gives you the freedom to sell a property that has become overpriced, or because you simply want to change your investment strategy, without getting stuck with the taxes.
Say those single-family homes you bought have now become a bit too much trouble – they’re lots of maintenance, and you’re getting less in depreciation. Using the like-kind exchange, you sell all the houses, and purchase an apartment building for an equal or greater price. You pay no tax for this sale, but now you’re enjoying a greater cash flow than you got from the family houses.
But apartments still require a lot of maintenance. Now you want an even greater cash flow, with none of the work. So, by the same like-kind exchange, you sell the apartments and purchase a retail store, which takes care of all the associated expenses itself. Once again, you’re not taxed for your gains on the apartments.
By this stage, all the depreciation you’ve been deducting has decreased your tax basis – and as you might remember from before, a low tax basis equals a higher gain, which means more tax. When you sell, you’re going to have to pay a lot in taxes.
So, don’t sell. If you hold on to the property until you die, your tax basis becomes the same as the value of the property. Pass that retail store on to your children, and they can sell it for its full, tax-free value. While you were alive, you received all the tax benefits from the depreciation; by holding it until your death, nobody has to spend a cent on taxes.
Through the combination of depreciation and like-kind exchanges, real estate investment really is the easiest path to tax-free wealth.
---
Choose the right tax advisor.
Tax law is a beautiful and exciting thing. You see, it has the capacity to be incredibly vague – and in the right hands, this vagueness can be twisted and interpreted into all sorts of fantastic wealth-amassing opportunities. On the other hand, those who are unwilling or unable to take advantage of its true potential will always miss out. This is why it’s of the utmost importance to choose the right tax advisor. You can’t do this alone, but you can learn what you need to look for when getting help.
First, a good tax advisor will be passionate about reducing your taxes – they will do everything in their power to find the interpretations that work in your favor.
It all comes down to how they look at the tax law. You’d be surprised how many tax accountants are actually afraid of the law. They will read the simple tax guides, and stay away from anything they don’t understand. This means they won’t be giving you the best advice, and you’ll miss all your tax-saving opportunities.
The appeal of these types of advisors is that they are probably cheaper. However, that’s the wrong way to look at it. It doesn’t matter how much they charge you – think of it in terms of how much they cost you in taxes. Sure, paying an extra $10,000 a year for a tax advisor might seem like a lot – but if they’re saving you an extra $70,000 a year in taxes, for example, then it’s definitely worth it.
You need a tax advisor who can think creatively. The law isn’t a straight line, and an accountant who got into the business because they like the certainty and clarity of numbers isn’t always going to be able to see this.
So, how can you know if a tax advisor is going to be doing the best for you? It’s all in the interview. Remember that your tax is based entirely on your facts and circumstances. When talking to a potential advisor, where’s the focus? Do they talk about themselves and their business, or do they focus on you and your needs? This is a good way to tell if they care enough about you to go the extra mile.
If you think that they’ll put you first, there are some other questions you can ask to make sure they’re the real deal – things like, “What's your view of tax law?” or “What’s your personal investment strategy?”
You can also tell a lot from what questions they choose to ask you. If they want to know about your dreams and goals, your relationship with your spouse and children, and your experiences and expectations regarding taxes, then they’re likely thinking in the right way.
Find a tax advisor who knows the law, knows you, and knows the tricks, and you will never have to be scared of taxes or audits again.
---
Imagine a world where you don’t need to be scared of taxes, but instead find yourself approaching them with confidence and enthusiasm. That world is entirely possible – with the right attitude, a little education, and some careful planning.
If you adjust the sources of your incoming cash flow to business and investments, then a whole world of tax breaks, deductions, and depreciation opens up. While you have many options, the fastest and safest way is almost certainly through real estate.
But you can’t do it alone! Find a tax advisor who knows their stuff, and before you know it, your wealth will be building in ways you never imagined. Tax-free wealth is a real possibility, and it’s within your grasp.
What’s stopping you?
The only two constants in life are death and taxes. We all know the old saying. And if you’re like most people, these things are equally scary – so you put all your effort into either delaying or ignoring them.
While you may have to come to terms with death in your own way, you’ll be happy to know that you don’t have to live in fear of tax season. Taxes can be understood by anyone, and the tax laws – while they can seem a bit complicated – actually exist to help you save money.
That’s right, taxes are your friend!
You see, taxes are the government's way of encouraging people to do what’s best to keep the economy running. If you’re doing what the government wants, then you’ll be rewarded by paying less in taxes.
