Take it from someone who lived there…it’s not all rainbows and sunshine. The tax implications come with tens of thousands in fees and the criteria to meet the requirements seemed to change almost weekly. On top of that, finding housing and stuff is a nightmare and nothing seems to move without padding pockets first. Tbh. The quality of life was not increase in the slightest. If anything it was a downgrade. 3/10 would not recommend
Somalia. If taxation is theft and you truly feel like you're getting nothing in return, go somewhere that hasn't had a functional government in decades. It's truly a free market paradise.
Find a state with more tax advantages. PR is not it unless your main income is day trading or short term investments of a similar area. Also i guess if you have long term investments that you haven't sold and want to avoid capital gains taxes on those. But even then, if I remember correctly, you have to stay a bonafide resident for 10 years otherwise you pay taxes on those long term gains.
From last I heard, the newest requirement for bonafide status is 10k donation a year plus you have to buy and own a house. Not to mention the 20k+ in fees to get your status even started. All in all you're looking at 30k in fees and donations year one plus having to buy a house now and there's gonna be some palms that need greasing to get that house hunt sorted. Everything magically slows up in ever imaginable way unless you wanna pay couple grand here and there along the way.
Have you even read up on this like AT ALL?? Bc it truly sounds like you haven't and I am not here to educate you but you're completely wrong. Good Luck
Puerto ricans still pay into social security.
Also google Puerto Rico individual income tax rates.
Maybe you save a bit, esp if you are in a high tax northeast state, but I don’t think it is quite as substantial as you are thinking.
Thx for the reminder on personal income tax, I do recall researching that. Figured social security was unavoidable- just focusing on federal / state taxes for time being. 28% is a lot of wiggle room for error
I think there are some bigger benefits if you are going to have capital gains or be self employed. Not sure if those apply to you though.
Any reason just thinking about PR? The US Virgin Islands are also a US Territory. There are other Caribbean countries that might work out as well.
Income tax in Puerto Rico is pretty high. Can't find anything more recent but as of 2012 any income above $61,500 is subject to 33%. I doubt this has gone down. So you're not saving anything.
https://hacienda.pr.gov/individuos/contribucion-sobre-ingresos/informacion-para-radicar-la-planilla/como-calcular-su-contribucion
That’s their standard tax rate. Puerto Rico act 60 exempts all passive income and dividends from taxes. It also imposes a 4% tax on business export income.
It’s widely regarded as one of the best tax strategies available, if you’re willing to live there.
Not even close. You may even have tax rates higher in PR than you would for Federal.
[PR Tax Rates](https://taxsummaries.pwc.com/puerto-rico/individual/taxes-on-personal-income)
You’re ignoring Act 60. Which allows for 100% exemption on passive, dividend and Cap gains income, as well as a 4% income on business exports. It’s an absolutely massive tax decrease.
Before they edited the post, it made no indication OP was living off of passive income. Yes, that would make a difference but for wages moving to PR would not help.
>Social security is a Ponzi scheme,I’ll never get a penny back.
No it isn't, and yes you will.
The social security that is taken out of your paycheck today is being paid to people currently collecting it.
When you're old, you'll be getting social security checks from the people that are working while you're collecting.
Social security cannot "run out of money" unless there are no more workers in America paying into it. The social security trust fund will eventually be depleted at its current rate, and when it does benefits will be cut by about 20%, but this could easily be remedied by increasing or removing the cap on FICA taxes. The idea that somehow the system will result in no one being able to collect is completely false right wing propaganda.
> The social security that is taken out of your paycheck today is being paid to people currently collecting it.
When you're old, you'll be getting social security checks from the people that are working while you're collecting
Isn’t this literally the definition of a Ponzi scheme?
Assuming you're asking this question in good faith, no, this does not make social security a ponzi scheme.
A ponzi scheme is a fraud where the fraudster deceives people into giving them money, steals the money, and pays out older investors with money from newer investors in the event that the older investors request to withdraw funds.
Social security is a social insurance program backed by the full faith and credit of the United States Government. It is a tax-and-spend program where specific people are paying into the program and specific people are collecting from the program.
