What a Billionaire’s Tax Season Looks Like vs. the Average American’s
Written by
Sarah Sharkey
Edited by
Jenna Klaverweiden
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It’s no secret that billionaires live in an entirely different reality than most. That holds true during the most painful time of the year for many Americans: tax season.
So what does a billionaire’s tax season look like? Find out more now.
Also see five tax loopholes the ultra-wealthy use that most Americans don’t know about.
Painless Tax Preparation
Most Americans must pull together their tax documents alone. With their tax documents in hand, most navigate an online tax filing system or hand off the chore to a local tax preparer.
That’s not often how billionaires handle this chore. For starters, it’s rather unlikely that billionaires pull together their own tax documents. After all, most have assistants to deal with unwelcome chores, like gathering 1099s.
Beyond assistants, most billionaires likely have a team of tax professionals that includes CPAs, a tax attorney and financial advisors to deal with their taxes every year. With such complex financial situations, most billionaires likely have a team of people handling this all year long.
Tax-Loss Harvesting
Tax-loss harvesting works by selling off assets that lost value during the year to offset gains from other assets. While tax-loss harvesting is technically available to all taxpayers, it’s a complex tax strategy that many everyday investors avoid.
Billionaires don’t skip out on tax-loss harvesting due to time constraints and complexity. Instead, they likely outsource this painful chore to a professional. Although they likely pay the professional handsomely, most walk away with tax benefits from this strategy.
More Tax Write-Off Opportunities
Most billionaires own at least one company. As business owners, billionaires can tap into opportunities for tax write-offs that not everyone has access to.
A few expenses business owners might be able to write off through their company include rent, utilities, business-related travel, depreciation of some assets and more, according to the IRS. All of these can add up to significant tax savings for billionaires.
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