Everything you do either raises or lowers your taxes – it all comes down to your facts. These are the circumstances related to how you do business, how you invest, and your personal activities. If you change your facts to be in line with what the government is encouraging, then you will save money on taxes. It’s as simple as that.
In this book, you’ll learn how to change your facts to greatly reduce your taxes and save money for yourself, your family, and your business. These tricks are all provided by the tax laws of most modern, first-world countries. Whether you’re from the US, Canada, Australia, or Europe, you can start getting these laws to work for you today!
Let’s find out how.
---
Make sure you’re earning the right type of income.
Did you use to earn pocket money as a kid? Maybe you got money from your parents for shoveling snow, or cleaning the windows. Chances are, you didn’t really care where the money came from – you were just happy to have it and spend it.
Well, you’re not a kid anymore, and you’re probably looking to earn a lot more than pocket change. There are different ways you can get money, and they are not taxed equally.
There are four types of earners: employees working for a salary, the self-employed, big business owners, and investors. It’s these last two – businesses and investors – that are taxed at the lowest rate.
Think about it. What does the government want? More jobs are good for the economy. New jobs are created by businesses and entrepreneurs, so the government rewards these people by lowering their taxes.
What else does the government want? Affordable housing. Once again, governments offer huge tax breaks to real estate investors, because they want to encourage that sort of behavior.
You may be thinking, That’s great, but what if you’re on the employee or self-employed side of the spectrum? It’s simple: if you want to get the tax benefits, you’re going to have to shift your income into one of the other areas. It’s not as hard as it seems – thousands of people all over the world take courses in business or investment and change the way they earn.
Now let’s look at the different ways you can receive income. Think of your income as if it were filling up one of five buckets – each with a different amount of holes through which money can be lost to tax.
The first bucket is earned income. This one has the most holes in it – you're going to lose a lot of money to income and employment taxes. Try to stay away from this bucket.
Let’s call the next one your ordinary income bucket. This is income you might be getting from your pension or retirement plan, or whatever income won’t fit into the other buckets. This still receives the highest income tax, but it doesn’t get the employment tax like the first bucket.
The next bucket is for investment income – things like capital gains, interest, and dividends. This income is taxed at a much lower rate, and in some cases, not at all!
The fourth bucket is for gifts or inheritance. In most countries, the tax is paid on the side of the person giving the money, so nothing is lost when it lands in your bucket.
Finally, you have the passive income bucket. This is money that you receive from a business or investment which isn’t managed by you personally. This is taxed at a regular rate, but there are many ways to reduce this amount.
That brings us to the topic of the next section – how to patch the holes in those buckets using a miraculous little thing called deductions.
---
Almost anything can be deducted.
Life isn’t fair, and neither are taxes. Sure, you can complain about it, but what’s that going to do? A better method is to join the side that’s receiving the benefits. As you saw in the previous section, that means becoming an entrepreneur or investor. Once you start a business or make some smart investments, a whole world of money-saving options opens up in the form of deductions.
You see, in the right circumstances – with the right facts – almost anything can be deducted. The government wants to encourage individuals who put money into the economy with the goal of producing, not consuming. This means that if the purpose of the expense is to produce more income, you can deduct it in your taxes.
Like going out to dinner? Invite a business partner and discuss growth opportunities, and it suddenly becomes a deductible expense. Love traveling to New Mexico? Invest in property there, and claim all your travel expenses. Get your family involved in the bookkeeping for the investment, and they can travel for free as well.
But there’s one type of deduction which sits above all the others. It’s the queen of deductions, and it’s called depreciation.
Depreciation is like magic. Say you own some sort of physical asset that produces income – this could be a building, or machinery, or even your car if you use it for work. You can actually deduct a portion of the cost of that building every year, for a certain number of years. It costs you nothing, so you’re making money appear from thin air. Magic!
To fully take advantage of the miracle of depreciation, make sure you’re deducting as much as you can. For example, when calculating the total cost of a building you own, don’t forget about any landscaping or improvement costs – car parks, fences, even the things inside it like floor coverings and cabinetry. These can be deducted separately, and because they depreciate faster, you will get a bigger deduction than if you treated the whole building as one cost.
There is one important trick to making sure that you get the most out of your depreciation and other deductions: document, document, document.
Every receipt or piece of evidence of a financial transaction should be carefully documented and filed. In the event of an audit, it’s invaluable to be able to quickly provide the required documentation to the IRS, or whatever government body is checking up on your deductions. Luckily, in the digital age it’s easier than ever to keep things properly documented. Just scan or take a picture of your receipt whenever you get one, and keep it stored on your computer or phone. Keep everything in order, and you can deduct and save on all your work expenses without a worry in the world.
