When we hear about tax loopholes, we often think of billionaires dodging taxes while the rest of us watch our paychecks shrink. But what if I told you that some of these so-called ‘rich people’ tax benefits are actually available to everyday people? You just have to know where to look. Let’s break down some legal, perfectly usable tax deductions and credits that can help you keep more of your hard-earned money.
1. The Home Office Deduction (For Small Business Owners & Side Hustlers)
If you work from home—even if it’s just a side gig—you may qualify for the home office deduction. This allows you to deduct a portion of your rent or mortgage, utilities, and internet based on the percentage of your home used for business.
🔹 How to qualify: Your home office must be a dedicated workspace (not just your kitchen table). It doesn’t have to be an entire room, but it must be used exclusively for work.
🔹 Pro tip: You can use the simplified method ($5 per square foot, up to 300 sq. ft.) or the actual expense method (where you calculate the percentage of your home used for business).
2. Retirement Account Contributions (A.K.A. The Legal Tax Shelter)
Rich people love tax-deferred retirement accounts, and you should too. Contributions to traditional IRAs and 401(k)s reduce your taxable income, meaning you pay less in taxes while saving for the future.
🔹 2024 Contribution Limits:
- 401(k): Up to $23,000 (or $30,500 if you’re 50+)
- IRA: Up to $7,000 (or $8,000 if you’re 50+)
🔹 Pro tip: If you’re self-employed, consider a SEP IRA or Solo 401(k) to increase your contributions and deductions.
3. The ‘Backdoor’ Roth IRA (Yes, It’s Legal!)
A Roth IRA lets you withdraw money tax-free in retirement, but if you make too much money, you can’t contribute directly. Enter the Backdoor Roth IRA, a perfectly legal loophole that lets high earners (and you!) still get the benefits.
🔹 How it works:
- Contribute to a Traditional IRA (which has no income limit).
- Convert that Traditional IRA into a Roth IRA.
- Pay the taxes on the conversion now, but enjoy tax-free withdrawals in retirement.
🔹 Pro tip: This strategy is best for people who expect to be in a higher tax bracket later.
4. The ‘Tax-Free’ Real Estate Hack (Depreciation & House Hacking)
Real estate investors use depreciation to write off the value of their properties over time, even if their property is increasing in value. But you don’t have to be a landlord to take advantage of real estate tax perks.
🔹 House hacking tip: If you buy a duplex or triplex, live in one unit, and rent out the others, you can deduct mortgage interest, property taxes, and even depreciation while having someone else pay your mortgage.
🔹 Pro tip: First-time buyers can look into FHA loans with just 3.5% down to get started.
5. The ‘Rich People’ Health Savings Account (HSA) Trick
An HSA (Health Savings Account) is like a triple tax-free loophole if you have a high-deductible health plan (HDHP):
- Contributions are tax-deductible
- Money grows tax-free
- Withdrawals for medical expenses are tax-free
🔹 Pro tip: Treat your HSA like an investment account—keep receipts for medical expenses but let the money grow over time. In retirement, you can use it tax-free for healthcare or withdraw it penalty-free for anything after 65.
6. The ‘Make Your Kids Work for You’ Strategy (Family Business Tax Benefits)
If you own a business, hiring your kids can be a major tax hack.
🔹 How it works:
- Pay your kids a reasonable salary for actual work (social media, filing, cleaning, etc.).
- If they earn under $14,600 (in 2024), they pay zero federal income tax!
- Your business gets a tax deduction for their wages.
🔹 Pro tip: This works even better if you put their earnings into a Roth IRA—they can invest tax-free for life!
7. Tax Credits You Shouldn’t Sleep On
Unlike deductions (which lower taxable income), tax credits reduce the actual tax you owe dollar for dollar. Here are a few easy-to-qualify credits:
✅ Earned Income Tax Credit (EITC) – Even moderate-income earners may qualify.
✅ Child Tax Credit – Up to $2,000 per child under 17.
✅ Saver’s Credit – A little-known credit for contributing to retirement accounts.
✅ American Opportunity Credit (AOTC) – Up to $2,500 per student for college expenses.
✅ Energy Efficiency Tax Credits – For home improvements like solar panels or energy-efficient windows.
Final Thoughts: Start Using These Strategies Today!
Rich people don’t just ‘get lucky’ when it comes to taxes—they know the system and use it to their advantage. Now you do too! By leveraging deductions, credits, and smart tax-saving strategies, you can legally reduce your tax bill and keep more of your hard-earned money.
💡 Need help maximizing your tax savings? Schedule a consultation with Borders & Co. Tax Solutions today and let’s make tax season work for you!
Have questions about tax loopholes? Drop them in the comments or send us a message—we’d love to help!
Borders & Co. Tax Solutions 
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