Tax Strategy Guide

How to Lower Your Taxes
27 Legal Strategies That Actually Work

Q: What is the single best way to lower my taxes?

For most W-2 employees, maximizing contributions to tax-advantaged retirement accounts (401(k), IRA, HSA) is the single highest-impact move. Contributing $23,500 to a 401(k) in 2026 at a 24% marginal rate saves $5,640 in federal taxes immediately. If your employer offers an HSA-eligible health plan, adding $4,300 in HSA contributions saves another $1,032. That's $6,672 in tax savings from two accounts alone.

Q: How much can I save by forming an S-Corp?

An S-Corp can save self-employed individuals 15.3% in self-employment tax on business profits above a reasonable salary. For example, if your business nets $200,000 and you pay yourself a $100,000 salary, you avoid self-employment tax on the remaining $100,000 — saving roughly $15,300 per year. This strategy typically makes sense once your business nets over $60,000-$80,000 annually.

Q: Is tax-loss harvesting worth it?

Yes, especially for high-income investors. Tax-loss harvesting lets you sell losing investments to offset capital gains. You can deduct up to $3,000 in net losses against ordinary income per year, and carry forward unlimited losses to future years. On a $500K portfolio, systematic tax-loss harvesting can add 0.5-1.5% in after-tax returns annually according to Wealthfront and Betterment data.

Q: What is the HSA triple tax advantage?

The HSA (Health Savings Account) is the only account in the US tax code with three tax benefits: (1) contributions are tax-deductible, (2) investments grow tax-free, and (3) withdrawals for qualified medical expenses are tax-free. After age 65, you can withdraw for any purpose penalty-free (just pay income tax like a traditional IRA). It's effectively a super-powered retirement account with a medical expense bonus.

Q: Can I deduct my home office on my taxes?

Only if you are self-employed or an independent contractor. W-2 employees cannot deduct home office expenses since the Tax Cuts and Jobs Act of 2017. For self-employed individuals, you can use the simplified method ($5 per square foot, up to 300 sq ft = $1,500 max) or the regular method, which deducts actual expenses proportional to your office space. The regular method often yields a larger deduction.

Q: What is a backdoor Roth IRA and is it legal?

Yes, it is completely legal and IRS-approved. A backdoor Roth IRA involves contributing to a traditional IRA (non-deductible) and then immediately converting it to a Roth IRA. This allows high earners who exceed the Roth IRA income limits ($161,000 single / $240,000 married in 2026) to still get money into a Roth IRA. The key caveat is the pro-rata rule: if you have existing pre-tax IRA balances, part of the conversion will be taxable.

Q: How does a 1031 exchange work?

A 1031 exchange lets you defer capital gains tax when selling an investment property by reinvesting the proceeds into a 'like-kind' property within strict timelines: you must identify a replacement property within 45 days and close within 180 days. You can chain 1031 exchanges indefinitely, and if you hold the final property until death, your heirs receive a stepped-up basis — effectively eliminating all deferred gains. It only applies to investment/business property, not your primary residence.

Q: Is it better to take the standard deduction or itemize?

For 2026, the standard deduction is $15,700 for single filers and $31,400 for married filing jointly. You should only itemize if your total deductible expenses (mortgage interest, state/local taxes up to $10,000, charitable contributions, medical expenses above 7.5% of AGI) exceed the standard deduction. Since the Tax Cuts and Jobs Act nearly doubled the standard deduction, roughly 87% of taxpayers now take the standard deduction. If you're close to the threshold, consider 'bunching' deductions — concentrating charitable giving into alternating years to itemize in one year and take the standard deduction the next.

The US tax code is 6,871 pages long. It was written by lobbyists and CPAs who get paid to make it complex. Most Americans overpay because they don't know the rules. Here are 27 legal strategies to keep more of what you earn.

By Glen BradfordFormer Hedge Fund ManagerS-Corp OwnerUpdated March 2026

The Big Picture: Why Most People Overpay

The average American pays an effective federal tax rate of about 14.6%. But the range is enormous — some people earning $200K+ legally pay single-digit effective rates through smart use of deductions, credits, and tax-advantaged accounts. The difference isn't cheating. It's knowing the rules.

Taxes You Owe = (Income − Deductions) × Rate − Credits

Every strategy on this page reduces one of these components. Deductions lower your taxable income. Credits directly reduce your tax bill. The right combination can save tens of thousands per year.

Lower Income

Retirement accounts, business deductions, deferral

More Deductions

Itemize, bunch, time expenses strategically

Lower Rate

Long-term gains, asset location, bracket management

More Credits

Dollar-for-dollar reductions in your tax bill

How Much Can You Actually Save?

The answer depends on your situation. Here's a realistic breakdown by taxpayer profile — no inflated promises, just math.

Profile	Key Strategies	Est. Savings	Rate Drop
W-2 Employee ($75K)	401(k), HSA, standard deduction, AOTC	$5,000 - $8,000/year	22% to 15-17%
W-2 Employee ($150K)	Max 401(k), backdoor Roth, HSA, tax-loss harvest	$10,000 - $18,000/year	24% to 17-20%
Self-Employed ($200K)	S-Corp, SEP IRA, QBI, home office, business expenses	$25,000 - $45,000/year	32% to 18-22%
Real Estate Investor	Depreciation, 1031 exchange, cost segregation, asset location	$30,000 - $80,000+/year	Varies widely

Key takeaway: Self-employed individuals have the most levers to pull. If you're W-2 only, focus on maximizing retirement accounts and tax-loss harvesting.

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Retirement Accounts

Strategies 1-5 of 27

Max Out Your 401(k) / 403(b)

Savings: $3,525 - $8,695/yearBest for: W-2 employees with access to an employer plan

What It Is

Contributing the maximum $23,500 (2026) to your employer-sponsored retirement plan reduces your taxable income dollar-for-dollar. Every dollar you contribute is a dollar the IRS doesn't tax this year.

Who It's For

W-2 employees with access to an employer plan. Especially valuable if your employer offers a match — that's free money you're leaving on the table.

Key Details

•At a 24% federal bracket, $23,500 in 401(k) contributions saves $5,640 in federal taxes. Add state taxes and the savings climb higher.
•Employer match: if your company matches 50% up to 6% of salary, that's an instant 50% return on your first 6%. No investment in history beats that.
•The money grows tax-deferred. On a $23,500 annual contribution at 10% returns, you'll have $4.1M after 30 years — and you deferred taxes on every dollar going in.
•Catch-up contribution: if you're 50+, you can contribute an additional $7,500/year ($31,000 total). Ages 60-63 get a super catch-up of $11,250 ($34,750 total).

