You can claim a lot of business expenses as deductions that you wouldnt be able to as an employee The IRS now has a 20% deduction for passthrough entities up t

You can claim a lot of business expenses as deductions that you wouldnt be able to as an employee The IRS now has a 20% deduction for passthrough entities up to 450K or so You can put approximately 40K or 25% of income (whichever is less) into a solo 401K. Much more than a typical company 401K There are ways to pay no FICA, by distributing through a limited partnership. You can save 15K up to the cap on those taxes, but then you will hurt your social security which requires 40 quarters of W2 wages to max out. Healthcare will potentially cost more, but once you have around 6 employees you can join a PEO and get grouped in with other small business and get a typical cost for a business. There are products (such as insurance ) that can shield a much larger portion of your income. For example, you buy income insurance that pays out any year you take a loss. You "pay" for it with your profit for that year. That counts as a business expense so you pay no tax on it. They keep track of your account balance+growth and you can borrow from your own account with no tax consequences. You can essentially withdraw the money at favorable tax rates if you ever take a loss.