8 types of income the IRS can't touch

Learn to play every angle the IRS gives you. GOOGLE-BONE UP the skivvy on the FEDERAL RESERVE, IMF/ US GOV, PENTAGON AND your CITY and STATE treasuries and the LICENSING BOARD not getting their pound of flesh, all their fees, penalties and taxes. State, City, Sales taxes, House tax, IRS. Those guys don’t care about you, Joe Sixpack. They are using YOU as a slave to generate cash and using your money to kill Arab babies and American G.I's/ our BOYS. Don't pay the tax man any more than you have to. That’s paying to be a NAZI. Their ENERGY industry buddies just doubled your utility bills. Why? Cuz they COULD! Cuz those bought politicos owed them (from all the campaign donations.) Daily, oligarchs are buying up utility companies. Peru couldn’t believe suddenly they have to pay an American company for water that was always free. In most countries they just double the cost when a US Corp takes over. Like ENRON doubled LA’s natural gas bills the very day Bush Jr. won. They owned him. YOUR DOLLARS pay for OILMEN to invade other countries. Currently USA is fighting 7 different wars, 7 different countries, in places using PROXY TERRORISTS TO DESTABILIZE THE AREA.  They are evil, so do not help them. Use every tax break that you can get. The U.S. tax code offers some fabulous ways to cut your tax bill and keep more of your hard-earned dollars. Many are legal.And a few are --- let’s say, interesting.

Want to keep the tax man away from your money? It's easier than you think. To justify it and to do it. There are lots of ways to increase your hold on your own earnings without having a chunk gobbled up by the IRS.

By Jeff SCHNEPPER

It's not that the agency doesn't want ALLLL your money. It's just that the tax law prohibits the IRS from touching it. And with a bit of planning, you can start to cut your current tax bill and put money in your pocket now. Let's look at a few examples.

Tax-free interest

Interest earned on bonds issued by a state, territory, municipality or any political subdivision is free from federal taxes. These are generically called municipal bonds, and their tax benefit increases in value as your marginal tax rate goes higher. (In other words, the bonds are worth more to you as your overall income rises.) Tax Free MUNIS they're called. And they are the ancient favorite of Money launderers.

Assume you're in the 38.6% bracket, the top rate for 2002 and2003. A 5% tax-free rate becomes the equivalent of a taxable rate of 8.14%. In the 15% bracket, the taxable equivalent is only5.88%. If you check out SITES THAT DESCRIBE PROFITS IN BONDS, you can compare taxable and tax-free yields. Compare the after-tax rates on alternative investments of equivalent risk.

Some bonds may not only be tax-free at the federal level, they may also escape state and local taxes. If you're in the top brackets and live in New York City, this is one investment you definitely want to consider for your portfolio.

Carpool receipts (WHO KNEW?)

Commuting to work? Bring a friend -- and his wallet. If you forma carpool to carry passengers to and from work, any dollars received from these passengers aren't included in your income.

Commuting costs are generally not deductible. But if you establish a carpool and you're reimbursed in amounts sufficient to cover the cost of your repairs, gas and similar items used in connection with operating your car to and from work, then you’ve converted personal nondeductible expenses into excludable income.

Assume you're in the 27% bracket. You have to earn $137 per month to cover a $100 monthly commuting expense. If you have a carpool arrangement with expenses being reimbursed, you've got no additional income. But you do have an additional $137 per month in wealth!

Sell your house the SMART WAY!

Under a tax law enacted in 1997, if your house was your principal residence for two of the last five years, you can exclude as much as $250,000 in gain ($500,000 on a joint return) when you sell it. So if you're single, marry your landscaper even if only to shelter taxes on half the gains.

You don't have to reinvest the money, and you can claim the exclusion every two years. (If you've got $500,000 in gain every two years, I want to meet your real estate agent and go real estate shopping THE CHEAP WAY. 

If you don't meet the two-year rule, you can get a partial exclusion based on the time of use and ownership. Assume you sold after only one year and had a $50,000 profit. Your exclusion is half the $250,000, not half the $50,000 profit. In this case, you'd pay zero tax on the sale.

But this partial exclusion is only if the sale is required because of either a change in place of employment, health reasons or unforeseen circumstances. I haven't yet seen final regulations defining "unforeseen circumstances." My understanding is that the IRS is going to be flexible here. And you can be imaginative!

Tax-free compensation

When you're due for a raise, ask your company to get creative in your compensation. There are numerous ways to receive non-taxable compensation. Let's look at some of the best alternatives to taxable earned income.

1.) Use your health coverage. Health and hospitalization insurance premiums paid by your current or former employer are tax-free --a huge benefit. Let's say your health insurance premiums come to$280 a month or $3,360 a year (for an HMO policy for a family of four with a $1,500 deductible). If you're in the 27% tax bracket and have to pick up the bill, the real cost to you would be$4,603. That's $3,360 for the premiums and $1,243 for additional income taxes because you'll be paying for the coverage in after-tax dollars. Having your company pick up the cost helps both of you. It doesn't have to pay the salary necessary to get you even. It gets to write off the full cost of the coverage. Plus, neither of you has to pay the 7.65% payroll taxes on the premiums. And you, of course, boost your disposable income substantially.

2.) Cover your life. Group term life insurance coverage of $50,000 or less paid for by your company isn't taxed to you. You pick the beneficiary; your company pays the premiums. Your company deducts the expense; you walk away with additional tax-free income. OTHER THINGS YOU CAN DO WHEN PLANNING AN ESTATE so GOV GETS NONE? READ ESTATE PLANNING

3). Send your butt to school. Get educated. The courses don't even have to be job-related. But they can't be for any education involvingsports, games, or hobbies. Your company can pay, and deduct, as much as $5,250 per year in educational assistance paid for either undergraduate or graduate courses. Again, that assistance comes to you tax-free. So negotiate some of these ‘perks’ when you find bosses who want to hire you. You gotta get them while they’re hot. Don’t say yes too fast, not until they cough college up!

