Move to Puerto Rico and pay no taxes?

[dsiomtw]

I'm not beating any horse, just responding to posts.

And LOL about hiring an accountant to reduce a US residents' taxes to 4% or less. Maybe if you make 35k a year ...

Ok here's one for you. Explain to us how a US citizen living on the mainland, who makes mid 6-7 figures a year in profits, can meaningfully reduce their tax burden and still have access to, and the ability to spend the money here in the US ... and I'll change my sig to anything you want for a month.

Why are you still beating this horse, dude?

You've already convinced yourself, nothing we can possibly say will invalidate that.

Don't let the door hit you, etc., and Good Luck Bro.

Lol, if half you "ballers" spent half the time you spend dreaming up avoidance schemes actually making monies, you wouldn't worry about taxes or moving to some third-world Caribbean cockroach heaven. A good accountant will handle that.

Lol Taxes.

 

[galacon]

I'm not beating any horse, just responding to posts.

And LOL about hiring an accountant to reduce a US residents' taxes to 4% or less. Maybe if you make 35k a year ...

Ok here's one for you. Explain to us how a US citizen living on the mainland, who makes mid 6-7 figures a year in profits, can meaningfully reduce their tax burden and still have access to, and the ability to spend the money here in the US ... and I'll change my sig to anything you want for a month.

WTF are you talking about- do you even know? Mid 6-7 figures, what the fuck does that mean??

That's quite a spread, bro. So what, 500K- 1.5 Million? That's what you just said. How much do you really make? Let's start there.

And I mean the adjusted gross you list on your 1040. That Number. And then let's discover how your "business" is structured, and what kinds of shelters are available to you. Do you know the answers to these and many other questions?

Your accountant should. Mine does. And I pay around 8-10% year over year, no more. Not 4%, but I don't have to live anywhere but exactly where I WANT to, either. If you're making (keeping) a mil, and paying out 10%, you telling me you can't live righteously anywhere on this fucking continent on $900K? Really??

I've said it before, and I'll say it again- "Taxes Are Good. If You're Not Paying Taxes, You're Not Making Money."

Just structure your business correctly, and hire PROS. And invest your energies into making MORE money, not worrying about bullshit like this.

Imho.

 

[notwayne]

Ok here's one for you. Explain to us how a US citizen living on the mainland, who makes mid 6-7 figures a year in profits, can meaningfully reduce their tax burden and still have access to, and the ability to spend the money here in the US ... and I'll change my sig to anything you want for a month.

This is not advice.


Mid 6 - 7 figures is quite the range.

Lets say you had a million a year. Pay yourself a salary of 50k. Assume 50% of that goes towards taxes. Weve locked a 2.5% tax rate in. Plenty of room for all the other taxes you hate so much. Now we need to get rid of the remaining 950k.

Options.

1. Trust fund

Remember when Bill Gates gave the entirety of his money to charity? Thats not really whats happened.

2. Accountant

2.1 Deferred profits

I dont know what name this goes by in your jurisdiction, but a semi competent accountant should be able to push your profits into years you can balance your tax sheet

2.2 balance your tax sheet

If youre somehow below the concept of holding everything to your name through some kind of legal entity, then quit bitching about taxes and up your legal game first.

Otherwise, youre probably owning some kind of corp that holds the LLCs you do business through. Which is a smart move, because that way, you will never have to pay a dime on anything you earn by technically not earning anything. Thats what they call investments.


Putting it all together (OH MY GOD I SOUND REALLY SMART LIKE THOSE ENLIGHTENED THREADS)

Get a competent panamanian expert on the matter of tax avoidance. Offshore because lawyers can and will be turned by the government to rat on their customers. Unconstitutional but go contest it.

Hell set all this up for you, but it should look like this:

In your trust, a charity will appear as the beneficiary. Charities dont pay taxes.

Your trust owns some kind of corp. C corp, S corp, Bullshit corp, I dont care (It will be panamanian). He knows better anyway. That corp holds all your assets.

