The Buckets of Money® Retirement Solution: The Ultimate Guide to Income for Life

Chapter 9. Give Uncle Sam His Fair Share—But No More

Next to being shot at and missed," somebody once said, "nothing is quite as satisfying as an income tax refund." I agree. In fact, I'm a stickler when it comes to not paying unnecessary taxes. Taxes detract from your returns. Taxes directly reduce spendable income, and most people probably are paying several thousand dollars more in taxes each year than they should.

What's more, there's every reason to believe that higher taxes await us. The recession and bailout have pushed the federal deficit to unheard-of levels. How much higher taxes go will depend on the shifting political sands, but it's widely believed that stiffer tax bites are in the offing, especially for those with higher incomes.

While you can't control how well an investment will do, you can—with planning—get a measure of control over your tax bill. Yet, for all we complain about taxes, most investors spend little time doing much about minimizing them. So in this chapter we're going to look at ways to easily reduce and, in certain instances, avoid taxes, all done legally.

I have no sympathy for unscrupulous promoters who set up tax shelters to help people illegally evade paying income taxes. Such con artists should be put in prison. It's important to understand the difference between legal and illegal ways to lower your tax bill and, thus, to be able to tell the difference between being helped or being scammed.

You already know that the government gives us quite a few ...