---
Real estate is where it’s at.
Your options if you decide to go the investment route are extensive and varied. However, there is one area that can earn you a little bit extra in tax savings, in almost every country. In fact, if you invest properly and seriously in this area, you should never have to pay tax on your cash flow at all. What is this magical tax shelter? Real estate.
The trick is to always be buying more. Here’s how it works.
Say you begin your real estate investment by buying several single-family homes. You get a nice cash flow from these, you collect your depreciation deductions, and the houses increase in value.
However, as you take the depreciation, you reduce a thing called your tax basis – this is the purchase price of the property. When your tax basis reaches zero, you stop receiving depreciation.
When you sell the property, you pay tax on your gain – the difference between the tax basis and the sales price. The lower the tax basis, the greater this gain, and therefore the more you will be taxed. You essentially pay back your depreciation deductions in tax when you sell the property.
But you can avoid this tax entirely by simply buying another property for the same price as the one you sold. This process – called a like-kind exchange, or a Section 1031 exchange in the US – means you can continuously put off paying capital gains tax on a property. This gives you the freedom to sell a property that has become overpriced, or because you simply want to change your investment strategy, without getting stuck with the taxes.
Say those single-family homes you bought have now become a bit too much trouble – they’re lots of maintenance, and you’re getting less in depreciation. Using the like-kind exchange, you sell all the houses, and purchase an apartment building for an equal or greater price. You pay no tax for this sale, but now you’re enjoying a greater cash flow than you got from the family houses.
But apartments still require a lot of maintenance. Now you want an even greater cash flow, with none of the work. So, by the same like-kind exchange, you sell the apartments and purchase a retail store, which takes care of all the associated expenses itself. Once again, you’re not taxed for your gains on the apartments.
By this stage, all the depreciation you’ve been deducting has decreased your tax basis – and as you might remember from before, a low tax basis equals a higher gain, which means more tax. When you sell, you’re going to have to pay a lot in taxes.
So, don’t sell. If you hold on to the property until you die, your tax basis becomes the same as the value of the property. Pass that retail store on to your children, and they can sell it for its full, tax-free value. While you were alive, you received all the tax benefits from the depreciation; by holding it until your death, nobody has to spend a cent on taxes.
Through the combination of depreciation and like-kind exchanges, real estate investment really is the easiest path to tax-free wealth.
---
Choose the right tax advisor.
Tax law is a beautiful and exciting thing. You see, it has the capacity to be incredibly vague – and in the right hands, this vagueness can be twisted and interpreted into all sorts of fantastic wealth-amassing opportunities. On the other hand, those who are unwilling or unable to take advantage of its true potential will always miss out. This is why it’s of the utmost importance to choose the right tax advisor. You can’t do this alone, but you can learn what you need to look for when getting help.
First, a good tax advisor will be passionate about reducing your taxes – they will do everything in their power to find the interpretations that work in your favor.
It all comes down to how they look at the tax law. You’d be surprised how many tax accountants are actually afraid of the law. They will read the simple tax guides, and stay away from anything they don’t understand. This means they won’t be giving you the best advice, and you’ll miss all your tax-saving opportunities.
The appeal of these types of advisors is that they are probably cheaper. However, that’s the wrong way to look at it. It doesn’t matter how much they charge you – think of it in terms of how much they cost you in taxes. Sure, paying an extra $10,000 a year for a tax advisor might seem like a lot – but if they’re saving you an extra $70,000 a year in taxes, for example, then it’s definitely worth it.
You need a tax advisor who can think creatively. The law isn’t a straight line, and an accountant who got into the business because they like the certainty and clarity of numbers isn’t always going to be able to see this.
So, how can you know if a tax advisor is going to be doing the best for you? It’s all in the interview. Remember that your tax is based entirely on your facts and circumstances. When talking to a potential advisor, where’s the focus? Do they talk about themselves and their business, or do they focus on you and your needs? This is a good way to tell if they care enough about you to go the extra mile.
If you think that they’ll put you first, there are some other questions you can ask to make sure they’re the real deal – things like, “What's your view of tax law?” or “What’s your personal investment strategy?”
You can also tell a lot from what questions they choose to ask you. If they want to know about your dreams and goals, your relationship with your spouse and children, and your experiences and expectations regarding taxes, then they’re likely thinking in the right way.
Find a tax advisor who knows the law, knows you, and knows the tricks, and you will never have to be scared of taxes or audits again.
