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How To Legally Pay *NO* Income Tax

Every year around tax time people get grumpy about shelling out cash to support the government. It always depresses me when people want more and more services out of the government, but don’t connect these services with their high tax bills (I like to call these people “Canadians”). Luckily there’s an easy method to reduce your income tax bill to nothing.

If you thinking about buying tax preparation software then consider software programs such as TurboTax or TurboTax Canada (formerly QuickTax).

Before getting into the how, a consideration is should you do this. Taxes pay for communal services such as hospitals, roads and schools that people are quite happy to take advantage of (and often happy to pay for). In the movie “Stranger than Fiction” Will Farrell plays an IRS auditor who is investigating Maggie Gyllenhaal because she deducts the money that would have gone to the military from her tax payment. Unfortunately we don’t have à la carte taxation, you pay your share of EVERYTHING or you go to jail.

Tax protesters are kooks who mistakenly believe they’ve found a legal loop-hole to avoid paying taxes, withhold paying taxes, then get thrown in jail. I definitely don’t recommend anything along those lines. Wesley Snipes got himself into trouble by falling in with some of these characters.  Luckily he’s half-vampire, so no one will mess with him in jail.

So, to get back to the title of this post, the easy way to pay no provincial or federal income taxes is just to earn less money than the minimum which is taxed in your country. In Canada, this would be about $9,850 (for someone living in Ontario according to Taxtips.ca), or $820 / month. Certainly you won’t be living like a king, but I think it’d be possible to live on this. You’ll have to calculate the maximum earnings for countries outside of Canada, but it’ll probably be a similar amount.

One man who’s living this lifestyle is Don Schrader. He felt strongly enough about not wanting to finance military conflict, that he has restricted his earning below an amount which would cause him to pay federal income tax (and lives the lifestyle this allows). He also drinks urine, so he might not be the ideal role model, but he does prove it’s possible.

42 replies on “How To Legally Pay *NO* Income Tax”

Pop out a kid, it drastically increases your tax-free income. You could probably make 25K before paying taxes if you include the GST rebate, CCTB, UUCB, Child Credit, and Equivalent to spouse credit.

I know, I’m insensitive . . . it comes with the heart of ice of being a Dad 🙂

MGL: Very true!

Traciatium: Hmm… that’s an idea. Could I get the kid to drink urine or make him a half vampire?

Potato: Yes, this is true. Or you could make more and shelter it in an RRSP, or you could make more from dividend income… Lots of options.

Mmmm… nothing like a hot steaming cup of urine you wake you up in the morning, maybe that’s the life style for me.

I’m no scientist, but I’m fairly certain drinking urine after it’s been through your body more than a time or two is extremely poisonous. Probably not the brighest of ideas.

Kyle: I actually discussed this with a buddy in med-school who’s grandfather drinks his own urine first thing in the morning (apparently it’s a Chinese thing).

As long as you didn’t drink ALL the urine your body produced, your system would just pass the waste products through a second time (and your urine would be a little more concentrated). Doesn’t do any harm apparently.

Here I was expecting an informative article on shell corporations, offshore investments, and small business tax arbitrage. Instead they talk of urine. Oh well.

I don’t think they are kooks. I think they are idealists who are brave enough to risk prosecution and imprisonment in order to not have their money used for something that is against their conscience.

There is a Peace Tax Trust Fund where you can send the money that would otherwise have gone to military purposes. Obviously the government has not yet recognized this as legitimate, but the money is being held in trust until the government agrees to use it for other purposes. This is supported by Mennonites, Quakers and other conscientious objectors.

And it’s kind of insulting to paint war tax resisters with the same brush as Wesley Snipes, who if I understood the link correctly, was in no sense connected with conscientious objectors nor was he motivated by ethical considerations.

Monica: If you click through to the wikipedia link, you’ll see that tax protesters are different than war tax resisters. Wesley Snipes is a tax protester (who I was calling kooks, not war tax resisters, because they incorrectly think they’ve discovered a legal way to not pay taxes).

