For those that read my post on finance. This should open your eyes. I doubt there will be any financial planner that will ever give you this advice.
The more a person or family spends a year, the more likely they will be required to pay income taxes, due to the graduated tax brackets that exist in the US and many other countries. Using the 2015 tax rules, a married couple can earn up to $20,600 a year without paying tax. This is because the government allows us a standard deduction for a married couple of $12,600 and an exemption of $4,000 per person. Other deductions can be applied, such as the $17,000 for 401k contributions, raising the untaxed income level to $37,600. Normally the deductions are increased every year with inflation or some arbitrary level decided by Congress
Once income and spending exceeds this level, taxes must be paid. Unless…
Unless that income comes from qualified dividends or long term capital gains. In this case, a married couple can have $20, 600 a year in income AND $74,900 in investment income, TAX FREE. Why 74,900 because this is the cut off for the 15% tax bracket and under the American taxpayer act of 2012 signed in 2013 long term gain and dividends for those in the 15% tax bracket is free. They did impose a 20% tax on those in 39.6%
If spending is kept below these levels (and thus incomes) then there will be no taxes
pharmerbear 