Tax Strategies
Stop overpaying, and stop guessing. Tax strategies are legal ways to arrange income, expenses, entities and accounts within the Internal Revenue Code. Each report below explains one strategy in plain English: what it is, how it works, the good, the bad and the ugly, and the rules behind it, with links to the statute and IRS guidance.
Business
Strategies built for owners who want to keep more of what the business earns.
The Augusta Rule (IRC §280A(g)): Renting Your Home for Fewer Than 15 Days
The Augusta Rule (IRC §280A(g)) excludes rent from gross income when a home used as a residence is rented for fewer than 15 days in a year.
- IRC §280A(g)
- Complexity: Medium
- Audit Risk: Medium
The Solo 401(k): How a One-Participant 401(k) Plan Works for Business Owners
A Solo 401(k) is a 401(k) plan for a business owner with no employees (or only a spouse), allowing both employee deferrals and employer contributions.
- IRC §401(k), §402(g), §415(c)
- Complexity: Medium
- Audit Risk: Low
Accelerated Depreciation: Bonus Depreciation (IRC §168(k)) and Section 179 Expensing After the 2025 Law
Accelerated depreciation lets a business deduct much or all of the cost of qualifying equipment in the first year through bonus depreciation (IRC §168(k)) or Section 179 expensing.
- IRC §168(k), §179
- Complexity: Medium
- Audit Risk: Medium
The Research and Development Tax Credit (IRC §41): How the R&D Credit and Domestic Research Expensing Work
The Research and Development Tax Credit (IRC §41) is a federal credit for qualified research spending, claimed on Form 6765, with a payroll tax option for certain small businesses.
- IRC §41, §174A
- Complexity: High
- Audit Risk: High
S Corporation Reasonable Compensation: Owner Salaries, Distributions and Payroll Taxes
S Corporation Reasonable Compensation is the IRS requirement that an S corporation pay its working shareholder-officers a reasonable wage before taking non-wage distributions.
- IRC §1361–§1379; §3121
- Complexity: Medium
- Audit Risk: High
Hiring Your Children in Your Business: Payroll Tax Exemptions, Reasonable Pay and the Kiddie Tax
Hiring Your Children describes a parent's business paying its children wages for real work, which can shift income to a lower bracket and, in some business forms, avoid payroll taxes.
- IRC §3121(b)(3)(A), §3306(c)(5), §162
- Complexity: Low
- Audit Risk: Medium
The Home Office Deduction (IRC §280A(c)): Rules, Methods and Recapture
The Home Office Deduction (IRC §280A(c)) lets self-employed people deduct costs for part of a home used regularly and exclusively as a principal place of business.
- IRC §280A(c)
- Complexity: Low
- Audit Risk: Medium
The Qualified Business Income Deduction (IRC §199A): The 20% Pass-Through Deduction After the 2025 Law
The Qualified Business Income Deduction (IRC §199A) lets owners of pass-through businesses deduct up to 20% of qualified business income; Public Law 119-21 made it permanent.
- IRC §199A
- Complexity: Medium
- Audit Risk: Low
The Health Savings Account (HSA): Tax Treatment, HDHP Rules, 2025 Limits and 2025 Law Changes
A Health Savings Account (HSA) is a tax-favored account for people covered by a high-deductible health plan, used to pay or save for medical expenses.
- IRC §223
- Complexity: Low
- Audit Risk: Low
Cash Balance and Defined Benefit Plans: How Large Pension Contributions Work for Business Owners
A Cash Balance Plan is a defined benefit pension plan that expresses benefits as an account balance, often used by high-income business owners to make large deductible contributions.
- IRC §401(a), §412, §415(b)
- Complexity: High
- Audit Risk: Medium
Real Estate & Investing
How property and investment owners defer, reduce and plan for gains.
Buy, Borrow, Die: Borrowing Against Appreciated Assets and the Stepped-Up Basis at Death
Buy, Borrow, Die describes holding appreciated assets, borrowing against them instead of selling, and passing them at death with a basis stepped up under IRC §1014.
