When you operate a sole‑owner business, every dollar you make also counts as tax. The good news is that the tax code is full of opportunities to reduce that burden, provided you plan ahead and stay on top of deadlines. Below is a practical guide to proven methods that can help you keep more of your hard‑earned money.

1. Select the Appropriate Business Structure
   

Your entity determines how you’re taxed. Sole proprietorships are simple but expose personal assets to liability. If you’re comfortable with extra paperwork, consider forming an LLC or an S‑Corporation.

• Limited Liability Company: Delivers liability protection and flexible profit‑sharing. Income passes through to your personal return, avoiding double taxation.
  
  
• S‑Corp: Lets you pay yourself a reasonable salary (subject to payroll taxes) and take the remainder as dividends, possibly cutting self‑employment tax.
  
  
  1. Boost Deductions Early
     

The sooner you identify deductible expenses, the more you can reduce taxable income. Common deductions for solo entrepreneurs include:

• Home office expenditures (a portion of rent, utilities, insurance, and internet).
  
• Vehicle mileage or actual vehicle costs if you use a car for business.
  
• Professional services such as legal, accounting, consulting fees.
  
• Health insurance premiums paid directly by the company.
  
• Retirement contributions (IRA, Solo 401k, SEP‑IRA).
  
  

Preserve meticulous records—digital receipts, mileage logs, and a dedicated expense spreadsheet—so you can justify every deduction if the IRS asks.

1. Utilize the Qualified Business Income Deduction
   

Under Section 199A, numerous small businesses can claim up to a 20% deduction on qualified business income. The deduction phases out for higher‑income taxpayers, but it can still shave a sizeable chunk off your liability if your earnings fall within the threshold.

1. Postpone Income, Accelerate Expenses
   

Tax timing is an underexploited strategy. If you foresee being in a lower tax bracket next year—possibly because of a dip in business activity—consider deferring invoicing until January. Alternatively, buy necessary equipment or pay for software subscriptions in December to claim the full deduction this year.

1. Leverage Depreciation and Section 179
   

Large purchases such as computers, office furniture, or a new machine can be depreciated over several years. Section 179 permits you to write off the full cost of qualifying equipment in the year it’s placed in service, up to a limit that changes each year. This can produce a huge immediate tax benefit.

1. Handle Payroll Taxes
   

If you operate as an S‑Corp, you must pay yourself a "reasonable salary." The IRS scrutinizes this closely; a salary that's too low can trigger penalties. After you establish a defensible salary, the remaining profits are taxed only once, at the corporate level, and then at your personal rate on dividends, which are exempt from self‑employment tax.

1. Maintain High Retirement Contributions
   

Solo retirement plans, like a SEP‑IRA or Solo 401(k), let you contribute up to 25% of your net earnings—often surpassing the limits of a traditional IRA. Contributions are tax‑deferred, and you can even deduct the contributions.

1. Take Advantage of Health Savings Accounts (HSAs)
   

If you have a high‑deductible health plan, an HSA provides triple tax advantages: contributions are tax‑deductible, growth is tax‑free, and withdrawals for qualified medical expenses are tax‑free. The contribution limits are generous, offering a powerful way to reduce taxable income.

1. Stay Current on State and Local Rules
   

Many states offer small‑business tax credits, research and development incentives, or low‑income tax rates for sole proprietors. Visit your state’s department of revenue website or consult a local tax professional to ensure you’re not overlooking a credit.

1. Schedule Estimated Taxes
   

Solo businesses often pay taxes quarterly via estimated tax payments. Underpaying can trigger penalties. Employ the IRS’s "Safe Harbor" rule: pay at least 90% of the current year’s tax or 100% of the previous year’s tax (110% if your income exceeded $150,000).

1. Consider a Tax‑Efficient Business Expense Strategy
   

Certain expenses prove more tax‑efficient when treated as capital expenditures rather than current ones. For instance, buying a computer can be capitalized and depreciated, but purchasing office supplies is a current expense. Recognizing these nuances can affect when and how you record costs.

1. Keep an Eye on Emerging Tax Laws
   

Tax legislation evolves. For example, recent proposals to change the deduction for business interest or adjust the thresholds for the Qualified Business Income deduction could affect your strategy. Stay informed via reputable news sites, IRS updates, or by maintaining a relationship with a tax advisor.

1. Work With a Qualified Tax Professional
   

While DIY software can take care of basic filings, a seasoned CPA or tax attorney can uncover deductions you might miss, advise on legal structures, and help you navigate complex areas such as payroll and retirement plans. The cost of professional advice is often counterbalanced by the tax savings they secure.

1. Record Your Reasoning
   

In the event of an audit, having a clear, logical rationale for your deductions, business structure, and income deferrals simplifies the process. Keep a "tax strategy" file that explains your decisions, backed by receipts, contracts, and correspondence.

1. Reassess Annually
   

Tax planning isn’t a single‑time task. Every year, assess your income, expenses, and business goals. Alter your structure, contributions, and deduction strategy accordingly to keep your tax liability as low as possible.

By combining these approaches—structuring your company wisely, maximizing deductions, timing income and expenses, 法人 税金対策 問い合わせ and staying current with tax law—you can dramatically lower the tax burden on a one‑person company. The key is disciplined record‑keeping, proactive planning and periodic consultation with a tax professional. The money you save can be reinvested in your business, used for personal enjoyment, or saved for future plans.