Home Run US Tax Strategies
Despite the Trump tax changes in 2017, there remain a number of ways for US taxpayers to save money by utilizing foreign domiciles and structures. There are also a few US based strategies that work very well. I want to break down the core of a few of these strategies, because they are insanely useful.
Scenario 1: Staying in the US
In this scenario, you have no intention of leaving the US physically or incorporating overseas. Your core strategy then becomes focused on deductions and deferments. There are a lot of dumb deductions out there so I'm only going to focus on the high impact deductions that can actually save you tens of thousands of dollars per year.
1) Retirement contributions. If you are self employed, you can contribute both your employee and employer contributions to a 401k. In 2025, the combined limit is $70,000 for a 401k. You can max out your IRA in the same year that you contribute to your 401k (as long as your income is under $165k as a single filer or $246k as a joint filer).
What this means is that you can build wealth (and you can even give yourself loans subject to certain conditions) with money you make in retirement contributions that actually lower your AGI - in effect paying a lower tax rate on the rest of your income AND allowing for tax deferred growth in your net worth.
2) Depreciation. According to the IRS, any property you obtain for the production of income can be depreciating on a varying schedule. You get a tax deduction every year based on the depreciation schedule. For foreign property for instance, it's depreciated over 30 years. For a taxi, it's 3 years. Some property (such as heavy machinery) can be depreciated in the same year under something called section 179. You can even buy property in an LLC (which is a pass through entity to your schedule C) and lease it out to another business you own, capturing the depreciation in the LLC, offset by leasing income, and creating an expense in the business that leases the property. In effect, you get two deductions.
Thomson Reuters publishes tables that follow IRS guidance and will tell you exact depreciation schedules for various types of assets. If you have some cash sitting around and want to offset future liabilities, buy some productive assets! The shorter the depreciation time, the bigger your tax deductions will be.
