For most small business owners, tax season is reactive. You gather documents, send them to your CPA, brace yourself for the number, and move on.

That approach quietly costs you money every year.

The business owners who build wealth don’t treat tax filing as the finish line. They use the months before filing as a planning window as a chance to redirect dollars away from taxes and toward long-term net worth.

If you’re a profitable small business owner, especially one balancing growth, family, and lifestyle, these moves can materially change both your tax bill and your financial trajectory.

First, my name is Mike Metzger. I’ve been a Durable member since the beginning and own two businesses: a hair salon in Colorado called Lifted Salon (URL) and a financial services firm called Lifepoint Financial Design (URL) that helps business owners navigate big financial decisions, including taxes.

This topic is one I’m passionate about and with tax season upon us, I worked with Durable to put together what should be a helpful guide for any business owner thinking about tax season right now. Let’s dive in.

1. Run an Entity Structure Checkup

One of the biggest tax leaks I see is business owners outgrowing their entity structure without realizing it.

Your structure — LLC, S corporation, partnership, or sole prop — directly affects:

How much you pay in self-employment taxes
How compensation is split between salary and distributions
Which retirement and tax strategies are available to you

Before filing, you should review:

Your business net profit
How much you paid yourself via payroll vs distributions
Whether your current structure still fits your income level

For many owners with consistent profits, structuring as an S corporation can significantly reduce self-employment taxes by properly separating reasonable salary from distributions. On the other hand, I also see owners stuck in structures that are overly complex, poorly maintained, or no longer optimal. In years where things change, your entity structure is the first place to start.

2. Maximize the Right Retirement Strategy (and Don’t Forget Spousal IRAs)

Retirement contributions are one of the most powerful — and underutilized — tax tools available to small business owners.

Before filing, review:

Whether you’re using a Solo 401(k), SEP IRA, or employer 401(k)
If profit sharing is being utilized or ignored
Whether higher-profit strategies like Safe Harbor or Cash Balance plans make sense

A well-designed 401(k) with profit sharing can allow owners to shelter a significant portion of income while building personal net worth. In strong income years, this can mean redirecting tens of thousands of dollars from taxes into long-term growth.

And here’s an often-missed layer: Spousal IRAs.

If your spouse has earned income you may be able to fund a spousal IRA even if they are not working full-time. This allows additional tax-advantaged savings inside the household and helps balance long-term planning between spouses.

The rules matter, the timing matters, and the plan design matters. When coordinated correctly, retirement planning becomes forced wealth creation instead of a forgotten line item.

3. Use “Overlooked” Tax Strategies the Right Way

This is where proactive planning really shows up. Here are some of the core elements to consider.

Health Savings Accounts (HSAs)

If you’re eligible for a high deductible health plan, maxing out an HSA is one of the most tax-efficient moves available:

Contributions are deductible
Growth is tax-free
Qualified medical withdrawals are tax-free

Used strategically, HSAs can function as a stealth retirement account while covering healthcare costs along the way.

The Augusta Rule (Done Properly)

Business owners can rent their personal residence to their business for up to 14 days per year, tax-free personally, for legitimate business use, such as meetings, planning sessions, or filming content.

The key is doing it correctly:

The rent must be reasonable
The business purpose must be legitimate
A written lease agreement should exist between you and the business

When structured properly, this allows income to move out of the business as a deduction without creating personal taxable income.

Paying Your Spouse or Children for Legitimate Work

If your spouse or children perform real, necessary work for the business, they can be compensated just like any other employee.

This shifts income to lower tax brackets, funds IRAs or savings for family members, and keeps money working inside the family system, all while staying compliant.

These strategies are powerful, but only when they’re documented, reasonable, and coordinated with your overall plan. Proceed carefully here, but it is important to consider these tax strategies if they apply to you.

4. Clean Up Your Books and Claim the Deductions You’re Already Missing

A surprising amount of overpaid tax has nothing to do with strategy and everything to do with bookkeeping.

Before filing, you should:

Reconcile all accounts
Ensure expenses are properly categorized
Review subscriptions, software, insurance, and recurring charges
Confirm home office, mileage, and travel tracking where applicable

Clean books do two things: they support legitimate deductions and they give you clarity. When you understand true profitability, you can make better decisions about taxes, cash flow, and personal income without surprises.

5. Turn Tax Planning Into a Wealth Plan

The most important shift is this: stop treating taxes as the end of the conversation.

Taxes are a signal that your business is producing income. The real question is what you’re doing with that income after it shows up.

Before filing, ask yourself:

How much of my business profit is actually becoming personal net worth?
Am I building assets outside the business?
Do I have a plan for excess cash flow?

Too many business owners generate great income but struggle to build lasting wealth. The goal isn’t just to lower this year’s tax bill, it’s to create a system where your business consistently funds your future.

When tax strategy, retirement planning, cash flow, and investments are aligned, taxes stop feeling punitive and start feeling manageable.

Where This All Comes Together

This is the work a great financial partner can help business owners navigate, and what we do at Lifepoint Financial Design.

Here’s your quick checklist:

Review entity structure and compensation
Design retirement and HSA strategies
Coordinate Augusta Rule and family payroll correctly
Clean up books and working alongside your CPA
Align business cash flow with personal wealth goals

The result is clarity, lower tax drag, and a business that supports your life.

For owners who want more than “filing and hoping,” tax planning becomes a strategic advantage. The window before filing isn’t just administrative. It’s an opportunity to build real wealth, as long as you know where to look.

5 Moves Business Owners Should Make Before Filing Taxes