Make Taxes Fair | Educational Articles

10 Smart Tax Moves for High-Income Entrepreneurs

Written by Chris Middleton | Oct 2, 2025 5:00:00 PM

If you are paying $100,000 or more in taxes every year, you know the sting of watching money you worked hard for vanish into government accounts.

It feels frustrating, and sometimes it feels unfair.

The truth is, it often is unfair. Not because you are doing something wrong, but because the system is designed to keep business owners like you reactive instead of proactive.

Most CPAs, as we often say, are happy historians.They record what has already happened, they keep you compliant, and they file your returns. That is important, but it is not a strategy.

Strategy is about looking forward, making intentional moves, and using the tax code as a tool to protect what you earn.

That is exactly why we built the CLEAR EDGE Framework. It is the system we use to evaluate every business owner’s situation, identify what is missing, and design strategies that build upon each other.

Instead of one-off tips that come and go, CLEAR EDGE creates long-term, repeatable savings.

The ten moves you are about to see are not random. Each one connects to a pillar of the CLEAR EDGE framework, giving you a system you can actually use.

1. Choose the Right Entity Structure

Your legal structure is one of the most important decisions you will ever make as a business owner.

Too many entrepreneurs stay with the setup they started with, even when the business has grown far beyond it.

This is why Legal Structure is a pillar of CLEAR EDGE.

The right choice can mean tens of thousands of dollars in savings. An S Corporation may reduce self-employment taxes by splitting your income between salary and distributions.

A C Corporation may make more sense if you are scaling aggressively, reinvesting profits, or preparing for an exit.

This is not just paperwork. This is a foundational strategy that should be reviewed regularly as your company evolves.

2. Implement an Accountable Plan

When we focus on Deduction Optimization in CLEAR EDGE, one of the first places we look is an Accountable Plan.

Too many business owners miss this, and it costs them every single year.

An Accountable Plan allows your business to reimburse you for legitimate work-related expenses. These reimbursements are deductible for the business and tax-free for you personally.

That means things like your home office, internet, travel, or even your cell phone bill can become powerful tools instead of sunk costs.

If you are not using an Accountable Plan, you are effectively donating to the IRS.

3. Max Out Tax-Free Fringe Benefits

The Employees pillar of CLEAR EDGE is not just about payroll. It is about building a system where investing in your people also reduces your tax bill.

Fringe benefits are a perfect example.

The IRS allows for benefits like educational assistance, health reimbursement arrangements, achievement awards, or even company-provided phones to be tax-free for your team and deductible for you.

That means you can strengthen retention, show appreciation, and reduce taxes simultaneously.

Smart entrepreneurs know this is not about spending more.

It is about spending with intention.

4. Use Retirement Plans to Defer Taxes

When it comes to the Retirement Planning pillar, high-income entrepreneurs have opportunities far beyond the average 401(k).

If you are paying six figures in taxes, you need tools that match your income level.

Cash Balance Plans or Defined Benefit Plans allow six-figure contributions that are deductible today while also building long-term wealth for tomorrow.

Even Solo 401(k)s with profit sharing can create powerful advantages if structured correctly. This is about capturing deductions now and building a future where you have options, not just obligations.

5. Hire Your Kids (the Right Way)

This move surprises people, but it falls squarely in the Accumulation of Wealth pillar.

When you hire your kids to do legitimate work in the business, you shift income from your high tax bracket into theirs.

If they are under 18 and you operate as a sole proprietorship or partnership, you may avoid payroll taxes entirely.

They can earn up to the standard deduction without paying federal income tax, and you can also help them start contributing to a Roth IRA. That is not just tax savings.

That is generational wealth building, using dollars that would have gone to the IRS.

6. Maximize Tax Credits

The Credits pillar exists in CLEAR EDGE because credits are often the most overlooked and most powerful opportunities.

Unlike deductions, which only reduce taxable income, credits reduce your taxes dollar for dollar.

Think about the R&D credit, energy efficiency credits, or even state-specific opportunities that most CPAs never bring up.

These are often the difference between writing a six-figure check to the IRS and reinvesting that same money into your business.

The tragedy is that most entrepreneurs never hear about them because no one is asking the right questions on their behalf.

7. Rent Your Home to Your Business

Another example of Deduction Optimization is the ability to rent your home to your business.

If you use your house for legitimate board meetings, planning sessions, or retreats, your business can rent it for up to 14 days each year.

Your business deducts the rent. You receive the income tax-free.

This is not a loophole. It is the law, and it is sitting right there waiting for entrepreneurs who know how to use it.

8. Establish a Board of Directors

The "Employees" and "Getting Organized" pillars intersect here. Establishing a board creates accountability and also unlocks tax benefits.

Travel, meetings, and even stipends can be deducted when properly structured and documented.

However, the benefit is greater than just tax deductions.

A board professionalizes your business, strengthens your compliance, and creates a paper trail that reinforces audit defense.

You get the tax advantages and the peace of mind that comes with being organized.

9. Implement a Real Tax Strategy Year-Round

The Efficiency pillar is about one thing: making sure you are not stuck scrambling in April. If you are only thinking about taxes when your CPA sends you a reminder, you are already too late.

Tax savings come from consistent action.

Quarterly reviews, updated documentation, and adjustments along the way are where the real results live.

Integrating CLEAR EDGE throughout the year ensures that your decisions on hiring, spending, and growth are aligned with tax impact.

This is the difference between reactive tax prep and proactive tax strategy.

10. Plan Your Exit Early

Finally, the Exit Planning pillar. How you leave your business matters just as much as how you build it.

Whether you are selling, transitioning to family, or retiring, planning early gives you control over the tax impact.

From installment sales to 1031 exchanges to Opportunity Zones and gifting strategies, some tools reduce what you owe and maximize what you keep.

The sooner you start, the more options are available to you.

Why CLEAR EDGE Matters More Than Any Single Move

Each of these strategies has its own power, but none of them is a magic bullet. The true value emerges when they are integrated into a system. That is what CLEAR EDGE provides.

Most CPAs record history. We design a strategy.

The CLEAR EDGE framework combines legal structure, credits, employees, wealth, retirement, exit planning, deductions, organization, and efficiency into a roadmap that consistently produces tax savings of 30 to 50 percent.

This is not about gimmicks. It is about fairness.

You have taken the risks, created jobs, and built something valuable.

You deserve to keep more of what you earn, and CLEAR EDGE is the system that makes that possible.

Ready to Stop Overpaying? Let’s get you on the CLEAR EDGE framework. Start a conversation and take your first step today.