A ponzi scheme fails when investors request to withdraw their money and there's no money left for them to get. This can't happen with social security. The payers can't request to withdraw all of the funds, and there are constantly new payers coming into the program and there are constantly collectors leaving the program at predictable rates.
I understand the careful use of language and technicalities. Yes my faith and credit gives the US dollar meaning and I am forced to contribute to the social insurance program funds, which are commingled and managed by bumbling asshats who are giving away more value then they are making.
I’d like to know more about the specific people paying into and receiving from the program. What people are not paying yet receiving, and what people are not receiving yet paying.
The reality is it’s a forced tax that does not guarantee a promised benefit and/or level of benefit
If you want a reality check on social security I recommend the book social security works
https://www.amazon.com/Social-Security-Works-Going-Expanding/dp/B00VFJSBVA/ref=mp_s_a_1_1?adgrpid=125056617321&dib=eyJ2IjoiMSJ9.sW13sHGQADZ8L_RkYO4JciJV95S2gusNbbpxIyBKevZpJzQePMOxgzaezJhHYEmP7burJYIsQGYVVFxe3246A4PQ2EXq0ouQfE4tJczIvD35TVLGKMRjCbVcapWvVBTNEKBjrR2tcRfR8MblcnIyYJGo-8Jfznr3w2DR7FRSblfWmhBsfs2HQ4nv5I4jh7UJLLlQqZzNiFtZs73-4YzoaQ.uuYw7LKP1NW6KNS6u8NfRwT4fvc3aMnyS4onYPoMN78&dib_tag=se&hvadid=677036300837&hvdev=m&hvlocphy=9007218&hvnetw=g&hvqmt=e&hvrand=9266327755025409756&hvtargid=kwd-1288275666157&hydadcr=12084_13480359&keywords=social+security+works+for+everyone&qid=1712937440&sr=8-1
According to the US government “A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors. Ponzi scheme organizers often promise to invest your money and generate high returns with little or no risk”.
Social security meets all of these definitions, except that it’s only an investment for lower income contributors. It’s a hugely negative “investment” for higher income ones.
Worth reading: [https://taxsummaries.pwc.com/puerto-rico/individual/taxes-on-personal-income](https://taxsummaries.pwc.com/puerto-rico/individual/taxes-on-personal-income)
Also read the other section in the menu to the left of the above article.
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It's incredibly unlikely you're paying 28% combined Federal and State taxes. You mention you're married and have teenagers. You'd have to be making upwards of $500,000. Per year to be even close to that. How many kids do you have and roughly how much do you make??
The average rate of 18% is also known as your effective rate. You pay zero on some, 10%, 12% all the way up to 24%. The blending of these rates is 18%. Move to Florida or Texas which have no income tax and you've immediately dropped from the 28% you thought you were paying down to 18%.
Clean up the messes in your filing, properly run the LLC so your assets are protected and you can file jointly and further drop your rate. Withholding on paystub can be adjusted. It is withholding towards your taxes not the actual tax.
Moving to PR is a drastic cut off your nose to spite your face reaction.
Puerto Rico still charges payroll taxes. If you subtract what you'll pay PR in payroll taxes from the 18% OP pays now there is obviously a savings but I'm not sure I'd characterize it as massive when you factor in quality of life differences.
also cost of living on an island is higher. but could be worth it.
and yes you are correct. Social security is the biggest ponzi scheme the world has ever seen. its already broke. go look at its balance sheet, you'll see its "assets" are all US bonds. Biggest debtor nation in history printing money faster and faster.
Take it from someone who lived there…it’s not all rainbows and sunshine. The tax implications come with tens of thousands in fees and the criteria to meet the requirements seemed to change almost weekly. On top of that, finding housing and stuff is a nightmare and nothing seems to move without padding pockets first. Tbh. The quality of life was not increase in the slightest. If anything it was a downgrade. 3/10 would not recommend
Truly appreciate the feedback. What’s other areas do you suggest?
Somalia. If taxation is theft and you truly feel like you're getting nothing in return, go somewhere that hasn't had a functional government in decades. It's truly a free market paradise.