If you want to do business, youll have an LLC to do that through. Its owned by the corp. Youll be the manager. Youll be paid a salary. Any profits that dont go towards your salary flow back to the corp. You will never take a distribution from the corp. Salaries are a tax writeoff for the corp.

Any kind of luxury items you might want to have are paid for and leased to you by the corp. At a reasonably low rate. Tax authorities in first world nations are ridiculously anal about bad business decisions. "tax havens" dont make that distinction.

The corp gets rid of its taxes by making sound, or not so sound, investments. Thats why you have corps. They can make a lot of money and then invest all of it and not pay a dime in taxes. You cant do that. If you make 50k and then claim you invest it all every year your ass will be hauled to jail because contempt of court.

Now if you actually have a million to your name, you can book a flight to panama and have it all set up by the weekend. Wont be more than a couple grand. If youre just dreaming, go dream some more.

Or just listen to kiopa matt ask another really stupid question hidden behind a really blunt statement about some other persons credibility.

sig: "Who is not wayne?"

 

[Moxie]

PR just seems to have too many problems of being 'Murikan with too many problems of it's own. The tax benefits are awesome, I'd be all over that in one of the 48 continental states, but being in PR is just way too high a price to pay, and doesn't protect you at all from the coming hyperinflation/greater depression that is due to start any day now.

(Since OP is a statist I'll throw in a fancy chart so he gets the idea of what I'm talking about faster...)

By many estimates, August is the month that China's GDP officially surpasses ours, and even McDonalds has started selling corporate Bonds in Yuan recently. Make no mistake, China's about to be the only world superpower, and their currency will be the new global reserve currency. (until bitcoin takes over of course.) Trillions and trillions of US dollars are about to be sent packing from the rest of the world, and the US Fedgov is going to have to make cut after cut after cut, massive capital controls, all while a loaf of bread doubles in price every week.

I doubt any of the sources listed in the chart are predicting hyperinflation for the US. If so, their predictions for China would also be different due to over 20% of their GDP being exports.


Despite rebalancing, exports still vitally important to China | South China Morning Post

China Is Dependent On Our Fiscal Health - Forbes



But who cares - THE WORLD HEAVYWEIGHT CHAMPION IS ON HIS WAY TO PUERTO RICO! WOOOOO!


[ame=http://www.youtube.com/watch?v=5RI3HAzU0co]WWC: Ric Flair and Carlos Colón Interviews - YouTube[/ame]

 

[lukep]

I doubt any of the sources listed in the chart are predicting hyperinflation for the US. If so, their predictions for China would also be different due to over 20% of their GDP being exports.

I also doubt that any of the sources listed in the chart would feel comfortable talking on the record about what the effects will be on the US economy when the Yuan becomes the new dollar.

 

[MadMaxNine]

Yeah go sell 190 days of your yearly life to go live in a shithole to save 20% of your revenue. Very Smart and Enterprising.

Why not spend that time, trying to save those shit amounts, in attempting to increase your revenue by at least that much? Lazy lost batards.

 

[dsiomtw]

Who cares what the spread is. That's not the point. The point is that once your income gets above a few hundred grand you can't legitimately and meaningfully reduce your tax burden with normal deductions and that type of thing.

The rest of this is a lot of long-winded babble. My response is much more succinct:

As a US citizen living in the US you can NOT have an income of 1 million (via any combination of salary, dividends, etc.), and legally pay only 10% in taxes, leaving you the other 900k to spend as you want in the US.

If you only pay 8-10% and you're putting the rest in your pocket to spend - and you're doing it all legally - I guarantee you don't have income in the range we're talking about. It's not possible, but like I said, I'd love to hear you specifically explain how you think it is.

WTF are you talking about- do you even know? Mid 6-7 figures, what the fuck does that mean??

That's quite a spread, bro. So what, 500K- 1.5 Million? That's what you just said. How much do you really make? Let's start there.

And I mean the adjusted gross you list on your 1040. That Number. And then let's discover how your "business" is structured, and what kinds of shelters are available to you. Do you know the answers to these and many other questions?

