Creator Science Ep. 286: How To LEGALLY Pay Less In Taxes (And Invest It Instead) — Ankur Nagpal

Date: December 19, 2025
Host: Jay Clouse
Guest: Ankur Nagpal (Founder of Teachable and Carry)

Episode Overview

This episode dives into the critical but often overlooked topic of tax optimization and retirement planning for creators and entrepreneurs. Jay Clouse sits down with Ankur Nagpal, founder of the course platform Teachable (which he sold for $250M) and current founder of Carry, a Solo 401k provider. Together, they break down how creators and solo business owners can legally pay less in taxes, invest more strategically, and protect their financial future, all by leveraging tools like the Solo 401k.

Key Discussion Points & Insights

Ankur's Introduction to Tax Strategy

• Origin Story: Ankur discusses selling Teachable and how a late decision to consult tax professionals saved him millions in taxes.
  • Quote: “They were able to structure my acquisition where I saved many millions of dollars just because I had that conversation.” (00:09)
• Mission: Frustrated by how little creators know about the tax code, Ankur became "obsessed" with it and sought to productize tax savings for others.
  • Quote: “If you learn how to beat the system, you get to keep potentially hundreds of thousands, millions of dollars more.” (02:21)

The Power of Solo 401k Accounts

• Why They're Important: Solo 401k accounts provide huge tax benefits and investment flexibility, particularly for creators and solo business owners.
  • Quote: “I think a solo 401k could be the most powerful retirement account in America.” (00:36)
• Major Benefit: Possible to deduct up to $70,000/year and invest pre-tax dollars that grow tax-free.
  • Quote: “You can set it up to get a deduction of up to $70,000. Your money grows and compounds tax free.” (00:48)

Knowing When to Prioritize Tax Optimization

• Threshold: Focus on tax optimization when net income exceeds ~$100k; it's less worthwhile below that, but essential above.
  • Quote: “As a creator…get to at least 100k net income, and then it's a good time to start spending on optimization.” (03:41)
• Compounding Effect: The earlier tax optimization starts, the more significant the long-term gains.
  • Quote: “The more that you are able to retain, that’s not net new effort or sales that you have to make, and yet it’s impacting your bottom line just as much.” (03:15)

Why Business Owners Have a Major Tax Advantage

• Creator vs. Employee: Business owners (including creators) have vastly more opportunities to deduct expenses and structure income for tax savings.
  • Quote: “There’s all these things in the tax code that are just rigged for business owners.” (16:48)
• Example: A 1099 physician in CA saves almost $200k/year compared to a W2 physician making the same $1M income. (15:30)

Solo 401k vs. SEP IRA

• Solo 401k Leverage: Solo 401k allows both employer and employee contributions, permitting potentially double the deduction versus a SEP IRA.
  • Example: At $100k income: ~$20k to SEP IRA, but ~$43k to Solo 401k. (11:49–13:44)
• Eligibility: Anyone with net self-employment income is eligible, provided they have no full-time W2 employees besides spouse/partners. (25:34)
• Spousal Exemption: Spouses actively involved can double contribution limits (~$140k household limit). (27:15)

Implementation and Business Structure Tips

• S Corp Election: At $100k+ net income, consider electing S Corp status for additional tax savings (self-employment taxes only on W2 portion). (17:13)
• Payroll and Legitimacy: S Corp owners become official W2 employees, which is "a little more legit" and offers optimized structure. (18:24)

Advanced Tax Strategies

• Direct Indexing: Buy all S&P 500 companies individually to harvest tax losses—makes sense at hundreds of thousands invested in brokerage, not inside Solo 401k. (31:40–33:47)
• Cash Balance Plans: For those making $2M–$3M+, supplement Solo 401k with a cash balance plan to massively increase tax-advantaged contributions (up to $400k for spouses). (36:10)

Potential Downsides & Considerations

• Liquidity Concerns: Money in Solo 401k is generally inaccessible until retirement (except $50k loan), so only contribute what you can set aside long-term. (34:14)
• Form 5500 Reporting: Required if Solo 401k exceeds $250k; minor paperwork, not a major barrier. (34:14)
• Losing Eligibility: Hiring full-time W2 employees (other than spouse/partner) ends Solo 401k eligibility, requiring a switch to a "regular" 401k subject to stricter rules. (25:34–26:27)

Practical Steps and Deadlines

• Timeline: Set up Solo 401k and make an election by December 31st for maximum options, especially for S Corp filers. (41:05)
• Resource: Ankur references a free, comprehensive tax-saving guide for business owners linked in the show notes. (44:03–45:05)

Underdiscussed Strategies

• Money Market Funds vs. High Yield Savings: Use treasury or muni money market funds to achieve similar yields as high-yield savings accounts with far less tax liability, especially in high-tax states/cities. (46:10)

Notable Quotes & Memorable Moments

• “What you earn, it's what you keep. … The difference, there can be an extra, you know, 100, 200K in your pocket every year.”
  —Ankur Nagpal (03:41)

• “People try and do it with fancier investments… I think the best way of growing your net worth is be smart about taxes. Save some amount upfront, and then you use that to index the market. … That’s a difference of tens of millions of dollars.”
  —Ankur Nagpal (05:42)

• “The government gives up to 20% as a 20% deduction for business owners of pass-through businesses. So LLCs and S Corps.”
  —Ankur Nagpal (20:08)

• “Do not let the tax tail wag the dog.”
  —Ankur Nagpal (38:42)

• “AI can create the most generic boilerplate stuff. So…what is unique to what Jay thinks…is more interesting versus something I can get from ChatGPT or whatever.”
  —Ankur Nagpal (45:15)

Timestamps for Major Segments

• 00:09 — Ankur’s Teachable exit and introduction to creative tax planning
• 00:36 — Why Solo 401k is so powerful
• 03:41 — Income thresholds for tax optimization focus
• 11:49 — Solo 401k vs. SEP IRA explanation and mathematical example
• 15:30 — Tax advantages of business owners over W2 employees
• 17:13 — When to elect S Corp status
• 27:15 — Doubling contributions with spousal involvement
• 31:40 — Direct indexing for tax harvesting
• 34:14 — Downsides of Solo 401k (liquidity, complexity, alternative assets)
• 36:10 — Outgrowing the Solo 401k (cash balance plans)
• 41:05 — Year-end Solo 401k setup and contributions
• 46:10 — Money market funds as a tax-efficient cash alternative

Final Takeaways

• Solo 401ks give creators powerful, legal tools to pay less tax and fast-track retirement savings, with flexibility unavailable to traditional employees.
  They unlock major self-directed investment opportunities, especially when incomes exceed $100k net, and can be optimized further by involving a spouse or strategic business entity formation.

• Professional advice is crucial.
  Complexities abound—seek both CPA and financial planner guidance (and understand their differences) to align tax, legal, and investment strategies.

• Act before year-end.
  Many benefits require accounts to be set up and elections made by December 31st.

• Stay curious and proactive.
  As Ankur repeatedly stresses, the tax code rewards those who pay attention. Whether using tools from Carry or elsewhere, every creator and entrepreneur should see this as core to their business growth.

Resource: Free tax-saving guide for business owners mentioned by Ankur available in show notes.
Learn more about Carry: carry.com
Recommended next episode: Protecting your channel legally with attorney Tyler Chao (see following Creator Science episode).