---
Imagine a world where you don’t need to be scared of taxes, but instead find yourself approaching them with confidence and enthusiasm. That world is entirely possible – with the right attitude, a little education, and some careful planning.
If you adjust the sources of your incoming cash flow to business and investments, then a whole world of tax breaks, deductions, and depreciation opens up. While you have many options, the fastest and safest way is almost certainly through real estate.
But you can’t do it alone! Find a tax advisor who knows their stuff, and before you know it, your wealth will be building in ways you never imagined. Tax-free wealth is a real possibility, and it’s within your grasp.
What’s stopping you?
August 23, 2020
High-level overview of tax considerations and ways to use the special tax treatment of certain asset classes such as real estate to your advantage. Part of the Rich Dad Poor Dad series; premise that wealth is created not by being an employee, but rather by being a business owner and/or investor (where lucrative tax benefits are found).
I thought the discussion about tax-deferred accts (IRA, 401k) was interesting: the author believes for a number of reasons that the old adage of putting away as much as you can in these retirement plans is actually bad advice. Instead, he encourages investment in real estate (for example) where the tax advantages are permanent and not just deferred. IMO, the notion that depreciation deductions are "permanent" is misleading: if you ever sell the property (assume you don't make a like-kind exchange) you'll have to recapture these deductions. But I digress.
In addition to real estate and business ownership, the book discusses the tax benefits of stock trading, oil/gas, precious metals. There is also much mentioned with respect to what qualities to look for in a tax advisor. This latter topic I found extremely helpful, and having been with several tax advisors I can heartily agree with points raised.
I thought the discussion about tax-deferred accts (IRA, 401k) was interesting: the author believes for a number of reasons that the old adage of putting away as much as you can in these retirement plans is actually bad advice. Instead, he encourages investment in real estate (for example) where the tax advantages are permanent and not just deferred. IMO, the notion that depreciation deductions are "permanent" is misleading: if you ever sell the property (assume you don't make a like-kind exchange) you'll have to recapture these deductions. But I digress.
In addition to real estate and business ownership, the book discusses the tax benefits of stock trading, oil/gas, precious metals. There is also much mentioned with respect to what qualities to look for in a tax advisor. This latter topic I found extremely helpful, and having been with several tax advisors I can heartily agree with points raised.
February 25, 2020
The book has more in common with a motivational "You Can Be Rich Too"-type narrative than an actionable list of definite tax reduction strategies that is within reach of anyone. I can't quite place who the audience for it is supposed to be.
Most of the advice seems to be targeted at already wealthy people who have significant business expenses like meals and travel or who can report significant depreciation and other deductions from business expenses. That's great for higher-income tax filers who itemize, but the average Standard Deduction filer will get significantly less from it.
So, is this book for higher-income readers who'd like to control their taxes? Well maybe, but that's hard to picture as well. The language is pitched as a primer on basic tax avoidance. If your already at the income level that is described, you really need a tax professional or to reach for a more academic book with less individual empowerment filling the margins.
So the vibe from the book is something like "How to Get Rich by already being Rich and also lowering your Taxes". Okay.
Most of the advice seems to be targeted at already wealthy people who have significant business expenses like meals and travel or who can report significant depreciation and other deductions from business expenses. That's great for higher-income tax filers who itemize, but the average Standard Deduction filer will get significantly less from it.
So, is this book for higher-income readers who'd like to control their taxes? Well maybe, but that's hard to picture as well. The language is pitched as a primer on basic tax avoidance. If your already at the income level that is described, you really need a tax professional or to reach for a more academic book with less individual empowerment filling the margins.
So the vibe from the book is something like "How to Get Rich by already being Rich and also lowering your Taxes". Okay.
February 5, 2018
The book has a lot of details that would be more applicable when you have a corporation. Less on personal income tax and more on corporation. I would recommend to people that has interest in growing your business to corporation.
March 25, 2022
This is a very thorough book on how to approach wealth building by considering carefully the tax handling of your investments.
It may be a bit too technical for people who are not well acquainted with tax strategies. But the main recommendation of the book is to find a good wealth and tax strategist.
This is not a get rich quick book, nor is it a "how to avoid paying taxes" instruction manual. What it is is a beginners guide to using the tax code as it is designed. The tax law is written in such a way that encourages certain activities and discourages others. Using the strategies outlined in this book, you learn how to make the tax code work for you instead of you being subservient to the tax code.
It may be a bit too technical for people who are not well acquainted with tax strategies. But the main recommendation of the book is to find a good wealth and tax strategist.
