We’re halfway through the year — and if you’re like most business owners, your calendar is packed, your goals are evolving, and your taxes… well, they’re probably not top of mind.
But here’s the thing: this part of the year (right now) is one of the most powerful windows of opportunity to shape how much tax you’ll owe next April. And more importantly, it’s your chance to fix what’s not working before it’s too late.
So, let’s hit pause on the day-to-day for a few minutes and walk through a few tax-smart moves that can dramatically lower your bill, protect your business, and help you grow with intention.
This isn’t just about “preparing” for taxes. It’s about strategizing your tax position. And trust me, the IRS won’t do this for you.
Where We Are in the Tax Year
If the first part of the year is all about reacting. Filing, paying, reconciling, and the second half is all about getting proactive.
July is the halftime show of your financial year. You’ve got six months of data behind you and six more to get your tax house in order. And here’s the kicker: you still have time. A lot of business owners assume that if they didn’t do any planning in Q1 or Q2, they’ve missed the boat. That’s simply not true.
Many of the most effective tax strategies… like adjusting payroll, shifting ownership structures, or reclassifying expenses can still be put in motion right now.
Start with Your Entity Structure
Before diving into deductions or credits, zoom out and ask: Am I even operating under the right entity structure for tax purposes?
Far too many entrepreneurs remain sole proprietors or single-member LLCs out of habit — or worse, because that’s how they started on LegalZoom years ago.
Let’s say you’re running a profitable consulting business under an LLC taxed as a sole prop. You’re earning $150,000. You’re paying self-employment tax on nearly all of that income — over $20,000 in just FICA taxes. But if that same business was taxed as an S-Corporation, you could split your income into a reasonable W-2 wage and a distribution, saving thousands in self-employment tax.
S-Corp elections aren’t just a trendy move — they’re foundational. But they also come with compliance requirements, payroll obligations, and the need for clean bookkeeping. That’s why mid-year is the perfect time to consider a change: you have enough data to forecast wages and enough runway to implement the structure correctly before year-end.
Clean Records = Clear Strategy
Let’s talk about something unsexy but incredibly powerful: recordkeeping.
If you’ve ever rushed through your taxes in March, digging through emails and receipts, you already know how painful disorganization can be. But what you may not know is how much money it can cost you.
When your records are clean, categorized correctly, stored securely, and reviewed regularly — you start to see opportunities others miss. For instance, did you know that meals with clients, employee training expenses, or even your home office square footage could be saving you more than you think?
Use this mid-year mark to reset your system. Whether you’re using QuickBooks, Xero, or a simple spreadsheet, take time to tag expenses, upload receipts, and review income sources. Set rules now, so your year-end isn’t a scramble — it’s a celebration.
Check In On Your Withholding
Now’s also a good time to check your withholding and estimated payments. The U.S. tax system is pay-as-you-go, and if you’re not paying enough throughout the year, you could get slapped with penalties.
You don’t want to end the year surprised. You want to end it in control.
The IRS has a Tax Withholding Estimator tool that can help you run the numbers. But if your income has changed. If you’ve landed a big client, expanded your team, or even changed states — you may want a strategist to review it with you.
For S-Corp owners especially, the split between W-2 wages and distributions matters here. Underpaying yourself? You may be flagged for unreasonable compensation. Overpaying? You’re giving Uncle Sam more than you need to. There’s a Goldilocks zone — and mid-year is your chance to find it.
Save for Retirement, Save on Taxes
Want to lower your taxable income and build wealth at the same time?
Mid-year is when retirement planning can do both.
If you’re a solo business owner, you might consider setting up a Solo 401(k). These plans let you contribute as both the employee and employer, potentially deferring up to $69,000 in 2025 (if you’re over 50). But that only works if your income structure supports it and you plan for it now.
If you’re an S-Corp, your contributions must be tied to W-2 wages. No wages, no deferrals. Another reason to get payroll in place before the end of the year.
Even traditional IRAs and SEP IRAs have rules and income thresholds that can impact deductibility. These are the types of things you want to map out well before December.
