College has numerous tax benefits, the main 3 are American Opportunity Tax credit (up to $1000 cash in your pocket), you can deduct up to $2500 in student loan interest & the 529 college saving plan.
The main benefits of retirement planning tools are Roth IRA's (which don't save you on taxes now, but when you retire can be used for tax free income) and 401k's which have tax benefits now and potentially company matching.
Real estate has multiple tax benefits, including deducting interest and depreciation; along with the 1031 tax deferred exchange and the ability to get $250k in tax free profits on your primary residence as long as you live there at least 2 years of the last 5 years (you can buy it today and sell it in 2 years if you live there the whole time.) The main benefits are in rental properties (you can't deduct depreciation on personal residence, can't deduct interest on personal residence unless you itemize; but you can do both and still get the standard deduction if it's a rental property.) It may be beneficial to qualify as a real estate professional (working on real estate 750+ hours per year, >50% of your total work hours) to deduct the full losses against unlimited income. Remember, the goal is to generate legal paper losses; not actually lose money. If you buy $500k in property, you can depreciate the building (lets say 80% of the value, so $400k) over 27.5 years; even though that property effectively goes up in value (though you may need maintenance or repairs sometimes.) From interest and depreciation, property worth approximately 10x your income with current interest rates around 6% would eliminate your tax liability in most cases (that's just a guideline, make sure the deal works and consult tax professionals.) Though your income increases with rentals, the depreciation comes in faster than rental income and you also have other deductions like property tax, HOA fees (if applicable, avoid HOA's if you can), maintenance and repairs, stepped up depreciation on appliances, etc. Rental properties get advantages that aren't available for primary residence. Depreciation is subject to recapture on sale, but mitigated with 1031 exchanges (or never sell and refinance to pull money out, your heirs won't have recapture despite depreciation.) You might have a $10k cash gain and an $18k paper loss, so you might need 5 properties to reduce your tax burden to zero; but actually are increasing your income to $150k.
Business has lots of tax benefits including writing off expenses related to the business, some like advertising you can write off completely this year and others like machinery or real estate might be written off over a period of 5-30 years (or more or less, check with an accountant as rules change all the time) that's where credit comes into play, you might pay nothing down and get a tax benefit that saves you all the taxes you would have paid if you hadn't spent that money over the next few years or longer in the case of real estate. Section 1244 allows you to write off stock losses in small businesses for up to $50k per person as ordinary losses rather than capital losses.
Even parenting has tax benefits the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC) can provide up to $12,630 in refundable credits for a low-income family with 3 kids. The CTC has a much higher cap, phasing out only at $200,000 (single) or $400,000 (married), and provides $1,600 cash per child, up to 15% of income above $2,500.
For an extreme example, a married couple earning $429,000 with 40 children could receive $64,000 in refundable CTC—though obviously, few people have 40 kids for tax benefits. Meanwhile, the EITC caps at 3 kids, with eligibility phasing out at $49K (single) and $55K (married).
All kidding aside, while no one is realistically having 40 kids to maximize CTC, the structure of these credits does incentivize families to have at least 3 children, especially for lower earners. Those with 6 or more kids might even find it financially smarter to remain unmarried.
Dynasty trusts are powerful, long term estate planning vehicles that preserve and grow family wealth for multiple generations: often up to 128 years or even perpetually in states like South Dakota, Nevada, or Delaware. By funding them with up to $5 million per person (or $10 million per couple) under the Generation Skipping Transfer (GST) tax exemption, families can avoid estate and GST taxes on assets passed down for over a century. These trusts can hold and invest in a wide range of assets: including cash, stocks, real estate, private businesses, and even life insurance — and allow those assets to compound tax-free while being shielded from creditors, lawsuits, and divorces. Investments within the trust can range from traditional stocks and bonds to private equity, real estate, and alternative assets, managed by professional advisors or family offices. Distributions to beneficiaries can be tailored precisely, allowing funds to be released only for specific needs like education, health, or general support, or at the trustees discretion. Because beneficiaries dont legally own the trust assets, wealth is protected and strategically controlled, all while staying within the family line; generation after generation.