This is not a get rich quick book, nor is it a "how to avoid paying taxes" instruction manual. What it is is a beginners guide to using the tax code as it is designed. The tax law is written in such a way that encourages certain activities and discourages others. Using the strategies outlined in this book, you learn how to make the tax code work for you instead of you being subservient to the tax code.
February 16, 2025
In Tax-Free Wealth, CPA Tom Wheelwright provides many useful tax tips aimed largely at people who own small businesses and invest in real estate -- there's not much advice aimed at the solely-W2-paid taxpayer. I do think most of the tips are useful -- though I would particularly caution US readers about Wheelwright's tip to structure their small businesses to avoid paying employees' social security taxes. Yes, it's legal, and that can mean smaller expenses for the employer and higher wages going to the employee -- but for those depending on social security income when they reach the appropriate age, that can mean they'd be ineligible for collecting social security as they haven't worked their minimum required 40 quarters of coverage (~10 years employment). Ideally, people would be able to save and invest during their working years and wouldn't need to depend on social security income, but as we know, many Americans aren't in that category.
As namedropped multiple times throughout this book, Wheelwright has close ties to Robert Kiyosaki (best known for Rich Dad, Poor Dad), and parts of 2012's Tax-Free Wealth are tied to Kiyosaki's four quadrant model.
I'd still recommend this book to its target audience. I'm not currently a real estate investor or small business owner, but these are things I'm considering starting in the near- to mid-term.
My statistics:
Book 52 for 2025
Book 1978 cumulatively
As namedropped multiple times throughout this book, Wheelwright has close ties to Robert Kiyosaki (best known for Rich Dad, Poor Dad), and parts of 2012's Tax-Free Wealth are tied to Kiyosaki's four quadrant model.
I'd still recommend this book to its target audience. I'm not currently a real estate investor or small business owner, but these are things I'm considering starting in the near- to mid-term.
My statistics:
Book 52 for 2025
Book 1978 cumulatively
October 2, 2023
Hello! A must-read. Riveting! Went a little heavy on debt creativity. Otherwise, an excellent entry point into the nebulous choppy waters of tax law.
November 28, 2024
A wealth of good information!! 👍
Libby listen 🎶
Libby listen 🎶
March 31, 2024
Very interesting concepts throughout. Enlightening and motivating. Unfortunately almost every chapter clearly pushes a product (seemed like every chapter ended with “but don’t do it alone - hire a tax advisor… oh btw we’re tax advisors”) that the author directly stands to benefit from. That’s fine, except it’s very biased writing. Which probably doesn’t make a difference for the majority of the “straightforward” advice but will need to balance this with some unbiased advice, for sure.
Last comment: some of the tax strategies proposed are comically optimistic. Reducing your business’s tax burden by transferring partial ownership to each of your children — strictly speaking a tax advantage, sure, but a nightmare for any family with anything but a Brady Bunch dynamic.
Last comment: some of the tax strategies proposed are comically optimistic. Reducing your business’s tax burden by transferring partial ownership to each of your children — strictly speaking a tax advantage, sure, but a nightmare for any family with anything but a Brady Bunch dynamic.
June 10, 2020
Decent book with interesting tips and ideas. It took me years to gather these ideas and the author does a good job keeping all these in one place. The author repeatedly emphasizes a lot on why is it important to be part of the right side of CASHFLOW quadrant. He touched and explained points such as depreciation, estate planning with good examples, etc. The author does a poor job of explaining when to use each tax sheltering idea. He also fails to address what are the short-comings of each of the mechanisms.
I recommend reading this at least once just so that someone understands what tax sheltering mechanisms are available.
I recommend reading this at least once just so that someone understands what tax sheltering mechanisms are available.
October 14, 2020
Dense with tips and strategy.
I dinged it two stars for repeating non-sequiturs and outright falsehoods regarding tax policy and its unwillingness to acknowledge that US tax policy's PURPOSE is to make the already-wealthy even wealthier at the expense of other US citizens while providing little to society in return.
Without these falsehoods, it would be a 5-star book.
I dinged it two stars for repeating non-sequiturs and outright falsehoods regarding tax policy and its unwillingness to acknowledge that US tax policy's PURPOSE is to make the already-wealthy even wealthier at the expense of other US citizens while providing little to society in return.
Without these falsehoods, it would be a 5-star book.
