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Tax strategies for investors

Start from the income you already have, not from the deduction that sounds best.

38 strategy guides, grouped by the income or asset each one applies to. Every guide states the qualification test first, then the mechanics, then a worked example with its assumptions written out.

Level describes the documentation burden, not the size of the deduction.

Start from your situation

A deduction that transforms a rental owner's return does nothing for a salaried employee with no property. Pick the group that matches your income, then read the one guide that changes your next decision.

Real estate

Depreciation, deferral, and the participation tests that decide whether a rental loss is usable this year.

Strategy What it does Level
Cost segregation Reclassifies building components into shorter depreciation lives so deductions land in the early years. advanced
Bonus depreciation Deducts a large share of qualifying property costs in the first year instead of over its useful life. intermediate
Rental property depreciation Deducts a rental building over 27.5 years and tracks the basis that matters at sale. beginner
Real estate professional status Removes the passive loss limit so rental losses can offset ordinary income. advanced
REPS vs the STR loophole The 750-hour and more-than-half tests next to the seven-day average and the 100-hour test, and which one a W-2 earner can meet. advanced
Short-term rental loophole Deducts short-term rental losses against W-2 income when average stays are seven days or less and you materially participate. intermediate
Depreciation recapture on a short-term rental What the loophole costs on the day you sell: Section 1250 gain at up to 25 percent and Section 1245 recapture at ordinary rates. advanced
1031 exchange Defers capital gains tax when sale proceeds are reinvested in like-kind property. advanced
Installment sale Spreads the gain on a sale across the years the payments are actually received. intermediate
Opportunity zone investing Defers and reduces capital gains reinvested in designated communities. advanced
Qualified opportunity zone funds Holds opportunity zone investments through a fund that has to meet asset and improvement tests. advanced
Primary residence gain exclusion Excludes up to $250,000 of gain, or $500,000 filing jointly, on the sale of a main home under Section 121. beginner

Business and entity

Entity choice, owner compensation, equipment, and the deductions that only exist once there is a business.

Strategy What it does Level
S-corp election Splits owner pay between salary and distributions to cut self-employment tax. intermediate
Qualified business income deduction Deducts up to 20% of qualified pass-through business income. intermediate
Section 179 expensing Expenses qualifying equipment in the year it is placed in service instead of depreciating it. beginner
Business vehicle deduction Deducts vehicle costs through Section 179, standard mileage, or the actual expense method. intermediate
Home office deduction Deducts the business-use share of your home under the simplified or actual expense method. beginner
Augusta rule Rents your home to your business for up to 14 days a year without reporting the rent as income. intermediate
Hiring your children Puts family members on payroll for real work, moving income into a lower bracket. intermediate
Pass-through entity tax Pays state tax at the entity level so the deduction survives the federal SALT cap. intermediate
Captive insurance Forms a licensed insurance company to cover real business risks and deduct the premiums. advanced

Retirement and benefit accounts

Contribution ceilings, conversions, and the accounts that shelter growth rather than a single year of income.

Strategy What it does Level
Solo 401(k) Combines employee deferrals and employer contributions for an owner-only business. intermediate
Health savings account Contributions, growth, and qualified medical withdrawals all escape tax. beginner
Dependent care FSA Pays childcare and dependent care costs with pre-tax payroll dollars. beginner
Backdoor Roth IRA Reaches a Roth IRA through a non-deductible contribution and conversion when income exceeds the Roth limits. intermediate
Mega backdoor Roth Uses after-tax 401(k) contributions and in-plan conversion to add Roth dollars above the deferral limit. advanced
Roth conversion ladder Converts traditional balances in planned yearly slices to control the bracket and open penalty-free access. intermediate
Self-directed IRA Holds real estate, private companies, and other alternative assets inside a retirement account. advanced
Net unrealized appreciation Moves employer stock out of a 401(k) so the appreciation is taxed at capital gains rates. advanced

Investments and capital gains

Timing realized gains and losses in a taxable brokerage account.

Strategy What it does Level
Tax loss harvesting Sells losing positions to offset realized gains while respecting the wash-sale rule. beginner
Tax gain harvesting Realizes gains deliberately in a low-income year to reset basis at the 0% or 15% rate. intermediate
Qualified small business stock Excludes gain on qualifying C corporation stock held five years under Section 1202. advanced

Charitable giving

Two structures that separate the year of the deduction from the year the money reaches a charity.

Strategy What it does Level
Donor-advised fund Takes the charitable deduction in the year the account is funded and grants the money out later. intermediate
Charitable remainder trust Converts an appreciated asset into lifetime income with a current deduction and deferred gain. advanced

Timing, residency, and family

Moves that change when income is taxed, where it is taxed, or who reports it.

Strategy What it does Level
Bunching deductions Concentrates two years of charitable gifts and other itemized deductions into one year to clear the standard deduction. beginner
Estimated tax payments Times quarterly payments and safe-harbor amounts so you avoid underpayment penalties. beginner
Income shifting Moves income to family members or entities taxed at lower rates. intermediate
State tax residency Establishes domicile and day-count evidence before changing the state that taxes your income. advanced

Retirement plan guides

Five plan guides sit alongside the strategies above. They cover contribution ceilings, deadlines, and who each plan fits.

  • Traditional vs Roth 401(k)

    Which contribution type fits your current and expected bracket.

  • 401(k) contribution strategies

    Capturing the full employer match, catch-up contributions, and deferral order.

  • SEP IRA

    A high-ceiling, low-paperwork plan for self-employed income.

  • SIMPLE IRA

    A small-business plan with mandatory employer contributions and lighter administration.

  • Defined benefit plan

    The largest deductible contributions available to a stable, high-income owner.

Common questions

Which strategy should I implement first?

Start with the one that fits the income you already have. A rental owner usually gets the largest first-year move from cost segregation combined with bonus depreciation. A W-2 employee with no property gets further with an HSA, bunching deductions, or the short-term rental loophole if a property is already in the plan.

Do I need a CPA to implement these strategies?

Some are self-service: HSA contributions, a solo 401(k), tracking mileage. Others are not. A cost segregation study has to be produced by qualified engineers, a 1031 exchange needs a qualified intermediary before closing, and real estate professional status stands or falls on contemporaneous time logs a CPA should review.

Can I use several strategies at once?

Yes, and most plans do. Cost segregation and bonus depreciation work on the same property. A solo 401(k) and an HSA sit alongside an S-corp election. The constraint is interaction: a deduction that lowers wages can shrink a retirement contribution limit, and passive losses only help if you clear the participation tests.

What is the difference between a deduction and a credit?

A deduction reduces taxable income, so its value is the deduction multiplied by your marginal rate. In the 24% bracket a $10,000 deduction saves $2,400. A credit reduces the tax itself, so a $10,000 credit saves $10,000. Almost everything on this page is a deduction or a deferral rather than a credit.

How much can these strategies actually save?

It depends on your marginal rate, your income type, and whether the facts support the strategy before you file. The savings figures on each page are worked examples with their assumptions written out. Run the same math with your own numbers rather than with the example.

Sources to check

Check primary guidance and your own records before you treat any page as a final answer.

Not sure which one applies to you?

The situation pages sequence four or five strategies for one kind of earner. The compare guides take two strategies that both sound right and show where each one wins.

Open the compare guides Start from a situation

Educational content only. It is not individual tax, legal, or investment advice.