Your accountant should. Mine does. And I pay around 8-10% year over year, no more. Not 4%, but I don't have to live anywhere but exactly where I WANT to, either. If you're making (keeping) a mil, and paying out 10%, you telling me you can't live righteously anywhere on this fucking continent on $900K? Really??

I've said it before, and I'll say it again- "Taxes Are Good. If You're Not Paying Taxes, You're Not Making Money."

Just structure your business correctly, and hire PROS. And invest your energies into making MORE money, not worrying about bullshit like this.

Imho.

 

[dsiomtw]

Yeah go sell 190 days of your yearly life to go live in a shithole to save 20% of your revenue. Very Smart and Enterprising.

Why not spend that time, trying to save those shit amounts, in attempting to increase your revenue by at least that much? Lazy lost batards.

1. PR isn't a shit hole. You've obviously never been there.

2. By moving there for 2-3 years I'd effectively be able to DOUBLE (that's 100% for the mathematically challenged) the amount of money I put in my pocket over the next 3 years, adding up to a very significant amount.

3. You're ignorant.

 

[dsiomtw]

1. Deferred profits isn't what we're talking about. We're talking about having an income, paying X in taxes, and keeping the rest in your pocket to spend here in the US right now however a person wants. You can't do any of that if you somehow manage to defer most of your profits.

2. Again we're talking about paying X in taxes and keeping the rest in your pocket to spend here in the US however you want. All of those offshore this and offshore that doesn't accomplish this.

3. If you think you can just setup a trust and a "charity" and magically make all your taxes disappear I'm afraid you couldn't be more wrong.

4. If your corporation owns your house, your cars, etc. and you think you'll get away with that for more than a handful of years you're the one dreaming. This is exactly how people get ruined (by the time they catch you you'll owe 2x as much in penalties and interest) and/or end up in jail.

5. I sure hope for your sake you're not doing any of this crap you just spewed.

This is not advice.


Mid 6 - 7 figures is quite the range.

Lets say you had a million a year. Pay yourself a salary of 50k. Assume 50% of that goes towards taxes. Weve locked a 2.5% tax rate in. Plenty of room for all the other taxes you hate so much. Now we need to get rid of the remaining 950k.

Options.

1. Trust fund

Remember when Bill Gates gave the entirety of his money to charity? Thats not really whats happened.

2. Accountant

2.1 Deferred profits

I dont know what name this goes by in your jurisdiction, but a semi competent accountant should be able to push your profits into years you can balance your tax sheet

2.2 balance your tax sheet

If youre somehow below the concept of holding everything to your name through some kind of legal entity, then quit bitching about taxes and up your legal game first.

Otherwise, youre probably owning some kind of corp that holds the LLCs you do business through. Which is a smart move, because that way, you will never have to pay a dime on anything you earn by technically not earning anything. Thats what they call investments.


Putting it all together (OH MY GOD I SOUND REALLY SMART LIKE THOSE ENLIGHTENED THREADS)

Get a competent panamanian expert on the matter of tax avoidance. Offshore because lawyers can and will be turned by the government to rat on their customers. Unconstitutional but go contest it.

Hell set all this up for you, but it should look like this:

In your trust, a charity will appear as the beneficiary. Charities dont pay taxes.

Your trust owns some kind of corp. C corp, S corp, Bullshit corp, I dont care (It will be panamanian). He knows better anyway. That corp holds all your assets.

If you want to do business, youll have an LLC to do that through. Its owned by the corp. Youll be the manager. Youll be paid a salary. Any profits that dont go towards your salary flow back to the corp. You will never take a distribution from the corp. Salaries are a tax writeoff for the corp.

Any kind of luxury items you might want to have are paid for and leased to you by the corp. At a reasonably low rate. Tax authorities in first world nations are ridiculously anal about bad business decisions. "tax havens" dont make that distinction.