January 1, 2024
This book should be a series of bullet points. You have to go through a lot of dirt to find the gems. It would benefit from an aggressive editor. The later half of the book is better than the first half. My experience is that it is very difficult to find a strategic minded accountant. In fact, I don’t think I’ve ever met one. As a result, I feel like I have to understand the tax code. This book had a few new ideas. But otherwise just reinforced some of what I have already learned.
I’m writing the thoughts below for my reference. If you want to read the book, don’t read the rest of my comments.
1. Entrepreneurs and investors receive tax breaks from the government, mainly to encourage job creation and affordable housing.
2. Depreciation is a powerful deduction that doesn’t cost money but can create significant tax savings.
3. Different types of income are taxed differently, with investment income often being more tax-efficient than earned income.
4. Utilizing tax brackets effectively and owning businesses through trusts and corporations can reduce tax burdens.
5. Tax credits, both refundable and non-refundable, can be a valuable tool in reducing tax liabilities.
6. Employment tax can be reduced with careful planning, especially for self-employed individuals or those in business.
7. Protecting your wealth from legal threats involves careful structuring of business and personal assets.
8. Businesses provide many tax benefits and can be an excellent shelter, especially when used in conjunction with real estate investments.
9. Real estate investment is one of the best tax shelters, with benefits like depreciation and the potential for tax-free gains. 1031 exchanges.
10. Preparing for and handling a tax audit effectively reduces the stress and potential financial impact.
11. Rather than thinking, “how much does a tax advisor charge?” Think, “how much can a tax advisor save.
I’m writing the thoughts below for my reference. If you want to read the book, don’t read the rest of my comments.
1. Entrepreneurs and investors receive tax breaks from the government, mainly to encourage job creation and affordable housing.
2. Depreciation is a powerful deduction that doesn’t cost money but can create significant tax savings.
3. Different types of income are taxed differently, with investment income often being more tax-efficient than earned income.
4. Utilizing tax brackets effectively and owning businesses through trusts and corporations can reduce tax burdens.
5. Tax credits, both refundable and non-refundable, can be a valuable tool in reducing tax liabilities.
6. Employment tax can be reduced with careful planning, especially for self-employed individuals or those in business.
7. Protecting your wealth from legal threats involves careful structuring of business and personal assets.
8. Businesses provide many tax benefits and can be an excellent shelter, especially when used in conjunction with real estate investments.
9. Real estate investment is one of the best tax shelters, with benefits like depreciation and the potential for tax-free gains. 1031 exchanges.
10. Preparing for and handling a tax audit effectively reduces the stress and potential financial impact.
11. Rather than thinking, “how much does a tax advisor charge?” Think, “how much can a tax advisor save.
September 10, 2022
This Book covers some of the big ideas and classic techniques to avoid over paying taxes. It has interesting advice like the importance of calculating your tax benefits when you were calculating how profitable an investment will be. It could be that after you get a tax credit the lower value investment is actually more profitable. It also talks about different types of legal structures, which industries get the best credits, mistakes that people make that caused them to lose their tax credit, and even some description of what a good tax strategy advisor looks like.
It even had a really insightful way of looking at tax strategy. He said that the tax code is a set of incentives designed by the government to reward some behavior and discourage other behavior. They tax cigarettes because they don’t want people to smoke them. They give tax credits to people who build real estate because they want people to build houses and commercial buildings. So, following these strategies to maximize your tax benefits is not cheating the government, it is actually you doing the kinds of business activities that the government wants you to do. Now, you might want to get upset with the government for deciding to give tax credits to one group and not another, but that’s a different discussion.
It’s not a book for people who are managing a tight budget. This is a book for people who have extra money to invest. It tells you where to put your extra money, what kinds of activities the government will reward with tax benefits.
Interesting note: he doesn’t just write this for the US, he also includes applications for many other English-speaking countries.
It even had a really insightful way of looking at tax strategy. He said that the tax code is a set of incentives designed by the government to reward some behavior and discourage other behavior. They tax cigarettes because they don’t want people to smoke them. They give tax credits to people who build real estate because they want people to build houses and commercial buildings. So, following these strategies to maximize your tax benefits is not cheating the government, it is actually you doing the kinds of business activities that the government wants you to do. Now, you might want to get upset with the government for deciding to give tax credits to one group and not another, but that’s a different discussion.
It’s not a book for people who are managing a tight budget. This is a book for people who have extra money to invest. It tells you where to put your extra money, what kinds of activities the government will reward with tax benefits.
Interesting note: he doesn’t just write this for the US, he also includes applications for many other English-speaking countries.
