The Solopreneur’s Quick Start Guide to Tax Savings

Straightforward strategies to save $10k or more in 2026.

This blueprint is for solo business owners. It’s designed to cut through noise and show you simple tax-saving strategies that actually work.

For each strategy I share, I'll walk through the big picture as well as more tactical how-to's.

All this with the goal of helping you save $10k or more in taxes in 2026.

With that, let's get started! 👇👇

Strategy #1

What is it?

401(k)'s aren't just for big companies. Businesses of any size can use them to supercharge their savings and massively reduce their tax bills.

Solo401(k)'s are specially designed for single-person businesses and don't require the extra expenses and reporting that come with large corporate plans.

Who can have one?

Solo401(k)'s work specifically for businesses run by one owner with no full-time employees. And yes, Solo401(k)'s still work if you employ your spouse, children, or use contractors.

Why do they matter?

Solo401(k)'s have a couple HUGE benefits:

1. 1They allow business owners to legally shelter 10x more of your long-term savings than IRAs—up to $72k per year (or $144k per year for you and your spouse).
2. 2They unlock the ability to better manage the taxes you owe now. By contributing to your Solo401(k) before tax, it reduces your taxable income and lowers your current year tax bill. This can be a godsend if you’re looking for immediate tax savings and don’t mind deferring income for the future.

Solo401k’s also come with other nice side benefits like:

• •No income limits for Roth contributions
• •Allowance for backdoor and mega backdoor Roth strategies, and
• •Options to take loans against your account balance

✨ Pro-Tip: If you make contributions to your Solo401(k) automatically, you can qualify for an extra $500 annual tax credit for up to 3 years. To claim it, make sure your plan has an auto-enrollment clause and ask your accountant to file IRS Form 8881 at tax time.

Action Checklist:

• Know Your Roles: You wear two hats with a Solo401(k) – "employee" and "employer." You can make contributions as both, so you’ll need to specify the type when making a deposit.
• Respect the Limits: For 2026, you can contribute $24,500 (or up to 100% of your wages) as an employee and another 20% of your net self-employment income (up to $47,500) as an employer, for a total of $72,000 (or $144,000 for you and your spouse).
• Max it Out: Even with a Solo401(k), you can still contribute to an IRA. IRA contribution limits are smaller ($7.5k in 2026), but an IRA + Solo401(k) combo brings your total yearly limit to $79,500 (or $159,000 for you and a spouse).
• Deadline Alert: You'll need to establish your Solo401(k) by December 31st of the current tax year. Contributions can be made until your tax filing deadline, but the plan needs to be open before year-end.
• Open Your Account: Fidelity, RocketDollar, and others offer Solo401(k)'s, but each has different features and costs. I use Carry.com. It's easy-to-use and inexpensive. If you like Carry and want to sign-up, use this link to get $100 off.

Now, let's move to Strategy #2...S-Corps ↓

Strategy #2

What is it?

Many business owners have a choice on how they are taxed. Most owners start out being taxed as a sole proprietorship (fyi, single-member LLCs are usually sole props). This tax status may work indefinitely, but as businesses grow they may choose to be taxed as an S-Corp.

Why does this matter?

If you're taxed as a sole proprietor, you pay self-employment taxes on 100% of your income (up to $184,500 in 2026). Self-employment taxes cover social security/medicare and cost more than 15% of your total earnings (on top of income taxes).

With S-Corp tax status, you only pay self-employment taxes on a reasonable salary. At certain income levels, being taxed this way can dramatically reduce your total tax bill.

BUT there are catches…

• •There are extra costs (and extra work) if you're taxed as an S-Corp. You'll need to use a payroll service and your tax filing expenses will be higher. On average, expect changing to an S-Corp to cost an extra $2k or more per year.
• •Some states don’t recognize S-Corp status or charge specific taxes for S-Corps. For example, Tennessee charges a 6.5% excise tax for S-Corps. This can quickly erase any S-Corp savings so be careful.
• •Undoing an S-Corp election comes with risks. If you decide an S-Corp isn’t right for you and switch back, you’re automatically banned from re-electing S-Corp status for 5 years.

✨ Pro-Tip: Do your research before switching. If you know S-Corp status makes sense for you, have your accountant file Form 2553 within 75 days after your tax year ends (March 15th for most people). If you’re past this deadline, talk to them about “late election relief.”

Action Checklist:

• Set a Reasonable Salary: Your salary can't be too low or the IRS will come looking for you. And if it's too high, you'll lose the tax benefits. Work with a licensed tax advisor to set the right salary and make sure they document the process.
• Payroll is a Must: As an S-Corp, you'll need to run payroll, withhold taxes, and file additional tax returns. This means some added admin work (and costs). Payroll services like Gusto can handle most of it.
• Timing is Everything: An S-Corp election makes most sense when your business is netting at least $100k, but this isn’t always the case. Crunch the real numbers before you switch.
• Election Deadlines: Remember the deadlines for making an S-Corp election (file within 75 days after your tax year ends).
• State of the States: Some states have extra taxes for S-Corps. If you live in Tennessee, New York, Illinois, or California, definitely talk to a tax pro before changing your status.