The corp gets rid of its taxes by making sound, or not so sound, investments. Thats why you have corps. They can make a lot of money and then invest all of it and not pay a dime in taxes. You cant do that. If you make 50k and then claim you invest it all every year your ass will be hauled to jail because contempt of court.

Now if you actually have a million to your name, you can book a flight to panama and have it all set up by the weekend. Wont be more than a couple grand. If youre just dreaming, go dream some more.

Or just listen to kiopa matt ask another really stupid question hidden behind a really blunt statement about some other persons credibility.

sig: "Who is not wayne?"

 

[cardine]

Yes, if you have one of those Tropical MBA type businesses and you are willing to put up with living in Puerto Rico, then it might be worth it for you.

I still think for most people you'll make more than 30% more by being stateside which makes any tax break a moot point. And you don't need to live in Puerto Rico for half the year.

 

[Meatytreats]

It would be a lot easier to hire a really smart accountant and lawyer and figure out how to not pay as much taxes while staying in your current location.

There are thousands of loopholes and ways your business can pay for your lifestyle.

Maybe you need a corporate car? Or a corporate golf membership to entertain clients.

Perhaps, you need to increase the size of your home office, in order to increase the % of your bills you can write off.

Maybe you need to give more to charity.

Maybe you need to increase your meals and entertainment expenditures.

Perhaps you should hire your wife to answer support emails and then write off the corporate dinners u share.

Maybe you should have a business trip to the Bahamas to meet with some clients.

Maybe you should start a wine site and buy inventory to put in your cellar?

And on and on and on... Not everything you do has to turn a profit!!!

 

[dsiomtw]

This is all fine and dandy, and most smart people are already doing some or all of these things. But the issue is that it doesn't achieve the stated goal of significantly reducing your tax burden while increasing the amount of spendable cash in your pocket.

These are all "little" things. If you make 500k+ a year, doing little things like having a company car, a company golf membership, writing off a portion of your bills from a home office, etc. barely makes a dent in your tax burden.

It would be a lot easier to hire a really smart accountant and lawyer and figure out how to not pay as much taxes while staying in your current location.

There are thousands of loopholes and ways your business can pay for your lifestyle.

Maybe you need a corporate car? Or a corporate golf membership to entertain clients.

Perhaps, you need to increase the size of your home office, in order to increase the % of your bills you can write off.

Maybe you need to give more to charity.

Maybe you need to increase your meals and entertainment expenditures.

Perhaps you should hire your wife to answer support emails and then write off the corporate dinners u share.

Maybe you should have a business trip to the Bahamas to meet with some clients.

Maybe you should start a wine site and buy inventory to put in your cellar?

And on and on and on... Not everything you do has to turn a profit!!!

 

[miketpowell]

It's OK dsiomtw - you shouldn't be surprised that plenty of people just don't understand because they haven't faced the situation.

Also plenty of people that get duped by accountants that think they have some great tax savings strategies when in reality they are just committing tax fraud without realizing their accountant has no obligations or liabilities in the situation. Happens to a ton of people in this industry.

Really what it comes down to is how happy your family is going to be there. Will your wife make new friends easily? Will your kids mind switching schools? If you think those things will work out I'd go for it if I were you.

 

[intent]

It's OK dsiomtw - you shouldn't be surprised that plenty of people just don't understand because they haven't faced the situation.

Also plenty of people that get duped by accountants that think they have some great tax savings strategies when in reality they are just committing tax fraud without realizing their accountant has no obligations or liabilities in the situation. Happens to a ton of people in this industry.

This. Lots of people in this thread said "get a smart accountant"... what they mean is "get an aggressive accountant". Tax accountants/lawyers come in all shades of grey (just like marketers), serving every level of tax risk appetite and many who don't know any better.

 

[vinnybluedog]

Puerto Rico is not bad at all, some nice beaches, rain forest, good surfing... Not sure if you can carry a pistol would be a must if I lived there.

 

[intent]

It'd be damned tough to leave all this splendor and be FORCED to live on a Caribbean island just for a paltry little 40% tax break.

