How Lawrence King pays ZERO income tax.

You’ve seen him tweet about it.

Have you ever wondered how he does it?

…or maybe if you could, too?

***Thread***

@lawrencekingyo
First Hurdle – Citizenship Country

Your country of citizenship may tax you on worldwide income, income earned in country, or a both.

Lawrence is a UK citizen, a Uruguay resident, and a “nonresident” for UK tax.

The UK only taxes income earned in the UK for nonresidents.
First Hurdle – Citizenship Country

As long as @lawrencekingyo stays out of the UK for all but 46 days a year, he should keep his UK tax nonresident status and not owe any income tax on any income he earns outside of the UK (presumably all of his income).

Hurdle cleared!
Next Hurdle - Resident Country

If you aren’t taxed where you have citizenship, it’s probably because you live in another country.

It would be great to not get taxed in your country of residence either.

How does Lawrence clear this hurdle?
Next Hurdle - Resident Country

@lawrencekingyo wisely took up residence in Uruguay.

Uruguay only taxes Uruguay-sourced income, nothing earned outside.
Next Hurdle - Resident Country (Continued)

Lawrence avoids any economic activity within Uruguay that would give him Uruguay-sourced income. Thus he pays no income tax in Uruguay.

He also needs to live there 183 days per year to maintain residency.
Next Hurdle - Resident Country (Continued)

Part of his ability to avoid Uruguay-sourced income is by earning it in a free-trade zone. Several countries have these and Uruguay has several of its own.

Hurdle cleared!
Last Hurdle - Everywhere Else

It would be a bummer to not get taxed in your country of citizenship or country of residence, but end up paying tax somewhere else.

How does Lawrence clear this hurdle?
Last Hurdle - Everywhere Else

This is country by country, but in general you cannot:

1) Have a place of business in country.
2) Have employees/agents working for you in country

You also don’t want to visit for more than 183 days/year and risk tripping residency.
Last Hurdle - Everywhere Else (Continued)

As long as @lawrencekingyo spends 183 days/year in Uruguay, he is spending less than that per year in other countries and generally avoids residency in other countries.

He also has to avoid a business presence in other countries.
Last Hurdle - Everywhere Else (Continued)

Assume this as he is making sales on the internet rather than operating.
As long as he does the above, he’s generally free to travel to all the countries he makes money in and not create income tax for himself.

Hurdle Cleared!
Benefit of no Income Tax

What is the benefit of not paying income tax? To @lawrencekingyo it is 45% of the profits he would be paying if he still lived in the UK.

That's HUGE!

What could you do if you kept 45% more of your profits?!
So what about YOU?

Are YOU tired of paying income tax?

US: 30% to 50%
Canada: 30% to 60%
UK: 45%
Australia: 45%
Others: Plenty of tax!

Like Lawrence, can you find a way to legally avoid it?
If you want to substantially reduce your income tax, saving $1,000s, buy my guide TODAY to start saving immediately and before the prices goes up!

gumroad.com/l/MbBbDf

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with Patrick the Tax Advisor 🔥

Patrick the Tax Advisor 🔥 Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @AskForTaxAdvice

20 Jan
Want to know the biggest loophole in the US Tax Code?

This might be it.

If you think you make too much income to contribute to a ROTH IRA, you might be right.

It just doesn’t matter...

There’s another way to get that tax-free goodness.

***Thread***
2) A ROTH Conversion

Some people all it a "backdoor ROTH," but let’s not! It sounds wrong and a ROTH conversion is soooo NOT WRONG.

There is no income limit on converting a traditional IRA to a ROTH IRA.
3) There is no income limit to contributing to an a traditional IRA (just a limit on getting a deduction for it).

If you want a ROTH IRA, tax free growth, and no tax on withdrawals at 59.5; but you make too much money, here are three easy steps:
Read 11 tweets
20 Jan
Get PAID to go on VACATION using the tax code!!!

Two transactions at the same time: one generates a tax DEDUCTION and one generates TAX-FREE INCOME.

This might be my second favorite thread I’ve ever written!

Let’s bounce this ***THREAD**** to all of our friends via like/RT!!
1) First, the DEDUCTION:

Vacations might have airfare, lodging, and food costs in the $1,000s or more.

In general, vacations are NOT deductible.

BUT!!!

When I'm on vacation, I like to be on vacation, but I know how most of us on MoneyTwit are...
2) You are going to spend a couple hours per day working, even while away.

At the resort bar or the pool, you are going to be naturally networking and making connections. Talking shop with others.

You might even be there looking at property to buy and rent out.
Read 11 tweets
19 Jan
Do you NEED an S Corp?!

You might!

Have you ever wondered what an S Corp actually does for you?

***Thread***
2) First, Self-Employment Tax (“SE Tax”)

If you are self employed - entity or not - and have no other sources of income, you will be taxed 15.3% of your profits to $137,700 of profit and 2.9% profits after $137,700.

It approximates payroll tax.
3) For example, let's say your business profits $150k, either as a sole proprietor or single member LLC.

In this example your SE Tax would be approx. $21,425.

Here’s how having a S Corp could save you tax...
Read 10 tweets
19 Jan
When do I NEED to form and LLC for my business or side hustle?

***Thread***
1) Upfront, you have to ask this question from multiple perspectives.

There is an answer for legal purposes.

There is an answer for tax purposes.

There may be an answer for commercial purposes.

I'm going to address the tax aspect directly.
2) From a tax perspective, if you are the only owner (called a "Member" in an LLC), the IRS does not see the LLC as separate and distinct from you. It is "disregarded" from you for tax so it doesn't matter.

(You can elect to regard it, but that's another topic.)
Read 13 tweets
19 Jan
How to hire someone GREAT to do your taxes.

Someone that will not only do a nice job on filing your taxes, but will find you all the LOOPHOLES.

***Thread***
Ask people similar to you who they use and if they are happy with the service.

If that doesn't work, google "[your city] + CPA.

While it's not necessary to have a local accountant you can meet with in person, it has it's benefits.

Visit some websites and get a feel.
Pick a few that you think you want to work with and call them.

Here's a script,

"I am in the business of [your operations], making about [your expected revenue] this year, and am looking for someone to help me with my books and taxes. Are you taking new clients?"
Read 9 tweets
19 Jan
FACT: You LOSE at least 1/3 of your income to TAX! ...and if you are making a lot of money, it's over 1/2!!!

Think what you could do with that money, even just some of it?

If you could just take 10% back, what would that mean to your life?
If invested properly, could you retire 10 years earlier and enjoy more of the good life? What would you do if you could stop working 10 years earlier?

What would your vacations look like if you had 10% more of your income?
That's like going from a hotel inland to staying in the biggest house on the beach!

Maybe you would put it all in dividend stocks or real estate and enjoy the financial security of knowing you had regular dividends and rents coming in.
Read 19 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!