![\"Preston](\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/07\/Preston-Seo.jpg\")
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\n \u00a9Preston Seo <\/p>\n
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GOBankingRates’ editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services – our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines<\/a> and our products and services review methodology<\/a>.<\/p>\n 20 Years<\/strong> Trusted by<\/strong> If you feel like you\u2019re paying way too much in taxes<\/a>, you\u2019re not alone. Even financial pros like Preston Seo, host of \u201cThe Legacy Investing Show,\u201d have ended up owing more than they would have liked. <\/p>\n In a recent YouTube video<\/a>, Seo shared that he once owed over $30,000 in taxes on top of his W-2 withholdings. But that all changed when he learned how to work within the U.S. tax code to keep more of his income.<\/p>\n \u201cNow my tax bill looks completely different \u2014 not because I make less, I actually make more \u2014 but because I learned how to legally use the system the way that it was written,\u201d Seo said. <\/p>\n<\/p>\n Here are nine IRS-approved strategies the wealthy use to pay less in taxes, that you can start using, too<\/a>.<\/p>\n 1. Max Out Your Health Savings Account<\/p>\n If you have a high-deductible health plan, you likely qualify for a health savings account (HSA) \u2014 and you should be taking advantage of it. <\/p>\n \u201cMost people don\u2019t realize how powerful these are,\u201d Seo said. \u201cYou get a tax deduction going in, tax-free growth and also tax-free withdrawals for qualified medical expenses.\u201d <\/p>\n To get the full tax benefits, Seo contributes the maximum amount to his HSA every year, but he doesn\u2019t use the account to pay his medical bills. <\/p>\n \u201cI pay those out-of-pocket and keep the receipts,\u201d he said. \u201cThat lets my HSA compound untouched, and years from now, I\u2019ll be able to reimburse myself, tax-free, with decades of growth on top. It\u2019s like a hidden retirement account, only better.\u201d <\/p>\n 2. Use a Backdoor Roth IRA To Grow Tax-Free Wealth<\/p>\n A backdoor Roth IRA<\/a> is a strategy that allows high-income earners to contribute to a Roth IRA, even if their income exceeds the IRS limits for direct contributions. (For 2025, single filers must have an income of less than $150,000 and joint filers must make less than $236,000 to make a full contribution to a Roth IRA.)<\/p>\n To use this strategy, contribute money to a traditional IRA, and then convert it into a Roth IRA.<\/p>\n \u201cEvery single year, I max out [my IRA contributions], convert them, and now I have money growing completely tax-free,\u201d Seo said. <\/p>\n<\/p>\n 3. Open a Solo 401(k) <\/p>\n A Solo 401(k) is a retirement savings plan that can be utilized by self-employed individuals or business owners with no full-time employees. You may qualify for this type of account and not even realize it.<\/p>\n \u201cLet\u2019s say you have freelance income from consulting, Airbnb or even selling things online \u2014 you may qualify for a Solo 401(k),\u201d Seo said. \u201cI use mine through one of my LLCs, and it\u2019s a great way to reduce tax on side income while also building wealth.\u201d <\/p>\n 4. Save on Self-Employment Taxes With an S Corp Election<\/p>\n![\"\"](\"https:\/\/cdn.gobankingrates.com\/wp-content\/uploads\/2023\/11\/icon-20.svg?webp=1&quality=75\"){kind=icon}
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