Most business owners assume paying a huge tax bill every year is unavoidable. The truth? The U.S. tax code is filled with incentives designed to help entrepreneurs lower — and in some cases, completely eliminate — their tax liability. If you understand how to use these strategies, you can keep more of your hard-earned money while still staying 100% compliant with the IRS.

Here are five proven, legal ways business owners can pay little to no taxes.

1. Maximize Business Deductions

Every dollar you spend on your business could potentially reduce your taxable income. But too many entrepreneurs miss deductions because they don’t track or categorize properly.

Common overlooked deductions include:

• Home office (portion of rent, mortgage interest, utilities, internet)

• Travel expenses (airfare, hotels, business meals)

• Business equipment & supplies

• Professional services (coaches, consultants, software tools)

• Education that improves your business skills

👉 The key: You must keep receipts, records, and mileage logs. With proper documentation, these are legitimate and powerful deductions.

2. Leverage Retirement Contributions

Retirement plans are one of the IRS’s favorite tax shelters. By contributing through your business, you can lower your taxable income while saving for the future.

• SEP-IRA: Contribute up to 25% of compensation (max $69,000 for 2024).

• Solo 401(k): Contribute as both employer and employee — much higher limits than a standard IRA.

• Defined Benefit Plans: For high-income owners, these allow six-figure contributions and deductions.

The beauty? You’re not just saving on taxes this year — you’re building long-term wealth.

3. Take Advantage of Bonus Depreciation & Section

179

Buying business assets — vehicles, equipment, technology — can result in huge tax write-offs thanks to depreciation rules.

• Bonus Depreciation: Allows 60% (2024 rate) of qualified purchases to be deducted in the year of purchase.

• Section 179: Lets you expense up to $1,220,000 of equipment immediately (instead of depreciating over years).

Example: Buy a $70,000 truck for your business → you could write off most (or all) of it the same year.

4. Use Real Estate Write-Offs & Cost Segregation

Owning real estate in your business? You’re sitting on major tax savings.

• Depreciation allows you to deduct the building’s value over time.

• Cost segregation studies accelerate depreciation, letting you deduct parts of the property much faster.

• Combined with a 1031 Exchange, you can defer taxes indefinitely when selling properties.

This is one reason wealthy entrepreneurs use real estate as a core tax strategy.

5. Shift Income Through Family Employment

Hiring your spouse or children isn’t just smart — it’s tax efficient.

• Children under 18 can be paid a reasonable wage, which is deductible for the business.

• That income may be taxed at the child’s much lower tax bracket.

• Wages can even fund their retirement accounts — creating generational wealth.

As long as they actually perform work for your business and you document payroll correctly, this is 100% legal.

Final Thoughts

Paying zero taxes isn’t about hiding money or doing anything shady — it’s about playing the game by the rules the IRS itself created. The government wants to incentivize entrepreneurship, investment, and growth.

The problem is, most business owners don’t know which strategies apply to them, or they wait until tax season when it’s already too late.

👉 At Pane Firm, we help entrepreneurs legally minimize taxes through proactive, year-round tax planning.

Curious how much you could save? Book a tax strategy consultation with Pane Firm today and discover how close you can get to zero taxes.