Business Deductions

• While those in lower income brackets often earn most or all of their income from wages, millionaires frequently own their businesses, either as their chief source of income or as investment vehicles. And while tax deductions exist for wage earners, business owners have far more significant opportunities for big deductions. In addition to deducting items such as luxury business travel, work automobiles and corporate jets, millionaires can take advantage of complex tax-savings vehicles that are not practical for those with lower incomes.
  
  

Capital Gains

• While not technically a deduction, the capital gains rules enable millionaires to grow their businesses and liquid investments without the same ordinary income tax treatment applied to bank interest. While those with little or no savings cannot afford to invest in properties and business ventures, millionaires do so knowing that those investments appreciate without interruption: Taxes will not be due until the investments are sold, and then only at the lower capital gains rate.
  
  

Politics, Charities and Foundations

• Taxpayers can take deductions for donating money to charities and other nonprofit organizations. Not surprisingly, millionaires often find themselves in the best positions to give those gifts in substantial amounts. Tax breaks for donations to politicians, charities, foundations and other such groups allow for millionaires to spend their money in a manner they find rewarding, while also garnering significant tax savings. Additionally, these donations can be financially advantageous in terms of reputation, access and networking opportunities.
  
  

Retirement and Education Accounts

• While retirement accounts are available to anyone regardless of personal wealth, millionaires have the disposable income that allows them to consistently maximize the benefits of these vehicles. In addition to having the means to make the highest allowable tax-advantaged contributions to a 401k or IRA, millionaires often have the opportunity to invest in self-employed retirement plans with much higher contribution limits. College savings accounts provide another deduction by which millionaires can save tens of thousands of dollars.