Tax season might be over, but smart investors think about taxes year-round and take advantage of the numerous benefits that the tax code has to offer. Being strategic about taxes all year can totally change your experience and perspective on the tax code.
If you want to begin building wealth, you'll have to fully understand the tax system, and change the way you think about taxes. For many people, this is a huge paradigm shift: the tax code is is a series of incentives that the government uses in order to encourage people to participate in certain behaviors. Most of these incentives are geared toward business owners and investors. In a sense, the tax code is rigged to benefit the rich!
And before we start a political debate, it's not about that. The government is not out to punish low income or middle class families. Incentivizing through taxes is simply the most efficient way to build the economy, create jobs, and provide housing. If you start a business or invest in performing assets, you’ll undoubtedly see the implications on your tax bill. In fact, taxes are the number one way that real estate investors make money.
So if you find yourself owing more than you’d like in taxes, it’s time to start playing by the rules of the game. Instead of complaining about taxes, you just need to change your approach and understand that the tax code is filled with advantages that you can take advantage of.
Once you understand the law, there are tremendous benefits that you can receive. The tax law is simply a way that the government enforces policy. All you have to do is understand how the tax law works and start thinking about taxes from a business perspective, then you can build wealth.
If you’re serious about saving on your taxes through real estate, there’s one resource I can’t recommend enough: Tax-Free Wealth by Tom Wheelwright. Tom is a brilliant accountant, and he really knows his stuff. I've also had the honor of interviewing him on the Investing in Real Estate Podcast regularly!