Year-End Tax Strategies: Pay Less in 2026 with Mark Kohler

Year-End Tax Planning for Business Owners

• 💡 Family board meetings are a tax-deductible strategy for small business owners to discuss finances, improve asset protection, and teach financial literacy. Expenses like travel and dining for these meetings can be written off.
• 👨‍👩‍👧‍👦 Family members can be placed on the payroll, receiving 1099s for legitimate services, which can lead to significant tax deductions for tuition and other expenses.
• 🏢 For businesses earning over $50,000 annually, consider an S corporation to potentially save on FICA taxes by taking a reasonable salary and distributing the rest as K1 income.

Retirement and Investment Strategies

• 💰 Solo 401(k)s offer substantial deductions, and a loophole allows business owners to claim the tax credit for auto-enrolling themselves.
• 🏠 Rental properties are considered a business and can be purchased within a Roth IRA or solo 401(k) to grow wealth tax-free, with potential for tax-free sales after age 59.5.
• 🔄 Roth conversions of traditional IRAs should be completed before December 31st to pay taxes now for long-term tax-free gains.

Health Savings and Deductions

• 🏥 Health Savings Accounts (HSAs) are powerful tools offering tax deductions, tax-free growth, and tax-free withdrawals for medical expenses, even allowing investments in assets like gold, crypto, or real estate.
• 🩺 Health Reimbursement Arrangements (HRAs), specifically the HRA 105 plan, allow small business owners to fully deduct medical costs for employees and their dependents.
• ⚠️ Healthcare sharing ministries can significantly reduce healthcare costs but are not tax-deductible and may have limitations regarding pre-existing conditions or catastrophic events.

Cautionary Tax Advice

• 🚜 Avoid buying unnecessary assets solely for tax write-offs, such as equipment or vehicles, as the tax savings are often less than the cost of the item.
• 📈 Don't let the tax tail wag the dog; purchase assets that are genuinely needed for business expansion or operational efficiency, rather than just to reduce tax liability.