STRATEGIES FOR BUSINESS OWNERS
Tax Strategies for Business Owners
You're building a business. These strategies make sure the IRS doesn't take more than its share.
Business owners have more tax planning levers than any other group. From entity structure (S-corp vs. LLC) to the QBI deduction, retirement contributions, vehicle deductions, and the Augusta Rule, the opportunities are significant. The key is having a proactive tax strategy rather than a reactive CPA who just files what you give them.
Common mistakes business owners make
- Paying full self-employment tax when an S-corp election would save thousands
- Missing the 20% QBI deduction or not structuring income to qualify
- Not maximizing retirement contributions through solo 401(k) or SEP IRA
- Overpaying on vehicle deductions by not using Section 179
- Not using the Augusta Rule to create tax-free rental income
10 strategies for business owners
Business
S-Corp Election
$5,000-$30,000
estimated annual savings
Business
QBI Deduction (Section 199A)
$5,000-$40,000
estimated annual savings
Vehicle
Vehicle Tax Deduction
$5,000-$30,000
estimated annual savings
Real Estate
Augusta Rule
$2,000-$10,000
estimated annual savings
Retirement
Health Savings Account (HSA) Strategy
$2,000-$5,000
estimated annual savings
Planning
Estimated Tax Payment Optimization
$2,000-$10,000
estimated annual savings
Retirement
Backdoor Roth IRA
$7,000-$14,000
estimated annual savings
Charitable
Donor-Advised Fund
$5,000-$40,000
estimated annual savings
Vehicle
EV Tax Credit
Up to $4,000 (used EVs only)
estimated annual savings
Real Estate
1031 Exchange
$30,000-$200,000+
estimated annual savings
Find your business tax savings
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Frequently Asked Questions
Should my LLC elect S-corp status?
If your net business income consistently exceeds $60K-$80K, an S-corp election likely saves money by reducing self-employment tax. You split income into salary (taxed) and distributions (not subject to payroll tax). Below $60K, the administrative costs may exceed savings.
How does the QBI deduction work?
The Section 199A deduction lets you deduct 20% of qualified business income from pass-through entities. For a business owner earning $200K in QBI, that's a $40K deduction. Income limits and business type (SSTB) restrictions apply. OBBBA extended this through 2028.
Can I deduct my vehicle?
If you use it more than 50% for business: yes. Heavy SUVs (6,000+ lbs GVWR) qualify for up to $30,500 in Section 179 expensing plus bonus depreciation. Keep a mileage log documenting business vs. personal use.