The two ways to pay less tax

There are only two ways to pay less tax: make less money, or spend more money on tax-deductible things.

I never recommend the first option.

As for the second option, tax deductions generally don’t come from nowhere. You generally have to commit some real cash to something—usually a retirement plan contribution or an asset purchase—in order to get a deduction.

A move to save taxes that drains cash, like buying a new asset just for the accelerated depreciation, might make good tax sense but still be a terrible financial move.

Sometimes it pays to pay a little more in tax.