One of the most important lessons we were taught is that it is not only about how much money you make, but also about how much money you get to keep.
We believe that you can make the most effective decisions about where your money is the most useful.
The more money you get to keep also means you have more available to grow, give back, travel, invest, and use as you see fit.
With constantly changing tax laws, we will make our best efforts to keep this list up to date. Please note this list will be accurate as of the U.S. laws in 2021.
Also, please make sure you consult competent tax professionals in helping you prepare your tax returns when using these strategies.
Here is a list of our top 10 favorite tax saving strategies, in no particular order.
Own a Small Business or Side Hustle
This is one of the most important aspects of saving money in your tax bill.
Many of the other tax saving strategies depend on this being in place first.
If you are looking for a side hustle, consider things you are already good at…and turn that into a profit making business.
Buying Real Property (Real Estate)
Did you know the average rental property shows approximately $6000 in losses in the United States?
Did you also know the average rental property cash flows approximately $100 per month?
(But we like to see cash flows closer to $400/month when we invest in a property)
Being able to take a writeoff for a rental property that is losing money on paper (according to current tax code and IRS rules), while adding cash flow into your pocket…
A double bonus!
Paying Your Kids
This little known strategy can allow a tax write off up to $12,400 per child – TAX FREE!
If you are in a 30% tax bracket, that means up to $3,720 per child stays in your pocket!
And the best part is…your own kids are exempt from child labor law age restrictions! 
Take advantage of a tax benefit for money you would likely be “giving” your kids anyway.
Pay your kids and have them pay for their own clothes, sports, activities, and even pitch in for the monthly grocery bill.
Paying Your Grandkids/Nieces/Nephews
This strategy allows you to pay grandkids, nieces, nephews, and other family members.
You will get a writeoff for paying them, and depending on how you transfer the money, it may or may not be taxable income to the grandkids, nieces, and/or nephews.
Make sure you consult a tax professional to be sure you are doing this the right way to be able to take advantage of another great tax benefit that you may be “giving” them anyway.
Travel For a Required Company Annual meeting
One important thing to maintaining the strongest legal protection that your company is a completely separate entity from you personally is to be sure to do annual company maintenance.
Any travel related expenses for a mandatory company annual meeting may be eligible for tax write offs.
Our company policy is to hold the required annual company meeting in a warm location between November and March (we live in a snowy climate 
).
Our kids are also company employees and required to attend the annual company meeting.
Auto Deductions
Two ways to take advantage of the auto deduction(s).
Make sure you consult a competent tax professional before making the decision on which is most beneficial for you based on your vehicle use.
These will also be based on the percentage of business versus personal use.
Actual Expenses
With this method, you can write off the cost (over time) when purchasing a “new to you” vehicle.
You can also write off all actual expenses related to the vehicle (gas, repairs, maintenance, tires, etc.)
Mileage
Keep track of all of your mileage for any vehicle used for business. The current deduction rate for auto mileage is $0.56 per mile.
That may not seem significant, but if you are driving 20,000 miles that is a $11,200 write off for the year.
In a 30% tax bracket, that is a tax savings of $3,360.
Incorporate Your Business
Incorporating your business (or having it taxed as an S-corp) can provide a 67% savings on self-employment taxes.
Keep in mind, the decision to incorporate (or having it taxed as an S-corp) should not be made too early because it comes with additional requirements and overhead.
These additional requirements and overhead will likely result in additional costs for your business.
It usually makes sense to start considering this as an option when your revenue reaches $40k-$50k since this is where the tax savings will start to outweigh the additional costs.
Contribute to a 401(k)
This strategy allows you to save money and have the growth for retirement be either tax deferred or tax free.
If you have a traditional 401(k) the money will give you a write off when you put it in (save taxes now).
There are no taxes during the time of growth.
However, the money will be taxed at retirement age when the money is withdrawn from the 401(k).
Bonus Tip
If you use a Roth 401(k) you will pay taxes now on the contributions to the Roth 401(k).
The money will still grow with no taxes due, just like a traditional 401(k).
However, when it is time to withdraw the money, there will be no taxes due on the withdrawals.
We prefer this strategy because we have a lot more personal write offs now with kids, home loans, etc.
To supercharge this strategy, we are building a cash flowing rental portfolio that will produce significant cash flow in retirement (even inside a retirement account).
Contribute to an Individual Retirement Account (IRA)
Much like a 401(k) this strategy allows you to save money and have the growth for retirement be either tax deferred or tax free.
There are traditional and Roth IRAs (see 401(k) section for details).
The major difference is that the annual contribution limits for an IRA are much lower than a 401(k).
And don’t forget to drop some cash flowing rental properties here too!
Contribute to a Health Savings Account (HSA)
First, in order to be able to contribute to a HSA, you must have an eligible high deductible health insurance plan.
The great news is, as a business owner, this type of plan is most likely going to be the most economical option for you.
Now for the juicy benefit!
You get a tax write off when you contribute to a HSA.
The current limit is $3,900 for yourself and $7,200 for a family.
This money will be able to be invested and grow tax free.
The money can also be withdrawn at ANY time to to cover eligible medical expenses.
And one more time for those in the back…
Find a cute little rental property that can cash flow your health care expenses (Are you sensing a theme yet?).
For More Info
These are common write offs for a lot of people, but there are many, MANY more available options for tax write offs.
If you are ready to learning how to keep more of your hard earned money by investing in real estate, check out this free wealth building video series.
To your wealth-building success,
Levi Hunsaker
Founder, Rising Phoenix Wealth