November 11, 2023
Only read this if you plan to make more than six figures a year. Some of this common sense but most of it is refreshing. Easier read. Some concepts can fly over your head (some flew over mine). Basic takeaway: you need a good cpa on your team if you want to grow your wealth. I read this to help a family member who needs serious tax savings since they’re in a high tax bracket. Start a business and buy lots of real estate to help reduce your taxes.
July 22, 2023
This book has more information about taxes on a corporation level than personal.
But that's the point.
If you take the time to learn about money and taxes, you'll learn that in order to minimize your taxes, you need to put your money toward the corporation level.
THAT'S where the tax breaks are.
It's not that the rich "don't pay taxes," they do. They're just better at it than you. 🤨🤨
Governments write tax codes to incentivize investors and entrepreneurs to behave how they want.
The 1% knows what to do in order to keep the economy running.
If you fall behind, you're going to think they're robbing you.
Nope, they're just financially literate.
But that's the point.
If you take the time to learn about money and taxes, you'll learn that in order to minimize your taxes, you need to put your money toward the corporation level.
THAT'S where the tax breaks are.
It's not that the rich "don't pay taxes," they do. They're just better at it than you. 🤨🤨
Governments write tax codes to incentivize investors and entrepreneurs to behave how they want.
The 1% knows what to do in order to keep the economy running.
If you fall behind, you're going to think they're robbing you.
Nope, they're just financially literate.
January 13, 2021
Super inciteful book for me. It went deep into very usable and tactical tips for legally protecting money and reallocating it for best use. Highly recommend this one to anyone who wants to save money on their taxes
November 28, 2023
Would give 10 stars if I could.
January 29, 2025
Lots of great tips on how to use the tax code to your advantage and why some of it was written the way it was. Also provides some good insight into how to pick a good CPA
August 6, 2025
Blew my freaking mind! no idea how much money I could save with a little knowledge and some minor adjustments.
If you hate taxes, READ THIS BOOK
If you hate taxes, READ THIS BOOK
November 22, 2021
Super interesting tips. Most of them are hard to implement but not impossible.
December 14, 2019
Interesting book on how to build more wealth by finding ways to lower your taxes. To me, the most interesting takeaway was that the tax law is designed to incentive people to invest in business, real estate, and whatever creates jobs and grows the economy. This means the tax law is designed to benefit business owners and investors.
My opinion is that taxes are way too high, and way too complicated. I understand we need to pay **some** taxes, to fund research & development, health care for people that can't afford it, social security, police, military, infrastructure, etc. But can we really not afford these things while taking less of everyone's money? Is it really this expensive? I don't think so. I'd support a much simpler tax code, something like:
- 0% for less than 50K
- 10% for 50K-150K
- 15% 150K-500K
- 20% for 500K+
That said, this simply isn't how the world works. If you want to pay less in taxes, and have more money to spend on things that are important to you, you need to understand the tax code, or pay some one who understands it.
This book outlines many ways to save money on taxes, from deductions, to starting your own LLC for side projects, depreciation, keeping good documentation, employing your children (lol!), investing in commodities, and more. I feel way more informed about the tax code after reading it, and appreciated the author's clear writing.
My main criticism of the book is that it felt like a sales pitch for the Author's company. At the end of the book, it seemed like he wanted me to use his firm, because his team 'get's it'. That's fine, but it took away a little of the books purity for me. If it feels like someone's trying to sell me something, I'm less likely to believe they're trying to help me. But to be fair, I don't actually know the author's intentions, and this could simply be a mis-read on my part.
My opinion is that taxes are way too high, and way too complicated. I understand we need to pay **some** taxes, to fund research & development, health care for people that can't afford it, social security, police, military, infrastructure, etc. But can we really not afford these things while taking less of everyone's money? Is it really this expensive? I don't think so. I'd support a much simpler tax code, something like:
- 0% for less than 50K
- 10% for 50K-150K
- 15% 150K-500K
- 20% for 500K+
That said, this simply isn't how the world works. If you want to pay less in taxes, and have more money to spend on things that are important to you, you need to understand the tax code, or pay some one who understands it.
This book outlines many ways to save money on taxes, from deductions, to starting your own LLC for side projects, depreciation, keeping good documentation, employing your children (lol!), investing in commodities, and more. I feel way more informed about the tax code after reading it, and appreciated the author's clear writing.
My main criticism of the book is that it felt like a sales pitch for the Author's company. At the end of the book, it seemed like he wanted me to use his firm, because his team 'get's it'. That's fine, but it took away a little of the books purity for me. If it feels like someone's trying to sell me something, I'm less likely to believe they're trying to help me. But to be fair, I don't actually know the author's intentions, and this could simply be a mis-read on my part.
