Summary of What This Blog Covers:
- How outdated business structures increase taxes and risk
- Smarter ways to pay yourself and avoid payroll tax issues
- Year-round expense tracking to maximize deductions
- Why proactive planning beats last-minute tax prep every time
You’ve put your heart into building a business that matters: one that’s profitable, impactful, and aligned with the life you want to live. You’ve figured out how to market your services, build client relationships, manage your team, and scale your income.
But when it comes to taxes?
Even the most capable women business owners sometimes feel unclear, overwhelmed, or unsure. Not because they aren’t doing enough but because they’re not getting proactive, personalized guidance from a tax professional who understands their business, their goals, and their challenges.
At Insogna, we work with ambitious, values-driven women who are ready to trade reactive tax preparation for forward-thinking tax strategy. Over time, we’ve identified some common patterns, avoidable tax mistakes that cost women both money and momentum.
Here are the five most frequent tax mistakes we see and how you can avoid them with confidence, clarity, and the right support.
1. Sticking With the Wrong Business Entity Structure for Too Long
When you’re first getting started, launching as a sole proprietor or single-member LLC is often the most accessible path. It’s easy to set up and requires minimal paperwork. But what begins as simplicity can quickly become a liability as your income grows and your business becomes more complex.
Why this matters:
Your business entity affects how you’re taxed, how you pay yourself, and whether your personal assets are protected from legal and financial risk. It also influences your access to certain tax planning strategies, including eligibility for S Corporation status.
The problem:
Many women business owners remain sole proprietors or standard LLCs far too long, often paying more in self-employment taxes and losing out on opportunities to structure their income more efficiently.
When to re-evaluate your structure:
- You’re consistently earning $50,000 or more in net profit
- You’re hiring contractors or employees
- You’re thinking about bringing on a business partner or investor
- You want to limit your personal liability
A licensed CPA in Austin, Texas can help you compare your current setup with alternative structures like electing S Corp status or transitioning to a Professional Limited Liability Company (PLLC) if you hold a license in a regulated profession. The goal? To protect what you’ve built and optimize what you earn.
2. Overpaying in Payroll and Self-Employment Taxes
Once your income exceeds a certain level, the way you compensate yourself becomes just as important as how much you earn.
The issue:
Many entrepreneurs especially those operating as S Corps, either pay themselves entirely through payroll (overpaying in taxes), or skip payroll altogether (triggering IRS scrutiny). Without the right balance, you could be leaving thousands on the table each year.
The smarter approach:
When you elect S Corporation tax status, you’re required to pay yourself a reasonable salary. However, profits beyond that salary can be distributed to you as dividends, which are not subject to payroll tax. This approach can significantly reduce your tax liability if it’s structured correctly.
What to do:
Partner with a tax advisor in Austin who can help you:
- Establish a compliant, optimized payroll system
- Determine an IRS-compliant salary that fits your business model
- Balance distributions and salary in a way that supports your cash flow
- Stay on top of quarterly and annual payroll filings
At Insogna, we guide women entrepreneurs through this process every day, helping them implement practical, compliant systems that lead to meaningful savings.
3. Not Tracking Deductible Business Expenses Consistently
You work hard to grow your business but if you’re not tracking your expenses throughout the year, you may be paying more in taxes than you should.
The problem:
Many women entrepreneurs rely on bank statements or memory to pull together deductions at year-end. This leads to:
- Missed opportunities (such as mileage, home office deductions, or professional development)
- Inaccurate categorization of expenses
- Delays and added stress during tax season
What counts as deductible?
- Business software, subscriptions, and tools
- Coaching, legal, and tax advisory services
- Internet and phone expenses used for business
- Marketing, branding, and website costs
- Meals with clients or prospects (with proper documentation)
The solution:
Create a sustainable system, one that fits your work style and gives you visibility into your finances all year long. That might include:
- Setting up QuickBooks Self-Employed or other bookkeeping tools
- Separating business and personal bank accounts
- Using monthly reconciliations to stay on top of expenses
- Working with a certified public accountant near you to review and categorize transactions
With the right tools and a proactive CPA, you’ll move from reactive data collection to confident financial decision-making.
4. Missing Out on Retirement Contributions That Lower Taxable Income
In the day-to-day work of running a business, retirement planning can easily take a back seat. But if you’re not contributing to a retirement account, you’re likely missing one of the most effective ways to reduce your taxable income and build long-term security.
The opportunity:
As a business owner, you can contribute far more to retirement than a traditional employee. Depending on your income, age, and structure, options like SEP IRAs, Solo 401(k)s, and SIMPLE IRAs allow you to shelter a significant portion of your income from taxes each year.
Why it matters:
- Contributions are often tax-deductible, directly reducing your income tax bill
- Retirement savings compound over time, building generational wealth
- These plans can also support employee retention if you choose to offer benefits
What to do now:
Consult with a tax consultant near you or a small business CPA in Austin who can walk you through the options, deadlines, and required documentation. At Insogna, we help you plan and execute retirement contributions in a way that fits both your financial and lifestyle goals.
5. Waiting Until Tax Season to Ask for Help
Perhaps the most common and most expensive mistake women entrepreneurs make is simply waiting too long to get expert guidance.
Why it’s a problem:
By the time you meet with your tax preparer in March or April, most of the tax-saving strategies available to you (like retirement contributions, charitable giving, or entity restructuring) are no longer on the table. You’re filing based on decisions you made months ago with no way to optimize them now.
What’s better:
Working with a proactive, strategic CPA year-round. Someone who:
- Checks in quarterly or bi-annually
- Helps you plan for large investments or financial changes
- Advises you on income strategy and cash flow
- Keeps you in compliance with federal, state, and local regulations
- Guides you through complex areas like multi-state income, FBAR filing, and contractor reporting (including 1099 NEC and W9 form management)
The earlier you ask for help, the more options you have.
The Role of a Strategic CPA Partner
You don’t need just a tax preparer. You need a partner who understands that your business is more than a P&L. It’s an extension of your values, goals, and future.
At Insogna, we serve as a full-service partner to women entrepreneurs. We help you:
- Make informed tax decisions year-round
- Revisit and optimize your business structure
- Build systems that support growth and peace of mind
- Reduce unnecessary tax payments
- Plan proactively, not reactively
And perhaps most importantly, we listen. We take time to understand your story, your challenges, and your vision so that the financial advice we give aligns with your full picture.
Let’s Turn Mistakes Into Momentum Together
If you’ve recognized yourself in one or more of these tax mistakes, you’re not behind. You’re ready. You’re ready for a new level of clarity, strategy, and support.
Whether you’re expanding, simplifying, or somewhere in between, your financial strategy should evolve alongside your business.
Schedule your personalized strategy session with Insogna today.
Let’s work together to simplify your tax life, maximize your earnings, and give you the confidence to focus on what matters most.