Tax Planning Tips for Entrepreneurs: Build, Grow, and Keep More
Chosen theme: Tax Planning Tips for Entrepreneurs. Welcome, builders and dreamers. This is your friendly, practical hub for keeping more of what you earn—without losing focus on growth, creativity, and momentum. Subscribe for new founder-friendly tactics, and tell us your biggest tax question today.
Choose the Right Business Structure from Day One
LLC vs. S-Corp: When a Shift Makes Sense
Mia, a solo designer, switched from single-member LLC to S-Corp after consistent profitability. By paying herself a reasonable salary and taking distributions, she trimmed self-employment taxes significantly, freeing cash for a marketing push that doubled her client pipeline.
C-Corp Considerations for Scale and Investors
If you anticipate venture funding or plan to grant stock options widely, a C-Corp can simplify equity and unlock potential future benefits like QSBS. Model compensation, double taxation, and exit strategy carefully before committing—and revisit annually as goals evolve.
Reasonable Compensation: A Cornerstone of S-Corp Strategy
An S-Corp works best when salary is documented thoughtfully. Benchmarks, responsibilities, and market data matter. Underpaying invites scrutiny; overpaying undermines savings. Keep memos, pay stubs, and rationale. Share your approach below, and we’ll feature a real-world review next week.
Get Ahead of Quarterly Estimated Taxes
Set automated reminders and use safe-harbor rules based on prior-year tax or current-year projections. A 30-minute calendar block each quarter beats expensive late fees and the stress spiral that distracts you during peak selling seasons.
Get Ahead of Quarterly Estimated Taxes
Sweep a percentage of revenue into a dedicated tax account every Friday. Tie estimates to rolling twelve-week forecasts. When a big invoice lands, peel off the tax slice immediately so growth plans never rely on money the government will eventually claim.
Get Ahead of Quarterly Estimated Taxes
Jared delayed his first-year estimates to fund inventory. Sales spiked, but so did penalties. The fix? A simple tax bucket policy and monthly check-ins with his bookkeeper. He now budgets confidently and avoids frantic last-minute scrambles.
Unlock Overlooked Deductions
Use the simplified method or actual expenses, but be consistent. Keep photos of the workspace, a floor plan, and utility statements. The key is exclusive and regular use for business. This deduction rewards founders who protect focused, productive space.
Unlock Overlooked Deductions
Choose standard mileage or actual expenses, then stick with it. Maintain a contemporaneous log with purpose, dates, and destinations. For travel, keep agendas and receipts together. A well-annotated calendar can be the difference between allowed and denied deductions.
Tap Powerful Tax Credits
If you build new software features, prototype hardware, or improve processes, you may qualify. Startups can even apply part of the credit against payroll taxes, easing runway. Keep time-tracking, specs, and test notes to link efforts directly to qualified activities.
Tap Powerful Tax Credits
When hiring eligible candidates, file the certification paperwork on time to access meaningful credits. Combine this with documented training plans and retention goals. You can advance your mission, help your community, and reduce your tax bill simultaneously.
SEP IRA vs. Solo 401(k): Pick Your Power Tool
Solo 401(k)s can allow employee deferrals and profit sharing, often enabling higher contributions at modest incomes. SEP IRAs are simple to open and maintain. Run side-by-side projections before year-end to see which structure maximizes your specific savings.
Timing Contributions with Growth Cycles
Front-load contributions in high-profit months, or dollar-cost average across the year. Set rules you can keep, then automate. Future-you will thank present-you for converting variable revenue into steady, compounding investments sheltered from immediate taxation.
A Founder’s Reflection: Stability Beats Stress
Nadia opened a Solo 401(k) after a chaotic first year. Watching balances grow turned anxiety into focus. Her quarterly tax set-asides and automated retirement transfers now move together, giving her confidence to pursue bold product bets.
Adopt a mobile scanner and mileage app, then make capture a habit. Tag expenses by project, client, and tax category. Weekly five-minute reviews beat painful year-end forensic accounting and make your narrative clear if you ever face scrutiny.
