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Save taxes like Donald Trump

W.Ahlkampfduell, Corona infection – So much news is coming from Donald Trump these days that one has almost forgotten what was known about his taxes: Donald Trump is said to have paid the American state only $ 750 in income tax in the election year 2016, reports the “New York Times”, in many years before nothing at all – many Germans pay more in church tax. A look at the newspaper’s tax records suggests that Trump may be a bad businessman who has barely made profits. But he probably also used practically every legal and perhaps some illegal trick to reduce his own tax burden. Many private expenses were listed as business expenses in the tax return. This has long been drowned out in the tax equity debate, as the finance scientist Wojciech Kopczuk of New York’s Columbia University has emphasized: Rich people often manage to deduct the costs of their private lives through their companies. But even average earners have more opportunities than they think, even in Germany, and quite legally. Trump has rejected the New York Times report – Germans can still learn a lot from it. Here are four ways.

Make a loss.

That’s how Trump does it. The most important principle of income tax is so obvious that it is hard to write it down: Taxes are paid on income. If you have no income, you don’t pay taxes. Donald Trump started out with a fortune, but apparently barely earned anything over the years – rather, he lost money with risky investments. The tax authorities also allow you to offset the losses from one year against the profits from another year and then pay less taxes later. The principle is called “loss carryforward”. When the losses are great, you can avoid taxes for a long time.

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