Glen's Take

This is the single easiest tax move in America. It's automatic, it's pre-tax, and most people don't max it out. If you're earning $100K and contributing $23,500 to your 401(k), you're only taxed on $76,500. The government is literally giving you a discount for saving for retirement. Take it.

Backdoor Roth IRA

Savings: $10,000 - $100,000+ over a lifetimeBest for: High earners above the Roth IRA income limits who want tax-free retirement income

What It Is

A legal workaround for high earners who exceed Roth IRA income limits ($161K single / $240K married in 2026). You contribute to a non-deductible traditional IRA, then immediately convert it to a Roth. The result: tax-free growth and tax-free withdrawals in retirement.

Who It's For

High earners above the Roth IRA income limits who want tax-free retirement income. Especially valuable if you expect to be in a higher tax bracket in retirement.

Key Details

•Step 1: Contribute $7,000 (2026 limit) to a traditional IRA. Don't deduct it.
•Step 2: Convert the traditional IRA to a Roth IRA. Since you already paid taxes on the contribution, the conversion is tax-free (assuming no other pre-tax IRA balances).
•The pro-rata rule is the trap: if you have existing pre-tax IRA money, a portion of the conversion will be taxable. Solution: roll pre-tax IRA money into your 401(k) before converting.
•$7,000/year in a Roth growing at 10% for 30 years = $1.27M completely tax-free in retirement. At a 24% tax rate, that's $305K in taxes you'll never pay.

Glen's Take

I do this every year. The pro-rata rule trips people up, but if you have no pre-tax IRA balances it's dead simple: contribute, convert, done. It takes 15 minutes and saves you potentially hundreds of thousands in retirement taxes. There is no reason not to do this if you qualify.

HSA Triple Tax Advantage

Savings: $1,032 - $3,164/year in tax savingsBest for: Anyone enrolled in a high-deductible health plan (HDHP)

What It Is

The Health Savings Account is the only account in the tax code with three tax benefits: tax-deductible contributions, tax-free investment growth, and tax-free withdrawals for medical expenses. It's a retirement account disguised as a health account.

Who It's For

Anyone enrolled in a high-deductible health plan (HDHP). The 2026 contribution limits are $4,300 for individuals and $8,550 for families.

Key Details

•Contribution tax savings: $4,300 at 24% bracket = $1,032 in federal tax savings. Plus you avoid 7.65% FICA taxes if contributed through payroll.
•Invest the balance: Most HSA providers offer investment options. Invested HSA money grows completely tax-free — no capital gains tax, ever.
•The stealth retirement play: Pay medical expenses out-of-pocket now, save receipts, let HSA grow for decades. Reimburse yourself tax-free at any point in the future. There's no time limit on reimbursement.
•After age 65, HSA withdrawals for non-medical expenses are taxed like a traditional IRA (no penalty). It becomes a flexible retirement account with a medical expense bonus.

Glen's Take

The HSA is the most underrated account in the entire tax code. Triple tax advantage beats everything — not the 401(k), not the Roth, nothing. If you have access to an HDHP, max the HSA before anything else. I pay medical bills out-of-pocket and let the HSA invest and compound. In 20 years, that money will be worth multiples of what I contributed.

Catch-Up Contributions (Age 50+)

Savings: $1,800 - $4,088/year in additional tax savingsBest for: Anyone age 50 or older

What It Is

Once you turn 50, the IRS lets you contribute extra to retirement accounts above the standard limits. This is designed to help people who started saving late — or want to accelerate their tax-deferred savings in peak earning years.

Who It's For

Anyone age 50 or older. Especially valuable for high earners in their 50s and early 60s who want to lower their taxable income before retirement.

Key Details

•401(k) catch-up: Additional $7,500/year (total $31,000). At 24% bracket, that's an extra $1,800 in annual tax savings.
•Super catch-up (ages 60-63): $11,250 additional (total $34,750). This is a new provision that significantly boosts late-career savers.
•IRA catch-up: Additional $1,000/year (total $8,000). Smaller, but still meaningful tax-free/tax-deferred growth.
•HSA catch-up (age 55+): Additional $1,000/year. Combined with the triple tax advantage, this is extremely efficient.

Glen's Take

If you're over 50 and not using catch-up contributions, you're leaving money on the table. The super catch-up for ages 60-63 is particularly aggressive — Uncle Sam is basically saying 'please, save more, we'll give you extra tax breaks.' Take the deal.

SEP IRA for Self-Employed

Savings: $5,000 - $25,900/yearBest for: Freelancers, consultants, sole proprietors, and small business owners

What It Is

A Simplified Employee Pension IRA lets self-employed individuals and small business owners contribute up to 25% of net self-employment income, with a maximum of $70,000 in 2026. This is dramatically higher than a traditional IRA's $7,000 limit.

Who It's For

Freelancers, consultants, sole proprietors, and small business owners. Especially valuable for high-earning self-employed individuals.

Key Details

•Contribution limit: 25% of net self-employment income up to $70,000. A consultant earning $280K+ can shelter $70,000 from taxes.
•At a 37% bracket, a $70,000 SEP contribution saves $25,900 in federal taxes. That's a substantial amount redirected from the IRS to your retirement.
•Easy to set up: You can open a SEP IRA at Fidelity, Schwab, or Vanguard in minutes. No annual filing requirements (unlike a Solo 401(k)).
•Alternative: Solo 401(k) allows both employee ($23,500) and employer (25%) contributions, potentially higher total than SEP if income is under ~$350K. Plus it allows Roth contributions.

Glen's Take

When I was running my hedge fund and doing freelance consulting, the SEP IRA was a lifesaver. Being able to stash $50K+ pre-tax when you're self-employed dramatically changes the math. If you freelance and you don't have a SEP or Solo 401(k), fix that today.

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Investment Strategies

Strategies 6-10 of 27

Tax-Loss Harvesting

Savings: $1,000 - $15,000+/yearBest for: Investors with taxable brokerage accounts and unrealized losses

What It Is

Selling investments at a loss to offset capital gains, then immediately reinvesting in a similar (but not identical) asset. You maintain your market position while generating a tax deduction.

Who It's For

Investors with taxable brokerage accounts and unrealized losses. Most impactful for high-income investors with significant capital gains.

Key Details

•Capital losses offset capital gains dollar-for-dollar. If you have $20K in gains and harvest $20K in losses, your capital gains tax bill drops to $0.
•Excess losses: Up to $3,000 in net capital losses can be deducted against ordinary income per year. Unused losses carry forward indefinitely.
•Watch the wash sale rule: You can't buy a 'substantially identical' security within 30 days before or after the sale. But you CAN sell the S&P 500 ETF (VOO) and immediately buy a total market ETF (VTI) — different fund, similar exposure.
•Robo-advisors like Wealthfront and Betterment do this automatically. Their data shows tax-loss harvesting adds 0.5-1.5% in after-tax returns on large portfolios.

