How to Legally Avoid Paying Taxes on 63% of Your Business Revenue

Here is exactly how I would avoid paying taxes on over 63% of my business revenue legally. I'm Tyler, a former financial advisor and portfolio manager, and I create financial content for free so you don’t have to pay for it.

1. Business Revenue Assumption

Let’s assume my business generated $400,000 of gross revenue in 2025.

2. Reinvesting in the Business

I would immediately put $100,000 back into the business to keep it growing, leaving me with $300,000 net business income.

3. Self-Employment Tax

Assume about $22,500 is out the door for self-employment tax—bummer.

4. Contributing to a SEP IRA

I open a SEP IRA and contribute the max of $70,000, which is an above-the-line deduction.

5. Funding a Health Savings Account

Next, I open a Health Savings Account (HSA) and put another $8,550 there, also an above-the-line deduction.

6. Healthcare Premiums

As I’m self-employed, I can also add another $15,000 of healthcare premiums, which is another above-the-line deduction.

7. Utilizing the Standard Deduction

The cherry on top? I take the old standard deduction of $30,000 for married filing jointly and inform the government that my taxable income is just $153,000. This drops me from the 32% to the 22% marginal tax bracket. With this approach, you'll most likely have $3.1 million in the SEP IRA within 20 years.

And that, my friends, is how we do business.

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