Billionaires in the United States have tax advantages that benefit them greatly. At least, that’s what most people think.
But I’m not so sure, so I asked ChatGPT. Here’s what ChatGPT had to say on whether the average American can get the same tax deductions as the rich.
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Most Deductions Are Available to Everyone
ChatGPT was very clear that the tax code is not focused on only giving breaks to the wealthy. In fact, most of the deductions and credits that the wealthy take advantage of are generally available to most Americans.
Tax deductions are designed to reward certain behaviors, such as owning a business, investing in real estate, donating to charity and contributing to retirement accounts.
For example, any worker with access to a 401(k) account can max it out (up to $24,500 as of 2026, per IRS) and receive a tax deduction for every dollar contributed. This is available to all workers, not just executives and business owners.
And real estate deductions aren’t just reserved for those with multimillion-dollar properties. Any property owner can deduct mortgage interest, property taxes, insurance, maintenance and depreciation. That said, you do need some up-front capital to purchase a rental property.
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But There Are Barriers To Getting Many Deductions
While most tax deductions can be used by anyone, there are some barriers to entry in taking advantage of them.
In general, wealthy households have a few advantages:
- Ownership stakes in businesses (more deductions)
- Multiple properties (tax shelters)
- Access to sophisticated tax planning (professional help)
- Cash flow to make large deductible investments
Compare that to the average American household making less than $90,000 and there are much fewer opportunities to shelter income from taxes.
For example, to take advantage of business deductions, this requires having a legitimate business with profit, while many W-2 workers simply can’t deduct as much.
And taking advantage of things like charitable contributions requires itemizing your deductions, which is much harder these days with the standard deduction exceeding $30,000 for married filing joint households, per the IRS. You typically need a much higher income to itemize deductions, which could exclude modest income households.
So Can You Use the Same Deductions?
Yes, you can use most of the deductions that the wealthy take advantage of.
But it requires making intentional financial moves to take the actions required by the IRS to take advantage of those deductions.
For example, You may need to start a side business if you want to start taking advantage of business deductions that many wealthy households already take. And you’ll need to budget your money well to be able to set aside over $2,000 per month to max out your 401(k) account.
So while the wealthy do not have access to a secret tax code, they do have the funds to take full advantage of all the deductions available to them.
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This article originally appeared on GOBankingRates.com: I Asked ChatGPT If I Can Get the Same Tax Deductions as the Rich — Here’s What It Said