Glen's Take

I've been doing this since my hedge fund days. The key insight most people miss: tax-loss harvesting isn't just for bad years. Even in a bull market, individual holdings often have temporary dips. Harvest the loss, swap into a similar ETF, and bank the tax deduction. It's free money from the IRS if you're disciplined about it.

Long-Term Capital Gains Rates

Savings: $2,000 - $20,000+/year depending on gainsBest for: Every investor with a taxable brokerage account

What It Is

Holding investments for more than one year qualifies you for long-term capital gains tax rates: 0%, 15%, or 20% — dramatically lower than ordinary income tax rates of 10%-37%. The simple act of patience saves you thousands.

Who It's For

Every investor with a taxable brokerage account. The savings are automatic — you just have to hold for 366+ days before selling.

Key Details

•Short-term gains (held < 1 year) are taxed at your ordinary income rate — up to 37%. Long-term gains max out at 20% (plus 3.8% NIIT for very high earners).
•The 0% bracket: Single filers earning under $48,350 in taxable income pay ZERO capital gains tax. Married filing jointly: $96,700. This is huge for early retirees.
•Example: $50K in stock gains at a 24% ordinary rate = $12,000 tax. At the 15% long-term rate = $7,500 tax. That's $4,500 saved by waiting one extra day.
•Net Investment Income Tax (NIIT): An additional 3.8% applies to investment income if your MAGI exceeds $200K (single) or $250K (married). Total max rate: 23.8%.

Glen's Take

This is the easiest optimization in investing and people still mess it up. I've seen investors sell winning positions at 11 months for short-term rates when waiting 30 more days would have saved them thousands. Set a calendar reminder. The long-term rate is almost always better than the short-term rate unless you think the stock is about to crater.

Municipal Bonds

Savings: $500 - $10,000+/year on bond interestBest for: High-income investors in the 32%+ federal bracket, especially those in high-tax states (CA, NY, NJ)

What It Is

Interest from municipal bonds is exempt from federal income tax, and often exempt from state tax if you buy bonds from your home state. For high-income investors, the tax-equivalent yield can make munis more attractive than taxable bonds.

Who It's For

High-income investors in the 32%+ federal bracket, especially those in high-tax states (CA, NY, NJ). Less valuable for investors in low brackets.

Key Details

•Tax-equivalent yield: A 3.5% muni bond for someone in the 37% bracket has a tax-equivalent yield of 5.6%. You'd need a taxable bond paying 5.6% to match it after taxes.
•Double tax-free: Buy California bonds if you live in California — exempt from both federal AND state income tax. In a state with 13.3% top rate, the tax-equivalent yield jumps even higher.
•Municipal bond funds (like Vanguard VTEAX) give you diversified exposure to hundreds of munis. Expense ratio: 0.09%.
•Credit risk is low: Municipal default rates are historically under 0.1% for investment-grade bonds. Cities and states almost always pay their debts.

Glen's Take

Munis are boring. That's the point. If you're in a high tax bracket and you're holding taxable bonds in a brokerage account instead of munis, you're donating money to the IRS for no reason. Do the tax-equivalent yield math. For most high earners, munis win.

Qualified Dividends

Savings: $500 - $5,000+/year on dividend incomeBest for: Dividend investors and anyone holding individual stocks or dividend ETFs in a taxable account

What It Is

Dividends from US stocks and qualified foreign corporations held for 60+ days are taxed at the preferential long-term capital gains rate (0%/15%/20%) instead of your ordinary income rate. Not all dividends qualify — REITs and money market funds typically don't.

Who It's For

Dividend investors and anyone holding individual stocks or dividend ETFs in a taxable account. The tax difference can be substantial.

Key Details

•Qualified dividends at a 15% rate vs. ordinary dividends at a 32% rate = 17 percentage points in tax savings. On $20K in dividends, that's $3,400 saved.
•Most S&P 500 stock dividends qualify. ETFs like VYM, SCHD, and VIG distribute primarily qualified dividends.
•REIT dividends do NOT qualify (taxed as ordinary income). Hold REITs in tax-advantaged accounts like IRAs for maximum efficiency.
•Holding period requirement: You must hold the stock for at least 61 days during the 121-day period beginning 60 days before the ex-dividend date. Translation: don't buy and flip for the dividend.

Glen's Take

Asset location matters. If you own REITs or bond funds (ordinary income), put them in your IRA. If you own stock index funds with qualified dividends, they're fine in your taxable account. This simple placement decision can save thousands over a career. Most people just throw everything in one account and hope for the best.

Opportunity Zones

Savings: $5,000 - $100,000+ in deferred/eliminated taxesBest for: Investors with large capital gains looking for long-term (10+ year) real estate or business investments

What It Is

Investing capital gains into Qualified Opportunity Zone funds allows you to defer and potentially reduce capital gains tax. If you hold the investment for 10+ years, all appreciation in the opportunity zone investment is completely tax-free.

Who It's For

Investors with large capital gains looking for long-term (10+ year) real estate or business investments. Minimum viable amount: typically $50K-$100K+.

Key Details

•Step 1: You sell an asset with a capital gain. You have 180 days to reinvest the gain into a Qualified Opportunity Zone Fund.
•The original gain is deferred until December 31, 2026 (or when you sell the OZ investment, whichever is earlier).
•The big prize: If you hold the OZ investment for 10+ years, ALL appreciation on the new investment is tax-free. No capital gains. Ever.
•Risks are real: opportunity zones are typically in economically distressed areas. The investment must work as an investment, not just as a tax play. Poor deals lose money regardless of tax benefits.

Glen's Take

Opportunity zones are powerful but complex. I've seen people chase the tax break into bad investments. The tax benefit is real — but only if the underlying investment is sound. Don't invest $100K in a bad deal just to defer $20K in taxes. The math doesn't work if the investment loses money.

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Deductions & Credits

Strategies 11-15 of 27

Standard vs. Itemized Deductions

Savings: $1,000 - $8,000+/year with bunching strategyBest for: Everyone

What It Is

Every taxpayer chooses between the standard deduction ($15,700 single / $31,400 MFJ in 2026) or itemizing individual deductions. The key is knowing when to switch — and using 'bunching' strategies to maximize your benefit in alternating years.

Who It's For

Everyone. Roughly 87% of taxpayers take the standard deduction, but high-expense taxpayers (large mortgages, high state taxes, major charitable giving) should itemize.

