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I’ve been a CPA for more than 40 years, and in all that time, I’ve never met an entrepreneur who likes taxes.
I understand why. Filing a return can be time-consuming and complicated. The possibility of an audit feels intimidating. And the cost can be high. Each year, Americans collectively work nearly four months just to cover their combined federal, state and local taxes. If you earn $100,000 a year, that can add up to more than $1 million over the course of your career — money that could otherwise be invested in your business or your family.
But the real problem isn’t the tax law. It’s your mindset.
With a shift in perspective and focused action, entrepreneurs can achieve a very different outcome. It’s time to stop viewing taxes as something to fear or resent. In reality, the tax code offers a roadmap to building lasting wealth.
Why do tax incentives exist?
The tax code isn’t just a revenue collection tool. Governments use it to influence behavior. While taxes are often portrayed as a burdensome system that takes from individuals and businesses, the truth is that nearly every country’s tax laws are filled with incentives designed to encourage activities that benefit society.
For example:
- To promote financial security in retirement, the government offers tax-advantaged retirement accounts.
- To encourage a more educated workforce, the tax code includes credits to help offset the cost of higher education.
- To stimulate economic development in distressed communities, Opportunity Zones allow investors to temporarily defer capital gains taxes.
Governments learned long ago that entrepreneurs and investors respond to incentives. With the right financial motivation, entrepreneurs build housing, create jobs, develop domestic manufacturing, produce energy, grow food and more. That’s why businesses benefit from deductions, favorable tax rates and credits.
Once you shift your thinking, you begin to see opportunity instead of obligation. That’s the mindset to adopt moving forward. Through my tax education company, WealthAbility®, I’ve worked with thousands of entrepreneurs and investors. We consistently see those who treat the tax code as an investment roadmap reduce their effective tax rates from around 40% — common among consumers — to 20% or even less.
Why does this approach work?
Reducing taxes is the fastest way to increase cash flow. Every dollar saved in taxes is a dollar that stays in your business immediately.
And when you reinvest those dollars strategically, you can often reduce your taxes even further. There are credits available right now for improving employee benefits, conducting research and development, upgrading technology and more.
Ultimately, it comes back to mindset. Thanks to the tax code, every entrepreneur is in partnership with the government. You can be a passive partner — run your business and simply pay what you owe. Or you can be a strategic partner — align your investments with what the government is incentivizing and lower your tax bill as a result.
The choice is yours.
How do you get started?
If you’re ready to accelerate your financial success, begin by changing your perspective. Taxes aren’t the enemy. They’re a guide.
The moment you start a business — whether it’s a side hustle or a high-growth startup — you gain access to some of the most favorable parts of the tax code. The government wants businesses to succeed because successful businesses strengthen the economy, serve communities and drive innovation.
Make this the year you commit to understanding how the tax law rewards entrepreneurs. Schedule a meeting with your tax advisor and let them know you’re ready to be proactive and strategic.
That conversation should include:
- Your current financial situation, including the last two years of tax returns
- Your entity structure
- Your expenses and potential missed deductions
- Available tax credits
- Your growth plans and the investments required to support them
This isn’t about exploiting loopholes or doing anything improper. It’s about understanding the rules and using them intentionally. There is no one-size-fits-all tax strategy. The key is to clarify how you want to grow your business and identify where tax incentives can accelerate that growth.
Stop fearing the tax law. When you start using it as a roadmap instead of resisting it, you’ll build more wealth — and likely pay far less tax along the way.
I’ve been a CPA for more than 40 years, and in all that time, I’ve never met an entrepreneur who likes taxes.
I understand why. Filing a return can be time-consuming and complicated. The possibility of an audit feels intimidating. And the cost can be high. Each year, Americans collectively work nearly four months just to cover their combined federal, state and local taxes. If you earn $100,000 a year, that can add up to more than $1 million over the course of your career — money that could otherwise be invested in your business or your family.
But the real problem isn’t the tax law. It’s your mindset.