 

[Meatytreats]

This. Lots of people in this thread said "get a smart accountant"... what they mean is "get an aggressive accountant". Tax accountants/lawyers come in all shades of grey (just like marketers), serving every level of tax risk appetite and many who don't know any better.

Smart and aggressive are different things.

If you take anyone's advice, everyone in this thread included, with out doing some of your own due diligence, then you get what you deserve.

However, when it comes to high dollar tax issues, you hire someone who deals with this as their specialty. Not some fish clerk from H&R Block. Or someone your mom recommends. And you do your due diligence, because you are certainly on the hook for your decision.

Anyhow, I guess you never know, maybe some people have actually experienced these issues first hand and care to give some friendly advice, but aren't actually stupid enough to give specifics in a public forum.

Also, it goes both ways... People can give advice on leaving the country and living in a totally different world, but until you have actually experienced it first hand, you don't know shit.

Conclusion: Hire smart, talk to experienced people who have done what your considering!

 

[dsiomtw]

Blah blah blah. Please stop complicating the issue, for the sake of those who are interested in the FACTS on this topic. It doesn't matter what CPA or tax attorney you hire. The fact is it can't be done. Not legally any way.

Period. End of story.

You don't want to give specifics on a public forum? Puh-leaze. If you knew something we didn't you could easily share the "specifics" in a way that could help lots of people, without it negatively affecting you in any way.

The truth is you don't, and you can't. I'll put money on it.

Smart and aggressive are different things.

If you take anyone's advice, everyone in this thread included, with out doing some of your own due diligence, then you get what you deserve.

However, when it comes to high dollar tax issues, you hire someone who deals with this as their specialty. Not some fish clerk from H&R Block. Or someone your mom recommends. And you do your due diligence, because you are certainly on the hook for your decision.

Anyhow, I guess you never know, maybe some people have actually experienced these issues first hand and care to give some friendly advice, but aren't actually stupid enough to give specifics in a public forum.

Also, it goes both ways... People can give advice on leaving the country and living in a totally different world, but until you have actually experienced it first hand, you don't know shit.

Conclusion: Hire smart, talk to experienced people who have done what your considering!

 

[miketpowell]

Here's a simple way to put it for you people:

A CPA saying something is "OK" on your taxes is about as much protection from the IRS as an "AM" saying your landing page is "OK" for protection from the FTC. It means nothing.

You can even find a random lawyer to say your page looks "OK" and the FTC can still rip you apart. You just *might* have a little recourse against the lawyer depending on what they said/did.

It's the same with taxes guys. Just because some CPA or lawyer said it was "OK" that doesn't in any way shape or form make it true or protect you from the IRS. It *may* give you somebody to go after the IRS is done with you but probably not.

So you can shop around until you find someone that tells you what you want to hear. Or you can face the realities of what the US tax code is and consider your options like dsiomtw

Oh and lastly the biggest sign you guys that think US citizens can just pay under 10% taxes with the right structure don't know WTF you are talking about? The fact that billionaire hedge fund guys are all considering or actively making the PR move. Because you and your accountant sure know things they don't.

 

[intent]

... to re-address the larger picture: several folks here expressed reasons why PR might not be a good option for them. Ready access to qualified labor pools, don't like tropical climates, want your kids in western school systems, you salsa like a white guy, etc.... all good reasons.

For others, those don't apply, and the opportunity that OP described is a damned good one, pretty much unique for Americans and worth looking into.

I, for one, was looking for a place I could:

* get out of the continental US
* continue to grow my internet businesses
* curb my corporate/personal tax exposure with as little grey area as possible
* establish an off-the-grid homestead
* dock a large catamaran with easy caribbean access
* avoid constant residency/visa issues
* keep expenses in check for my frequent trips back to US for consulting gigs

So far as I've seen, these new programs make PR a top destination to fit those criteria as closely as anywhere else.

It won't be perfect, but nothing will be... and despite PR already having been on my radar, I'm glad OP posted the thread. WF is great for finding out about new shit or getting collective feedback on existing shit.... so thanks, gentlemen.