Key Details

•Common itemized deductions: mortgage interest, state and local taxes (capped at $10,000), charitable contributions, medical expenses above 7.5% of AGI.
•The bunching strategy: If you normally donate $8,000/year but fall short of the itemized threshold, donate $16,000 in one year (itemize) and $0 the next (standard deduction). Net tax benefit: significantly higher than $8K/year.
•Donor-advised funds (DAFs) make bunching easy: contribute a large amount to the DAF in your bunching year, then distribute to charities over time from the fund.
•Medical expenses: If you're close to the 7.5% AGI threshold, consider scheduling elective procedures in the same year to bunch medical deductions.

Glen's Take

The bunching strategy is one of the most underused tax moves in America. Most people just do the same thing every year and take whatever deduction they get. Think strategically about timing. A donor-advised fund at Fidelity or Schwab takes 10 minutes to set up and can save you thousands over a decade.

Charitable Giving (DAFs & QCDs)

Savings: $1,000 - $15,000+/yearBest for: Anyone who donates to charity (DAFs); IRA owners age 70

What It Is

Donating to charity reduces your taxable income if you itemize. Donor-Advised Funds (DAFs) let you front-load donations for a big deduction now while distributing to charities over time. Qualified Charitable Distributions (QCDs) let retirees donate directly from their IRA — satisfying required minimum distributions tax-free.

Who It's For

Anyone who donates to charity (DAFs); IRA owners age 70.5+ (QCDs). Especially valuable for retirees trying to manage RMDs.

Key Details

•Donating appreciated stock to a DAF: Deduct the full market value AND avoid paying capital gains tax on the appreciation. A stock you bought at $10K now worth $50K? Donate it, deduct $50K, pay zero gains tax on the $40K appreciation.
•QCDs: Retirees 70.5+ can donate up to $105,000/year directly from their IRA to charity. This counts toward your Required Minimum Distribution but is excluded from taxable income. Double benefit.
•QCD vs. standard deduction: Even if you take the standard deduction, a QCD still reduces your taxable income. It's the rare deduction that works on top of the standard deduction.
•DAF minimum at most providers: $5,000 initial contribution. You can grant as little as $50 to individual charities from the fund.

Glen's Take

If you're still donating cash to charity and writing a check, you're doing it wrong. Donating appreciated stock through a DAF is strictly better: you get the same deduction AND you skip capital gains tax. If you're over 70.5, the QCD is a no-brainer for managing your RMDs. These two moves alone can save retirees thousands.

Mortgage Interest Deduction

Savings: $2,000 - $8,000+/yearBest for: Homeowners with mortgages, especially those in the early years of a loan (when interest is highest) and those in high-tax states where state/local taxes push them past the itemized threshold

What It Is

Homeowners can deduct mortgage interest on loans up to $750,000 ($375,000 if married filing separately). This is one of the largest deductions available, but it only helps if your total itemized deductions exceed the standard deduction.

Who It's For

Homeowners with mortgages, especially those in the early years of a loan (when interest is highest) and those in high-tax states where state/local taxes push them past the itemized threshold.

Key Details

•On a $500K mortgage at 6.5%, you'll pay roughly $32,000 in interest in year one. At a 24% bracket, that's a $7,680 tax deduction value — but only if you itemize.
•Front-loaded benefit: Mortgage amortization means most of your early payments are interest. A 30-year $500K mortgage at 6.5% pays $32K in interest in year 1 but only $2K in year 30.
•Refinancing resets the clock: If you refinance, the new loan's interest is deductible (within the $750K limit). Points paid on a refinance are deductible over the life of the loan.
•Second home mortgage interest is also deductible (combined total of primary + secondary can't exceed $750K in loan balance).

Glen's Take

The mortgage interest deduction is not a reason to buy a house. I've heard people say 'but the tax break!' to justify a home purchase that doesn't make financial sense. Run the numbers. If the standard deduction covers you already, the mortgage interest deduction is worth nothing extra. It's a nice bonus if you already need to itemize — it should never be the primary reason to take on a $500K debt.

State & Local Tax (SALT) Deduction

Savings: $2,400 - $3,700/year (at $10K cap)Best for: Residents of high-tax states (California, New York, New Jersey, Massachusetts) who itemize deductions

What It Is

Taxpayers who itemize can deduct up to $10,000 ($5,000 MFS) in state and local taxes paid, including state income tax, property tax, and local taxes. The $10K cap was introduced by TCJA in 2017.

Who It's For

Residents of high-tax states (California, New York, New Jersey, Massachusetts) who itemize deductions. The cap limits the benefit for very high earners.

Key Details

•The SALT cap: Before 2018, there was no cap — some taxpayers deducted $50K+ in state/local taxes. The $10K cap significantly raised the effective tax rate for high-income residents of high-tax states.
•What counts: State income tax (or sales tax, your choice), real property tax, personal property tax. You can mix and match up to $10K total.
•Strategy: If you pay estimated state taxes, consider timing your 4th quarter estimated payment (usually due January 15) to either December or January depending on which year you benefit more from the deduction.
•If your SALT alone pushes you past the standard deduction, every additional itemizable dollar (charitable, mortgage interest) is pure incremental benefit.

Glen's Take

Living in Florida means I dodge this entirely — no state income tax. But if you're in California or New York, the SALT cap hurts. Some of my friends pay $30K+ in state income tax alone and can only deduct $10K. It's one of the strongest financial arguments for relocating to a no-income-tax state if your work is remote.

Education Credits (AOTC & LLC)

Savings: $1,000 - $2,500/year per studentBest for: College students and their parents (AOTC); anyone taking courses to improve job skills (LLC)

What It Is

The American Opportunity Tax Credit (AOTC) provides up to $2,500/year per student for the first four years of college (40% refundable — you can get $1,000 even if you owe zero tax). The Lifetime Learning Credit (LLC) covers up to $2,000/year for any post-secondary education.

Who It's For

College students and their parents (AOTC); anyone taking courses to improve job skills (LLC). Income limits apply: AOTC phases out at $90K single / $180K MFJ.

Key Details

•AOTC is a credit, not a deduction — it reduces your tax bill dollar-for-dollar. $2,500 credit at any bracket = $2,500 saved. This is more valuable than a $2,500 deduction.
•AOTC: 100% of first $2,000 + 25% of next $2,000 in qualifying expenses (tuition, fees, books). Max 4 tax years per student.
•Lifetime Learning Credit: 20% of up to $10,000 in expenses = $2,000 max. No limit on years. Covers grad school, professional development, even single courses.
•You can't claim both for the same student in the same year. AOTC is almost always better for undergrads; LLC is for everything else.

