.png)
Tax season is more than just paperwork; it’s a great opportunity to strengthen your business both legally and financially. By choosing the proper business structure, using smart tax strategies, and having clear legal agreements, you can protect your assets and lower your tax bill. Here’s what every business owner should know.
1. Is Your Business Structure Costing You Money?
The way you structure your business affects your taxes. Choosing the wrong type can lead to higher taxes and personal risk. Here’s a quick overview:
S-Corp: Lets owners take a salary and distribute profits, which can lower self-employment taxes.
C-Corp: Good for reinvesting profits, but you’ll face double taxation (corporate taxes plus dividends).
LLC: Flexible, but how it’s taxed depends on how it’s set up (single-member, partnership, or S-Corp election).
2. Don’t Leave Money on the Table—Claim Your Deductions!
Many business owners miss out on valuable tax deductions. Are you taking advantage of these?
✅ Home Office Deduction: If you use part of your home for business, you may qualify.
✅ Business Vehicle Expenses: Deduct mileage or actual expenses for your personal car used for work.
✅ Retirement Contributions: Invest in a SEP IRA or solo 401(k) to lower your taxable income.
✅ Legal & Accounting Fees: Fees for professional services are tax-deductible.
Pro Tip: Keep detailed records to maximize your deductions!
3. Are Your Contracts Protecting You?
Solid contracts can help you avoid tax surprises and legal disputes. Here are some essential contracts to have:
Independent Contractor Agreements: Protects against penalties for misclassifying workers.
Operating Agreements (for LLCs): Clarifies tax sharing and business terms among partners.
Buy-Sell Agreements: Defines what happens if a partner leaves or business ownership changes.
4. Plan for the Future: Business Succession & Tax Planning
What happens to your business if you step away? A good succession plan can help you avoid:
❌ High estate taxes on your business.
❌ Disputes among partners or family.
❌ Unexpected tax burdens for your loved ones.
Consider these strategies:
Selling the business? Structure it to minimize capital gains taxes.
Keeping it in the family? A trust can help with a smooth ownership transfer and tax savings.
Co-owners? A buy-sell agreement can prevent conflicts.
This article is a service of The Ambitious Legacy Firm. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Legacy Planning Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by using the link below to schedule a call with our Client Services Director, who will be able to guide you on scheduling your Legacy Planning Session, or by emailing us at legacy@franco-lawfirm.com. Mention this article when you contact us to find out how to get this $750 session at no charge.
WE CARE ABOUT YOUR LEGACY. LET US HELP YOU PLAN IT!
Copyright (C) 2025 The Ambitious Legacy Firm. All rights reserved.
Comments