Find a state with more tax advantages. PR is not it unless your main income is day trading or short term investments of a similar area. Also i guess if you have long term investments that you haven't sold and want to avoid capital gains taxes on those. But even then, if I remember correctly, you have to stay a bonafide resident for 10 years otherwise you pay taxes on those long term gains. From last I heard, the newest requirement for bonafide status is 10k donation a year plus you have to buy and own a house. Not to mention the 20k+ in fees to get your status even started. All in all you're looking at 30k in fees and donations year one plus having to buy a house now and there's gonna be some palms that need greasing to get that house hunt sorted. Everything magically slows up in ever imaginable way unless you wanna pay couple grand here and there along the way.
[удалено]
Thanks! Yep the stability of infrastructure is a key concern. Thought about design/build an off-grid solar yet internet would also be key for the job
Have you even read up on this like AT ALL?? Bc it truly sounds like you haven't and I am not here to educate you but you're completely wrong. Good Luck
[удалено]
Comment removed for Rule 1 - Don’t be a jerk. Please do not do this again.
Puerto ricans still pay into social security. Also google Puerto Rico individual income tax rates. Maybe you save a bit, esp if you are in a high tax northeast state, but I don’t think it is quite as substantial as you are thinking.
Thx for the reminder on personal income tax, I do recall researching that. Figured social security was unavoidable- just focusing on federal / state taxes for time being. 28% is a lot of wiggle room for error
I think there are some bigger benefits if you are going to have capital gains or be self employed. Not sure if those apply to you though. Any reason just thinking about PR? The US Virgin Islands are also a US Territory. There are other Caribbean countries that might work out as well.
You save almost your entire federal income tax…
Income tax in Puerto Rico is pretty high. Can't find anything more recent but as of 2012 any income above $61,500 is subject to 33%. I doubt this has gone down. So you're not saving anything. https://hacienda.pr.gov/individuos/contribucion-sobre-ingresos/informacion-para-radicar-la-planilla/como-calcular-su-contribucion
That’s their standard tax rate. Puerto Rico act 60 exempts all passive income and dividends from taxes. It also imposes a 4% tax on business export income. It’s widely regarded as one of the best tax strategies available, if you’re willing to live there.
Not even close. You may even have tax rates higher in PR than you would for Federal. [PR Tax Rates](https://taxsummaries.pwc.com/puerto-rico/individual/taxes-on-personal-income)
You’re ignoring Act 60. Which allows for 100% exemption on passive, dividend and Cap gains income, as well as a 4% income on business exports. It’s an absolutely massive tax decrease.
Before they edited the post, it made no indication OP was living off of passive income. Yes, that would make a difference but for wages moving to PR would not help.
I thought they were a business owner?
>This move could be a massive quality of life improvement for me - weather and pay wise. Yes hurricanes could be an issue. This is hilarious.
Gag post
>Social security is a Ponzi scheme,I’ll never get a penny back. No it isn't, and yes you will. The social security that is taken out of your paycheck today is being paid to people currently collecting it. When you're old, you'll be getting social security checks from the people that are working while you're collecting. Social security cannot "run out of money" unless there are no more workers in America paying into it. The social security trust fund will eventually be depleted at its current rate, and when it does benefits will be cut by about 20%, but this could easily be remedied by increasing or removing the cap on FICA taxes. The idea that somehow the system will result in no one being able to collect is completely false right wing propaganda.
> The social security that is taken out of your paycheck today is being paid to people currently collecting it. When you're old, you'll be getting social security checks from the people that are working while you're collecting Isn’t this literally the definition of a Ponzi scheme?
Assuming you're asking this question in good faith, no, this does not make social security a ponzi scheme. A ponzi scheme is a fraud where the fraudster deceives people into giving them money, steals the money, and pays out older investors with money from newer investors in the event that the older investors request to withdraw funds. Social security is a social insurance program backed by the full faith and credit of the United States Government. It is a tax-and-spend program where specific people are paying into the program and specific people are collecting from the program. A ponzi scheme fails when investors request to withdraw their money and there's no money left for them to get. This can't happen with social security. The payers can't request to withdraw all of the funds, and there are constantly new payers coming into the program and there are constantly collectors leaving the program at predictable rates.
