Money & FinanceBeginnerPreview
Tax Strategy for Entrepreneurs
A practical, numbers-first walkthrough of how US entrepreneurs lower their tax bill the legal way — from picking the right entity to mastering deductions, self-employment tax, and quarterly filings.
Built for new founders, freelancers, and self-employed professionals who file a Schedule C or own a small LLC and want to take control of their taxes.
Course content
Workbook & downloads
Put the course into practice — a printable workbook plus editable templates you can fill in and reuse.
Preview the workbook
This workbook turns the course into action. Each section maps to a course module and combines exercises, fill-in worksheets, and checklists so you build a real, documented tax plan as you go. Work through it with your latest bank statements and last year's tax return nearby, and keep the completed templates as your year-round tax file.
Choosing Your Entity and Getting Set Up
Decide how your business should be taxed and complete the formation steps in the right order.
Exercise: Run Your S Corp Break-Even
Use your projected net profit to test whether an S corporation election would save you money this year. Compare the self-employment tax you would pay as a sole proprietor against the payroll tax on a reasonable salary, then subtract the added compliance cost.
- What is your realistic net profit (revenue minus expenses) for the year?
- What reasonable salary could you defend for your role, based on Bureau of Labor Statistics or Glassdoor data?
- Sole-prop SE tax (net profit x 0.9235 x 15.3%) minus S corp payroll tax on salary minus ~$2,000 compliance cost — is the result a clear, comfortable saving?
- Does your profit reliably clear the ~$50,000-$80,000 zone where the election usually starts paying off?
Worksheet: Entity Decision Worksheet
Fill in each field to document your entity choice and the reasoning, so you can revisit it as the business grows.
- Current legal structure (sole prop / LLC / corporation)
- Current tax treatment (Schedule C / partnership / S corp / C corp)
- Projected net profit this year
- Defensible reasonable salary if electing S corp
- Estimated annual tax saving from S election
- Estimated added compliance cost (payroll + extra return)
- Decision and effective date
- Form 2553 filing deadline (within 2 months 15 days of tax-year start)
Checklist: Formation and Setup Checklist
- Registered the entity with the Secretary of State
- Obtained an EIN free at IRS.gov (did not pay a third party)
- Filed Form 2553 if electing S corp status (within the deadline)
- Opened a dedicated business checking account
- Opened a separate business credit card
- Registered for state sales tax and payroll accounts as needed
- Recorded the March 15 and April 15 filing deadlines in my calendar
Capturing Every Legal Deduction
Build the documentation habits and big-ticket write-offs that lower taxable income without raising audit risk.
Worksheet: Home Office Deduction Calculator
Measure your dedicated, exclusive-use workspace and compute the deduction both ways, then keep the larger figure.
- Office square footage (exclusive business use only)
- Total home square footage
- Business-use percentage (office / total)
- Simplified method: office sq ft (max 300) x $5
- Total eligible annual home costs (rent, utilities, insurance, repairs)
- Regular method: business-use % x total home costs
- Larger of the two methods (claim this)
Exercise: Find Your Missing Deductions
Review three months of business bank and card statements line by line and categorize every charge. The goal is to surface deductions you have been forgetting.
- Which software, subscriptions, and professional memberships are you paying for but not currently deducting?
- What business meals lack a recorded purpose and attendees that you can still reconstruct?
- Did you buy any equipment over $500 that could be expensed under Section 179 this year?
- Are you deducting self-employed health insurance premiums above the line?
Worksheet: Retirement Contribution Planner
Pick a plan and the amount you will contribute to shelter income before the deadline.
- Projected net profit
- Plan chosen (SEP-IRA / Solo 401(k) / SIMPLE IRA)
- Maximum contribution allowed under that plan
- Amount you will actually contribute
- Contribution deadline (note SEP can fund up to filing deadline incl. extensions)
- Estimated tax saved (contribution x marginal rate)
Checklist: Audit-Proof Documentation Checklist
- Every business expense runs through the business account or card
- Receipts captured into accounting software the day they occur
- Meals annotated with business purpose and attendees
- A contemporaneous mileage log (date, destination, purpose, miles) is in place
- Each deduction passes the 'ordinary and necessary' test
- Records retained at least three years (seven for losses and major assets)
Self-Employment Tax and Quarterly Payments
Run the SE-tax and QBI math, then lock in penalty-free quarterly estimates using the safe harbor.