Glen's Take

If you're paying for college and not claiming the AOTC, you're literally burning $2,500/year. And the 40% refundable piece means even low-income students get $1,000 back. This credit helped me during my Purdue years. Make sure you or your parents are claiming it — one of those things that's easy to miss.

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Business & Self-Employment

Strategies 16-20 of 27

S-Corp Election for Self-Employment Tax

Savings: $5,000 - $25,000+/yearBest for: Self-employed individuals and LLC owners netting $60K+/year

What It Is

Electing S-Corp status allows business owners to pay themselves a reasonable salary and take remaining profits as distributions — which are exempt from the 15.3% self-employment tax. This is the single biggest tax move for profitable small businesses.

Who It's For

Self-employed individuals and LLC owners netting $60K+/year. Below that threshold, the accounting costs may outweigh the savings.

Key Details

•How it works: You pay yourself a W-2 salary of, say, $80K on a $180K business profit. The remaining $100K comes out as a distribution — no self-employment tax (15.3%) on that $100K. Savings: $15,300.
•The 'reasonable salary' requirement: The IRS requires you to pay yourself a salary comparable to what you'd earn doing the same work for someone else. Setting it too low triggers audit risk.
•Additional costs: S-Corp requires payroll processing ($500-2,000/year), a separate tax return (Form 1120-S, ~$1,000-2,000 to prepare), and quarterly payroll tax filings.
•Break-even point: Most CPAs say the S-Corp election saves money once net business income exceeds $60K-$80K/year. Below that, the administrative costs can eat the savings.

Glen's Take

I run Nimba Solutions as an S-Corp. The self-employment tax savings alone justified the switch within the first year. If you're freelancing or consulting and netting $80K+, you should be talking to a CPA about S-Corp election yesterday. The 15.3% SE tax on profits above your salary is money you never have to pay.

Home Office Deduction

Savings: $1,500 - $5,000+/yearBest for: Self-employed people and independent contractors only

What It Is

Self-employed individuals and independent contractors can deduct a portion of their home expenses (rent/mortgage, utilities, insurance, internet) based on the percentage of their home used exclusively for business.

Who It's For

Self-employed people and independent contractors only. W-2 employees cannot claim this deduction since 2018 (TCJA eliminated it).

Key Details

•Simplified method: $5/square foot, up to 300 sq ft = $1,500 maximum deduction. Easy, no complex calculations.
•Regular method: Calculate the percentage of your home used for business (e.g., 200 sq ft office / 1,500 sq ft home = 13.3%), then deduct that percentage of rent, mortgage interest, utilities, insurance, repairs, and depreciation.
•The regular method usually yields a larger deduction but requires more record-keeping. A 200 sq ft office in a home with $3,000/month total costs = ~$400/month ($4,800/year) in deductions.
•The space must be used 'regularly and exclusively' for business. A desk in the corner of your bedroom that you also use for gaming doesn't count. A dedicated room with a door does.

Glen's Take

I use the regular method because my home office is a dedicated room. The deduction covers a chunk of my rent. The key word is 'exclusively' — the IRS takes that seriously. If your office doubles as a guest room, you're asking for trouble. Get a dedicated space, even if it's small, and take the deduction.

Section 199A QBI Deduction

Savings: $2,000 - $30,000+/yearBest for: Owners of pass-through businesses

What It Is

The Qualified Business Income deduction lets owners of pass-through businesses (sole proprietorships, partnerships, S-Corps, LLCs) deduct up to 20% of their qualified business income from their personal tax return. This effectively lowers the top rate on business income from 37% to 29.6%.

Who It's For

Owners of pass-through businesses. Income limits apply for 'specified service trades or businesses' (law, medicine, consulting, finance) — phases out above $191,950 single / $383,900 MFJ in 2026.

Key Details

•Basic math: If your business earns $150K in qualified business income, the QBI deduction is $30,000 (20%). At a 24% marginal rate, that saves $7,200 in federal taxes.
•Specified service businesses (SSTBs): If you're a doctor, lawyer, consultant, or financial professional, the deduction phases out above the income threshold. Below it, you get the full 20%.
•Non-SSTB businesses: The deduction is available regardless of income, but above the threshold it's limited by the greater of (a) 50% of W-2 wages paid or (b) 25% of W-2 wages + 2.5% of qualified property.
•This deduction is set to expire after 2025 unless Congress extends it. As of 2026, check current legislation — extensions have been proposed but not guaranteed.

Glen's Take

The QBI deduction is complicated but the payoff is huge. 20% off the top of your business income is a massive benefit. My CPA makes sure I capture this every year. If you're self-employed and your tax preparer isn't calculating QBI, find a new tax preparer.

Business Expense Deductions

Savings: $2,000 - $20,000+/yearBest for: Any self-employed individual or business owner

What It Is

Legitimate business expenses reduce your taxable business income dollar-for-dollar. The key is documentation — every deductible expense needs a receipt, a business purpose, and a contemporaneous record.

Who It's For

Any self-employed individual or business owner. The range of deductible expenses is broader than most people realize.

Key Details

•Common deductions: software subscriptions, professional development, business travel, meals (50% deductible when business-related), equipment, professional services (accountant, lawyer), marketing, and health insurance premiums (100% deductible for self-employed).
•Section 179 expensing: Immediately deduct the full cost of business equipment (computers, furniture, machinery) up to $1,220,000 in 2026. A $3,000 computer is a $3,000 deduction in year one.
•Self-employed health insurance: If you're not eligible for employer-sponsored coverage, your health insurance premiums are 100% deductible above the line (reduces AGI, not just taxable income).
•Retirement plan contributions (SEP/Solo 401(k)) are also business deductions — double benefit of tax shelter + business expense reduction.

Glen's Take

The biggest mistake I see freelancers make is not tracking expenses. That $200/month in software subscriptions? Deductible. The conference you flew to? Deductible. Your health insurance premiums? Deductible. I use a separate business bank account and credit card for everything. At tax time, the categorization is already done.

Vehicle Deductions

Savings: $2,000 - $12,000+/yearBest for: Self-employed individuals and business owners who use their vehicle for business

What It Is

Business use of a personal vehicle can be deducted using either the standard mileage rate (70 cents/mile in 2026) or the actual expense method. The standard rate is simpler; the actual method can yield larger deductions for expensive vehicles.

Who It's For

Self-employed individuals and business owners who use their vehicle for business. W-2 employees cannot deduct vehicle expenses (TCJA eliminated this).

