Over the years, I’ve noticed something about the business owners who consistently take home more profit than the rest. It’s not just that they work harder, sell more, or have better clients.
The real edge? They take taxes seriously.
Tax planning isn’t a “back-office” task you deal with in April. It’s one of the most powerful tools you have to increase your margins, keep more of what you earn, and grow your business.
Here’s the part most business owners miss: simply handing off your books to a CPA at the end of the year won’t cut it. At that point, the game’s already over, and all your accountant can do is record the score.
Want to be one of the smart business owners? There are six things you need to start doing today:
1. Prioritize Tax Planning
If there’s one thing that moves the needle, it’s proactive tax planning. I’ve worked with hundreds of business owners, and I can usually find a way to reduce their tax bill by $40,000–$100,000—all legally.
The most common excuse I hear? “I’m too busy to think about taxes. That’s why I hire a good CPA.”
The truth is that once January 1st arrives, your CPA is in compliance mode. At best, they’re reporting what happened and trying to minimize the damage. But if you want to change the outcome, you have to take action before the year ends.
Want to grow your business faster? Pay off old debts? Take that dream vacation? Tax planning is one of the best ways to find more money!
2. Talk to a Tax Pro Before Big Decisions
Too many business owners make costly moves before consulting their tax advisor, and it often costs them thousands.
I had a client who withdrew from his IRA at 59 years and 4 months because a golf buddy told him he could once he turned 59. The problem? You have to be 59 and a half. That mistake cost him over $5,000.
Another person sold an investment property and asked me, after closing, if he could do a 1031 exchange. Had he called me earlier, we could have arranged it and shielded his capital gains from taxation.
The takeaway? If you’re considering a major financial move, call your tax professional first. A 15-minute conversation could save you four, five, or even six figures.
3. Keep Your Books Clean
If your bookkeeping is a mess, I can almost guarantee you’re overpaying in taxes.
Maybe you forgot to track that business dinner you paid for on your personal card, or you lost the receipt for an equipment purchase, or maybe you’ve got murky records across the board. That’s a problem!
Good books aren’t just for audits. They’re the foundation of every tax-saving strategy available to you. If your numbers aren’t accurate, neither are your deductions.
Want to keep more of your hard-earned money? Keep better records year-round.
4. Start Your Tax Return Early
If you’re waiting until April to work on your taxes, you’re already behind. Most of the biggest filing mistakes happen in the days leading up to the deadline, when your CPA is buried with other last-minute returns.
Get your documents in early or, if you’re running behind, file an extension. It’s better to buy an extra few months to make sure your taxes are filed properly than to rush your return at the eleventh hour.
5. Set Money Aside for Taxes
When you’re self-employed, there’s no payroll system automatically withholding taxes for you. This means you have to be disciplined.
Waiting until year-end to figure out your tax bill is stressful and expensive. Instead, set aside a percentage of your income each week or month and then make estimated payments every quarter.
This does two things: it keeps you from scrambling for funds at tax filing time, and it helps you avoid costly IRS penalties.
6. Get the Right Tax Partner
Most business owners think they have a “tax planner,” when what they really have is a tax preparer.
There’s a huge difference! A tax preparer simply reports your numbers after the fact. A tax planner helps you make decisions before they hit your return.
If your current advisor isn’t helping you actively reduce your tax liability throughout the year, it might be time to make a change!