5 Tax Shelters and How Can They Help You Save Taxes

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When you think of the word tax shelters, you probably immediately think of something that’s super sketchy and not exactly the best legal practice. Sure, that may be the case when you are storing your cash in an off-shore island in order to not pay taxes in the US. However, there are plenty of legal tax shelters that you can take advantage of that will help you save on your taxes. And this is something that’s super important for a lot of your business owners out there who are looking to save money wherever you can to help push your business forward. Economic times are still tough for a lot of businesses, so when you can save on your taxes this way, you are going to be that much better off.

That’s where we’re here to help! We want to help you take advantage of some of the top legal tax shelters that will help your business out. Keep reading down below and you’re going to get the inside scoop on these tax shelters and who can take advantage of them.

1. Real Estate

No matter whether you are an individual paying taxes or whether you are a small business owner, owning real estate is a great way to get out of those taxes. You will be able to deduct some costs of owning the property from your taxes every year in order to save a ton of cash. You are going to be able to deduct the cost or a portion of the cost of points, your mortgage insurance, any lines of credit, and that property tax that you’re paying already. However, the fact of the matter is that you have to own at least 10% of the property if you want to get those deductions.

If you don’t own at least 10% of the property, you might want to look into getting a larger share of the real estate. These are some amazing tax deductions that you can take advantage when you file your taxes next year that you might not be taking advantage of at the moment.

2. Home Office Deduction

Another fantastic way that you can take advantage of a legal tax shelter is using your home office to your advantage if you are an entrepreneur. This is great if you operate your business from home and you are someone who doesn’t have a lot of money for your business in the first place. You are going to be able to take advantage of these tax deductions from the work that you already do at home.

These deductions include but are not limited to the money you spend on office supplies, the furniture in your home office, utility bills, various electronic devices, your mortgage, and even your home repairs. You can argue that these expenses are necessary for you to operate your business and have them taken off on your taxes. How great is that if you are running your business from your house? This is especially important for those of you who are trying to save as much money as much as possible to push your business forward. Take advantage of this tax deduction and you’ll be glad that you did!

3. Retirement Savings

For both individuals and businesses, retirement savings are one of the best tax shelters that you can take advantage of. This is very similar with real estate, so you can think of retirement and real estate in the same kind of bubble. When you get a high-quality retirement plan like a 401(K), you are able to take this down on your taxes and ensure that you’re not paying way too much on your taxes every year.

4. Gifts to Others

Now this one is a little bit iffy, but it’s a great tax shelter to try if you’re in the situation where you’ve bought gifts for others. There are some situations where you can gift a certain amount of money to someone else in your family that’s in a lower tax bracket and you can take this down on your taxes. This is particularly is relevant when you gift to your children, who are automatically in a lower tax bracket. Make sure to keep receipts of these gifts and you will be able to use them for your advantage at tax time.

5. Self-Employment

If you are someone who is self-employed, then you know just how tough it can be to get your expenses in check and actually make a profit. You are just starting up your small business or your freelance work and you probably want to take advantage of as much tax savings as possible. Because those taxes can take a serious dent in your monthly income!

That’s why there are plenty of tax shelters for you to take advantage of when you are self-employed. You can take off deductions for all of those home office deductions that we mentioned before, travel expenses, expenses for electronics, and really a lot of other points! On top of that, you are also able to deduct up to 100% of your income, which goes up to $205,000 for the contributions that you make to your private pension plan. In addition to this, you are going to be able to deduct up to 100% of your health care costs. This means that tons of savings are going to come your way that will help you prop up your business and find financial success. How great does that sound?

And there you have it! When you think about tax shelters at first, you might think that this is just a practice that criminals and those who don’t want to pay taxes partake in. However, that’s far from the truth. There are plenty of legal tax shelters that we have mentioned above that you might qualify for. Be sure to check which ones you can use on your taxes next year and you’re going to be able to save a pretty penny that you can use on more important matters.


A traveller by day and reader by night' is how I would sum up my life. My wanderlust led me to quit my cushy job at 28 and finally embark on a journey around the world. Since then, I have lived in many countries and soaked in as many books as possible during my travel journeys. Among them, the "Book of Mirdad" is still my personal favourite and holds a special place in my heart. My progression towards writing was inevitable and happened quite naturally. I have been writing for a few years now an...

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