The Tax Trap Snares Many Business Owners: A Financial Pro's Guide to 11 Strategies You May Be Missing

If you've ever felt like your business is growing but your wealth isn't, you're not alone. I see it all the time.

On paper, the numbers look strong — revenue is up, profits are respectable — but when tax season rolls around, it's like the wind gets knocked out of your sails. The success you've built suddenly feels diluted.

And that's the problem with how most business owners approach taxes. They treat them like a season instead of a strategy.

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The reality is, if taxes are your single biggest expense — and for most business owners, they are — then ignoring them until April is not just inefficient … it's expensive.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

What I tell my clients is simple: The goal isn't just to pay taxes, it's to position yourself. It's not about beating the IRS. It's about understanding the system you're playing in and making the rules work for you, not against you.

Don't work harder: Plan better

Here's the truth: Wealthy individuals and successful companies aren't necessarily working harder than you. They're just thinking differently.

They look at taxes as a design opportunity. They ask better questions. They don't settle for the default approach. They coordinate strategy across their CPA, attorney and financial adviser so their tax plan doesn't just check boxes, it creates outcomes.

The deeper problem isn't just the taxes themselves — it's how business owners think about them. Too many believe tax planning is a once-a-year event, a box to check. File and forget. But that's not how the tax system works.

The tax code is a living, breathing system designed with incentives baked into it. And those incentives aren't hidden, they're just buried under years of bad advice, rushed decisions and a lack of integrated thinking.

Business owners are problem-solvers by nature. They innovate. They create. They take risks. But when it comes to their tax strategy, many are stuck in the status quo. And let's be honest: Tax season is not when strategy happens.

By the time April rolls around, the game is already over. You don't change outcomes by looking backward. You change them by planning forward. And that requires thinking differently, acting intentionally and seeing taxes not as a punishment, but as a system to navigate.

A good tax plan takes more than just a CPA

What makes this even more complicated is that most business owners don't know what they don't know. They assume their CPA is doing "all the things." But here's what most people miss — CPAs prepare tax returns. That's their job.

What they don't always do is proactively design tax strategies around your goals. That's a completely different discipline. And if there's no bridge between your adviser, your CPA and your long-term vision, the odds are high that opportunities are being missed.

Tax-saving options you may have overlooked

If you're not sure whether your CPA is helping with forward-thinking strategies, ask yourself whether there has been a conversation around any of the following possibilities:

Research & development (R&D) tax credits. Most people think R&D is just for tech giants or pharmaceutical companies, but it's not. If you're improving products, processes or software, you could qualify. These credits can offset wages, materials and more.

The "Augusta Rule" (Section 280A). Rent your personal residence to your business for up to 14 days a year and receive tax-free income, while your business deducts the expense. This is especially powerful for home-based business owners or those who host client events at home.

De minimis safe harbor election. This allows small businesses to immediately expense low-cost property purchases (such as equipment and furniture) instead of depreciating them over years. It simplifies accounting and maximizes deductions upfront.

Qualified business income (QBI) deduction (Section 199A). If you operate as a pass-through entity (LLC, S corporation, sole proprietor), you may qualify to deduct up to 20% of your business income — assuming you're under certain income thresholds or properly structured if you're not.

Bonus depreciation and Section 179 expensing. Accelerated depreciation options allow you to write off large purchases, such as vehicles, equipment and software — sometimes all in the first year. This can create immediate tax savings and boost cash flow.

Intangible drilling costs (IDCs). For those investing in oil and gas projects, a large portion of upfront costs can be written off entirely — even if the well doesn't produce. This is a high-leverage tax shelter for accredited investors looking to offset income.

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Cost segregation studies. If you own commercial or investment real estate, a cost segregation study can reclassify parts of the building (e.g., electrical, HVAC) into shorter depreciation schedules — leading to significant early-year deductions.

Market value timing for Roth conversions (real estate). Converting a real estate asset from a traditional IRA to a Roth IRA while the asset is under construction or undervalued can minimize taxes now and let appreciation grow tax-free long term.

BUILD Banking™ strategy (high-cash-value life insurance). Create your own "private banking" system using whole life insurance. The policy grows tax-deferred, allows tax-free access via policy loans and serves as an asset-protected reserve of liquidity for business needs or succession planning.

1031 exchanges (like-kind real estate swaps). Sell appreciated investment property and defer capital gains taxes by reinvesting in similar real estate. This keeps money working and avoids the tax drag from selling outright.

Opportunity zones. Reinvest capital gains into designated opportunity zone projects and defer, reduce or even eliminate future taxes — especially if held for 10-plus years. This opens the door for tax-advantaged real estate or business development.

These are a few of the most commonly overlooked strategies, but these aren't just about saving money. They're about creating margin — space between what you earn and what you lose to inefficiency. And for business owners, that margin is where opportunity lives.

It's not about how much you make …

There's a big disconnect between earning money and keeping it. Just because your business is profitable doesn't mean your personal financial life is efficient.

I've seen owners with seven-figure top lines who still feel like they're drowning when tax time rolls around — because they never took the time to build a cohesive plan that aligns income, taxes and long-term strategy.

Business owners deserve better than that. They deserve to operate from a position of control, not confusion. But that starts by acknowledging the problem: Tax planning, as most people approach it, is broken. It's disjointed, reactive and often disconnected from the bigger picture.

You don't need more hustle. You don't need more grind. You need a new framework for how you think about money, about taxes and about what's really possible when those things are aligned.

A comprehensive plan includes cash flow

You see, real tax strategy starts with how you think about your money. It's not just about deductions or credits. It's about building an ecosystem around your business that channels income efficiently, legally and with purpose.

That's how you create sustainable, tax-efficient wealth. That's how you scale your business and build a personal balance sheet that actually keeps up with your effort.

And here's the part most people miss: Your tax strategy is your cash flow strategy. When you're able to keep more of what you earn, you unlock the ability to reinvest in your business, secure your retirement, fund new ventures and live with more freedom.

That's what this is really about — control, flexibility and having options.

But none of that happens by accident. It starts with intention. With getting clear about what you want your money to do for you. With seeing tax planning as part of a bigger picture — not an afterthought, not a reaction but a proactive part of your financial design.

Now, I'm not a CPA, and I'm not your tax preparer. My job is to help you think differently. To bring ideas to the table that most people never hear because they're stuck in a system built for compliance, not optimization.

I work with business owners to help align their cash flow, their tax strategy and their personal goals so that all the pieces move in sync.

Because when they do? That's when you stop surviving and start scaling. That's when you stop asking, "How much am I going to owe?" and start asking, "How much can I keep working for me?"

Believe it or not, the IRS wants to reward you

The tax code wasn't written to punish business owners. It was written to reward them — for taking risks, creating jobs, innovating and reinvesting. But if you're not actively designing your strategy, you're likely leaving more money on the table than you realize.

All you need is a road map — a way of viewing your business and your money through a strategic lens, where every decision compounds into greater efficiency and more control.

That's exactly why I put together "The Cash Flow Guide" — to help business owners like you shift from reactive to proactive, from hoping to planning.

This is a practical resource designed to help you align income, eliminate inefficiencies and keep more of what you earn. Because earning more is great — but keeping more in a tax-efficient, sustainable way? That's a game-changer.

Download the Cash Flow Guide at BrianSkrobonja.com.

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