Hypothetical compensation structure in a C corp company you own and are the sole employee: You get a salary of $38500, contribute $23500 to a Roth 401k and the company matches your traditional 401k with $9625; and your federal income taxes are only $2678. The downside is you have to do your ss/medicare matching, it's $5944 (2972 or so coming out of your paycheck) but you can also contribute $7000 to a Roth IRA; for a total of $39765 in your retirement accounts. If you have student loans and an income based payment plan, you could contribute some of your cash to the traditional 401k instead of Roth and your taxable income can be below $30k and you may not owe anything; or they may have you pay a token amount. Of course, this doesn't cover living expenses and you have $2k-4k left after; but it illustrates how retirement accounts can be optimized. If you paid yourself $100k, it would cost about $20k in extra taxes including ss/medicare and employer match; effectively a 35% tax rate on additional income and you'd gain an extra $45k in cash you can use; the benefit is your employer can match an extra $15,375 in your 401k which mostly makes up for the high tax (employer match is about the same as employee cost of payroll taxes, only cost is $4400 in employer matching of ss/medicare.) Though this would increase student loan payments to around $585 a month or could be on a graduated plan, but that's not that much compared to $100k. If you wanted to put more in a 401k, you could put 23500 in, which increases your deductions, payroll tax from salary decreases to 16.3% and total is about 24%. The other good thing is that contribution limits to 401k, IRA and employer matching all go up over time and when you're 50 they go up extra because of so many people who need to make catch up contributions. The maximum beneficial amount (above this, benefit goes down) is $150k income from a company you own, the company can match $37500 into a 401k (just put it into low fee sp500 index funds) and you can contribute $23500 into a Roth 401k and $7k into a Roth IRA; you pay $25k federal income taxes and $11500 and the company pays another $11500 ss/medicare match but you can invest for long term growth in those and while it lacks deductions you will eventually be able to sell covered calls against stocks (some sp500 low fee index funds allow daily options writing, you could make a payday after 10:30 am and have it clear the next morning) and current law says 401k matches are always pre-tax dollars!
Retirement Savings Contributions Credit (Savers Credit) if you earn less than $36,500 you can get a benefit for even contributing to a Roth IRA. If you earn $21k and contribute $7k to a Roth IRA, you'll save about $650 in taxes and owe nothing on your federal return; you may even get an EITC and get a refund! At the higher level it's only 10% of the investment, but that's still $200 off what you contribute; a bit less than 1/4 of the taxes on that money.
Puerto Rico has amazing tax benefits, valid thru 2035! You have to buy property within 2 years (can be a studio apartment for $100k 5 minutes from the beach), you have to give $10k/yr to charity (so you really need to be making at least $100k to justify this) and you have to stay in Puerto Rico 184 days a year (stay uninterrupted January to the summer and feel free to leave if it gets too hot, but save your days in case you have to leave due to hurricanes.) The corporate tax rate is 4% for businesses exporting services, the capital gains rate is 0% as long as you bought after moving there. Peter Thiel and Logan Paul both moved there, probably enjoying at least some of the tax benefits. If you're interested, make sure you qualify for Act 20, act 22 and act 60 if they apply to you and make sure you follow the rules.
For those not limited to the US, residence in Monaco can be achieved with a 1 year lease on an apartment (as low as $2200/mo) and/or owning a Monaco based business ($16k in filing fees usually. When you live there 10 years you can request citizenship, the Prince of Monaco (nice guy, son of Grace Kelly) decides each person who will become a citizen of Monaco. There's extremely low taxes in Monaco, it's inside Europe (so you can travel Europe year round once you have a Monagasque passport) and it's the best choice if you can afford it. Some now go to the UAE, which is more western than most parts of the Middle East (but still respect their culture while there, if not in the resort then treat it like any other middle eastern country) and they have low taxes and lots of wealthy people open to doing business deals. The caribbean also has some tax benefits at different islands, but the passports aren't quite as good as US or EU passports. If you are a US citizen, then Puerto Rico is the best deal for taxes in most cases; as outside of the Puerto Rico Act 60 exception the US collects taxes on your worldwide income (if you renounce your US citizenship and have a net worth over a certain amount there is a cashout fee or they can get taxes on your income for 10 years after you leave, though there's lots of great tax programs like the QSBE allowing up to $10 million in tax free cash when a business sells from investing in small business in the US and up to $452k in dividends at only 15%!