Business tax strategy is the entity structuring, retirement-plan stacking, owner-comp timing, and capital-event positioning that closes on December 31, not April 15. K&K quarterbacks that work alongside your CPA so the filing season they handle starts with a lower number.
Owners of profitable companies typically lose six figures of avoidable tax every year, and the pattern is almost always the same. The CPA is doing compliance well, but compliance happens after the year is over. Quarterly estimates are sized off the prior year, so a strong year shows up as a surprise check. The real planning work, the part that depends on entity structure, compensation timing, retirement plan design, and forward-legislation awareness, never gets a calendar slot.
Most traditional CPAs aren't doing advanced tax planning because that isn't the job they were hired to do. Their work is filing, and they're good at it. Planning is a different specialty: forward-looking, strategy-led, and tied to every other discipline in your financial life. That's the layer K&K runs, with strategy work that starts well before December 31. Your CPA stays your CPA. We hand them clean strategies they can execute inside their normal workflow.
The structure you set up five years ago when revenue was $800K is rarely the structure that fits a $3M operating company. Entity-level decisions move the most tax dollars, and they're the ones owners revisit least often.
A few of the structural questions we run with clients each year:
Owners running profitable LLCs can often save substantial self-employment tax by electing S-corp treatment, but only if reasonable compensation is set defensibly. Get the split wrong in either direction and you trade a tax bill for an audit risk.
For owners with high reinvestment rates, the spread between C-corp rates and personal pass-through rates can change the math, especially when paired with QBI optimization on the personal side.
When the operating company starts owning real estate, equipment, or IP, separating those into related entities protects assets and unlocks planning options the single-LLC structure cannot.
State and local tax (SALT) workarounds through pass-through entity (PTE) elections continue to be one of the highest-dollar planning levers for owner-operators in qualifying states.
None of these decisions belong in October. They belong in a planning session built around forward income, forward investment, and forward exit timing.
The strategies that move real money for a profitable owner-operator usually live outside standard tax software. They're the 98% of the tax code traditional CPA workflows don't touch, not because the CPA is unwilling, but because the workflow isn't built for forward planning. A working list of the strategies we coordinate with clients and their existing CPAs:
Solo 401(k), defined benefit, and cash balance plans layered correctly can shelter six figures of contributions a year. The right combination depends on age, employee count, and target funding level.
Capital purchase decisions move tax materially when the calendar matters; deferring or accelerating into the right year is the planning decision.
Reimbursing legitimate business expenses through a properly drafted accountable plan converts after-tax personal spending into deductible business expense.
Renting a personal residence to the business for legitimate business use up to fourteen days a year produces tax-free income to the owner and a deduction for the business.
Underused outside of obvious technology firms; many service and product businesses qualify for activity that already happens inside operations.
The qualified business income deduction is sensitive to entity choice, compensation level, and business type. Small adjustments to the structure can preserve the deduction for owners on the phase-out edge.
Coordinated through specialist partners for clients with the scale and complexity to justify them. Real planning levers when the rest of the picture supports them.
These are general tax-code mechanics. Whether any of them belong in your plan depends entirely on your entity structure, income mix, and trajectory.
The tax bill on a sale or capital event is almost always the largest single tax bill an owner will ever face. It's also the one most likely to have been left to compliance instead of planning. By the time the LOI is signed, the highest-leverage strategies are already off the table.
Capital-gains mitigation needs runway. Installment sales, qualified small business stock (QSBS), opportunity zones, charitable structures, and pre-sale entity moves all require the work to happen well before the transaction closes. The owners who walk away with the most after-tax proceeds usually started the planning conversation three to five years before the actual exit, even when the timing wasn't certain.
This is why business tax strategy and exit planning live in the same plan at K&K. The capital event decisions you make now shape the tax treatment when you sell, and that gap can be the difference between funding a comfortable next chapter and writing the IRS a check that didn't have to be that size.
K&K does not file taxes. Your CPA stays your CPA. We work in the planning lane, before the filing year is over, and hand strategies to your CPA in a form they can execute inside their normal workflow. Many of the CPAs we collaborate with end up using the same strategies with their other clients, which is part of why CPA referrals are one of our largest client sources.
Three things change when proactive planning runs alongside your CPA:
Quarterly estimates stop being guesses. They reflect the actual plan for the year, including the deductions, deferrals, and entity-level moves we've already mapped.
Year-end isn't a scramble. September through November is when planning happens. By December, the work is done; the CPA is in execution mode.
Tax planning, wealth, and risk stop fighting each other. Retirement plan stacking, insurance-funded strategies, and entity moves get evaluated for total impact, not in three separate silos.
The fee structure varies by engagement scope, income, and complexity, and you see it in full alongside the projected ROI during your Proactive Value Review. K&K delivers value in multiples.
The same coordination logic applies on the personal side. Most owners need personal tax strategies coordinated alongside the entity work, because the operating company and the household share one combined tax picture. Both sit inside our Advanced Tax Planning hub.
LLCs use pass-through taxation, so the entity itself doesn't pay federal income tax in most cases. The income flows to the owner's personal return. Real reduction comes from how the LLC is structured (S-corp election, holding company layering), how compensation is split between salary and distributions, and which retirement strategies are layered on top.
Entity structuring usually starts to matter at $100K of business income, and the ROI grows quickly above that. By the time business income clears $500K, the cost of running with a sub-optimal structure is typically tens of thousands a year. The right answer depends on your industry, reinvestment rate, and where your personal income lands.
Federal income tax, state income tax, and self-employment tax stack on the same incremental dollar of business income. For an owner in a high-tax state without proactive planning, the combined marginal rate on the next dollar can land north of 60%. Most of that is preventable through entity structure, compensation design, and timing decisions made before the year closes.
Common full deductions include qualified business equipment under Section 179, ordinary and necessary operating expenses, employee retirement plan contributions, and qualified health insurance. The bigger savings sit in strategies that go beyond standard write-offs: retirement plan stacking, accountable plans, and capital purchase timing.
CPA filing fees for a business return typically run $1,500 to $7,500 depending on entity type and complexity. The more important number is the gap between what a compliance-only CPA produces and what proactive planning can produce on top. For a profitable owner-operator, that gap is regularly $50,000 to $200,000+ a year. K&K clients save an average of about $54,000.
Yes, and most clients do. K&K plans; your CPA files. We coordinate strategies before December 31 and hand them to your CPA to execute through their normal process. Many CPAs appreciate the planning layer because it makes their compliance work cleaner.
If this year's number was bigger than it should have been, the time to fix next year's is now, not next April.
or call (804) 372-8307. We'll cover your entity structure, this year's exposure, and the specific levers worth pulling before December 31. You can also start with our tax savings calculator for a directional estimate. See Business Owners overview for the full picture of how the Virtual Family Office model serves owner-operators.
Important disclosure: Kotini & Kotini coordinates tax strategy proactively; tax filing and preparation are performed by your CPA. K&K does not provide legal advice or fiduciary investment management directly. Strategies referenced on this page are general tax-code descriptions, not specific recommendations. See our disclosures page for the full description of the coordination model.
