In this instructional video, tax strategist Donna Genie warns small‑business owners that many are overpaying tens of thousands of dollars in taxes because they fail to use tax‑avoidance strategies that Congress intentionally provides. She first confronts the fear of audits and clarifies the difference between illegal tax evasion and legal tax avoidance. She then walks through five high‑impact tactics that can be implemented immediately: (1) electing S‑corporation status to eliminate self‑employment tax on a portion of profit; (2) maximizing retirement‑plan contributions (SEP IRA, solo 401(k), defined benefit or cash‑balance plans) to deduct up to 25% of compensation and build wealth; (3) aggressively using depreciation tools—Section 179, bonus depreciation, and cost‑segregation studies—to accelerate deductions on equipment and real‑estate; (4) establishing an accountable reimbursement plan to capture personal‑expense deductions (cell phone, home office, mileage, conference fees) without tax impact; and (5) employing legitimate family members and renting home space under §280A to shift income into lower brackets. Throughout, she stresses the importance of timing—deadlines for S‑corp elections, retirement‑plan set‑up, asset placement, and cost‑segregation—all of which must be decided before year‑end. She lists five common mistakes (staying a sole proprietor, mixing personal and business accounts, ignoring cost segregation, skipping retirement contributions, and hiring a tax preparer instead of a tax planner) and positions her firm, Calculated Moves, as a proactive planning service. The video ends with a call to action to book a consultation and a teaser for the next episode.
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You overpaid your taxes last year, and not by a little. If your business cleared $200,000 or more, you probably overpaid by somewhere between $15,000 to $80,000. And here's the part that should make you angry. Your accountant didn't do anything wrong. Nobody committed fraud. Nobody botched a number. Your return was correct. It was just filed by somebody who showed up in March after every decision that could have saved you a dime was already locked in. There's a business owner across town right now doing the same revenue you're doing, in the same industry, with the same profit margin, and he paid a fraction of what you paid. He's not hiding income. He's not going to jail. He's using rules that Congress wrote on purpose. Rules nobody ever bothered to hand you. Well, I'm going to hand them to you. 5 of them, in order, that you should attack right now. And that $80,000 number isn't hypothetical. Stick with me, and I'll show you exactly where it comes from. Let's start with the thing that stops most owners from doing any of this. That's fear. Every owner I sit down with eventually says some version of the same sentence: I don't want to do anything that gets me audited. That's great instinct, but most people are terrified of the wrong thing because they've never had anyone explain the difference between tax evasion and tax avoidance. Tax evasion is lying. It's taking cash and never bringing it up. It's writing off your boat as a marketing expense. It's putting your brother-in-law on payroll when he's never done a day's work for you. Evasion is a felony. It carries prison time, and it's not what we're talking about today. Tax avoidance is using rules that were deliberately written to encourage you to do exactly what you already did: hire people, buy equipment, invest in property, save for retirement. Now, that's not a loophole. That's the design. The Supreme Court settled this decades ago. You are under zero obligation to arrange your affairs to pay the maximum tax. None of us are. So when I tell you to do the next 5 things, understand what's really happening. You're not sneaking around. You're not reading the instruction manual that came in the box. And the first page of that manual is the one most owners never turn to. The entity you're operating under. An enormous number of profitable businesses are still running as a sole proprietorship. Or a plain single-member LLC. And here's what that costs you. Every single dollar of profit hits with self-employment tax on top of your income tax. That's roughly 15% before the IRS even gets in to cut its part of income taxes. On $200,000 of profit, that's about $30,000 a year in self-employment tax alone, and it's gone. All for nothing. Once you're consistently profitable, An S corporation election changes that math completely. You go on payroll at a reasonable salary for the work that you actually do. That salary gets payroll taxes just like any employees would. The remaining profit distributes to you without self-employment tax attached. Same business, same revenue, same work, different container. Owners at that profit level routinely save $8,000 to $15,000 a year, every year, forever, From a decision they make once. Now, 2 warnings. First, reasonable salary has to actually be reasonable. Paying yourself $15,000 while distributing $200,000 is how you get an audit, and you genuinely deserve it. Second, if you're barely profitable, an S corp can cost you more in payroll administration than it saves. So this needs a real analysis, not just a YouTube video. Now, structure fixed, you've got taxable profits sitting on the table. Let's move it somewhere that the IRS can't reach. How about retirement contributions? I know, retirement sounds like something you'll deal with later after the equipment's paid off and the hiring's all done. But look at what it actually does. A SEP IRA lets you put away up to 25% of compensation. A solo 401, which is my personal favorite, lets you contribute as the employee and the employer, which usually gets you a bigger number faster than a SEP ever will. And if you're in your 50s with high, stable profit and a small team, A defined benefit or cash balance plan can shelter well into 6 figures in just 1 year. Every dollar you put in is a dollar off your taxable income today. And it isn't gone. It's yours. It's invested, compounding, and completely out of reach by the IRS. This is a strategy people