Worksheet: Self-Employment Tax Worksheet
Follow the Schedule SE logic to find what you owe in Social Security and Medicare tax, and the half you get to deduct.
- Net profit from Schedule C
- Multiply by 0.9235 (taxable SE base)
- SE tax = base x 15.3% (up to the Social Security wage base)
- Additional 2.9% on any amount above the wage base
- One-half of SE tax (your above-the-line deduction)
- QBI deduction estimate (up to 20% of qualified business income)
Exercise: Set Your Safe-Harbor Quarterly Payment
Use last year's tax to compute four equal payments that make you penalty-proof regardless of how this year turns out.
- What was your total tax on last year's Form 1040?
- Was your prior-year AGI over $150,000 (if so, use 110% instead of 100%)?
- Safe-harbor target = last year's tax x 100% (or 110%); divide by 4 for each quarterly payment.
- Which payment method will you use — IRS Direct Pay or EFTPS — and is each due date on your calendar?
Checklist: Quarterly Estimated Tax Checklist
- Separate tax-savings account opened
- 25-30% of every client payment swept into the tax account
- Q1 payment scheduled (~April 15)
- Q2 payment scheduled (~June 15)
- Q3 payment scheduled (~September 15)
- Q4 payment scheduled (~January 15)
- Confirmation number saved for each payment
Records, Your Accountant, and Year-Round Planning
Keep clean books, brief the right tax professional, and run a quarterly rhythm that lowers your effective rate.
Checklist: Monthly Close Checklist
- Imported all bank and card transactions for the month
- Categorized every transaction to a consistent chart of accounts
- Flagged any personal charges for owner reimbursement
- Reconciled ending balances to the statements
- Annotated meals and travel with business purpose
- Snapshotted profit and loss vs. the tax set-aside target
Worksheet: Accountant Briefing Agenda
Complete this before any meeting with a tax professional so the same fee buys planning, not data entry.
- Professional engaged (Bookkeeper / EA / CPA) and their PTIN verified (Y/N)
- Reconciled financials attached (P&L and balance sheet)
- Top 3 tax questions to ask
- Major changes this year (new revenue level, hire, large purchase, move)
- Estimated-tax projection requested (Y/N)
- Written action items and deadlines received (Y/N)
Exercise: Build Your Quarterly Tax Calendar
Assign concrete moves to each quarter so taxes are managed all year instead of scrambled in April.
- Q1: which prior-year retirement contribution will you fund, and what is your safe-harbor estimate?
- Q2: after reconciling, has income jumped enough to raise your estimates?
- Q3: at your mid-year review, should you make or revisit the S election and retirement plan?
- Q4: which year-end moves apply — equipment purchase, income deferral, maxing retirement before December 31?
Checklist: Year-End Tax Moves Checklist
- Maxed Solo 401(k) or SEP-IRA up to the annual limit
- Purchased genuinely needed equipment and applied Section 179
- Deferred or accelerated income to manage the bracket (legally)
- Prepaid deductible expenses where it lowers this year's bracket
- Harvested investment losses to offset taxable gains
- Confirmed all moves are documented tax avoidance, never evasion
Your Action Plan
- Open a dedicated business bank account and credit card this week, and stop running personal charges through them.
- Get a free EIN at IRS.gov and confirm your entity's current tax treatment.
- Run the S corp break-even on your projected profit and decide whether to file Form 2553.
- Set up accounting software (QuickBooks, Xero, or free Wave) and import the last three months of transactions.
- Calculate your self-employment tax and your QBI deduction using this year's projected net profit.
- Compute your safe-harbor quarterly payment from last year's tax and schedule all four payments in Direct Pay or EFTPS.
- Open a separate tax-savings account and automate a 25-30% sweep on every payment received.
- Choose and fund a retirement plan (SEP-IRA or Solo 401(k)) before its deadline.
- Hire or schedule a mid-year review with an EA or CPA and bring reconciled books plus a written agenda.
- Put the four quarterly reviews and the March 15 / April 15 filing deadlines on your calendar for the whole year.
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