Key Details

•Standard mileage rate (2026): $0.70/mile. If you drive 15,000 business miles/year, that's a $10,500 deduction.
•Actual expense method: Deduct the business-use percentage of gas, insurance, repairs, depreciation, lease payments, registration, and parking/tolls. If 60% of your driving is business, deduct 60% of all vehicle costs.
•You must choose one method in the first year you use the car for business. Standard mileage is simpler; actual expenses can be higher for expensive or heavily-used vehicles.
•Keep a mileage log: The IRS requires contemporaneous records of business miles driven, including date, destination, business purpose, and miles. Apps like MileIQ or Everlance automate this.

Glen's Take

I drive to client meetings, conferences, and business events. Every mile gets logged. The standard mileage rate at 70 cents/mile adds up shockingly fast. A 30-mile round trip to a client meeting three times a week is $3,276/year in deductions. Just log the miles — there's no excuse with free mileage-tracking apps.

🏠

Real Estate

Strategies 21-24 of 27

Depreciation on Rental Property

Savings: $3,000 - $15,000+/yearBest for: Real estate investors with rental properties

What It Is

The IRS lets you deduct the cost of a rental property (minus land value) over 27.5 years, even though the property may be appreciating in value. This phantom expense reduces your taxable rental income — and sometimes creates a paper loss you can deduct against other income.

Who It's For

Real estate investors with rental properties. The passive loss rules limit deductions for high earners, but real estate professionals can unlock unlimited deductions.

Key Details

•Basic math: $300K property (building value, excluding land) / 27.5 years = $10,909 annual depreciation deduction. At a 24% bracket, that's $2,618 in tax savings — on a paper expense (you didn't actually spend $10,909).
•Passive loss rules: If your AGI is under $100K, you can deduct up to $25,000 in rental losses against non-passive income. The $25K allowance phases out between $100K-$150K AGI.
•Real estate professional status: If you spend 750+ hours/year on real estate activities AND more time on real estate than your day job, all rental losses become fully deductible — no passive loss limitations.
•Depreciation recapture: When you sell, you'll owe a 25% tax on the accumulated depreciation. But you can defer this with a 1031 exchange (see Strategy #22) or eliminate it entirely at death with a stepped-up basis.

Glen's Take

Depreciation is the reason real estate investors pay so little in taxes. You own a property that goes UP in value while the IRS lets you write off its value as if it's going DOWN. It's the most generous accounting fiction in the tax code. And if you 1031 into bigger properties forever and hold until death, your heirs get a stepped-up basis and nobody ever pays the recapture. Legal, ethical, and extremely powerful.

1031 Exchange (Like-Kind Exchange)

Savings: $10,000 - $200,000+ in deferred taxes per exchangeBest for: Real estate investors looking to sell and reinvest

What It Is

Section 1031 lets you sell an investment property and defer all capital gains taxes by reinvesting the proceeds into another investment property within strict timelines. You can chain 1031 exchanges indefinitely.

Who It's For

Real estate investors looking to sell and reinvest. Especially valuable for investors upgrading from smaller to larger properties or diversifying across markets.

Key Details

•Timeline: You must identify a replacement property within 45 days of the sale and close within 180 days. A qualified intermediary must hold the funds — you can never touch the cash.
•Like-kind is broad: An apartment building can be exchanged for a strip mall, a warehouse, raw land, or even multiple properties. 'Like-kind' means real property for real property — not a specific type.
•Boot: Any cash you take out of the exchange ('boot') is taxable. You must reinvest the full proceeds and take on equal or greater debt to fully defer the gain.
•The ultimate endgame: Chain 1031 exchanges for your entire life, then your heirs receive a stepped-up basis at your death — effectively eliminating all deferred gains. Generations of real estate investors have built empires this way.

Glen's Take

The 1031 exchange is the single most powerful wealth-building tool in the tax code. Sell a $300K property with a $200K gain, defer $40K+ in taxes, and reinvest the full amount into a larger property. Repeat for 30 years. At death, your heirs get a stepped-up basis and all that deferred tax vanishes. I've seen people build $10M real estate portfolios starting with a single duplex — and the 1031 exchange was the engine.

Primary Residence Exclusion ($250K/$500K)

Savings: $37,500 - $100,000+ in excluded capital gains taxBest for: Any homeowner selling their primary residence

What It Is

When you sell your primary residence, you can exclude up to $250,000 in capital gains (single) or $500,000 (married filing jointly) from taxes — completely tax-free. You must have owned and lived in the home for 2 of the last 5 years.

Who It's For

Any homeowner selling their primary residence. One of the most generous tax exclusions available — and it's repeatable (every 2 years).

Key Details

•No income limit. No age requirement. A married couple can exclude $500K in gains every 2 years. Over a lifetime of homeownership, this can shelter millions in appreciation from taxes.
•The 2-of-5 year rule: You must have owned AND used the home as your primary residence for at least 2 of the 5 years before the sale. They don't need to be consecutive.
•Partial exclusion: If you don't meet the 2-year requirement due to a job change, health issue, or unforeseen circumstances, you can claim a prorated exclusion.
•Strategy: Live in a house for 2+ years, sell, exclude the gain, buy another. The serial homeowner strategy has built significant tax-free wealth for disciplined home buyers.

Glen's Take

This is the homeowner's jackpot. Buy a house, live in it for 2+ years, sell it, and the first $250K (or $500K married) in profits is completely tax-free. No other investment offers this. And unlike 1031 exchanges, there's no reinvestment requirement — you can take the cash and do whatever you want with it.

Cost Segregation Study

Savings: $15,000 - $100,000+ in accelerated first-year deductionsBest for: Real estate investors who purchase commercial or residential rental properties worth $500K+

What It Is

A cost segregation study reclassifies components of a building (carpet, fixtures, landscaping, certain electrical) from 27.5-year property to 5, 7, or 15-year property — dramatically accelerating depreciation deductions in the early years of ownership.

Who It's For

Real estate investors who purchase commercial or residential rental properties worth $500K+. The study itself costs $5,000-$15,000, so it needs to generate sufficient accelerated deductions to justify the expense.

Key Details

•Without cost segregation: A $1M building depreciates over 27.5 years = $36,364/year. With cost segregation, 20-30% of the building value ($200-300K) might be reclassified to shorter-lived assets.
•Bonus depreciation (check current rates): Reclassified assets may qualify for first-year bonus depreciation, potentially allowing you to deduct $200K+ in year one instead of $36K.
•The study is performed by a qualified engineer or CPA firm. They physically inspect the property and categorize every component. Cost: $5,000-$15,000.
•Combine with depreciation recapture planning: The accelerated deductions will be recaptured at sale (25% rate), but 1031 exchanges or death basis step-up can defer or eliminate recapture.

Glen's Take

Cost segregation is for serious real estate investors — not your first rental property. But once you're buying $500K+ properties, the math gets compelling fast. Pulling $100K+ in deductions into year one instead of spreading them over 27.5 years dramatically changes your cash flow and tax situation. Pair it with a 1031 exchange strategy and you may never pay the recapture.