That being said, war tax resisters are kooks too if they think they’re going to cause any change in society (if they’re just doing it for their personal morality, power to them).

I’m not going to piss on the pee party…but wouldn’t running an incorporated business (which pays you the min before taxes kick in) help reduce taxes? OR would corporate taxes defeat this….playing with numbers. 😀 Guess it depends on how much the business makes.

I could be wrong but my understanding is the big benefit of corporate taxation is that its capped at 25% (whereas usually income tax climbs towards 43% in Canada).

Plus it limits your legal liabilities. I don’t really know much about corporations though, so take this with a grain of salt…

I’ve never forgotten Financial Jungle Guy (who seems to have dropped off the face of the Earth since this summer) saying that a couple in BC could earn $99,200 in dividends annually before incurring any income tax!

I think that would be pretty darn nice, but you have to have a lot of cash to buy the shares that earn the dividends (why do I feel I should be singing that to the tune of This is the House that Jack Built?).

I work in a government position. If you had any idea how much of your money that we waste it would make your head spin. Just glad Im on this side of the fence. 😉

I would like to know what way a person can NOT pay weekly contributions to federal and provincial taxmen. If a person is self-employed, they pay by installment. Why MUST a person, who works as an employee, pay each paycheck? Is there a form one might sign that forbids an employer to deduct income tax?

Eric: I don’t know which country you’re in, but you can (in Canada and the US I believe) adjust your withholding (so less is deducted from every paycheck). HOWEVER, if you lower your withholding, then have to pay a large tax bill, the tax man gets angry at you (since the withholding is expected to mirror what your tax situation will be at the end of the year).

The government wants their money as soon as possible. There aren’t many ways to prevent this (although if you have a few crates of tea we can go to Boston and try to do something about it).

By Post Author

It’s sounds like this site is run by a bunch of university students who believe the first sentence in every paragraph they read is the whole story.
It is true that we are being taken by our government, and the tax money they take from our hard work does not pay for our education, health or any of our services for that matter. This money is put toward the debt our foolish and ignorant politicians have created for us by borrowing the money to pay for the services I mentioned earlier because they cannot manage the huge amounts of tax dollars we already give them. Your property tax pays for our education system, gas tax pays for the highways and roads to name a few . This money they borrow with interest, is money they could be printing themselves without interest but that is another story anyway if you people think we are obligated to pay income tax you can go ahead give half your hard earned dollars away but you will have to show me where in the constitution that it states that it is a legal requirement. Until someone can do this I would not make statements about people and their beliefs, especially when they are smarter than you!!

wow david…….
that’s pretty intense…
personally i hate the idea of taxes, it was first put up to help fund stuff for the war, it was considered “temporary” wich as we all know is not.

Heres an idea.

Have you ever wondered why the government takes there part of the income tax before you get your part of your pay check.

I found a study that said if we got our full paycheck and than had to pay the government there part. Citizens would than start realizing how much they are paying the government and it would start a riot.

The government takes about 25% when you make it. Than about another 7% when you buy something with it.

Freedom of speech is a wonderful thing, if used to provide numerous points of view and aids a person in making their own decisions. I’ve read a plethora of articles on taxation, constitutional arguments and know a few accountants. To this day there is no one who has posted or advertised an acual law of remittance or proof of governements ability to tax us. On the other hand, the only people you hear about standing up and demanding their hard earned money is so-called kooks. What’s so kooky about knowing your rights, and demanding they be satisfied? I’m sure that if more people used the net and television for information purposes, and not the usual facebook, porn, shopping and gaming there would be a shift in thinking and the public would be more than cattle and chattle. The government has complete control of the population, so much so that we allow ourselves to be exploited, robbed, poisoned and enslaved. If anyone out there has had success with reclaiming their taxes I’d love to hear about it. If anyone can show a law that states that the governement can tax at will, I’d love to see it. If people could reclaim their taxes without fear of landing in jail, think of the immense benefit. Employers could cut back wages to adjust net incomes, which would trickle down to every person. Not only would there be cheaper goods and services, but our standard of living would greatly increase. Maybe one employee households would become the norm and our children would be parented… possibly a 5 day, one job work week could be enough to live…the effects would be staggering.