Now, let’s cover Strategy #3…Deductions ↓

Strategy #3

What is it?

Business owners can take many of their legitimate business expenses as tax deductions. Every dollar you deduct is a dollar less that gets taxed. Deductions can add up fast, but many are underutilized. In this section, I'll go over the three most needle-moving deductions for solo business owners.

Which deductions matter most?

Ordinary and Necessary Expenses

Customary expenses in your business are generally 100% deductible, with a few exceptions (like meals and entertainment). Where most business owners miss out here isn’t knowing what’s deductible and what’s not, it’s knowing what their spending is.

If you don’t have a system to track expenses, you’re missing out—simple as that. I routinely see business owners overstating income, and overpaying taxes.

All because they don’t track what they spend!

You don’t have to get fancy here. Using a spreadsheet, Quickbooks, or another app is often all it takes and can save you thousands.

Itemized vs Standard Deduction

Itemizing can be a great tax-saving tool. Only about 10% of taxpayers itemize deductions. So if you don’t, you could be leaving money on the table. Not every expense can be itemized, but usually folks paying a lot in medical bills, mortgage interest, property taxes, state taxes, or giving to charity can benefit most from itemizing.

✨ Pro-Tip: For a full list of what you can include when itemizing, check the IRS website here: https://www.irs.gov/credits-and-deductions-for-individuals

Home Office Deduction

If you use part of your home exclusively and regularly for your business, you can deduct the cost of using that area from your taxes. This deduction isn’t always huge, but every bit helps.

The easiest way to claim the home office deduction is to use the 'Simplified Method', which sets the deduction limit at $5 per square foot for up to 300 square feet (or $1,500 total). A $1,500 deduction would save you about $360 in taxes if you’re in the 24% federal tax bracket.

If you track your expenses for office use or have an office (or outbuilding) larger than 300 square feet, you can use the 'Regular Method' to maximize this deduction. Do this by adding up the pro-rated costs of the office (i.e. its share of mortgage interest, utilities, maintenance/repairs, etc.).

✨ Pro-Tip: If you elected S-Corp status, you’ll need to claim home office expenses a little differently. You’ll need something called an accountable plan and then reimburse yourself for the costs of your office. Work with a tax advisor to set up an accountable plan correctly.

Action Checklist:

• Tracking Your Expenses: Use a spreadsheet, an app like Quickbooks, or even ChatGPT or Claude to help you track what you spend on your business.
• Dollars are in the Details: Add up your annual mortgage interest, property taxes, state taxes, and charitable donations to see if itemizing beats the standard deduction.
• Make Yourself at Home: If you use your home office exclusively and regularly for work, you can deduct the cost of using that space each year.

Last, let’s cover a BONUS strategy…The Augusta Rule ↓

The Augusta Rule

BONUS Strategy

What is it?

The IRS allows you to rent your home tax-free for up to 14-days per year. You can rent to anyone and benefit from this strategy, but it’s most powerful when you rent to yourself.

How does it work?

Business owners sometimes need space for special company events (planning sessions, conferences, strategy meetings). Why not rent your home to your business for these? Through the Augusta Rule, the IRS allows this. And if you use it, you’ll legally reduce your taxes in two ways:

1. 1By generating tax-free rental income for you personally, and
2. 2By lowering your taxable income for the business.

Essentially, the Augusta Rule lets you double-dip and realize two tax benefits at once.

But the Augusta rule doesn’t work for everyone.

There are a few limitations for the Augusta Rule, so here’s what you need to know:

• •You can’t use the Augusta rule if you file your taxes as a sole proprietor (on Schedule C). In this case, the IRS views you and your business as effectively the same entity and prohibits you from renting to yourself.
• •The rule also only applies to property you own in your name, like your primary residence or a vacation home (it can still work if the property is an apartment, condo, or townhome).
• •The rule only allows renting for a total of 14-days per year.
• •The rental price needs to be in line with fair market rates for similar properties (no $100k nightly fees!).
• •If your home is also your primary place of business, the Augusta Rule doesn’t work. This means you can’t claim both the home office deduction and use the Augusta Rule.
• •You must document everything! To avoid problems with the IRS, have a rental agreement, write down the business purpose for using your property, and provide evidence the rental rate is set at market prices. Also, be sure you create an invoice for proof of payment. If you don't, you could be subject to fines and penalties.

In this guide, we covered multiple straightforward strategies to save you $10k or more in 2026. There are plenty of other ways to save out there, but this should be plenty to get started.

Now the only thing left to do is ask:

How much could you save?

If you’re ready for an answer, click the button below to get a quote and book an intro meeting.

Thanks for reading and talk soon!