The Tax Strategies That Saved Me Six Figures Legally
I’m Jaxon Forge, founder of MoneyForged.com, and if you’ve been following the grind on the site or digging into “The Psychology of Making Money,” you know I don’t peddle shortcuts or shady loopholes. What I share is battle-tested, 100% legal moves that actually moved the needle for me when my business started printing real money. We’re talking six-figure savings over a few years—money that went straight back into compounding assets instead of Uncle Sam’s pocket.
This isn’t theory. Back when I crossed into consistent high six figures (and later seven), my CPA showed me the bill and it felt like a gut punch. Revenue was up, but after taxes, it didn’t feel like freedom—it felt like I was working for the government half the year. I got ruthless about optimization without crossing lines. Here’s what actually worked, in the order I implemented them, and why they stacked to save me serious cash.
First, I restructured the business entity the right way. I started as a sole prop—simple, but brutal on self-employment taxes (15.3% on every dollar of profit). Switching to an S-Corp election changed everything. I paid myself a reasonable salary (what the IRS would call “fair” for my role—don’t lowball it or they come knocking), and the rest flowed through as distributions, dodging self-employment tax on that portion. For someone pulling mid-six figures in profit, this alone shaved tens of thousands annually in FICA taxes. Add the permanent Qualified Business Income (QBI) deduction—now boosted under recent laws—and you’re effectively taxing a big chunk of pass-through income at a lower effective rate. No more bleeding 15.3% on the full pie—huge unlock.
Next, I maxed out every tax-advantaged retirement vehicle I could touch. Solo 401(k) or SEP IRA became non-negotiable. As a self-employed guy, I could shove in massive pre-tax contributions—up to around $70k+ in recent years (with catch-up limits if you’re older). That dropped my taxable income hard while building wealth tax-deferred. I layered in HSA contributions too (if you have a high-deductible health plan)—triple tax-free: deduct now, grow tax-free, withdraw tax-free for medical. For high earners, these aren’t small potatoes; they compound into six figures of saved taxes over time because you’re reducing current brackets and letting money grow untouched.
Then came aggressive business deductions and depreciation plays. I stopped treating expenses like personal hits and started tracking everything legit: home office (portion of rent/mortgage, utilities, internet), vehicle mileage or actual expenses if business-heavy, equipment, software, marketing, professional fees, travel for client meetings or conferences. But the real accelerator? Section 179 and bonus depreciation. With recent updates restoring 100% immediate expensing on qualifying assets (computers, vehicles under limits, machinery, even some improvements), I timed purchases to front-load deductions. Bought a new rig for the business? Deduct the full cost in year one instead of spreading it. That wiped out taxable income in fat years and saved me five-to-six figures in deferred tax hits.
Charitable giving got strategic too—not just feel-good donations, but bunching them into donor-advised funds or appreciated stock transfers. Donate stock that’s up big? Avoid capital gains tax entirely, deduct fair market value, and the charity gets the full amount. For high earners phased out of itemized deductions otherwise, this keeps the write-off alive and moves money to causes I care about while slashing the bill.
I also got serious about income timing and deferral. Cash-basis business? Delay invoicing big clients into January if it pushes income to a lower-bracket year or takes advantage of bracket adjustments. Defer bonuses or distributions. On the flip side, accelerate deductions—prepay expenses, make January’s rent payment in December. Small moves, but when you’re in the top brackets, they compound fast.
Finally, I hired pros early—CPA who specializes in entrepreneurs, not just a tax filer—and reviewed quarterly. No waiting for April surprises. We modeled scenarios: “If I buy this asset, contribute max to retirement, elect S-Corp tweaks—what’s the net save?” That alone prevented overpaying by catching missed deductions or credits.
Look, none of this is sexy. No crypto tricks, no offshore nonsense—just boring, consistent execution. But it freed up capital to reinvest in boring businesses, index funds, real estate—stuff that compounds quietly. The result? I kept six figures more over the years, all legally, and built real net worth instead of just higher income statements.
If you’re pulling good money but the tax man still feels like your biggest partner, start here: audit your entity, max retirement, hunt every deduction, time income/expenses, and get a sharp advisor. Pay the planning tax now—it’s way cheaper than the alternative.
Stay grinding in silence. The numbers will speak eventually.
— Jaxon Forge
MoneyForged.com
Forge Your Wealth. No Excuses.
