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18 Ways to Tax-Free Income
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It’s no coincidence that the 9 states with no personal income tax have some of the highest population growth rates. People generally don’t like paying taxes.
So, what if there were a way to pay 0% taxes on certain income.
Well, there is.
The good people at Forbes.com have come up with a list of 18 ways to earn tax-free income. Here are the top 5:
1. Remodel - Sweat equity is tax free, if you know what you’re doing. Buy a fixer-upper and live in it for at least two years. If you’re talented at painting and carpentry, you’ll make a nice profit when you sell, and you can take advantage of the $500,000 exemption on capital gains for your principal home. For singles, the exemption is $250,000.
2. Moonlight - The first couple of thousand dollars a year you pocket from outside jobs is likely to be tax free. Reason: You probably have all sorts of expenses, such as for continuing education, a home office, professional association dues and a computer, that you can write off against freelance income. Since these are expenses that you usually can’t otherwise deduct, your early freelance dollars are pure gravy.
3. Get reimbursed - Ask your employer to cover more of your work expenses (like those professional dues) in lieu of giving you a raise. So long as your expenses are documented, the reimbursement is not income to you. Your company will save on payroll taxes, too. But don’t mess with country-club dues; these aren’t deductible.
4. Earn airline miles - If you pick these up by taking deductible business trips and then use them on a vacation, they should, in principle, be taxable. But they aren’t. This is a political hot potato, and the IRS gives frequent fliers a free ride.
5. Take the bus - You can pull up to $230 a month out of your paycheck, pretax, to cover mass transit, vanpooling and commuter parking.
For the entire list of 18 Ways to Earn Tax-Free Income click HERE