If you feel like you’re paying way too much in taxes, you’re not alone. Even financial pros like Preston Seo, host of “The Legacy Investing Show,” have ended up owing more than they would have liked.
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In a recent YouTube video, 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.
“Now my tax bill looks completely different — not because I make less, I actually make more — but because I learned how to legally use the system the way that it was written,” Seo said.
Here are nine IRS-approved strategies the wealthy use to pay less in taxes, that you can start using, too.
If you have a high-deductible health plan, you likely qualify for a health savings account (HSA) — and you should be taking advantage of it.
“Most people don’t realize how powerful these are,” Seo said. “You get a tax deduction going in, tax-free growth and also tax-free withdrawals for qualified medical expenses.”
To get the full tax benefits, Seo contributes the maximum amount to his HSA every year, but he doesn’t use the account to pay his medical bills.
“I pay those out-of-pocket and keep the receipts,” he said. “That lets my HSA compound untouched, and years from now, I’ll be able to reimburse myself, tax-free, with decades of growth on top. It’s like a hidden retirement account, only better.”
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A backdoor Roth IRA 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.)
To use this strategy, contribute money to a traditional IRA, and then convert it into a Roth IRA.
“Every single year, I max out [my IRA contributions], convert them, and now I have money growing completely tax-free,” Seo said.
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.
