A buddy of mine will earn $500K+ this year as a one-person business in a high tax state If they don't do anything, they would have to pay a tax bill of ~$250K between federal, state & self-employment taxes Here's what I told them to save 6-figures in taxes this year alone:

1 - Choose to file your taxes as an S-Corp This bifurcates your salary into a fair W-2 income you pay yourself & the rest is distributed as profits You only have to pay self-employment taxes (social security & medicare) on the W-2 This alone saves many thousands of dollars

2 - Have a CPA calculate the optimal W-2 salary to pay yourself You don't want the lowest possible W-2 salary since that could reduce your Qualified Business Income or QBI deduction Plus, it limits how much you can contribute to a retirement plan Pay a pro to calculate this!

3 - Hire your spouse to the business & pay them a salary Now between the two of you, you can get a $138K tax deduction by setting up a Solo 401k on @carryhq_ If you want to put even more into retirement, set up a defined benefit plan & now you can both get a ~$300K deduction

4 - Pay your state taxes through your business entity If you and your spouse pay your state taxes on your personal return, you can't deduct more than $10K *combined* But at that income, you should pay state taxes through your business entity & the entire amount is deductible!

5 - Track all big deductible expenses Deduct your home office from your mortgage Travel to/from conferences Pre-pay any big software expenses before the end of the year (ask vendors if you can pay early!) Put as much as possible on a credit card that pays out a lot of points