skip and they regret the hardest. You're converting a tax payment into net worth. That's a whole game. That's the entire point. All right, now let's talk about the one that produces the biggest single-year swings. Depreciation. And using it on purpose instead of by accident. Most owners think depreciation is something that just happens to them. You buy a truck, the accountant does something, deduction shows up eventually. That's the passive version, and it's leaving an enormous amount of money on the table. So here's the active version. Section 179 lets you deduct the full cost of qualifying equipment in the year that you place it into service instead of spreading it out over 5 or 7 years. Machinery, computers, furniture, software, And certain vehicles. Now, bonus depreciation stacks on top of that and can accelerate a large chunk of qualifying assets into year 1 as well. The exact percentage has shifted a little with recent legislation, but it's back to 100% current deduction in the first year. Vehicles have their own rules, and they're better than people assume. Vehicles over 6,000 pounds gross weight get dramatically better treatment than a sedan does. If you're buying a work truck anyway, or an SUV, the weight class matters more than most people think. And if you own a building your business operates out of, this is a big one. By default, your accountant probably puts the whole structure in at 39 years for depreciation, and you get just a little small deduction every year until roughly the heat— and you get just a small little deduction each year. But a building isn't one asset. It's dozens. The electrical serving the equipment, the specialty plumbing, the flooring, the parking lot, landscaping, signage, security system. Much of that is 5, 7, or even 15-year property instead of 39. So separating that all out is called a cost segregation study. And on the right property, it can turn $50,000 deductions into $300,000. And there's a mechanism to capture depreciation you missed in prior years Without having to amend old returns. That's the $80,000. That's usually where it's hiding. Now let's go get that money that's already walking out of your pocket every month. The expenses you're paying personally and never deducting. Your cell phone, which is a business phone with a corporate contact list in it. The room in your house where you actually do the work. Your mileage, your home internet, the conference you paid for on your personal card because it was easier. If you're an S corp and you just move money out of the business account to cover it, or worse, you never reimburse yourself at all, you're doing it wrong and you're losing the deduction entirely if the IRS ever audits you. The fix is super easy. It's an accountable plan. It's a formal written policy where you submit documentation for legitimate business expenses and the company reimburses you. Now, done properly, that reimbursement is fully deductible to the business and completely tax-free to you. It never even touches your W-2. It's a document. It just takes a few minutes. Most owners are giving up $5,000 to $15,000 a year in deductions because that document doesn't exist. While we're here, 2 more that are sitting right in front of you. If you have kids and legitimate work for them to do, employing them shifts income into a much lower tax bracket. And it's real, and it's allowed, as long as the work is real and the pay is reasonable. And under Section 280A, your business can rent your home for legitimate meetings, limited number of days a year, and deduct it to the business, and it's not taxable to you personally. Now, both require documentation, both are completely legal, but both get ignored constantly. But here's the thing that determines whether any of this actually works: timing. Almost everything I just described has to be decided before December 31st. The S election has deadlines. Retirement plans have to be established by certain dates. Equipment has to be purchased and actually placed into service, not just ordered, not paid for. It has to be in service and used. Cost segregation ties to the year that you acquired the property. So when you hand your books to somebody in March, understand what that person is actually doing. They are not planning your taxes. They're just reporting them. They're a historian. They're writing down what actually happened. And by the time they open the file, every decision that really mattered It's already set in concrete. Real planning looks different. It looks like a projection in the summer, a check-in in the fall while you can still act on it, a conversation in November about whether the purchase needs to happen this year or next. That's the entire difference between you and the guy across town. Now, before I let you go, 5 mistakes I see constantly. See how many you recognize. 1. Staying a sole proprietor years after the profit justifies an S corp. Mixing personal and business in one account so no deductions can be defended under scrutiny. Owning your building and never running a cost segregation study. Skipping retirement contributions because cash felt tight in a year that you wrote the IRS a giant check. Hiring somebody who files your tax return instead of somebody who plans your year. That last one causes all 4 of the others. So look, None of this is ex nunc risky. This is standard operating procedure for people who own profitable businesses. It's fully available to you today. The only real question is whether anybody is running the play on your behalf. That's what we do at Calculated Moves. We're not a firm that surfaces in March with a stack of forms. We build the plan in advance. We'll tell you what to do while you can still do it, and we quantify it so you know exactly what you're getting. If you want to know your specific number, there's a link below to book a call. Please make sure you have your last return and provide it when you book that so that we can tell you straight what you overpaid. And if this was useful, subscribe. The next one covers the most misunderstood strategy on this list, and getting it wrong is the fastest way to turn a legitimate deduction into an audit.
