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The Tax Game: Play to Win

Taxes aren’t about paying more—they’re about keeping more. By using the right strategies, you can legally reduce your tax bill and keep more of your hard-earned money. Here’s how to play smarter.

Strategy 1: Shift Personal Expenses to Business

Many everyday expenses can be partially or fully deductible if they’re used for business purposes:

  • Home Office Deduction: Deduct $5 per square foot, up to 300 square feet.
  • Cell Phone Bill: If 70% of your usage is business-related, 70% of the bill is deductible.
  • Education Expenses: Courses, certifications, or training programs that improve your business skills are 100% deductible.

Strategy 2: Defer Income to Stay in a Lower Tax Bracket

If you’re close to moving into a higher tax bracket, you can delay receiving income until the next tax year. How?

  • Hold off invoicing clients until January.
  • Push large transactions to the next fiscal year.

This strategy works well for self-employed individuals and business owners who have flexibility in receiving payments.

Strategy 3: Maximize Retirement Contributions

Retirement savings not only build long-term wealth but also lower taxable income. For 2023, here’s how you can save big:

  • Solo 401(k): Contribute up to $66,000, reducing your taxable income significantly.
  • SEP IRA: Set aside up to 25% of your net earnings, up to $66,000.

Case Study: Lisa’s Tax Savings

Lisa, a consultant, applied these strategies effectively:

  • Deferred $30,000 of income to the next year.
  • Contributed $20,000 to her Solo 401(k).
  • Dropped from the 32% to the 24% tax bracket, saving $9,000 in taxes.

Conclusion

Winning at taxes isn’t about cheating—it’s about playing strategically. By shifting expenses, deferring income, and maximizing deductions, you can legally reduce your tax liability and keep more of your earnings.

Need a personalized tax strategy? Call Guerrero CPA at 210-490-7100—our team will craft a winning tax plan for you.