As the year winds down, most entrepreneurs are focused on finishing strong with more sales, more momentum, and getting more done.
But if you’re not thinking about taxes right now, you’re probably leaving thousands on the table. Because by the time April rolls around, it’s too late to change the outcome. The real savings happen before the clock strikes midnight on December 31st.
So, whether you’re a high-income solopreneur or running a multi-employee business, here are three strategic moves you can make this quarter to reduce your tax bill without cutting corners or increasing audit risk.
1. Rethink Your Business Entity (And How You Use It)
Still filing as a sole proprietor or Schedule C? That structure is one of the least efficient ways to pay taxes.
Worse yet, if you’re making over $250K/year, it could also increase your audit risk, jumping from around 1% to 16% at the $500K threshold.
Why this matters:
- Filing as an S Corporation can let you split income into salary (taxed) and distributions (not subject to self-employment tax)
- That simple shift can often save $10K–$15K+ annually for growing businesses
- If you have a partner, consider using two LLCs taxed as S Corps that jointly own a partnership. It gives you flexibility and legal protection
Pro Tip: Even if you already have an LLC, you may be able to elect S Corp status retroactively for 2025 if you act soon.
2. Pay Your Kids Through Your Business
Sounds wild, right? But this is one of the most underutilized (and IRS-approved) wealth-building strategies available to entrepreneurs.
Here’s how it works:
- You can pay your child up to $14,600 (standard deduction for 2025) through your business without them paying federal income tax
- Your business deducts the wages as a legitimate business expense
- Your child can use that income for real-life expenses, or invest it in a Roth IRA for future tax-free growth
Just make sure the work is age-appropriate, documented, and paid at a reasonable market rate.
Producer Move: Use your tax strategy to transfer wealth, teach financial literacy, and fund generational legacy all while reducing your tax bill.
3. Use the Augusta Rule (a.k.a. the “14-Day Tax Loophole”)
If you’ve never heard of this one, prepare to be amazed.
The Augusta Rule lets you rent out your personal home to your business for up to 14 days per year, and not pay a dime in income tax on that rent.
The play:
- Host planning meetings, team strategy sessions, video shoots, or masterminds at your home
- Charge your business fair market rent for the space
- Deduct it as a business expense
- Keep the income personally tax-free
Just keep records: date, agenda, who attended, and how you calculated the rate.
Bottom Line
You don’t need to grind harder to lower your tax bill. You just need to use the tax code the way it was written.
When you take action before year-end, these three strategies alone could save you $10K–$30K or more, without increasing risk or cutting back on lifestyle.
So, before you wrap up Q4, take a moment to review your setup with your financial team, or better yet, build that team if you haven’t yet.
For assistance, we have a team of wealth architects ready to help. Click here to apply for your free 1-on-1 strategy session.