4.) Get you there…and parked. Your company can give you discount fare cards, passes or tokens to take public transportation to work. As long as it's not worth more than $100 per month, your company can deduct it, but you, as an employee, receive it tax-free as a deminimus tax benefit. You're taxed only on any excess over the$100. If you drive and have to pay for parking, your company can provide free parking, up to a maximum value of $180 per month, to you tax-free.

5,) Cafeteria plans. These are sometimes called Flexible Spending Accounts. Your company makes deductible contributions under a written plan, which allows you to select between taxable and non-taxable benefits. To the extent you chose non-taxable benefits, you have no additional income. Available non-taxable benefits may include group life insurance, disability benefits, dependent care and/or accident and health benefits. Your individual plan details the options. 

You get the idea. Any time you can convert taxable income into non-taxable income, you've given yourself a raise. And when both you and your company save money, it's a win-win for everybody .SO take the potential boss out to a two-martini lunch and negotiate!

Get creative…in most cases you're paying for the items anyway, and on an after-tax basis. It's really relatively simple.

FROM ANITA THE ASTROLOGER, an ADDENDUM to Jeff’s article

BUY AND SELL HOMES so the IRS doesn’t get the cash. WANT TO BUY OR SELL and give no part of your money to the GOV? EVEN when you sell costly properties? TRY THE LAND CONTRACT! Wage earners often spend every cent to live. Under the table workers may have plenty of savings even a down payment but if they don’t show wages on paper, they aren’t paying income tax and they go into gooseflesh if you mention loans and some bank getting interest. Because for them, that interest is not going to win us a deduction on our taxes. Many of us today who have cottage industries bank in the back of our car. Some of us are quite wealthy. We run cash businesses, have a high cash flow. We don't pay much if any taxes and don't need deductions thank you very much. We'd like to make home buying a person-to-person thing and leave the corner bank and the World Bank OUT OF IT. And the IRS!

Now that is possible. The answer is to look for a house, which has been on the market for more than a year, something a crack real estate agent can spot on the computer. Send your agent to ask the owner if you can buy the place with a 'land contract.' It's a kind of installment plan only the bank is left out of it. And so are all those piles of interest that double the price of every house. The old owner retains title to the house until you've paid every drop. His property taxes stay the same (and that's nice as you're paying them). You see, there's been no transfer. You, the new owner, get a quitclaim deed which will become valid when you pay off a given sum, --- say his asking price. (You don't lowball a man who's going to give you his home, friend.) There's no transfer of title until it's paid off, so the old owner doesn't get a huge lump sum of capital gains on which he must pay income taxes, which is so sweet because it leaves the GOVERNMENT out of it! You pay whatever monthly sum you can afford, maybe in cash that this owner might not even fully declare on his income taxes. That would really confound the gov. You do this on a monthly basis. If the OLD OWNER were to die while you were paying the house off, you wouldn't have anything so what you do is, buy a term policy life insurance payable to his heirs. If he dies, it pays a huge amount to his heirs and you get the house because that's stipulated in a contract that he signed to you. But here's the so hot bonus for him; his heirs do not have to pay any taxes on life insurance. They would have to pay it on any house they inherited. But not on this trade. Show them they will get the sale price of the house via insurance, you’ll have that family eating out of your hand! So you see, as is true throughout nature, the most beautiful is the most economic and vice versa. NOW if you understand this theory, you will know that when you sell YOUR house, you want to look for a buyer who’ll do this with you! That way you get the full sale price, don’t pay taxes on a cent of it. Use your brains, gang. Find a realtor who understands this. A paralegal with brain impairment could make up the deal memo contract on one page. Wheel this baby out on the streets, you'll see it flies!

ONE KIND OF INCOME THEY CAN TAX, your SOCIAL SECURITY CHECK and this law has to be changed. You didn’t pay taxes on it when you earned it the first time as it was subtracted from you … Am I wrong? Your entire income was FICA deducted at the time you earned it, back When each l00 bucks was worth a lot. You amassed a serious percentage of your wages in a pension plan. Now you get it and nowadays cuz of inflation, each 100$ of it isn’t enough for a dinner out, won’t buy much…yet you are paying taxes on it? Does that make sense? ONCE 100$ was a trip to Mexico for two. When you earned it. Now it's nothing, zilch. So they tax you on all the trips to MEXICO you didn't take?? HUH? Or is it apple and oranges? Help me with the logic, brainoids. Astrology at earthlink is where I hang out.

YOU DO HAVE TO PAY TAXES ON UP TO FIFTY PERCENT OF YOUR BENEFITS as a SOCIAL SECURITY RECIPIENT... if..... (read the conditions at GOV sites that explain this little hitch. Google "TAX on SS BENEFITS".

THANK YOU ANITA SANDS! I love the SEMINAR! Could you point me to the entire EASY PATH TO BE A MILLIONAIRE SEMINAR THE PORTAL TO IT… ALL your many websites, (LUCK IN REAL ESTATE with no cash, How to avoid taxes, how to run a lucrative Cottage Industry,FREE MONEY via public aid: Frugal living. Frugal Gardening, FRUGAL FARMING, Building a Farm Home, RECESSION TECH SECRETS, Urban Survival, List of all Future "THINGS TO COME". AND GUERILLA CAPITALISM, HOW TO LAUNDER $ your entrepreneurial MONEY, ALL OF THE 7,000 webinars.

      <=========YES, I put them all here: at THE PORTAL to 7,000 WEBINARS

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