Advanced Tax Strategies the Ultra Wealthy Use (and How You Can Too)

Most business owners focus on the basics.
They set up an LLC, fund their retirement plan, and track deductions.

But once you start earning over $250,000 or sell a major asset, the game changes.
You move beyond simple write-offs into advanced tax planning. These are strategies that can legally save you hundreds of thousands of dollars.

Core vs. Advanced Strategies

Before you move to advanced strategies, you need a solid foundation.

Core strategies are available to everyone:

• Choosing the right business entity.
  
• Maximizing retirement plans like a solo 401(k) or IRA.
  
• Using HSAs or HRAs for health costs.
  
• Writing off travel, meals, auto, tech, and home office.
  
• Hiring your kids or spouse.
  
• Donating to charity.
  
  

Once you’ve done all of that and your tax bill is still high, that’s when advanced strategies come into play.

The government wants to grow the economy without doing it itself.
So it rewards taxpayers who do things that create jobs, housing, or energy development.

Start a business? Hire people? Invest in energy? You get tax breaks.

When you align your financial moves with those incentives, you win.

The Five Core Categories of Advanced Tax Planning

1. Advanced Retirement Planning

If you’ve already maxed out your standard retirement accounts, you can go further.

Options include:

• Cash balance plans for higher contributions.
  
  
• Mega backdoor Roths.
  
  
• Non-qualified deferred comp plans.
  
  
• Self-directed IRAs or solo 401(k)s for real estate or private investing.
  
  

These expand your retirement savings while lowering your taxable income.

2. Asset Purchase Strategies

Use leverage to buy assets and create large first-year deductions through depreciation or credits.

Example:
Buy a $100,000 Escalade for a Turo business with $10,000 down.
If structured correctly and you materially participate, you can deduct the full $100,000 in year one.

This strategy also applies to:

• Equipment leasing.
  
• Software and tech projects.
  
• Solar or energy installations.
  
• Film production investments.
  

You’re using the tax code to front-load deductions and offset high-income years.

3. Asset Donation Strategies

Buy assets at a discount, donate them at fair market value, and deduct the full value.

Example:
You buy stock for $100.
It grows to $500.
When you donate it, you get a $500 charitable deduction.

The same principle works for land, real estate, or other non-tangible assets.

4. Oil and Gas Investments

Oil and gas projects can provide 80-90% first-year deductions through intangible drilling costs and depletion allowances.

If you invest $100,000, you might deduct $80,000 to $90,000 in year one.

These deductions can offset both business and W-2 income and can strengthen your Qualified Business Income (QBI) deduction.

5. Captive Insurance Companies

A captive insurance company is one you own.
It insures risks your business faces that aren’t covered by normal insurance.

This lets you move profits into a tax-advantaged insurance structure while still maintaining real coverage.
It’s both a risk management and tax planning tool.

Before You Implement These

Advanced strategies come with more responsibility.

Keep these in mind:

• Work involvement: Some require material participation (100+ hours per year).
  
• IRS scrutiny: Every strategy must be done correctly and documented.
  
• Vendor selection: Work with credible providers who follow compliance rules.
  
• Investment or loan obligations: Understand the deal. Don’t do it just for the deduction.
  
  

Each advanced category has multiple versions and vendors.
If you only talk to one, they’ll tell you their way is best.

A tax strategist helps you choose what fits your income, goals, and risk profile.
They see the full picture and build a plan that combines strategies correctly.

The Takeaway

Always start with your core tax planning.
Once those are optimized, advanced strategies can take your savings to another level.

Used correctly, they can legally and ethically reduce your tax bill while building long-term wealth.

👉 Download the Free Tax Savings Starter Kit: https://www.taxsavingspodcast.com/starterkit
 

Transcript 

[00:00:00] Introduction: Save Hundreds of Thousands in Taxes

[00:00:00] Mike: If you are earning over $250,000 or planning to sell a highly appreciated asset. What I'm about to share today could save you hundreds of thousands of dollars in taxes. Most people stop at basic tax deductions and 4 0 1 Ks, but today I'm taking you behind the curtain into advanced tax strategies that the ultra wealthy rely on strategies that go way beyond.

[00:00:22] Standard planning, and I'm gonna break down exactly how they work, when to use them, and why your CPA might not be talking about them. So let's dive in. 

[00:00:49] Core vs. Advanced Tax Strategies

Mike: So the first thing before we get into the advanced side, I wanna talk about what I call core strategies and advanced strategies. 'cause it's important to understand how those fit in together core strategies [00:01:00] are available to everyone, whether you're making $10,000 a year or $10 million a year.

[00:01:04] Core strategies are available to you where advanced strategies start to come into play once you have high income earners, and this could be business owners, W2 workers, whatever it might be, but once you start to have a high income earner, and typically we say that's 250, roughly $250,000 or more per year.