🎯

Advanced Strategies

Strategies 25-27 of 27

Roth Conversion Ladder

Savings: $50,000 - $500,000+ over a lifetimeBest for: Early retirees, people taking career breaks, or anyone expecting temporarily low income

What It Is

Converting traditional IRA/401(k) money to a Roth IRA during low-income years (gap years, early retirement, sabbaticals) — paying a small tax now to lock in tax-free growth and withdrawals forever. Each conversion has a 5-year seasoning period before penalty-free withdrawal.

Who It's For

Early retirees, people taking career breaks, or anyone expecting temporarily low income. Also valuable for retirees before Social Security and RMDs kick in.

Key Details

•The gap years: Between retirement and age 72 (when RMDs start), most people have low taxable income. Fill up the lower tax brackets with Roth conversions — pay 10-12% tax now instead of 22-32% later.
•The 5-year rule: Converted amounts can be withdrawn penalty-free after 5 years (regardless of age). This creates a 'ladder' — convert $40K/year, and 5 years later you have $40K/year accessible tax and penalty-free.
•FIRE strategy: Build a 5-year cash/bond bridge to cover expenses while your Roth conversion ladder 'seasons.' After year 5, live off Roth conversions indefinitely.
•Tax bracket filling: In 2026, a single filer can have $48,475 in taxable income and stay in the 12% bracket. Convert up to this threshold and pay just 12% instead of whatever your future bracket might be.

Glen's Take

The Roth conversion ladder is the secret weapon of the FIRE community, and it works for anyone with a transition period between W-2 income and traditional retirement. I write about this on my FIRE calculator page. The idea is elegant: pay a little tax now, during your lowest-income years, to avoid paying a lot of tax later when RMDs force distributions at potentially higher brackets. Plan ahead — the 5-year rule means you need to start converting 5 years before you need the money.

Income Timing & Bracket Management

Savings: $2,000 - $15,000+/yearBest for: Self-employed individuals, freelancers, business owners, and people with significant capital gains or year-end bonuses

What It Is

Strategically accelerating or deferring income between tax years to manage which tax bracket you fall into. This is especially powerful for self-employed individuals, freelancers, and anyone with variable income.

Who It's For

Self-employed individuals, freelancers, business owners, and people with significant capital gains or year-end bonuses. Anyone whose income varies meaningfully year-to-year.

Key Details

•Deferring income: If you're having a high-income year and expect next year to be lower, delay invoicing or contract payments to January. Shift income to the lower-bracket year.
•Accelerating deductions: Prepay deductible expenses (state taxes, charitable donations, business expenses) in your high-income year to maximize the deduction value at your higher bracket.
•Capital gains timing: Harvest gains in low-income years (0% long-term rate is available under $48,350 single). Defer gains to years when you're in a lower bracket.
•Bonus timing: If your employer offers flexibility, deferring a December bonus to January can shift income to a year with potentially lower total income.

Glen's Take

I think about bracket management constantly as an S-Corp owner. The difference between landing in the 24% bracket vs. the 32% bracket on $50K of income is $4,000. By timing invoices, prepaying expenses, and managing distributions, I can often keep myself in a lower bracket. It takes planning — you can't do this on April 14th.

Asset Location (Tax-Efficient Placement)

Savings: $1,000 - $10,000+/yearBest for: Any investor with both taxable and tax-advantaged accounts

What It Is

Placing different types of investments in the right account type to minimize taxes. High-tax assets (bonds, REITs) go in tax-advantaged accounts; low-tax assets (index funds with qualified dividends, municipal bonds) go in taxable accounts.

Who It's For

Any investor with both taxable and tax-advantaged accounts. The larger your portfolio, the bigger the benefit.

Key Details

•Tax-advantaged accounts (IRA, 401(k)): Hold bonds, REITs, actively managed funds, and anything generating ordinary income. These assets would be taxed at your full income rate in a taxable account.
•Taxable accounts: Hold total market index funds (VTI), international funds (VXUS), individual stocks. These generate qualified dividends (0-20% rate) and long-term capital gains (0-20% rate).
•Roth accounts: Hold your highest-growth investments. Since Roth withdrawals are tax-free, you want maximum appreciation in this account. Small-cap growth, aggressive growth funds, individual stocks.
•Vanguard research estimates proper asset location can add 0.25-0.75% in annual after-tax returns. On a $1M portfolio, that's $2,500-$7,500/year — compounding over decades.

Glen's Take

Asset location is the tax optimization most investors completely ignore. They hold a REIT fund in their taxable account paying 32% on distributions, while their Roth IRA holds Treasury bonds yielding 4%. Swap them. Put the REIT in the Roth (tax-free distributions) and the bonds in the taxable account (lower rates). Same investments, same risk, significantly less tax. It's free optimization.

My Tax Story: From Hedge Fund to S-Corp

When I ran Global Speculation LP — my hedge fund — I learned more about taxes than I ever wanted to. Hedge fund taxation is a beast: carried interest rules, K-1s that arrive in September, quarterly estimated payments, and the constant game of short-term vs. long-term gains. The tax complexity alone is enough to make you quit active management.

When I transitioned to Nimba Solutions (Salesforce consulting and AI development), I set up an S-Corp on day one. The self-employment tax savings were immediate — paying myself a reasonable salary and taking distributions above that meant I kept an extra five figures per year that would have gone to FICA taxes on self-employment income.

Add in the SEP IRA contributions, home office deduction, Section 199A QBI deduction, and disciplined business expense tracking, and my effective tax rate as a self-employed person is dramatically lower than it was as a W-2 employee earning less money. That's not a loophole — it's the tax code working as designed. The government incentivizes entrepreneurship, retirement savings, and real estate investment. I just follow the incentives.

S-Corp

Business structure since day one

5 Strategies

Used annually (SEP, QBI, home office, S-Corp, expenses)

$20K+

Estimated annual tax savings vs. W-2

7 Tax Mistakes That Cost You Thousands

Knowing what TO do is only half the battle. Here are the mistakes I see most often — each one costs real money.

Not maxing your 401(k) match

$2,000 - $10,000+/year

If your employer matches 50% up to 6% and you contribute less than 6%, you're declining a 50% guaranteed return. No investment in history beats that. This is the financial equivalent of leaving cash in the parking lot.

Selling winners before 365 days

$1,000 - $10,000+/year

Short-term gains are taxed at your ordinary income rate (up to 37%). Long-term gains max out at 20%. On $50K in gains, that's a $8,500 difference. Set a calendar reminder.