January 12, 2024
Let’s be real, taxes are notoriously one of the most boring subjects on the planet, so I was expecting this to be an informative but dull book. I won’t lie, it was definitely hard to stay focused at times, but Wheelwright did a pretty decent job at making the subject as fun and intriguing as possible using personal stories as well as some well timed jokes.
In terms of the information, it was pure gold. No shocker coming from one of the “Rich Dad Advisors”. Although some chapters didn’t apply to me at all, many absolutely did and will help me save/make so much more money in the future. That being said, this book won’t help you that much if you’re not a business owner or investor. If you are, I highly recommend picking it up.
In terms of the information, it was pure gold. No shocker coming from one of the “Rich Dad Advisors”. Although some chapters didn’t apply to me at all, many absolutely did and will help me save/make so much more money in the future. That being said, this book won’t help you that much if you’re not a business owner or investor. If you are, I highly recommend picking it up.
May 8, 2021
If you were ever curious how big corporations and wealthy individuals can get away with paying little to no taxes, then this book is definitely an interesting read. The purpose of this book is to outline legal ways that you can use the Tax Code to your advantage to reduce your overall taxable income. The author is extremely knowledgeable in this subject and does a great job laying down actionable steps. Although I don't have a job in finance, I still found this book to be interesting. Lots of little trivia that will help me have a knowledgeable discussion whenever I'm consuming news about wealth and taxes.
So why 3 stars and not 5? Well here's the thing. All of the advice in this book requires you to own a business or be a private investor. If you're the average joe, none of this information is going to help you. Also, his advice regarding retirement planning is absurd. I would not follow any of that retirement advice because it's built on false assumptions.
Also, the author reveals some of his political biases with unnecessary comments around government programs. And some of it just comes across as a privileged humble brag.
So why 3 stars and not 5? Well here's the thing. All of the advice in this book requires you to own a business or be a private investor. If you're the average joe, none of this information is going to help you. Also, his advice regarding retirement planning is absurd. I would not follow any of that retirement advice because it's built on false assumptions.
Also, the author reveals some of his political biases with unnecessary comments around government programs. And some of it just comes across as a privileged humble brag.
March 22, 2022
This book is a long infomercial. This is a book that approaches taxes as a “one size fits all.” It barely scratches the topics that most small business owners are looking for (tax savings) and when it does, it buries them in constant self promotion; promotion for his mentor (Dad rich series); promoting the idea that nothing really works other than investing in real property and perhaps cryptocurrency. I wanted to learn strategies that would help me understand tax saving concepts but I did not find the answers here. I am listening to The Tax and Legal Playbook by Mark Koehler, CPA, Attorney and I’m learning everything from business entity formation to tax savings strategies done ethically and without getting into dangerous territory with the IRS. I am an attorney myself (not a tax attorney) and all I want is understand these complicated concepts so that I can at least discuss them with my accountant and know whether there are any tax savings I should be taking advantage of. I simply cannot recommend this book.
October 28, 2023
I really enjoyed the first part of the book, and felt it was practical and helpful for the average person, but deeper into the book it is more advice for the wealthy. I don’t currently have the money to be investing or passing on to my kids, so I lost interest. I have always been angry and frustrated with the tax laws, but this have me some hope that there is legal ways to take advantage of the laws. But it is still frustrating and overwhelming because he still suggests getting a tax advisor even with a better understanding and knowledge.
January 8, 2024
I wanted this book to teach me something new. Or at least clearly articulate statagies I'm already familiar with and be something I can refer my friends and investors to.
Unfortunately like so many "self help" or "business" books the author spends 50% of the book telling why you need his advice, the other 25% giving extremely vague advice on stratagies to take and the other 25% telling you to hire his firm (or one like his) to actually tell you what to do.
My take away; I need to get a consultation from a tax strategist... but I already knew that.
Unfortunately like so many "self help" or "business" books the author spends 50% of the book telling why you need his advice, the other 25% giving extremely vague advice on stratagies to take and the other 25% telling you to hire his firm (or one like his) to actually tell you what to do.
My take away; I need to get a consultation from a tax strategist... but I already knew that.
March 15, 2013
Eye-opening, but not for people who want detail; there's a lot of "get a tax advisor" and "talk to your tax advisor" and "discuss this with your tax advisor". Still, just knowing things are there is a big start; you can research the IRC or use RIA/CCH and read up on things yourself if you're the do-it-yourself type or you want to _be_ said tax advisor.
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