[00:01:20] Or advanced strategies come into play. If you're selling a highly appreciated asset, so maybe you're not a high income earner, but you're gonna have a major income year where you're selling crypto, you're selling stock, you're selling something that's gonna produce a gain, that's when advanced strategies come in.

[00:01:34] So core strategies available to everyone, any size advanced strategies can be limited to those with higher income, roughly $250,000 or more, or those that are selling a highly appreciated asset. 

[00:01:45] Core Tax Strategies Overview

[00:01:45] Mike: Now, core strategies. There are things we talk about every day on all of our channels, our podcast, our YouTube, everything that we talk about.

[00:01:52] Things like, setting a solid business foundation or choosing the correct entity type. Maybe setting up and contributing to a retirement account, whether it's a [00:02:00] solo 401k, a Safe Harbor, 401k, or some type of IRA. We talk about health strategies, HSAs, our hra, self-employed health insurance and how that works.

[00:02:08] We talk about the 14 day home rental and maximizing deductions and travel meals, technology auto. Hiring your children, family members, the home office deduction, real estate investing, college savings, charitable contributions, and I can go on for days, but these are what I call core tax strategies, and we want to ensure that we are always implementing these core tax strategies to their fullest extent before we ever talk about moving on to advanced strategies.

[00:02:35] But for those high income earners, I often hear things like, I'm making more money than ever. But taxes are killing me, or it doesn't even pay to make more money because so much of it goes straight to the government. And that's the problem that we're looking to solve today. That's the piece that we wanna touch.

[00:02:50] So remember core strategies, we always want to implement those before we even look. In advanced strategies, but if we've done everything that we can on core strategies, all those things we, I just talked about, if we've done [00:03:00] everything we can there and we still have a large tax bill, that's when we start to look into these more advanced strategies.

[00:03:08] Introduction to Advanced Tax Strategies

[00:03:08] Mike: Now, when we talk about advanced strategies and that actually any kind of tax planning, we wanna talk about government. Incentives. Tax planning isn't about loopholes. It's about understanding government incentives. The government wants to stimulate specific areas of the co economy, but they don't want to do it themselves.

[00:03:25] They want people to be employed. They want housing to be affordable, and they want small businesses to grow and they even want advancements in different energy sectors. So what do they do instead of. Doing it themselves, which we don't want them doing and they don't want to do. They offer tax breaks to anyone that helps them achieve the goals that they want.

[00:03:45] So the government wants something. How do they do that? They incentivize their citizens to do it in the form of. Tax breaks. So whether it's investing in real estate, whether it's starting a business or hiring employees, or backing various different energy type projects, tax [00:04:00] incentives are your reward for fueling the economy in ways that the government cares about.

[00:04:05] Advanced planning is simply learning how to align your wealth building moves with the incentives already written into the tax code. That's it, but guess what? The government isn't going to implement these incentives for you. They're not gonna plaster them on a billboard for you to see. It's something that you need to understand, you need to learn, and then you need to implement and take advantage of.

[00:04:27] So with that being said, let's dive into the advanced strategies that you need to know. But real quick, if you're a business owner and you're tired of guessing when it comes to taxes, we just released a brand new tax savings starter kit and it's a hundred percent free. Inside. You'll get our ultimate list of business deductions.

[00:04:42] You'll get real case studies showing how others saved five to $25,000 or more. And you'll also get access to our team. For a bonus discovery call, just head on over to www.taxsavingspodcast.com. Forward slash starter kit. Go there to grab your fee free copy. so now let's talk about [00:05:00] these actual advanced strategies.

[00:05:02] And when we talk about advanced strategies, there's five core categories. That I like to talk about. And for all of these categories, there's different vendors and strategies within them, but I wanna talk about it at a high level so we understand what that high level is. And then within each of these, there's very different strategies and vendors that we can work with.

[00:05:22] Advanced Strategy 1: Advanced Retirement Planning

[00:05:22] Mike: So core category number one is advanced retirement planning. Now this is specifically if you're already maxing out your retirement accounts already and you're looking to do more, that means you're looking to put more into it than you're already doing, and you're already maxing out what you can. Then there's options for you.

[00:05:39] So we talk about advanced retirement planning. We look at things like cash balance plans. We look at mega backdoor Ross, we look at non-qualified plans or maybe some type of health insurance as a retirement plan. And we maybe even look at self-directing your retirement accounts if you're looking to get into investor retirement accounts, into things that, not stock market, but maybe it's real estate, maybe it's these various other plans.

[00:05:59] There's opportunities to [00:06:00] self direct your retirement accounts. And so that's the advanced retirement planning. Then we go down. 

[00:06:05] Advanced Strategy 2: Asset Purchase Strategy

[00:06:05] Mike: The second core category is asset purchase strategy. So let's to go through a basic concept of how this works. Basically, it involves utilizing leverage alone to acquire an asset, and then utilizing things like depreciation and tax credits to create a large.