I did the whole pay no taxes for 8yrs. Now in 2009 I am paying the IRS $1000.00 A month. Whoever is thinking about this DON?T DO IT! Those that helped me with letters and such, were not doing it themselves. So if your product works why arent you using it? Like I said anyone who thinks of doing this DON?T DO IT! my life is no longer mine it?s Uncle sams.

Years ago when I was in high school I had a friend that had a dad that was I thought a kook. He owned his own construction business. He one day was arrested for driving without a license. He stayed in jail while waiting for trial. While in jail he studied cases that were dismissed because of the person saying that driving was a right and not a privlege. His court date came and he walked in with an arm length of cases that had been dismissed saying driving was a right not a privlege and that the judge had no right taking his driving right away, even without a license. The judge said he was not going to debate this in his court room and said case dismissed. He than turned around and sued the sheriff’s office for holding him for a month. He won and asked for $6000 for a months lost wages. I saw him do this. I still do not understand how he really won that case. I was talking to him about it and he told me that was nothing. He had went to court and did not pay any taxes. I said your crazy, and how did you do this. He said he somply went to the courts and said it was against his religion to pay money to something that aided to abortions. The catch 22 is that the judge also said if you do not pay any taxes than you also release your rights to fair trials, no social security no government benefits. He agreed and I guess he does not pay taxes. I was friends with his son and I saw him to the driving case and win, I am taking him and his son’s word for it on the taxes part though. I scratch my head today and wonder if this is really true or not.

Do not listen to stories about “someone I knew never paid income taxes and got away with it for years” or “the government has no legal right to collect taxes”. Read the news! The courts are all over this and the tax evaders DO NOT WIN! There are dozens of tax scams out there, and they are exactly that: SCAMS! The only people who profit from these scams are the promoters who will take your money and tell you how to avoid paying taxes. They’ll provide you with stories of how to be “natural persons”. WTF is a natural person? This is so ridiculous that it’s almost funny! The part that isn’t funny is that the people who get duped by this end up paying double what they would have been required to pay had they filed their taxes honestly to begin with. These scams may work for a year or two, or so one may think, until CRA (Canada) or the IRS (U.S.A.) uncovers all individuals involved in the scam (except for the promoters who have gotten rich off of every poor fool they’ve scammed because, for some reason nobody will tell who the scammers are). CRA/IRS will then reassess the taxes that should have been paid, plus penalties of another 50% of the tax owing, plus interest. The promoters get away with it because they don’t even try their own scams, they actually pay their taxes on the easy money they’ve earned from these fools. DON’T BE ONE OF THOSE FOOLS!

I am canadian and I Have to say that it is utterly disgusting how much money the government takes from us. I am middle income and I have a working spouse. We get slammed with taxes because we’re without children and never see a dime back at income tax time. The only people that benefit are dead beat people that do nothing such as Treaty Natives, single welfare mothers and varous other leeches. It is ridiculous and the worst of it is that these people do not contribute to the tax pool. I mean REALLY!! The hard working middle class gets nothing as we simply make too much to qualify for getting any of our money back and not enough to get massive tax breaks. If you think about it about half of our income goes to the government: 30% off the check, 10-12% on every purchase, 25 cents a liter on gas, over half the cost of cigarettes. (mind you with the additonal health care costs smokers will rack up this is understandable) In the end, could we really not make out better by calculating our fair share to determine our taxes… The amount of money wasted by the Government is also unbelievable! the cost of anything government related is ridiculous as the government grossly overpays for even the most basic things. I wonder what our defecit would look like if we had people that are used to paying household bills and having to make smart decisions on a day to day basis running the show…

To Jimmy I understand how you can be bitter towards natives because you haven’t achieved great wealth as a benefactor of the genocide that your people brought to this land. Your are still racist and ignorant. If you really do not like it you can always move back to Europe where you truly belong.

its obvious that we can spend our money better then any politician can, the scandals , the out right theft , the mismanagement , in Israel there is no income tax and they are the wealthiest country in the world , why? because their citizens spend money because they can afford to and the economy thrives like no other

When our government gets huge surpluses Canadians think , ooooo that’s a good thing, well its not, there over taxing us, and they now have to find ways of spending that money or they cant justify overburdening us the following year, so they give themselves huge raises , I say they work for us and its time we let them know, by ending income tax we the people would get a nice lil raise and its about dam time !