Know Your AGI — and How to Lower It
Here’s a fun fact: lowering your Adjusted Gross Income (AGI) often unlocks access to additional deductions and credits.
AGI determines things like how much you can deduct for medical expenses, whether you qualify for the QBI deduction, and whether your IRA contributions are fully deductible.
But AGI isn’t just a number you’re stuck with. You can lower it, strategically, by contributing to retirement accounts, leveraging health savings accounts, and even investing in certain tax-advantaged assets like conservation easements or real estate with depreciation benefits.
The goal isn’t just to reduce taxes this year. It’s to reduce them in a way that builds wealth and protects your future.
Watch for Life Changes
Marriage, divorce, a new child, a dependent aging out of coverage… these are all personal changes that can affect your filing status, withholding, and overall tax picture.
Let’s say you got married earlier this year. You might want to reevaluate whether filing jointly or separately gives you the better tax outcome. The answer isn’t always what you’d expect. Joint filing often comes with lower rates, but it can also phase you out of certain credits.
Name changes and address updates should also be on your checklist. Make sure you’ve alerted the IRS, Social Security Administration, and your payroll provider to avoid mismatched documents come tax time.
These life moments may be personal, but they have real financial consequences. A quick conversation with your tax advisor now can avoid a mess later.
Reevaluate Your Business Expenses
Are you making the most of what the tax code allows you to deduct?
We’re not talking about buying things you don’t need just for a write-off. We’re talking about aligning your spending with your strategy.
If you’ve invested in marketing, equipment, education, or software this year — fantastic. But how is it being categorized? Is it being tracked at all?
And what about auto expenses? Are you using the standard mileage deduction or actual expenses? Did you purchase a vehicle over 6,000 pounds GVWR and use it 100% for business? If so, Section 179 and bonus depreciation may still be your best friends.
This is where real tax strategy shows up. Not in filing forms, but in asking better questions about how your money moves through your business.
Be Ready to Shift If the Tax Laws Change
As of June 2025, there are proposals on the table (some from both political parties) that could drastically reshape the tax landscape for high-income earners and business owners.
With the 2017 Tax Cuts and Jobs Act (TCJA) scheduled to sunset at the end of 2025, we could see a return to higher individual rates, lower estate tax exemptions, and fewer business deductions unless Congress acts.
That’s why this mid-year check-in isn’t just about the current rules. It’s about staying nimble for what’s coming. If your strategy only works under today’s law, you’re gambling. A good tax plan should be flexible, resilient, and designed for multiple outcomes.
Bookkeeping Isn’t Just Compliance — It’s Intelligence
If you’re treating bookkeeping like a chore, you’re missing out.
Mid-year is the ideal time to run reports, spot trends, and analyze where your cash is actually going. Think of your books as your business’s bloodwork. It tells you what’s healthy, what’s stressed, and where you need attention.
A few things to look for: Are your expenses in line with your projections? Are you tracking reimbursable expenses correctly? Have you reviewed your balance sheet for red flags like unpaid payroll liabilities or inconsistent owner draws?
Your accountant will thank you later. But more importantly, you will make better decisions today.
This Isn’t a Drill. It’s a Strategy.
Mid-year tax planning is not just about checking a few boxes. It’s about making intentional moves that align with where your business is headed.
It’s not just what you make that matters — it’s what you keep.
And the difference between keeping $70,000 versus $50,000 isn’t always in how hard you work. It’s in how smart your tax structure, retirement planning, and entity setup are.
We help business owners every day lower their tax burden, restructure their operations, and regain financial clarity.
If you’re unsure where to start, now is the time to schedule a free consultation. We’ll review your current setup, identify gaps, and help you map out the next six months with confidence.
Welcome to the New Age of Accounting. Let’s begin.
Chris is the Managing Partner at Weston Tax Associates, a best-selling author, and a renowned tax strategist. With over 20 years of expertise in tax and corporate finance, he simplifies complex tax concepts into actionable strategies that drive business growth. Originally from Sweden, he now lives in Florida with his wife and two sons.