[00:06:22] Year one deduction that can offset other income, oftentimes business income or W2 income, depending on the type of strategy. So with this one, I like to give an example to help put this into practice and put this into play. Let's say that a local dealership is running a deal on Escalades and you go out and buy a hundred thousand dollars Escalade with 10% down, and you start a Turo business where you're not using that Escalade at all personally, you're renting it out.

[00:06:47] On Turo, you're just managing that rental, but you are not physically using that Escalade, you're just renting it out. So you buy a hundred thousand dollars Escalade, with 10% down, if you did that and you set it up correctly, you dot your i's cross your T's, [00:07:00] you're gonna take a hundred thousand dollars deduction in year one.

[00:07:03] That can offset W2 or other business income if you materially participate. So it's a hundred thousand dollars deduction, but you only paid $10,000 to get to that. That's the power behind utilizing this leverage. Now, we have many partners in this area that are different variations of this type of strategy, different concepts of it.

[00:07:21] We have equipment leasing deals. We have film project deals where you're investing in a film, an actual film that you're gonna see on tv, or you're gonna see on Netflix, or you're gonna see in the movie theaters. We have technology or software type projects that involve the same thing. And we even have solar projects that allow you to go back and collect some back taxes that are out there.

[00:07:39] But just know that the concept, the overall idea is the same. You're utilizing leverage to create a massive year one deduction through the form of depreciation or tax credits. That's this concept of our core strategy of asset purchase strategies. Number two. 

[00:07:54] Advanced Strategy 3: Asset Donation Strategies

[00:07:54] Mike: Number three is asset donation strategies, and this is a basic concept.

[00:07:59] Basically, you [00:08:00] acquire an asset at a discount, and then when you donate it, you get a deduction for the fair market value. Of that asset. So to help put this one into practice, lemme give you a brief example. Let's say, one year ago you bought a stock for a hundred dollars and now that stock is worth $500.

[00:08:17] If you donate that stock to a charity, you get a $500 charitable deduction. The fair market value of that stock $500 today, even though. You only paid a hundred dollars for that stock a year ago or two years ago, and that's the power of this. Buying something at a discount and then donating it to cherry at a higher fair market value.

[00:08:37] Again, we have many different partners that kind of focus on this concept if you're not just doing your own stock portfolio and utilizing this. But we have other partners that focus on different areas, whether it's land, whether it is working with non-tangible assets. There's a lot of opportunities there.

[00:08:51] Now core bucket of strategies. 

[00:08:53] Advanced Strategy 4: Oil and Gas Investments

[00:08:56] Mike: Number four is oil and gas investments. The basic concept here is you invest in oil and gas and get significant [00:09:00] tax benefits things. These are things like intangible drilling costs or IDCs. There's also tangible drilling costs and there's , a depletion allowance.

[00:09:08] There's a lot of power. Behind it. Investing in oil and gas and generally stating is an example of this. Generally if you invest a hundred thousand dollars into one of these types of projects, you're gonna get a tax deduction in year one of 80 to $90,000. That can be used against other income and potential in the near.

[00:09:28] Also gonna have future growth on that money. So again, generally stating. Invest a hundred dollars into an oil and gas deal, you're gonna get a lost a year, one deduction of 80 to $90,000 that you can utilize to offset other income. That's W2 income. That's business income. So for those people out there that say I'm just gonna go out and buy a truck because I don't really need a truck, but I get a tax deduction for it.

[00:09:50] I recommend going down this route instead. So oil and gas can be super powerful. We also do a lot of oil and gas planning when you're starting to hit QBI limitations, and that can even amplify [00:10:00] the deduction you get from this even more. 

[00:10:02] Advanced Strategy 5: Captive Insurance

[00:10:02] Mike: The fifth one is captive insurance in a captive insurance company is a small insurance company that you own and operate to ensure risks specific to your business.

[00:10:12] It allows you to shift money from your business into a tax advantage structure while creating real insurance coverage. For, types of risks that you can't normally get a policy for. Super powerful and a really good risk tool now. When we talk about these kind of five groups, they're just the start.

[00:10:31] And within each group there's different variations of it. We have different partners. We have people that do it differently. There's a lot of flexibility and options based on your specific situation and if you're looking to sell a highly appreciated asset. We may even look into various different programs.

[00:10:45] We might look at an ESOP program or some type of charitable trust, or maybe a 10 31 exchange if it's real estate or an installment sale, or maybe even an opportunity zone, which had been amplified by the one big beautiful bill. So there's lots of options available, and we talk about these advanced strategies.[00:11:00] 

[00:11:00] We just wanna know what your core situation that we're looking to solve, and which one fits best into your portfolio, your investment piece, and what you ultimately are looking for from a tax savings aspect.

