Top 10 Tax Strategies for Business Owners

Watch the video above, then use this playbook to take action.
Need deadlines and an estimate calculator? Open the Tax Playbook & Estimator.

The quick take

• Pick the right entity + compensation and keep it current.
• Install an Accountable Plan so reimbursements are deductible to the business and non‑taxable to you.
• Stack retirement (401(k) + profit‑sharing + cash balance) for large deductions.
• Use QBI rules intentionally; align payroll with the calculation.
• Coordinate state tools (PTET, apportionment) with federal strategy.
• Accelerate with bonus/§179/cost seg; use credits; shift income via family employment; leverage HSAs/HRAs; and time giving.

1) Entity structure & compensation (the foundation)

Why it matters: S‑Corps can reduce self‑employment tax on distributions, but you must pay reasonable compensation.

• Too high → needless payroll tax.
• Too low → reclassification risk.

How to do it:

• Use cost (duties × hours × wage) and market (comparable roles) approaches.
• Document your compensation study; revisit annually as profit and duties change.
• At higher profits, savings on the SE/payroll layer can be substantial.

Action: Book a comp study review and memorialize your methodology.

2) Accountable Plan reimbursements (turn life costs into business deductions)

What qualifies: Business‑use share of home office, phone, internet, mileage, and similar items.
Result: Deductible to the business, non‑taxable to you (when substantiated).

Action:

• Adopt a written policy.
• Submit a monthly reimbursement form with receipts/logs.
• Add COA categories (Home Office Reimb., Mobile/Internet Reimb., Mileage).

3) Retirement stacking (401(k) + PS + cash balance)

Why it works: Combining plans can move $50k–$300k+ into tax‑advantaged space, creating large current deductions while building long‑term wealth.
Action: Engage a TPA/plan designer to model designs across owners/staff and cash‑flow.

4) QBI design (up to 20% for pass‑throughs)

Key idea: Up to 20% of qualified pass‑through income may be deductible, but W‑2 wages, taxable income, entity type, and limits/phase‑outs drive the math (C‑Corps don’t qualify).
Action: Coordinate reasonable salary and profit flow with QBI rules; monitor throughout the year, not at filing time.

5) State strategy (PTET & apportionment)

• PTET: Elect to pay state income tax at the entity so the business deducts it (can bypass personal SALT limits).
• Apportionment: For multi‑state operations, allocate receipts/payroll/property per each state’s rules - don’t over‑report where you don’t have to.

Action: Model cash‑flow impact and compliance before electing; set calendar reminders for state deadlines.

6) Accelerate deductions with depreciation

• Cost segregation for buildings/leasehold improvements front‑loads depreciation into early years.
• Bonus depreciation / Section 179 for qualified equipment and >6,000‑lb vehicles can allow first‑year expensing (facts and limits apply).
• You generally can’t double‑dip; pick the right lever per asset.

Action: Build an asset roadmap; verify placed‑in‑service dates; coordinate elections in your return.

7) Credits that move the needle (especially R&D)

• Qualifying process, software, or systems work can generate credits that offset income (and sometimes payroll) tax.
• Success depends on documentation: time tracking, SOWs, repos, and narratives.

Action: Run a credit screening; stand up lightweight project documentation now.

8) Family employment & income shifting

• Hire spouse/kids for real work at reasonable pay; shift income into lower‑tax buckets.
• With the right structure, younger workers’ wages may avoid FICA, and funds can seed a Roth IRA, education savings, or long‑term investing.

Action: Define duties, rate, and timesheets. Pay by check/payroll; keep a personnel file.

9) Health strategies (HSAs & HRAs/QSEHRA)

• QSEHRA/ICHRA can reimburse individual policies pre‑tax (plan rules/notice requirements apply).
• HSAs: deductible in, tax‑free growth, tax‑free out for qualified medical expenses. Coordinate with plan design and payroll.

Action: Ask your broker/PEO which structure fits headcount and budget; set payroll codes and documentation.

10) Charitable planning & timing

• Use DAFs, appreciated stock, and timing against high‑profit quarters.
• Pair giving with bracket/QBI/PTET planning so gifts produce the most deduction where it matters.

Action: Draft a giving calendar; pre‑fund DAFs in strong years; keep receipts and acknowledgment letters.

Implementation checklist (HavenStone quick start)

• Re‑run entity & compensation study; minute your “reasonable comp.”
• Adopt Accountable Plan; start monthly reimbursements.
• Model retirement stacking (401(k)+PS+cash balance) with a TPA.
• Align QBI with payroll/profit targets; monitor quarterly.
• Decide on PTET and confirm multi‑state apportionment.
• Build a fixed‑asset plan; choose bonus/§179/cost seg per asset.
• Screen for credits (R&D, etc.); set up simple documentation.
• Stand up family employment with job descriptions and timesheets.
• Implement HSA/HRA/QSEHRA with plan docs and payroll codes.
• Draft a charitable timing plan (DAF/appreciated stock) for high‑profit periods.

Tools: Deadlines & estimates → Tax Playbook & Estimator.

What to do next

Simple start: Pick two moves (Accountable Plan + compensation tune‑up) and implement this week.
Next step: Map your retirement, asset, and state strategy for the year.
Full service: Book a free strategy session. We’ll configure your structure, install the monthly cadence, and quantify your savings.