Tax Planning Essentials for Small Business Owners
Apply the exclusive and regular use rule, then choose simplified or actual expense methods for your home office. Track square footage, allocate utilities, and document internet and mobile costs. Comment if you want our worksheet to size your deduction accurately.
Connect bank feeds to cloud accounting, use receipt capture apps with OCR, and reconcile monthly without fail. A calendar reminder beats year‑end panic every time. Subscribe for our reconciliation checklist and keep your deductions safely documented year‑round.
Records That Withstand an Audit
Open dedicated checking and credit for the business and avoid commingling. Pay yourself through payroll or owner draws rather than swiping the business card. Clear separation protects your records, strengthens your story, and improves audit readiness. What’s your system?
Records That Withstand an Audit
Quarterly Estimates Without the Panic
Safe Harbors and How to Calculate Them
Use the safe harbor rules—generally 90% of current‑year tax or 100% (110% for higher incomes) of prior‑year tax—to avoid penalties. Model estimates with Form 1040‑ES or 1120‑W. Subscribe to grab our estimator template and schedule your reminders today.
Cash Flow Buckets and a Tax Sinking Fund
Automate weekly transfers to a separate high‑yield tax account, guided by a simple percentage of revenue. Pay via EFTPS on a schedule, not emotion. This habit smooths seasonality and protects payroll. Share your percentage target and we’ll weigh in with tips.
Seasonality, Surprises, and Penalties
Windfalls and seasonal spikes happen. Adjust estimates, review Form 2210 implications, and communicate changes with your tax pro early. A mid‑year checkup beats an April shock. Post your toughest timing question and we’ll cover it in our next newsletter.
Solo 401(k), SEP IRA, and Defined Benefit Plans
Owner‑employees can shelter substantial income with Solo 401(k)s, while SEPs offer simplicity. Very high earners may consider defined benefit plans for outsized deductions. Mind deadlines, W‑2 wage requirements, and coordination with payroll. Subscribe for our contribution planner.
HSAs, QSEHRA, and ICHRA for Small Teams
HSAs deliver triple tax advantages; QSEHRA and ICHRA reimburse premiums and medical costs with structure. Document policies, communicate eligibility, and track reimbursements carefully. Comment if you’d like our comparison chart to match options with your headcount and budget.
A Real Pivot: Lowering Taxable Income to Unlock QBI
A photographer boosted pre‑tax retirement contributions, slid under the QBI threshold, and increased the 199A deduction at once. Two levers, one result: lower tax. Tell us your target income range, and we’ll send scenarios to model the sweet spot.
Owner Pay, Payroll, and the QBI Deduction
Set a defensible salary based on duties, experience, and market rates, then document the method. Too low invites scrutiny; too high shrinks savings. Subscribe for our reasonable comp worksheet and benchmark your role with confidence before year‑end.
