I don’t own a phone.
My company owns my phone. For most of you with a job, your phone is an expense. For me, it’s a deduction.
That one difference is the whole conversation about the tax benefits of owning a business. There are two tax systems in this country. One for employees. One for companies. The tax code favors the owner of the company, every single time.
Nobody teaches you this. We go to school to get a job. My son earned a finance and accounting degree and a master’s in accounting, and he still tells me, “Mom, I never learned anything that’s in your books.”
Doctors get maybe three hours of business training in medical school. Lawyers get about the same in law school. Then they open a practice and become entrepreneurs with zero training in how money actually moves.
So let’s fix that. Here’s how the two tax systems work, what you can run through a company that you can’t run through a paycheck, and why the right structure is the winning formula.
There Are Two Tax Systems, and You Get to Pick
I’ll make this simple.
As an employee, you make money, the government taxes it immediately, and you live on what’s left.
As a business owner, your company makes money, deducts legal business expenses, and then pays tax on what’s left.
Same dollar. Completely different order.
There are 81,000 pages of tax code, and most of the deductions in it belong to companies. Companies get the best tax strategies. Individuals get the worst.
In The Millionaire Maker, I teach that U.S. law has two primary tax structures: one for employees and one for corporations. Employees get taxed on what they earn, usually right out of the paycheck. Corporations manage their own taxes, including deducting business expenses.
So which tax code do you want? You decide. I clearly lean toward the one where I pay the least.
“You can pay tax after you spend on legal deductions, or straight out of your paycheck. You pick.”
Why a Side Hustle on Schedule C Isn’t Enough
A lot of you have a job and a little side hustle. Good. Keep both.
But if that side hustle runs as a sole proprietorship, it still sits under your Social Security number. You file one extra form, the Schedule C, and you get a short list of deductions. You do not get what a true business owner gets.
So I say this: move that side hustle out of Schedule C and into a company.
That’s the pattern most of our clients follow. They keep the job, build the company on the side, and as the business grows, they strategically exit the job. Over time, they become pure entrepreneurs.
I did it myself. Even as an employee at the oil company, I ran a health and fitness business on the side that brought in an extra $1,000 a month. That gave me a real entity to run legitimate business expenses through.
The industries I see making the most mistakes are service businesses. Hair salons. Nail salons. Restaurants. I know restaurant owners who own the restaurant in their own name with no entity around it at all.
Graphic designer, editor, lawyer, doctor. Whatever service you provide, it belongs inside a company.
“Whatever service you provide, it belongs inside a company.”
Expenses vs. Deductions: What Your Company Can Pay For
Here’s where living corporate pays off. I live and teach the Rockefeller principle: own nothing, control it all.
Who owns it? The companies own it. Not you.
When your company has a legal intent to make money, you activate the tax code. With the right structure, your company can provide officer and director benefits that may include:
- A housing allowance
- A vehicle allowance
- Phone and technology allowances
- A wardrobe allowance, where it truly qualifies
- A 401(k) that also reduces your tax liability
In The Millionaire Maker, I list the everyday deductions most people pay for personally: utilities, computer equipment, a home office, phone, internet, marketing, education, meals, travel, your car, gas, and insurance. Most business owners pay these out of personal funds. That’s a failure, and it costs real money you could have invested.
None of this happens on autopilot. You need the right kind of company, the right CPA and tax strategist, and properly handled corporate compliance. Our corporate structure team works from between 230 and 250 corporate resolutions that document your ability to take these deductions.
Document everything: cost, date, description, business purpose. Money will not come to chaos.
“Own nothing, control it all.”
Your Tax Team Picks Your Structure, Not You
So many of you hear me say, “get a company,” and you run to the Secretary of State to set up an LLC because it’s the easiest option.
Stop. You don’t decide your corporate structure. Your tax team decides.
Depending on how you make money, you may need an S corp at certain times. When you’re making a quarter million or more, you’ll likely need a C corp. And sometimes life decides. This morning I was on a call with a woman going through an ugly divorce with a stack of other issues. The tax team looked at her whole situation and decided she needs a C corp.
One question doesn’t pick your entity. Your whole situation does.
I run several LLCs, one S corp, and a couple of C corps. I also run a management company, a marketing company, a sales company, and an event company. A tax team organized that structure strategically, not me.
And here’s the difference between a preparer and a strategist. H&R Block and TurboTax prepare a return. That’s tax preparation, not tax strategy. Most CPAs are historians. They record what you did. They don’t forecast what you should do.
Tax strategy means sitting down at the beginning of the year and asking, “How are you going to make money? What are you going to invest in?” Then you build a plan that creates your tax number on purpose.
Several years in a row, I told my CPA, “I want to pay zero. Can you get me there legally if I use the tax code properly?” We used the right companies and the right investments to get there.
“Most CPAs are historians. They record what you did. They don’t forecast what you should do.”
How You Invest Changes Your Tax Bill
This is the piece most people, and most CPAs, leave out.
Some investments carry big depreciation schedules: aviation, oil and gas, and real estate. The One Big Beautiful Bill, signed July 4, 2025, gave real estate a serious boost with bonus depreciation, depending on the kind of property.
I have a client who just bought several mobile home parks and a storage facility. Amazing. With the right team, they can do cost segregation studies and look at R&D credits. Those strategies can legally cut the tax burden.
And here’s the other side of it. Once you pay the IRS, you rarely get that money back.
A lot of you think, “If I pay around 10%, that’s fine. I have to pay something.” I call that invisible pain. Overpay $10,000 a year for 20 years, and that money invested at 13% could have grown to roughly $800,000. Gone.
Generational wealth doesn’t come from the money you make. It comes from the money you keep and how you invest it.
“Generational wealth comes from the money you keep and how you invest it.”
Hold Your Assets in a Company, Then in a Trust
One last structural point, because I see this mistake constantly with new clients.
Your assets go straight into a trust, and you miss the entire tax code. A trust doesn’t get the same corporate tax deductions that entities do.
Here’s the right order. Your business, your real estate, anything you own, sits inside a company. Then a trust holds the company. That’s the umbrella I recommend in The Millionaire Maker, so your trust, not you, shows up as the participant in each business.
Let the right structure do its job, and you will pay a very minimal amount.
Start Today
This isn’t difficult. It’s just different from what you’ve been taught, and the people around you, especially family, will push back. “Why are you starting a company? You’ll fail.” Put it aside and keep moving.
Here’s your week:
- List every expense you pay personally that your business actually uses: phone, car, internet, home office, education.
- If you run a side hustle on Schedule C, book a conversation about moving it into a company.
- Ask your CPA one question: “What’s our tax plan for this year?” If you get a blank stare, you have a historian, not a strategist.
- Check how your assets are held. If they go straight into a trust with no entity in between, flag it.
- Take the Financial Personality Quiz to see if overpaying taxes is one of your traps.
Then pull out your last three tax returns and look at the total you paid. If that number makes you wince, that’s your signal. You don’t need a better preparer. You need a strategist.
Every structure has to fit your state and your situation. Legally, with the right strategist, that’s where the real savings live.
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