How Do I Avoid Paying Taxes On Windfall?

If you are anticipating a high amount of tax on your windfall gain, then there are ways to avoid it, but before you get started with it research the taxes you might owe to the IRS on that sum. Note that if it’s a big amount, there are ways to help lower it. They are few things you can try to do with that extra cash to reduce the tax amount. Pension is considered as one of the best ways to cut taxes, although using a pension to minimize taxes works only if the windfall is earned income not through other sources like a lottery. Next, creating a captive insurance company is an advanced strategy that requires having the right tax and legal team, but the rewards can be worth the cost. Other ways are to fund an IRA, health spending account, or another qualified retirement plan.