Learn languages (Duolingo), change countries depending on your income type, ask ChatGPT, set up companies for yourself. There are lots of ways to do it, and many average people are doing it already in different ways.

For example for me just moving to Switzerland made both my tax percentage lower and more legal, salary much higher, and cleaner streets from those lower taxes than anywhere else I lived before. Somehow the government was able to afford professional cleaning machines from those lower taxes.

I’m not sure you understood my point. Moving continents isn’t an average person solution. In fact it exposes another problem - companies can easily register anywhere and restructure their finances for lower taxes.

Its interesting that you put so much value on clean streets? My observation is that in many European countries its very uncool to throw trash on the floor outside. People still do it, but its usually done hidden. Also people take offense when they see someone throwing trash on the street.

what works in tiny countries does not work in large countries

> How does the average person avail these optimisation schemes?

The Wall Street Journal often runs articles on various aspects of the tax laws, like how to do a Roth IRA conversion. I'm sure there are plenty of books on the topic, too, just check Amazon.

Roth IRA != Global Tax Evasion

Tax avoidance is perfectly legal.

There are plenty of tax optimization scheme available to the average person. Find a good accountant who can help.

None of them are easy and usually require taking on financial risk, but they are there if you want them.

Can you share some? I've spent a lot of time looking into this, reading and posting on boggleheads, talking with accountants, advice only financial advisors, etc. and the general consensus is that there isn't much you can do as a high W2 earner besides pay your taxes and be grateful to be in such a position.

If you define "average person" as W2 income only, then yeah, there aren't many. If you're married and your spouse can put enough time in to be a "qualified participant", you can you offset W2 income with rental losses (including depreciation).

But for the "average person", you're looking more at investment opportunities - real estate using a 1031 exchange, investing in Opportunity Zones, etc.

You may not be able to avoid taxes on W2 income, but you might be able to shift around when that income is recognized and reduce your overall tax rate.

Poking around online it looks like over 90% of the country is filing only W2 income so that feels like a fair classification for "average person".

I've gone pretty deep on the real estate research front. We have short term rentals but (fortunately) they do well enough that we can't show paper losses even with depreciation. We're both well employed so real estate professional status is off the table (which is why we started with short term rentals - schedule C vs. E)

1031s and opportunity zones don't do anything to change when your W2 income is recognized or reduce your overall tax rate, the only tax benefits are around the capital gains with the property. Both require upfront investments with post tax money.

It just feels a little disingenuous to say there are "plenty of tax optimization schemes for the average person" because showing paper losses on real estate with one spouse getting real estate professional status, is the only strategy I've seen consistently mentioned.

Only 10% have other income than W2?

That doesnt reflect IRS data.

Just capital/gains losses is 20%, then self-employment income is another 20%, real estate or S-corp is another 10%, etc

Sure there is overlap, but it’s not 100% across all those. And its not like if youre not taking advantage of those things now you cant in the future.

https://www.irs.gov/pub/irs-soi/22inweek47.xls

Thanks for posting the raw data, it's super interesting and I wasn't able to find it on my own.

I think we are mostly in alignment, I have just been focused on "how to lower taxes on W2 income" where your point is that anyone can diversify their income streams and find opportunities with lower tax rates.

Anyway, I appreciate the info you shared. Cheers.