One of the hardest parts of being a business owner is keeping as much of your hard-earned money as possible. Uncle Sam always wants his cut, and I don’t think you shouldn’t give him any more than the bare minimum required by law.

You might think you could just hire an accountant and they would tell you every tip and trick, but that’s really not the case. I’ve hired business CPAs and tax attorneys that charge $400/hr, and very few of them recommended any strategy that would save us money. I ended up reading books and doing online research myself, and THEN going to my accountants and attorneys to see if what I found applied to my business, was legal, and could save us money.

I’ve found that most CPAs are better at filing taxes properly and keeping up to date with the changes in the process year to year and tax attorneys are great help if you get audited or need help arguing your case with the IRS. Sure, if you had unlimited funds and a team of attorneys and accountants you could probably find a way to pay no taxes just like the billionaires, but for most of us small business owners, we’re stuck figuring this out on our own.

So below, I’m going to show you my 10 best strategies for reducing your taxable self-employment income up to $100,000.

Now, I’m not an attorney or accountant, and this is NOT legal, tax, or financial advice, just some information from a fellow entrepreneur with over 20 years of experience. Do your own research, and I recommend you run these strategies by your CPA to make sure they apply to your individual situation. Because every business is different.

Now, let’s get into it…

  • Keep track of ALL business expenses
  • Track Your Mileage
  • Self employed health insurance deduction
  • Save for retirement
  • HSA contribution deduction
  • Section 179 and Bonus Depreciation
  • Take the S-corp election
  • Qualified Business Income Deduction
  • Pay quarterly taxes on time + 10%
  • Choose business sponsorships over personal charitable donations

Keep Track of ALL Your Business Expenses

First – Keep track of ALL business expenses using a business bank account and dedicated business credit card! Keep your personal and business finances completely separate.

I can’t tell you how many small business owners I have met that put personal expenses on a business card or business expenses on their personal card.

This is the most important thing you should do immediately after registering your business… go open a business checking account. As for the credit card, well it’s very possible you wouldn’t be approved for a business credit card as a brand new business with no history of revenues, and it’s okay to use a personal card for business expenses, as long as you choose one card and only use that card for business expenses. It will make it so much easier to reconcile the transactions later when they are all organized into dedicated accounts.

And remember, pay off your balances in full every month – only reason using credit cards is for security, to get points/miles or to increase our cash flow by 30 days

And you want to use a real double entry accounting software – I recommend using an online service like Xero or Quickbooks Online. Xero starts as low as $5.50 a month so there is really no reason not to use it from the start. Real accounting software is so important because it categorizes both your income and expenses, but also your assets and debts. It can easily connect to your bank accounts and credit cards to pull down transactions automatically, you can create rules for categorizing revenues and expenses.

It also allows you to easily generate financial reports for your business to see how profitable you are, which can really help you determine your tax liability throughout the year and plan properly for tax time. Remember, you are taxed on your total net profit regardless of whether you have taken that money out of the business or put it all into new inventory. Using an online bookkeeping software platform will also make it much easier for your accou