Navigating Small Business Tax Challenges

3 tax myths costing you real money: I see founders overpaying every day. Here's what I know after 15 years of building businesses: 1. "Safe deductions = smart business" Wrong. The average business owner leaves $15K on the table yearly from fear. • Vehicle expenses • Home office • Travel • Equipment Reality: Documentation matters more than deduction type. Take what's yours. 2. "DIY = Hustle" This costs you twice: • Time studying tax code instead of closing deals • Missed industry-specific deductions you don't know about Think about it: Every hour learning tax law is an hour not spent on: • Product development • Sales calls • Team building • Strategy That's expensive pride. 3. "December tax planning" Simple truth: Every business decision is a tax decision. Waiting until Q4 means you've missed 9 months of optimization on: • Equipment purchases • Contractor hiring • Payment structures • Growth investments The fastest-growing companies don't track expenses. They build tax strategy into every decision. Here's the framework that works: 1. Document religiously 2. Get industry-specific expertise 3. Make tax strategy part of daily operations Everything else is noise. I use Intuit TurboTax Business for this. (#ad - but I actually do) #TurboTaxPartner #Entrepreneurship #SmallBusiness https://lnkd.in/d6bCQgr2

“My business made $150K in all of 2024. This quarter alone? Already over $200K.” That’s what one of our clients just told us. Last year, they coasted through with modest income. This year, Q1 alone blew past their entire 2024. It’s exciting. But also dangerous. Because based on actual Q1 profit, they owe $75,000 in taxes. But if we go by Safe Harbor rules? Only $10,000. See the problem? This is where most business owners get blindsided: They look at last year’s numbers and make decisions based on the past. But taxes aren’t static. They move with your business. $75K in taxes in one quarter means potentially $300K+ by year-end. It’s not just about paying—it’s about planning. So we immediately pulled out the strategy toolkit: - Retirement plan setup (to reduce taxable income) - Charitable gifting strategies - Real estate acquisition (with short-term rental treatment) - Multi-entity structures to split income and optimize brackets None of this works if you wait until December. You need time to structure. To qualify. To plan. If you’re having your best year ever, tax surprises shouldn’t be part of it. Start now. Or risk playing catch-up with the IRS.

The most expensive tax advice usually comes from non-tax professionals. We've reviewed hundreds of returns from owners who've come to us, and we notice mindsets that keep draining their bank accounts: "I should minimize my income on paper to pay less in taxes." But suppressing your income costs you way more than taxes. You'll struggle to qualify for loans, reduce your SSI benefits, and limit your wealth-building options. Smart planning means optimizing what type of income you have and when you take deductions. "If I make more money, I'll just lose it all to taxes anyway." Tax brackets don't work like that. Moving into a higher bracket only affects the dollars above that threshold; not your entire income. I've seen too many owners avoid scaling because they don't understand this basic concept. "I can figure out that stuff in March." By the time you're filing your return, it's too late for most legitimate strategies. Most moves that can reduce your bill need to happen before December's done. The businesses saving the most on taxes are planning quarterly, not scrambling annually. "I need to keep my business small to avoid tax complications." Bigger businesses tend to have more tax planning opportunities, not fewer. The tax code actually rewards scale in a quite a few ways. But some owners intentionally cap their growth because they're afraid (which is ironic since it becomes their most expensive tax strategy). "My business structure doesn't really matter for taxes." The difference between an LLC taxed as a sole proprietorship versus an S-Corp can save established owners $10K+/year just on self-employment taxes. Your entity structure should evolve as your business grows. What worked at $100K/year isn't going to be optimal at $5M/yr. Professionals worth their fee focus on optimizing your overall tax strategy on a proactive basis, not just finding more deductions.