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Building Wealth From the Ground Up [Part 1]: Earn, Save, Invest

Building Wealth From the Ground Up [Part 1]: Earn, Save, Invest

How 2025’s higher contribution limits and fresh tax thresholds let solo founders shield over six figures—before breakfast.

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Max Donovan
Jun 28, 2025
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Building Wealth From the Ground Up [Part 1]: Earn, Save, Invest
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Entrepreneur income has never been more tax-leveraged than in 2025. Bigger Social Security and retirement ceilings, the SECURE 2.0 catch-up kicker, and the still-alive 80 % bonus depreciation mean you can shelter well into six figures without cutting a single expense line. This guide decodes the numbers, shows you how to apply them this quarter, and previews where we’re heading next.

In Part 2: Forget Busywork — Build Systems That Compound Wealth, we dive into automated funnels, delegation frameworks, and asset-location hacks that work while you sleep. ➡️ Subscribe to our Premium Newsletter to unlock the entire series.


EARN — Keep More of Every Dollar

The first lever is the way you route income through your entity. For 2025, the Social Security wage base increases to $ 176,800. By setting your S-corp salary close to that figure, you cap the 12.4 % OASDI hit—any profit above that flows out as a payroll-tax-free distribution.

Those savings are amplified if you also watch the §199A qualified-business-income deduction. The 20 % write-off now begins to phase out at $197,300 for single founders and $394,600 for joint filers. Every dollar you defer into a Solo 401(k) or a cash-balance plan pushes taxable income back under the cliff and preserves the deduction.

Thinking bigger than consulting cash-flow? A clean C-corp start date means your founder shares can grow into tax-free millions under Qualified Small-Business Stock (§ 1202). Hold five years, exit, and exclude up to $10 million—or ten times your basis—completely from federal tax. While the clock runs, a cash-balance plan can drive your W-2 comp low enough to sidestep the 3.8 % NIIT and maximize retirement contributions, effectively paying for itself in deductions.

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