Ignoring the HSA

$1,000 - $3,000/year

The HSA has a triple tax advantage that no other account offers. If you have an HDHP and aren't maxing your HSA, you're leaving the most tax-efficient account in the code on the table.

Holding REITs in taxable accounts

$500 - $5,000/year

REIT dividends are taxed as ordinary income (up to 37%). Hold them in your IRA or 401(k) where the dividends grow tax-free. This costs you nothing to fix — just move the holding.

Not tracking business expenses

$2,000 - $10,000/year

Every legitimate business expense you don't claim is a voluntary donation to the IRS. Software, travel, meals, home office — get a dedicated business credit card and track everything.

Filing as a sole proprietor above $80K

$5,000 - $15,000/year

Self-employment tax is 15.3% on all net earnings. An S-Corp election lets you split income between salary and distributions — avoiding SE tax on the distributions. The accounting costs are $2-3K/year; the savings are multiples of that.

Not doing Roth conversions in low-income years

$10,000 - $100,000+ over a lifetime

Career breaks, early retirement, sabbaticals — these are golden opportunities to convert pre-tax money to Roth at a low rate. Most people don't think about taxes until April. The planning happens in January.

Tax Planning Calendar: When to Act

Tax savings happen throughout the year, not on April 14th. Here are the key deadlines and planning windows.

January

Max out HSA for the new year. Start Roth conversion ladder if in a low-income year. Review W-4 withholding.

April 15

Tax filing deadline. Last day to contribute to prior-year IRA/Roth IRA. Q1 estimated tax payment due.

June 15

Q2 estimated tax payment. Mid-year tax projection — are you on track for your target bracket?

September 15

Q3 estimated tax payment. Extended return deadline. SEP IRA contribution deadline for extended returns.

October - November

Tax-loss harvesting season. Review portfolio for gains/losses. Bunch charitable deductions. Prepay deductible expenses.

December

Max 401(k) contributions. Complete Roth conversions. Make charitable donations. Last day for QCDs (age 70.5+). Final income timing decisions.

Frequently Asked Questions

What is the single best way to lower my taxes?▾

For most W-2 employees, maximizing contributions to tax-advantaged retirement accounts (401(k), IRA, HSA) is the single highest-impact move. Contributing $23,500 to a 401(k) in 2026 at a 24% marginal rate saves $5,640 in federal taxes immediately. If your employer offers an HSA-eligible health plan, adding $4,300 in HSA contributions saves another $1,032. That's $6,672 in tax savings from two accounts alone.

How much can I save by forming an S-Corp?▾

An S-Corp can save self-employed individuals 15.3% in self-employment tax on business profits above a reasonable salary. For example, if your business nets $200,000 and you pay yourself a $100,000 salary, you avoid self-employment tax on the remaining $100,000 — saving roughly $15,300 per year. This strategy typically makes sense once your business nets over $60,000-$80,000 annually.

Is tax-loss harvesting worth it?▾

Yes, especially for high-income investors. Tax-loss harvesting lets you sell losing investments to offset capital gains. You can deduct up to $3,000 in net losses against ordinary income per year, and carry forward unlimited losses to future years. On a $500K portfolio, systematic tax-loss harvesting can add 0.5-1.5% in after-tax returns annually according to Wealthfront and Betterment data.

What is the HSA triple tax advantage?▾

The HSA (Health Savings Account) is the only account in the US tax code with three tax benefits: (1) contributions are tax-deductible, (2) investments grow tax-free, and (3) withdrawals for qualified medical expenses are tax-free. After age 65, you can withdraw for any purpose penalty-free (just pay income tax like a traditional IRA). It's effectively a super-powered retirement account with a medical expense bonus.

Can I deduct my home office on my taxes?▾

Only if you are self-employed or an independent contractor. W-2 employees cannot deduct home office expenses since the Tax Cuts and Jobs Act of 2017. For self-employed individuals, you can use the simplified method ($5 per square foot, up to 300 sq ft = $1,500 max) or the regular method, which deducts actual expenses proportional to your office space. The regular method often yields a larger deduction.

What is a backdoor Roth IRA and is it legal?▾

Yes, it is completely legal and IRS-approved. A backdoor Roth IRA involves contributing to a traditional IRA (non-deductible) and then immediately converting it to a Roth IRA. This allows high earners who exceed the Roth IRA income limits ($161,000 single / $240,000 married in 2026) to still get money into a Roth IRA. The key caveat is the pro-rata rule: if you have existing pre-tax IRA balances, part of the conversion will be taxable.

How does a 1031 exchange work?▾

A 1031 exchange lets you defer capital gains tax when selling an investment property by reinvesting the proceeds into a 'like-kind' property within strict timelines: you must identify a replacement property within 45 days and close within 180 days. You can chain 1031 exchanges indefinitely, and if you hold the final property until death, your heirs receive a stepped-up basis — effectively eliminating all deferred gains. It only applies to investment/business property, not your primary residence.

Is it better to take the standard deduction or itemize?▾

For 2026, the standard deduction is $15,700 for single filers and $31,400 for married filing jointly. You should only itemize if your total deductible expenses (mortgage interest, state/local taxes up to $10,000, charitable contributions, medical expenses above 7.5% of AGI) exceed the standard deduction. Since the Tax Cuts and Jobs Act nearly doubled the standard deduction, roughly 87% of taxpayers now take the standard deduction. If you're close to the threshold, consider 'bunching' deductions — concentrating charitable giving into alternating years to itemize in one year and take the standard deduction the next.

Recommended Resources

Tools & books I actually use and recommend

Interactive Brokers

Low commissions, global market access, and professional-grade tools. This is where I hold my positions.

Open an Account

A Random Walk Down Wall Street

Burton Malkiel's classic case for index investing. The book that convinced millions to stop stock-picking.

View on Amazon

The Intelligent Investor

Ben Graham's timeless guide to value investing. The book Warren Buffett calls "the best investing book ever written."

View on Amazon

Some links above are affiliate links. I only recommend products I personally use. See my full disclosures.

The Bottom Line

You don't need to use all 27 strategies. Most W-2 employees can save thousands with just three moves: max your 401(k), fund an HSA, and do a backdoor Roth. If you're self-employed, add the S-Corp election and QBI deduction and you're looking at five-figure annual savings.

The tax code rewards people who plan ahead. Every strategy on this page is legal, well-documented, and used by millions of Americans. The only difference between people who use them and people who don't is awareness.

You earned the money. Learn the rules. Keep more of it.

Disclaimer: This article is for educational purposes only and does not constitute tax advice. Tax laws change frequently. Consult a qualified CPA or tax professional for advice specific to your situation. Glen Bradford is not a CPA, enrolled agent, or tax attorney.

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