Things to Learn From Donald Trump's Tax Return

A 2005 tax return revealed Tuesday night indicated that President Trump had paid $38 million in federal income taxes.

Although the pages did not detail the financial aspects of President's business, it did confirm he had made payments to the government for his tax liability.

The key to understand how most businessmen managed to lower tax liabilities by legal ways is to look at how they report their losses. In the President's case, there reported a $916 million in 1995 which could allow him to carry over to offset taxable income for up to 18 years.

Certain business losses could be carried over to future tax years to lower taxable income and this is actually a both legal and smart way for businessman to avoid paying large sums of taxes to IRS.