Tax & Retirement Strategies for Business Owners
Use your business to build long-term wealth and reduce your tax burden
Aligning Business Structure With Personal Taxes
Choosing and Using the Right Entity for Efficiency
How your business is structured can have a major impact on how much you pay in taxes and how quickly you can build personal wealth. We help you understand the implications of operating as a sole proprietor, LLC, S-corporation, or C-corporation, and how each affects your income, self-employment taxes, and deductions. In collaboration with your CPA, we explore strategies such as setting a reasonable salary for S-corp owners and taking additional profit as distributions when appropriate. We also consider how benefits like health insurance, retirement contributions, and other perks are treated under each structure. With the right setup, your business can become a more efficient engine for your personal financial goals.
Maximizing Retirement Contributions
Turning Business Success Into Future Financial Security
Business owners have powerful tools to save for retirement while reducing current taxes, but choosing the right plan depends on your income, employees, and goals. We compare options such as Solo 401(k)s, SEP IRAs, SIMPLE IRAs, and defined benefit plans, highlighting how each works and what they might allow you to contribute. For example, a Solo 401(k) can provide high limits and potential Roth features for solo owners, while a SEP IRA offers simplicity and flexible employer-only contributions. In certain high-income situations, a custom defined benefit plan may allow very large, tax-deductible contributions in later career years. To bring this to life, we often walk through scenarios like:
- A solo consultant using a Solo 401(k) to contribute at both the “employee” and “employer” level.
- A profitable small firm selecting a SIMPLE IRA to offer employees a benefit without heavy administration.
- A late-career owner adopting a defined benefit plan to rapidly build retirement assets while lowering taxable income.
- Our goal is to help you choose and implement a plan that fits your business profile and personal timeline.
Integrating Personal and Business Tax Strategy
Coordinating Income, Deductions, and Benefits Across Your Whole Financial Life
For business owners, tax planning doesn’t stop at the company level — it extends into your household finances as well. We look at opportunities like employing a spouse or children when appropriate, which can shift income to lower brackets and support additional retirement saving. Fringe benefits such as health insurance, retirement plan matches, and certain reimbursed expenses can also create tax-efficient value when designed properly. At year-end, timing decisions — such as when to recognize income or accelerate expenses — can help you manage tax brackets and cash flow. By viewing your business and personal finances as one connected system, we help ensure tax strategies support, rather than conflict with, your long-term goals.
Planning for a Tax-Efficient Business Sale
Preparing Today for the Tax Impact of Tomorrow’s Exit
If you plan to sell your business in the future, tax planning should begin well before you start talking to buyers. We coordinate with tax and legal professionals to consider whether changes, such as converting from a C-corp to an S-corp or reorganizing ownership, may be beneficial years ahead of a sale. Where applicable, we explore opportunities like the Qualified Small Business Stock (QSBS) exclusion, trust strategies, or family entities that might reduce taxes on a future sale. We also model different sale structures, including lump sums versus installment payments, to understand how they affect your annual taxes and retirement income. Proactive planning helps ensure more of your hard-earned value ends up in your pocket rather than going to taxes.
Post-Sale Investment and Income Planning
Shifting From Business Cash Flow to Portfolio-Driven Income
Once your business is sold or you begin stepping back, your financial life starts to look more like that of a traditional retiree — but with unique complexities. We help you translate sale proceeds or ongoing buyout payments into an investment strategy and income plan that match your risk tolerance and lifestyle. For installment sales, we coordinate how each year’s payments are invested and how they interact with other income sources and tax brackets. For lump-sum exits, we focus on building a diversified portfolio and defining sustainable withdrawal strategies. This bridge from being an owner-operator to a financially independent individual is a critical part of securing the life you want after the business.
Common Questions About Tax & Retirement Strategies for Business Owners
Your Business Structure, Tax, and Retirement Plan Questions, Answered
What’s the best retirement plan for a small business owner?
The best plan depends on your income level, whether you have employees, and how much you want to save. Solo 401(k)s can be excellent for owner-only businesses that want high contribution limits and potential Roth options, while SEP IRAs offer simplicity and flexible contributions. SIMPLE IRAs may be ideal for small teams where you want to offer a benefit with minimal administrative burden. We help you compare these choices so you can select a plan that fits your business and supports your long-term retirement goals.
How can I reduce my taxes as a business owner?
Reducing taxes often involves a combination of entity selection, compensation strategy, retirement contributions, and thoughtful expense planning. We work with your CPA to explore ways to structure income between salary and distributions, make use of available deductions, and time certain expenses. Retirement plans are one of the most powerful tools because they both reduce current taxable income and build your future nest egg. The right strategy is always customized to your business model, industry, and personal goals.
Is a SEP IRA or Solo 401(k) better for me?
A SEP IRA is generally easier to set up and maintain, and works well when you have no or very few employees, but contributions are employer-only and proportional across eligible employees. A Solo 401(k) can allow higher total contributions at lower income levels, plus optional Roth features and loan provisions, but has more administrative requirements as balances grow. We analyze your income, desired savings level, and whether you may hire employees to determine which fits better. As your business evolves, we revisit these choices to ensure your plan remains the right fit.
How does my business structure affect my personal taxes and retirement saving?
Different structures change how income flows to you, which taxes apply, and what planning opportunities are available. For example, an S-corp can allow part of your earnings to be treated as distributions rather than salary, potentially reducing self-employment taxes when done correctly. Your structure can also impact the design and funding of retirement plans, as well as how a future sale may be taxed. We help you understand these connections so your choice of entity supports both current tax efficiency and long-term wealth building.
What should I think about tax-wise before selling my business?
Before selling, it’s important to understand whether the deal will be treated as an asset sale or stock sale, how that affects capital gains or ordinary income, and how much of the proceeds you’ll actually keep after taxes. Planning might involve restructuring ownership, exploring potential tax exclusions or deferrals, or considering installment sales that spread gains over multiple years. We also connect the sale strategy to your retirement plan so you know what net amount you need to achieve your goals. Addressing these questions early helps you walk into negotiations with a clear sense of what you need and how different offers really compare.
