Here are some strategies I actually use—and what most entrepreneurs completely overlook:
1. The Augusta Rule (Free Tax-Free Income) The IRS allows you to
rent your home to your business for up to 14 days per year—and that income is
100% tax-free. Example:
🏡 Market rate to rent a space like yours for an event?
$1,500 per day 📅 14 days x $1,500 =
$21,000 of tax-free income ✅ Your business gets a deduction
✅ You personally pay
zero tax on that money
✅ You don't even need an LLC to do this
Most people miss this one. Don't be that person.
2. Vehicle Deductions (Write Off Your Car Like a Boss) If you use your car
for business, you can deduct mileage or even the entire cost of your vehicle.
✅
Mileage Deduction: You can deduct 67 cents per mile (2024 rate) for business use.
✅
Bonus Depreciation: If your vehicle is over 6,000 pounds (like a Tesla Model X or a Range Rover), you may be able to deduct the entire purchase price in year one. Check out Section 179 to learn more.
Imagine writing off a
$100,000+ SUV against your taxable income. That's real money.
3. Invest in Real Estate (The IRS Loves Landlords) Why do so many wealthy people own real estate? Because the tax benefits are insane
. Here's how it works:
✅
Depreciation allows you to deduct "phantom losses"—even if your property is making money
✅
You can use rental losses to offset business income ✅
1031 Exchanges let you sell properties TAX-FREE and roll the gains into another property
Example:
You make $50,000 in rental income but have $50,000 in tax deductions from depreciation—you pay $0 in taxes.
It's why so many millionaires invest in real estate instead of stocks.
Right now my wife and I are converting our primary residence to a rental property in Marina Del Rey. The income + tax benefits created make more sense than selling the home as we explore and move to Orange County.
4. Max Out Your Retirement Contributions (Use the Government's Money) Most people underuse tax-advantaged accounts, but the wealthy maximize them.
✅
Solo 401(k): Contribute
up to $69,000 per year tax-deferred
✅
SEP IRA: Another way to stash tax-free money if you're self-employed
✅
HSA (Health Savings Account): Tax-free contributions
AND tax-free withdrawals for medical expenses
✅
Defined Benefits Plan: Are you an entrepreneur that has at least one company without employees? You can establish a DB plan and save tens of thousands (if not six figures) in taxes annually. I set one up almost a decade ago and am damn happy I did.
Advanced Maneuver: I recently set up a
Mega Backdoor Roth after learning that Peter Thiel did so to save billions. I wrote about it in this LinkedIn post
HERE.
Why does this matter?
Because
the more money you shelter, the less tax you pay.
5. Tax Bracket Planning—
Step One (Cut your taxes in half) Paying 35% in federal taxes and would rather pay 20%? This could work for you and it doesn't entail some elaborate offshore shady strategy. This works especially well if you're starting out and making little to no profit because then you'll avoid gift taxes.
✅
Have adult children? Give them a portion of your business. For instance, according to 2023 fed tax brackets, single filers with less than $44,725 in income and married filers with less than $89,450 in income pay only 12%. If you're currently in the 35% fed tax bracket ($231K to $578K of income) and have 3 unmarried kids, you could transfer ~$135K of income to them and save $31K in taxes annually by doing so.
✅
Have elderly parents in a low-income bracket? You can do the same thing.
And remember, it's not how much of the business you own that matters; it's how much you control.
If you're the manager of your LLC, and your kids each have trusts where you and your spouse are the trustees, this can work wonders.
Speak to your CPA to figure this out because you want to get it right. And if you have non-adult kids under the age of 18, you can pay them up to $15K/year tax-free. Lots of options!
6. Tax Bracket Planning—
Step 2 Don't waste a down year!
Many businesses have down years where a typically high earner will have much lower income in one or two years (especially in down economies).
This is all about taking advantage of your own personal tax brackets.
This may mean that in a down year, after taking all deductions, you have a loss for the year. What do you do in these situations? Create income.
You can postpone certain deductions and cause some income to be recognized in the current year that would normally have been recognized in a later year.
7. The Home Office Deduction (Your Rent Should Work for You)
You probably already know about this one, but I'll include it anyway because it's so damn easy. If you work from home, you can legally deduct a portion of:
✅ Rent or mortgage payments
✅ Utilities & internet
✅ Property taxes
✅ Home repairs & maintenance
But here's the catch: It has to be a dedicated space exclusively used for business. A simple 200 sq. ft. office in your home could translate to thousands in deductions every year.
🛠️ The Simple Rule: Structure Your Life Like an Entrepreneur
If you're paying taxes like an employee, you're doing it wrong.
💡 Employees pay taxes first, then spend what's left.
💡 Entrepreneurs spend first, then pay taxes on what's left.
That's the difference between playing the game and getting played.
Even if you're making good money, if you're not thinking like an investor and business owner, you're leaving money on the table.
⚠️ How Much Should You Focus on This?
Trying to game every tax rule can become a full-time job.
You don't need to get lost in the weeds. Just take the base hits that save you $10K-$30K per year—and move on.
🚀
Step 1: Get an accountant who understands tax strategy (not just filing paperwork).
🚀
Step 2: Set up your business to take advantage of
legal deductions.
🚀
Step 3: Invest tax-free where possible—real estate, 401(k)s, HSAs.
Tax law favors those who build things. That's why the wealthy pay less and the middle class overpays.
The system is already rigged in favor of entrepreneurs. You just need to start using the rules to your advantage.
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