1. Go Offshore: Use Offshore Entities for Tax Deferral



Set up an offshore holding company in a tax haven like the Cayman Islands or Belize. By shifting profits offshore, you can defer U.S. taxes on income until it’s brought back into the country. This strategy is particularly effective for businesses with international operations or those owning intellectual property. The key is to structure the entity correctly to ensure full compliance with IRS regulations while keeping your profits growing tax-free overseas.





2. Shield Your Wealth with Asset Protection Trusts



Establish a Domestic Asset Protection Trust (DAPT) in states like Nevada or South Dakota. These states offer robust legal protection and, if structured properly, allow you to minimize capital gains and estate taxes. Offshore Asset Protection Trusts (OAPT) go a step further, offering enhanced protection and potential tax benefits. These trusts can hold high-value assets and investments, shielding them from both creditors and excessive taxation.





3. Leverage Real Estate Professional Status for Big Deductions



If you qualify as a Real Estate Professional, you can unlock powerful tax benefits. This designation allows you to offset active income with rental property losses, reducing your overall tax liability. Using cost segregation studies and accelerated depreciation, you can create substantial paper losses, even if your properties are generating positive cash flow. This is a goldmine for real estate investors looking to minimize taxes while growing their portfolio.





4. Incorporate as a C Corporation to Lower Federal Taxes



Consider restructuring your business as a C Corporation to take advantage of the flat 21% federal tax rate. Retain earnings within the company and reinvest them to grow your business. C Corporations also offer fringe benefits like health insurance and retirement plans that can be deducted, further reducing taxable income. This strategy is ideal for businesses looking to reinvest profits rather than distributing them as dividends.





5. Go Global: Use the Foreign Earned Income Exclusion (FEIE)



Move abroad and qualify for the Foreign Earned Income Exclusion (FEIE), which allows you to exclude up to $120,000 of your income from U.S. taxes. By becoming a bona fide resident or meeting the physical presence test in a low-tax country like Panama or Portugal, you can effectively eliminate a large portion of your taxable income while enjoying the benefits of an international lifestyle.





6. Maximize Charitable Giving with a Donor-Advised Fund



Open a Donor-Advised Fund (DAF) to streamline your charitable giving and secure immediate tax deductions. By donating appreciated securities instead of cash, you avoid capital gains taxes and maximize your tax savings. The DAF allows you to spread your donations over time, giving you flexibility and control while still reaping the tax benefits upfront. It’s a smart way to reduce your taxable income while supporting causes that align with your values.





7. Invest in Opportunity Zones for Tax-Free Growth



Opportunity Zones provide a powerful way to defer and even eliminate capital gains taxes. By reinvesting your capital gains into these designated areas, you can defer taxes until 2026 and potentially eliminate taxes on future appreciation if you hold the investment for at least 10 years. This strategy not only reduces your immediate tax burden but also offers the potential for tax-free growth, making it a win-win for investors seeking long-term wealth building.





8. Accelerate Deductions with Cost Segregation Studies



Conduct a cost segregation study on your real estate properties to accelerate depreciation. This technique involves reclassifying assets like HVAC systems, landscaping, and lighting into shorter depreciation schedules, allowing you to take larger deductions early on. It’s a highly effective way to reduce taxable income and increase your cash flow, especially for real estate investors aiming to maximize their deductions.





9. Change Your State Residency to Save on Taxes



Relocate from a high-tax state like California or New York to a no-tax state such as Florida, Texas, or Nevada. By establishing residency in a state with no individual income tax, you can save tens of thousands of dollars annually. To successfully change your residency for tax purposes, you’ll need to buy property, obtain a local driver’s license, and spend the majority of your time there. It’s a straightforward but highly effective strategy for reducing your overall tax burden.





10. Use Installment Sales for Business Exit Tax Planning



When selling your business, structure the sale as an installment agreement to spread out the capital gains recognition over several years. This keeps you in a lower tax bracket each year and reduces the immediate tax impact of the sale. The steady income stream can also provide financial stability while minimizing the overall tax hit, making it a smart choice for business owners looking to exit strategically.





Plan Your Tax Strategy with American Egress



Tax avoidance is about using the tools at your disposal to legally minimize your tax burden. At American Egress, we offer exclusive resources, expert guidance, and a network of like-minded individuals to help you master these strategies. Whether it’s leveraging Opportunity Zones, structuring trusts, or maximizing charitable deductions, we have the insights you need to build a tax-efficient financial plan.