- IRC §1014
- Complexity: High
- Audit Risk: Low
Cost Segregation Studies: Faster Depreciation for Buildings Under IRC §168
Cost segregation splits the cost of a building into parts with shorter depreciation lives under IRC §168, which can move deductions into earlier years.
- IRC §168
- Complexity: High
- Audit Risk: Medium
The Short-Term Rental Tax Strategy: The 7-Day Average Stay Rule and Material Participation
When guests stay an average of 7 days or less, a rental is not a rental activity under the passive loss rules, so an owner who materially participates may treat losses as non-passive.
- Treas. Reg. §1.469-1T(e)(3)(ii)(A)
- Complexity: High
- Audit Risk: High
Real Estate Professional Status (IRC §469(c)(7)): The 750-Hour and More-Than-Half Tests
Real estate professional status under IRC §469(c)(7) lets a qualifying taxpayer who materially participates treat rental real estate losses as non-passive.
- IRC §469(c)(7)
- Complexity: High
- Audit Risk: High
The 1031 Exchange (IRC §1031): Deferring Gain on Like-Kind Real Estate
A 1031 exchange under IRC §1031 defers gain when business or investment real property is exchanged for other like-kind real property.
- IRC §1031
- Complexity: High
- Audit Risk: Medium
Opportunity Zones and Qualified Opportunity Funds (IRC §1400Z-2): Deferral, Basis Increases and the 2025 Changes
Opportunity Zones let investors defer capital gains by investing them in a Qualified Opportunity Fund and, after 10 years, exclude gain on the fund investment itself.
- IRC §§1400Z-1, 1400Z-2
- Complexity: High
- Audit Risk: Medium
Tax-Loss Harvesting: Capital Loss Netting, the $3,000 Limit and the Wash-Sale Rule (IRC §1091)
Tax-loss harvesting is selling investments at a loss to offset capital gains and up to $3,000 of other income, within the wash-sale rule of IRC §1091.
- IRC §§1091, 1211
- Complexity: Medium
- Audit Risk: Low
Qualified Small Business Stock (IRC §1202): The Gain Exclusion and the 2025 Changes
Qualified Small Business Stock under IRC §1202 lets non-corporate holders of original-issue C corporation stock exclude some or all of the gain when they sell.
- IRC §1202
- Complexity: High
- Audit Risk: Medium
Retirement & Charitable
Save for later and give with purpose, using the rules that reward both.
The Backdoor Roth IRA and Mega Backdoor Roth: Conversions, the Pro-Rata Rule and Form 8606
A Backdoor Roth IRA is a nondeductible traditional IRA contribution followed by a Roth conversion, used by people whose income is too high to contribute to a Roth IRA directly.
- IRC §408A, §408(d)(2)
- Complexity: Medium
- Audit Risk: Low
Donor-Advised Funds: How They Work, Bunching Charitable Gifts and the 2026 Charitable Deduction Changes
A Donor-Advised Fund is an account at a sponsoring charity that receives a donor's deductible gift now and makes grants to other charities over time on the donor's advice.
- IRC §170, §4966, §4967
- Complexity: Low
- Audit Risk: Low
Charitable Remainder Trusts (CRATs and CRUTs): Income for Life, a Gift to Charity and the IRS Rules
A Charitable Remainder Trust is an irrevocable trust that pays income to the donor or others for life or up to 20 years, then passes the remainder to charity.
- IRC §664, §170(f)(2)
- Complexity: High
- Audit Risk: Medium
Installment Sales (IRC §453): Spreading Gain Over Time, Form 6252 and the Rules That Limit Deferral
An Installment Sale (IRC §453) is a sale where at least one payment comes after the year of sale, letting the seller report gain as payments are received.
- IRC §453, §453A
- Complexity: Medium
- Audit Risk: Low
Not sure which of these fit your business? Talk it through with our team at no cost.
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