Your Business Should Fuel Your Wealth.
Stop treating your business like a job. We help you implement S-Corp Optimization, the Augusta Rule, and advanced strategies to keep more of what you earn.
A guide by Taxstra Tax & Accounting — CPA-led tax strategy for business owners
Why Business Owners Pay Too Much
The tax code was written for business owners. Most are too reactive to use it.
The tax code was written FOR business owners. Every major deduction and incentive is designed to reward you for taking risks and creating jobs.
Yet most small business owners treat taxes as an afterthought. They meet their CPA once a year in April, get a surprise bill, and complain. This is reactive.
The "April Surprise"
If you are talking to your CPA only during tax season, it is too late to save money. The books are closed. The year is over. Real tax planning happens in June, October, and December.
The Self-Employment Tax Trap
Most new businesses start as Sole Proprietorships. You pay 15.3% Self-Employment Tax (Social Security & Medicare) on every single dollar of profit, on top of your income tax.
Example: $100,000 Profit
- $15,300 (SE Tax)
- $20,000 (Income Tax, est.)
= $64,700 Take Home
The Solution
We implement the S-Corporation Election. This splits your income into "Salary" (subject to SE tax) and "Distributions" (NOT subject to SE tax). This single move often saves our clients $8,000–$15,000+ per year.
Strategy #1: Entity Structure & Salary
The foundation of every business tax plan.
The "Reasonable Salary" Game
The key to S-Corp savings is paying yourself a "Reasonable Salary"—not too high (wastes tax savings) and not too low (triggers IRS audit).
- RC Reports AnalysisWe use IRS-defensible data to determine the lowest defensible salary for your role, maximizing your tax-free distributions.
- LLC vs. S-Corp vs. C-CorpMost small businesses should be S-Corps. However, venture-backed startups often need C-Corps for QSBS (Section 1202) eligibility (tax-free exit).
When to Switch?
The S-Corp isn't free. You have to run payroll and file a separate tax return (Form 1120-S).
The "Break-Even Point" is typically around $40,000–$50,000 in Net Profit.
If you are making more than this and are still a Sole Proprietor, you are literally donating money to the government. We can often make the election retroactively(Late Election Relief) to recapture savings from the current year.
Strategy #2: Advanced Deductions
Beyond the obvious write-offs. These strategies require planning.
The Augusta Rule
Rent your home to your business for up to 14 days/year. Business gets a deduction; you get tax-free income.
Hiring Children
Shift income to their 0% tax bracket (up to ~$14k). Deductible wages for you, tax-free for them.
Section 199A (QBI)
The "Pass-Through Deduction." Qualify for a 23% deduction on net business income, even if you're in a Specified Service Trade (SSTB).
Travel Blending
The "Sandwich Rule." Schedule business on Friday and Monday to make the weekend stay deductible.
Full list: Small Business Tax Deductions (2026 Guide)
Strategy #3: Buying Assets Smartly
Don't just buy things to 'get a write-off.' Buy assets that generate ROI and provide tax benefits.
Vehicle Strategy (Section 179)
SUVs/Trucks over 6,000 lbs (GVWR) can often be written off 100% in Year 1. We compare this against the Standard Mileage Rate to see which wins.
Medical Reimbursement (HRA)
If your spouse is your only employee, a Section 105 HRA allows you to reimburse family medical expenses as a business deduction. Turns non-deductible healthcare into business expenses.
Bonus Depreciation Tracker
*Restored to 100% by the Omnibus Bill (OBBBA).
Strategy #4: Supercharged Retirement
Forget the $7,500 IRA limit. Business owners have access to the most powerful retirement vehicles in the tax code.
Solo 401k
The ultimate tool for solopreneurs. Contribute as both employer and employee. Total limit up to $72,000 (2026). Includes Roth option.
SEP IRA
Simpler to set up than a 401k. Allows employer contributions up to 25% of compensation. Great for high-income businesses with no employees.
Cash Balance Plan
For the ultra-high earners ($500k+ profit). Stack this on top of a 401k to shelter an additional $200k+ annually.
The "Tax-Free" Millionaire
By combining a Solo 401k with the Mega Backdoor Roth strategy, a business owner can put away $72,000+ per year.
If you do this for 15 years at 8% growth, you will have over $2 Million completely tax-free.
Start Building WealthBusiness Owner Resources
Free guides, calculators, and deep dives to help you make smarter tax decisions.
Not sure where to start? Discover what a tax strategist does and why every business owner needs one.
Business Tax FAQ
Common questions about S-Corps and deductions.
Scale Your Business.
Don't let taxes be the leak in your bucket. Let's implement a strategy that keeps your cash flow where it belongs—in your business.
Find Out What You're Overpaying in Taxes
Book a free 30-minute call to walk through your situation. We'll tell you exactly how our CPA-led team can help — and whether we're the right fit.
What to Expect on the Call
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