[00:11:13] Important Considerations for Advanced Strategies

[00:11:13] Mike: Now when we look at, advanced tax strategies, there's some important things to consider that we want to be thinking about.

[00:11:20] Number one, there is work involved. This isn't just set it and forget it. As an example, the asset purchase strategies, they often require. a material participation, which means that at a minimum, you'll need to spend at least a hundred hours on the project. So if you get into, a solar deal, or you're running a solar business, or you're running the Turo business, or you're running a software type business, in order to be able to utilize that loss to offset other income, there's likely gonna be a time requirement, which is at least at a minimum.

[00:11:50] A hundred hours that needs to be spent on that project. So there's work involved to get the power behind this. The second one is IRS scrutiny. Now, [00:12:00] unfortunately, there's a lot of people out there that abuse the tax law and that upsets the IRS. And for that reason, whenever we're doing an advanced strategy, we need to ensure.

[00:12:10] That you're dotting your i's and crossing your T's on these strategies and doing them the right way. And I say this even with core attack strategies. Let's look at the home office for example. Many people believe that the home office deduction is risky. Why? Because the IRS has attacked it in the past.

[00:12:26] And the reason they attacked it is because people abused it. They said that 90% of their home was their home office. The Iris knows. That's not true. Does that mean that the IRS doesn't like the home office deduction? No. It's in the law. It is completely black and white legal, but you gotta do it correctly.

[00:12:42] Same thing applies as it does for core strategies. Same thing applies for advanced strategies. There's people that will take tax law and abuse it, and that's where the IRS targets it. So that means that if we're gonna use tax strategies, we just need to make sure that we're doing it correctly. This stuff's in the law.

[00:12:56] We just need to make sure we're dotting our i's crossing our T's and [00:13:00] doing these strategies. Correctly. The third piece, you need to pick a proper vendor. The vendor is, the heart of many of these strategies is they handle a lot of the setup and a lot of the main details of the strategy. So you need to ensure that you've done a full due diligence on your vendors.

[00:13:16] If you're getting into one of these strategies and advanced strategy, you need to make sure that you have a good. Vendor that you're working with, because you're gonna be dependen on them to dot a lot those i's, and to cross a lot of those T's, you wanna make sure you've done some due diligence on a good vendor on any of these types of strategies.

[00:13:33] And the fourth piece is an investment or loan obligation. So many of these strategies involve some type of investment or maybe a loan. So you need to ensure that it's sound. There's more than just tax savings. That you need to consider on these deals. So do a little due diligence, spend some time on it, understanding it, and then find the right situation that makes sense for you.

[00:13:54] Mike: in summary, there's a lot of options and our core group includes things when we talk about [00:14:00] advanced planning, we're looking at advanced retirement strategies, asset purchase strategies, asset donation strategies, oil and gas investments. In captive insurance, that's our core group. Now, within each of these categories, we work with multiple vendors, multiple variations and various different programs that are adjusted in it.

[00:14:19] So within asset purchase strategies, as an example, we have things where you can buy an Escalade and rented out on Turo. We have software projects, we have solar projects, we have film projects. There's a lot of variations within each of those five categories. So again, the five categories are.

[00:14:34] Advanced retirement strategies, asset purchase strategies, asset donation strategies, oil and gas investments, and captive insurance. Another thing to consider is this is detailed stuff and you want a program that is a good fit for you. The benefit of working with a tax strategist. Versus just a specific strategy consultant is that they're gonna have information on all these types of strategies.

[00:14:57] If you go and talk to somebody about captive, they're gonna say, captive [00:15:00] is the only tax strategy you nearly need to utilize. Or if you talk to someone about an asset purchase strategy, one of our partners, they're gonna say, this is the best asset purchase strategy. This is the best tax strategy.

[00:15:09] When you work with a tax strategist, they have knowledge of. All of these, and that helps find the perfect fit for you because not every strategy is the right fit for everybody, and that's the important piece. Finally, when we talk about core strategies and advanced strategies, do your due diligence. You wanna make sure that you're working with the right people on the right projects, doing things correctly, dot your.

[00:15:32] And crossing your T's because there is so much power in advance planning and it can significantly reduce your tax bill. We just gotta make sure that we're doing it right. So I hope this helped open your eyes to the true potential there is to legally and ethically lower your tax bill significantly.

[00:15:48] Remember though, this is only after you have done all that you can with the core tax strategies that we discuss every single day. If you find this helpful, don't forget to subscribe. Hit that like button and share it with a business owner who's [00:16:00] sick. Of paying too much in tax. And if you want help from our team of tax professionals implementing these advanced strategies along with so many other tax strategies, visit www.tax elm, that's TAX el m.com, or click the link into the description for a free discovery call.

[00:16:15] We are helping people like you lower your tax bill every single day. Thank you, and I'll see you on the next one.