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When most people think about taxes, they think about how much they owe—not how much they could be saving. But here’s the truth: the wealthy don’t just get lucky. They follow the rules—but they understand the rules better than most. They use structure, strategy, and timing to legally reduce their tax liability, year after year.

You don’t need to be a billionaire to take advantage of the same tactics. You just need to know what’s available and how to apply it. That’s where smart tax planning comes in—and where our team at Legacy Law Group of Colorado can help.

Let’s break down the strategies the wealthy use—and how you can use them too.

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Maximize Retirement Contributions

One of the most effective tax-saving strategies is maximizing contributions to retirement accounts. Traditional 401(k)s and IRAs allow you to reduce your taxable income by contributing pre-tax dollars. Roth IRAs, on the other hand, offer tax-free growth and withdrawals during retirement. In 2025, contribution limits have increased, giving you more room to save.

If you’re unsure how retirement planning fits into your estate strategy, visit our page on Estate Planning Services.

Roth conversions can also be powerful. By transferring funds from a traditional IRA into a Roth IRA, you’ll pay taxes now and avoid them later—ideal if you expect higher future tax rates.

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Use a Health Savings Account (HSA)

With a high-deductible health plan, an HSA can be one of the best tax shelters available. It offers:

• Tax-deductible contributions
  
  
• Tax-free growth
  
  
• Tax-free withdrawals for qualified medical expenses
  
  

Many people don’t realize you can invest your HSA funds and let them grow like a retirement account. Learn more about eligibility at HealthCare.gov.

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Use Tax-Loss Harvesting

If you invest, tax-loss harvesting is a strategy you should know. It involves selling investments at a loss to offset gains from other sales. Any unused losses can roll over into future tax years.

Make sure to avoid wash-sale rules and consider working with a financial advisor or attorney to implement this correctly. Learn more about how to protect gains with our Asset Protection Planning service.

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Give Smarter, Not Just More

Donor-Advised Funds (DAFs)

A Donor-Advised Fund allows you to make a large charitable donation now and decide where to send the money later. You get the immediate tax deduction in a high-income year while supporting your favorite causes on your own timeline.

Visit National Philanthropic Trust for more on how DAFs work.

Charitable Remainder Trusts (CRTs)

CRTs let you donate appreciated assets, take a partial deduction, receive income from those assets for life, and send the remainder to charity. It’s a powerful way to support a cause while reducing estate and capital gains taxes.

We cover this and other trust types in our blog: Types of Trusts You Need to Know About.

Invest in Real Estate Strategically

Real estate offers multiple tax advantages:

• Depreciation deductions
  
  
• Mortgage interest deductions
  
  
• Deductible expenses (repairs, travel, management)
  
  

You can also defer capital gains taxes with a 1031 Exchange, which allows you to roll over the gains from one property into another.

Advanced investors can also use cost segregation to accelerate depreciation and front-load tax savings.

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Use the Qualified Small Business Stock (QSBS) Exclusion

If you invest in early-stage startups, the QSBS exclusion under IRS Section 1202 allows you to exclude up to 100% of capital gains on qualifying stock (up to $10 million or 10x your basis). If you're an entrepreneur or angel investor, this is a strategy worth exploring.

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Entity Structuring for Business Owners

If you’re a business owner, the way your company is structured has a huge impact on taxes. Choosing between an S-corp, LLC, or partnership isn’t just a legal decision—it’s a tax strategy.

Additional tax-saving opportunities include:

• Salary vs. dividend income strategies
  
  
• Reimbursement for business-related expenses
  
  
• Home office deductions
  
  
• Employing family members (such as paying your child)
  
  

Schedule a review of your business structure at our contact page.

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Don’t Forget Estate Tax Planning

The federal estate tax exemption is currently high but will decrease in 2026. Wealthy families are acting now to:

• Move assets out of their estates
  
  
• Use Irrevocable Trusts and Family Limited Partnerships
  
  
• Leverage gifting strategies
  
  

These strategies aren’t just for billionaires. If you have a home, retirement accounts, or life insurance, you should be planning. Read more about this in our Trust & Estate Administration page.

Plan Proactively, Not Reactively

At Legacy Law Group, we don’t just create documents—we create a plan. We coordinate with your CPA, financial advisor, and insurance providers to ensure your strategy works together. The wealthiest individuals don’t wait until tax season. They plan year-round.

And neither should you.

Are You Missing Opportunities?

Even if you're doing some things right, chances are you're leaving money on the table if your financial plan isn’t integrated. We help you:

• Analyze your full financial picture
• Identify gaps and untapped savings
• Create a personalized strategy that evolves with your goals

Schedule your consultation today

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Want to see how these strategies work in real life?

Watch our video here to see how high earners reduce their tax bills legally—and how you can apply the same principles starting today.