Soulful Tax Shelters

by John O. Andersen

Recently I cleaned the carpeting in a spacious home the day before the new owner was to move in. When I arrived, the mother of the owner greeted me. She beamed with pride that her daughter, single with no dependents and just five years out of college, was able to afford her own luxury home. According to her mother, the daughter "needed" to buy the big home for the tax breaks.

Later, I thought about that popular notion of going into debt in order to save on taxes. On the surface, it sounds reasonable. But a closer look reveals the possibility that part of it may be a veiled rationalization for greed. Mass marketing and peer pressure form an irresistible combination in their ability to control buyer behavior. This may account for the fact that so many are convinced that taking on debt is the "done thing" when it comes to reducing their taxes.

There are, however, other options. Here are two which we might consider:

Earn less money

I'm not talking about elaborate accounting schemes to hide income. Literally, I'm talking about working less hours, and making less money. For some this is not possible without leaving their job. For others, it's very feasible.

Visualize a life with less income and outgo. Write this goal in your day planner or tack it to your reminder board. Review it daily. Take steps to make it a reality. Some people achieve this by switching to part-time work, job-sharing, or taking a lower stress job with another company. Others voluntarily change their status from employee to independent contractor. Self-employed people might close down the business for a month or two each year during slow season. Choosing any of these options could yield considerable tax savings.

Some may object to the concept of intentionally earning less money. They might claim that money equals peace of mind and freedom. Sadly however, many gloss over the fact that there are non-monetary forms of wealth which could bring them a substantially higher quality of peace of mind and freedom. Consider for instance, having a wealth of close family and friends, or a wealth of interesting experiences, or a wealth of learning.

We have a finite amount of time allotted to us in life. What we choose to pursue costs us not only the time and effort to achieve it, but also the lost opportunity of pursuing other paths. With this in mind, doesn't it make sense to experiment with a variety of forms of wealth beyond money? And just think, we don't have to pay taxes on a wealth of friends, experiences, or learning!

Vastly increase charitable giving

If earning less money isn't an available option, giving more away certainly is. Charitable giving can be an escape hatch from the all-too-typical scenario of watching your lifestyle rise to the level of your income.

There is nothing to stop a person from exchanging the "dream home" mentality for the "dream life" or the "dream community" mentalities. Better shelters and food for the homeless, more playgrounds for children, accessible mentoring for eager learners, or just more active service clubs and organizations are great causes into which you might funnel your surplus money (and time for that matter).

Of course, generous charitable giving will cut your taxes significantly.


Contrary to what we're often led to believe, we don't have to accumulate more things in order to reduce our taxes. Rather, we have the choices of earning less or giving more of our surplus away. When we consider our total wealth picture (including the many forms of non-monetary wealth and our limited time to pursue them), such methods of cutting taxes can make a whole lot of sense.

John is a small business owner and a proponent of a simpler lifestyle. Send any questions or comments to

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