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Maximizing Your Tax Strategy as a Business Owner

Operating a small business or franchise involves many responsibilities, with tax planning being a crucial yet often overlooked aspect. Here at SAS, we understand the intricate tax implications owners navigate daily. Entity type, investments, and succession are three key components of robust tax planning.

Strategic Entity Selection: Understanding the Impact

How you structure your business-whether as an S Corp, C Corp, or LLC-plays a vital role in determining your tax obligations and liabilities.

S Corporation:

Pass-Through Taxation: S Corps passes profits and losses to owners’ taxes, potentially lowering taxes for franchisees.

Avoidance of Double Taxation: S Corps doesn’t pay federal corporate income tax, helping franchisees avoid double taxation.

Shareholder Restrictions: S Corps limits the number and type of shareholders with which franchisees must comply.


C Corporation:

Unlimited Shareholders: C Corps allows unlimited shareholders, attracting multiple investors and aiding franchise growth.

Investment Appeal: Different stock classes in C Corps appeal to investors seeking varied risk and return levels, benefiting franchisees seeking funding.

Double Taxation: C Corps faces double taxation, taxing profits at the corporate and individual levels, which is a factor for franchisees to consider.


Limited Liability Company (LLC):

Flexibility: LLCs offer management and ownership flexibility, which is crucial for franchisees seeking custom structures.

Pass-Through Taxation: LLCs follow a tax model, passing profits and losses to owners’ personal taxes, simplifying tax reporting.

Self-Employment Taxes: LLC owners may face self-employment taxes on net income, contrasting with S Corps, where only wages are taxed. These are aspects for franchisees to assess.

With a seasoned tax team well-versed in business dealings, we can provide expert guidance on the advantages and disadvantages of each entity type. By choosing the proper structure, you can make informed decisions that positively impact your bottom line.

 

Discerning Financial Investments: Balancing Tax Benefits

While leveraging tax deductions is crucial for reducing tax liabilities, strategic spending is equally important. At SAS, we emphasize the significance of thoughtful financial decisions beyond tax benefits. We caution against unnecessary spending aimed solely at tax deductions, advocating for a balanced approach that aligns tax benefits with sound financial strategies for long-term growth.

Enhanced Depreciation Planning: Maximizing Benefits

Strategic depreciation planning lets business owners capitalize on tax deductions when renovating or improving. By collaborating with SAS, you can ensure you reap maximum benefits from bonus depreciation and Section 179 expense deductions.

Bonus Depreciation: allows businesses to depreciate a more significant percentage of the cost of eligible property in the year it was placed in service. This can provide businesses with immediate tax benefits and help stimulate investment.

Section 179 Expense Deduction: allows businesses to deduct the full cost of qualifying property purchased or leased during the tax year up to a specified limit. Section 179 deductions are especially beneficial for small businesses to offset taxable income and improve cash flow.

Our team provides customized advice to align depreciation decisions with your financial objectives, enhancing your business’s short-term and long-term outcomes.

Thoughtful Quarterly Tax Management: Mitigating Risks

Quarterly income tax payments are a fundamental but often overlooked aspect for many business owners. We recommend a proactive approach to managing these payments to avoid penalties and optimize cash flow.

2025/2026 Tax Deadlines:

  • Q1 2025 Estimated Tax Payments due on April 15, 2025
  • Q2 2025 Estimated Tax Payments due on June 16, 2025
  • Q3 2025 Estimated Tax Payments due on September 15, 2025
  • Q4 2025 Estimated Tax Payments for Calendar-Year C-Corp due on December 15, 2025
  • Q4 2025 Estimated Tax Payments for Individuals due on January 15, 2026

Our tax experts can help you adhere to estimated tax payment rules and facilitate robust financial planning processes that safeguard your financial stability.

 

Forward-Thinking Business Transition: Securing Your Legacy

Planning for retirement and business succession is essential for securing your financial future and preserving your legacy. SAS advises creating a comprehensive strategy integrating tax considerations into retirement planning, exploring diverse employee retirement plan options, and developing a robust business succession plan.

  • Tax Considerations: utilizing tax-advantaged accounts like Roth IRAs, managing required minimum distributions efficiently, and staying informed about tax law changes that can affect retirement income
  • Employee retirement plan options: 401(k) plans, SIMPLE IRA plans, SEP IRAs, and defined benefit pension plans, allowing employees to choose options that align with their financial goals and risk tolerance.
  • Business succession plan: buy-sell agreements, estate planning, life insurance policies, and consideration of tax implications for the transfer of assets.

Our experts can help you structure tax-efficient sales or transfer strategies that protect your hard-earned legacy for years to come.

Unlocking Optimal Tax Optimization with SAS

Based on years of experience serving various industries, SAS offers a holistic suite of accounting, management, and advisory services designed to elevate your business trajectory. Contact us today to explore how our tailored solutions can empower your business for sustained growth and success and discover the SAS difference in maximizing your tax strategy as a business owner.