You're taxed when you make money. You're taxed when you spend money. You're even taxed on things you've
already paid taxes on.
So why are you handing over more money to the IRS than you need to?
Wealthy people and business owners don't play by the same rules as W-2 employees—and it's 100% legal. They use strategies baked into the tax code to reduce how much they owe (and sometimes walk away with big-time savings).
If you're a founder, freelancer, or just someone tired of giving the government a fat cut of your earnings, it's time to level up your tax game.
Here are 7 wildly underrated tax strategies most entrepreneurs
completely miss—but the wealthy quietly swear by:
1. The Augusta Rule—Rent Your Own Home to Your Biz (Tax-Free) This one sounds fake... but it's IRS-approved.
If you own your home, you can rent it out to your
own business for up to 14 days per year—and not pay
a single cent in taxes on that income. It's called the Augusta Rule (named after Augusta, GA, where residents used it to rent their homes during the Masters golf tournament).
Let's say the market rate for renting your house is $1,500/day. That's
$21,000 per year of tax-free income. Your business gets a write-off. You get the cash. The IRS? Gets nothing.
👏 Chef's kiss of a loophole.
2. Home Office Deduction—If You Zoom There, You Can Deduct It Working from home? You could be sitting on
literal deductions.
If you have a dedicated space in your home used
exclusively for business (that means your dining table doesn't count), you can deduct a portion of your:
- Rent or mortgage
- Utilities
- Internet
- Property taxes
- Home repairs + maintenance
This deduction isn't just for full-time entrepreneurs either—if you freelance, consult, or side hustle, it might still apply.
Pro tip: Use the
simplified method (up to $1,500)
or calculate based on square footage for bigger savings.
3. Max Out Retirement Contributions—Let Your Money Grow (Without the Tax Man Watching) Retirement accounts aren't just for saving later. They're a now-move to cut your tax bill
today.
✅
Solo 401(k): Contribute up to $69,000 (as of 2024) if you're self-employed. Tax-deferred, which means you don't pay taxes on the money until you retire.
✅
SEP IRA: Easier to set up than a Solo 401(k), and great for freelancers or solopreneurs. Contributions are tax-deductible.
✅
HSA (Health Savings Account): Triple tax advantage: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses? Also tax-free.
Moral of the story: stash cash, cut taxes, and grow your future wealth.
4. Vehicle Deductions—Write Off That Boss Ride Yes, your car could be a business expense—if you use it for biz purposes.
There are two big ways to take advantage:
- Standard mileage deduction: 67 cents per mile (2024 rate). Those client meetings, supply runs, and work trips? They add up.
- Bonus depreciation: Buy a car over 6,000 lbs (think Range Rover, Tesla Model X, or even a Ford F-150), and you may be able to write off the entire purchase price in year one.
Let that sink in: a $100K SUV could become a $100K deduction. The key? Use it
primarily for business.
5. Invest in Real Estate—Make the IRS Work for You Real estate = the tax strategist's dream.
- Depreciation lets you reduce taxable rental income—even if you're turning a profit.
- 1031 Exchanges allow you to sell a property and roll those profits into a new one without paying capital gains taxes.
Plus, real estate income is passive, and when structured right, can keep your effective tax rate
shockingly low.
Real estate doesn't just build wealth—it shields it.
6. Tax Bracket Planning—Split the Pie Strategically If you're in a high tax bracket (say, 35%+), consider shifting income to family members in lower brackets.
This could mean hiring your college-aged kid to help with marketing, admin, or customer support. They get work experience and a paycheck, and you get a deduction.
Even gifting appreciated assets (like shares in your company) to family in lower brackets can reduce your overall tax bill.
It's not dodging. It's
delegating. 7. Down Years = Smart Tax Moves Had a slow year? Before you wallow, know this: low-income years are a tax
opportunity. This is the perfect time to:
- Recognize deferred income (you'll pay less tax on it now)
- Convert a traditional IRA to a Roth IRA (while in a lower bracket)
- Realize capital gains at a lower rate
Smart entrepreneurs plan for the long game—and that means knowing when to lean into the dips.
Just make sure you're working with a CPA who
gets business owners and freelancers and is fluent in strategy—not just spreadsheets.
To learn more about maximizing these tax-saving strategies,
read more here.
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