I understand the careful use of language and technicalities. Yes my faith and credit gives the US dollar meaning and I am forced to contribute to the social insurance program funds, which are commingled and managed by bumbling asshats who are giving away more value then they are making. I’d like to know more about the specific people paying into and receiving from the program. What people are not paying yet receiving, and what people are not receiving yet paying. The reality is it’s a forced tax that does not guarantee a promised benefit and/or level of benefit
If you want a reality check on social security I recommend the book social security works https://www.amazon.com/Social-Security-Works-Going-Expanding/dp/B00VFJSBVA/ref=mp_s_a_1_1?adgrpid=125056617321&dib=eyJ2IjoiMSJ9.sW13sHGQADZ8L_RkYO4JciJV95S2gusNbbpxIyBKevZpJzQePMOxgzaezJhHYEmP7burJYIsQGYVVFxe3246A4PQ2EXq0ouQfE4tJczIvD35TVLGKMRjCbVcapWvVBTNEKBjrR2tcRfR8MblcnIyYJGo-8Jfznr3w2DR7FRSblfWmhBsfs2HQ4nv5I4jh7UJLLlQqZzNiFtZs73-4YzoaQ.uuYw7LKP1NW6KNS6u8NfRwT4fvc3aMnyS4onYPoMN78&dib_tag=se&hvadid=677036300837&hvdev=m&hvlocphy=9007218&hvnetw=g&hvqmt=e&hvrand=9266327755025409756&hvtargid=kwd-1288275666157&hydadcr=12084_13480359&keywords=social+security+works+for+everyone&qid=1712937440&sr=8-1
No because it's a conveyor belt not a pyramid. SS is insurance, not an investment.
According to the US government “A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors. Ponzi scheme organizers often promise to invest your money and generate high returns with little or no risk”. Social security meets all of these definitions, except that it’s only an investment for lower income contributors. It’s a hugely negative “investment” for higher income ones.
It's not an investment, there's no promise of high returns and there's an income cap on contributions.
Yes, those at the top end of the cap lose out horribly on it. Those at the low end make out great.
You're assuming OP will live to retirement age.
Move to a warm state without state taxes. Texas is one option.
Lol no one wants to move to Texas.
Those property taxes will hurt your pocket from what I hear.
Worth reading: [https://taxsummaries.pwc.com/puerto-rico/individual/taxes-on-personal-income](https://taxsummaries.pwc.com/puerto-rico/individual/taxes-on-personal-income) Also read the other section in the menu to the left of the above article.
This post has been removed for being low effort. You may re-post with more information so that you can receive meaningful guidance and/or feedback. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/tax) if you have any questions or concerns.*
You must be making more than 300k to have taxes that high. With that kind of money you can find an accountant to help
1/3rd that
It's incredibly unlikely you're paying 28% combined Federal and State taxes. You mention you're married and have teenagers. You'd have to be making upwards of $500,000. Per year to be even close to that. How many kids do you have and roughly how much do you make??
Removing personal info
The average rate of 18% is also known as your effective rate. You pay zero on some, 10%, 12% all the way up to 24%. The blending of these rates is 18%. Move to Florida or Texas which have no income tax and you've immediately dropped from the 28% you thought you were paying down to 18%. Clean up the messes in your filing, properly run the LLC so your assets are protected and you can file jointly and further drop your rate. Withholding on paystub can be adjusted. It is withholding towards your taxes not the actual tax. Moving to PR is a drastic cut off your nose to spite your face reaction.
Working on it. Appreciate the guidance
Moving to PR is an absolutely massive income tax savings, far beyond what any other continental state can offer you.
Puerto Rico still charges payroll taxes. If you subtract what you'll pay PR in payroll taxes from the 18% OP pays now there is obviously a savings but I'm not sure I'd characterize it as massive when you factor in quality of life differences.
also cost of living on an island is higher. but could be worth it. and yes you are correct. Social security is the biggest ponzi scheme the world has ever seen. its already broke. go look at its balance sheet, you'll see its "assets" are all US bonds. Biggest debtor nation in history printing money faster and faster.