You people are fear porn. Many people out there right now not paying slavery tribute usury debt to the gov and international bankers. Gotta just know how to do this and stick up for yourself. It also helps not to volunteer into their court as well. If most people stopped paying, it would be like prohibition. The world would not end. We would be in much better shape. TAXES DO NOT PAY FOR INFRASTRUCTURE, peoples labor and skills do, nothing else. Get a grip and learn for yourselves and stop being brainwashed by fear. I havent paid since 99, no jail time here and no bills neither. I work my ass for my community as well building things and repairing as well, REAL WORK!!! not just paper pushing chowderheads like lawyers, bankers and accountants that drag us into this system so they can profit from us. Wake the hell up.

I agree that we should be paying taxes for our health care, for social programs that deal with children, etc., however, I do not believe that we should be paying for foreigners just starting out in our country, I do not believe we should be paying tax dollars into foreign aid. We have starving children living on the streets here – take care of here. I make below the poverty and I have 3 children. I make it – without the use of social services. The CTB and UCCB are a tremendous help – when the government officials at CRA don’t decide that they need to make you prove you have children and that they are living with you over and over again!

The whole thing here is that taxes are relative to income, but, if you turn around and say that your net income isn’t covering household expenses, like the mortgage, schooling fees, and transportation, you can turn around once again and request some part of what you’re losing in taxes, and taxed income *(these days almost everything we buy is not only covered by HST at 13% but you also have taxes like the Ad Valorem tax which is about to go to 3.50, plus the import fee on booze, wine, beer), so that if you’re spending half of your income inside of our franchised GNP, you get nearly a quarter back, if you know how to request it (you can’t simply indicate that you have a home office without spending a few bucks at ikea).

Taxes are important to support government spending, but we should be investing in ourselves first, selfishly or not, because as one of the countries with the most natural, and beneficial resources, we should not be operating on a deficit, especially not one that triples or quadruples our Southern neighbours who have ten times the population.

Not for anything, but we should be not only be decriminalizing, but also taxing, every ounce of marijuana that is sold in this country at 50 cents a sale; the fact is it really it adds nearly nothing to the price of weed and yet contributes near 1.2 billion dollars to our GDP, or domestic earnings. It’s not just the cops that should benefit from our powerful strains!

Anyway, rant over. Feel free to comment and share. I love this discussion and think that free speech is the only way to a free world.

Lastly, Bigotry doesn’t count as an opinion; it is simply a way of mind that doesn’t fit natural selection!

Great article but you are missed informed by your narrative knowledge of how you think the system works. Does some of our money go to pay for services that we use absolutely, but a large part of that goes to paying off the interest rate from the bank of Canada and fund government initiatives that do not serve the people. We are forced to work and taxing the populace is an excellent mechanism to keep the masses working and in debt. Just imagine a world where your house was paid off in 10 years and you never had to work 9- 5 M-F. It’s ABSOLUTE that the people keep working and spending. 70% of the GDP is just from us buying stuff

We also fail to consider the trillions of dollars made from sales tax and every time something is exchanged its taxed – tax on top of tax. For example, you buy a house you pay tax, you sell a house you pay tax, the seller real estate agent pays tax on that purchase, the buyer real estate agent pay tax on that purchase towards their income. The Builder pays tax multiple taxes towards the municipality and provincial governement etc etc. Government is not the solution they’re the problem. The system is heavily flawed by corrupt people and heavily influenced by big corporations .

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