All resources

Tax guide / 3 min read

Top 10 Tax Strategies for Solo Business Owners

By J.T. Ryker, EA

Share Email LinkedIn
On this pageShow sections

General Tax Strategies

These initial three tax strategies aren’t specific to business owners, but I still see a lot of missed opportunities in these areas.

01

HSA Contributions

  • Check if you’re eligible. More plan types are now post-OBBBA.
02

IRA Contributions

  • If you can’t do pre-tax, do Roth (also consider backdoor or Roth conversions).
03

Charitable Donations

  • Up to $2k is deductible in 2026 without itemizing.
  • Track non-cash donations, including appreciated property.
  • Explore Donor Advised Funds (useful in deduction “bunching”).

Business Tax Strategies

For solo businesses specifically, these options are where most of my clients have realized the biggest and most durable tax savings.

01

Quarterly Estimated Payments

  • Paying quarterly estimates based on projections (not just safe harbor) avoids underpayment penalties and surprises at tax filing time.
02

Maximize Business Deductions

  • Most deductions are missed because they aren’t tracked, not because they don’t qualify. Pay for a bookkeeper or an app like Quickbooks.
  • Don’t forget home office deduction (simplified or actual).
  • If your business is new, consider optimizing startup costs.
03

Using a Business Retirement Plan

  • For solo businesses, the Solo401k nearly always beats other retirement plans, plus opening one with the right provider comes with a $500/year tax credit for 3 years.
  • SEP IRA can also work if you have employees or missed the deadline to open a Solo401k. I don’t usually recommend SIMPLE IRAs.
04

S-Corp Conversion

  • Very over-recommended. Not a good option unless at least $100k in profit, but can be great if your situation fits.
  • Full breakdown by a tax professional (including reasonable compensation study, QBI analysis, state-level treatment + PTET, and retirement contribution analysis) is a must.
  • Best when paired with an accountable plan.
05

Accountable Plan Reimbursements

  • Allows reimbursement for business expenses paid personally, such as mileage, phone, internet, and home office use.
  • Necessary if you’re taxed as an S-Corp.
06

Real Estate

  • Short-term rental loophole and REPS are common avenues for savings, but have strict requirements. Both can be complicated and not everyone qualifies.
  • Cost segregation can also be beneficial, but watch out for depreciation recapture.
07

Hiring Your Spouse or Children

  • Jobs must be real. Always document hiring and tasks performed. Pay market wages, and check state requirements for hiring children.

Disclaimer: This checklist is presented for educational purposes only and should not be construed as tax advice. Tax outcomes are based on individual circumstances. Actual results will vary.

Want advice for your situation?

These guides are educational. Your circumstances determine what actually applies.

Get a price