The words tax loopholes are often associated with taxation for the wealthy. The truth is tax loopholes belong in the equal opportunity category, and are available to ordinary taxpayers who take the time to understand options available to them. Loopholes are when tax laws facilitate a loophole in which taxpayers can take advantage of the law and lower their taxes. Fortunately tax loopholes, once understood, are available to you and every other US citizen.
It is true that all codes and laws are published on the irs.gov web site for anyone to read. Yet being able to read the law doesn't help you to understand how to lower your taxes, or how to take advantage of certain laws.
Consumer software does an excellent job of enabling taxpayers to get it right and write-off deductions, as well as remind taxpayers of deductions which they may have forgotten. But this same software does little to help you take advantage of the loopholes. For this you would need to understand the codes and this is why the wealthy pay Tax Attorneys, Certified Public Accountants and Enrolled Agents large retainer fees each year.
Taxpayers, who continue to owe taxes each year, may want to look at the options available to them, before the next tax season rolls around. There are literally a dozen plus ways for the everyday taxpayer to take advantage of loopholes which have previously been used by people of wealth.
The number one misunderstanding about tax loopholes is that taxpayers believe high earners just walk into their CPA's office and receive tax loopholes on a silver platter. This is not true. The major of the larger tax benefits are initiated through tax planning. In other words, savvy taxpayers tax plan their way into tax loopholes, which can benefit almost any taxpayer who files a Schedule A, Schedule C, D and especially a Schedule E.
Savvy taxpayers are able to reduce their taxes, while building assets, and take advantage of certain write-offs, year after year. Some tax benefits are given in the form of tax credits, while other tax benefits are taken. Loopholes falls into the latter category. Tax avoidance is legal and savvy taxpayers, tax-plan each year to make sure there are no surprises on April 15th of each year.
It's not necessary to take a course in taxation to learn how to plan. There are books, reports and articles that can help you learn the right questions to ask your tax professional. Knowing which questions to ask can change your tax portfolio for years to come.