Summary of What This Blog Covers
- How to set and adjust your S Corp salary using real benchmarks
- Why monthly reconciliations bring confidence and reduce tax surprises
- How retirement contributions lower taxes and support long-term wealth
- The importance of reviewing your entity type and estimated taxes annually
You didn’t launch your business just to earn a paycheck.
You launched it for freedom. For flexibility. For the kind of purpose that a 9-to-5 never quite gave you. You had a vision and whether you’ve been at this for two years or twenty, that vision still fuels your drive. You’re a builder, a risk-taker, a problem-solver. You know how to work hard, and you’ve figured out more than most.
And yet, there’s one area where even the most successful solo entrepreneurs feel unsure: tax planning.
It’s not because you’re doing anything wrong. In fact, the very reason you feel uncertain might be because you care about doing things the right way, about being smart, about protecting what you’ve built.
If you’ve ever had that pit-of-the-stomach feeling when tax season approaches…
If you’ve ever asked, “Am I missing something here?”…
If you’ve ever felt like your accountant simply files your taxes but never gives you guidance…
Then this post is for you.
Today, I want to share with you five tax planning moves that can completely shift the way you manage your business finances. These aren’t gimmicks or trendy loopholes. They’re foundational practices that we walk through with every solo entrepreneur who comes to Insogna looking for clarity, stability, and long-term growth.
Let’s walk through them together with clarity, warmth, and an honest look at what really works.
1. Set and Regularly Adjust a Reasonable S Corp Salary
Let’s start with something that sounds simple but rarely is.
If you’ve elected S Corporation status (or are thinking about it), you’ve likely heard you need to pay yourself a “reasonable salary.” What most people don’t tell you is what reasonable actually means or how to know if you’re getting it right.
And the truth is, most solo entrepreneurs don’t know. Not because they’re careless, but because the rules are vague. The IRS expects your salary to reflect fair market value for the role you perform in your business. But there’s no formula. No exact number. Just guidelines. Suggestions. Interpretations.
And in that ambiguity, many solo business owners default to a guess. They pick a number that sounds “safe” or one their tax preparer recommended a few years ago. Then they stick with it, year after year, never reevaluating.
Here’s why that’s risky:
- Pay yourself too little, and you may attract unwanted attention from the IRS. You could face reclassification of distributions and retroactive payroll tax assessments.
- Pay yourself too much, and you may unnecessarily increase your payroll taxes, draining money from your business and your own pocket.
What’s the fix? Treat your salary like a strategic decision not a static one. Use data. Benchmark your role. Look at what someone in your position, with your responsibilities, in your industry would earn. At Insogna, we help clients analyze that data and revisit it regularly as their business grows.
Because here’s the truth: what was reasonable two years ago may not be today. Your role evolves. Your revenue shifts. Your compensation should reflect that.
This isn’t about compliance alone. It’s about honoring the work you do and paying yourself in a way that’s strategic, safe, and smart.
2. Build the Habit of Monthly Reconciliation
I know “monthly reconciliation” doesn’t sound exciting.
It sounds like accounting homework. Something tedious. Something you’ll get to later.
But let me reframe it for you.
Monthly reconciliation is not a task, it’s a conversation. A regular check-in between you and your business. It’s your opportunity to ask: How are we doing? Where is the money going? What do the numbers say that I might be missing?
When we meet new clients, one of the most common scenarios we see is the entrepreneur who only reviews their books at tax time. By then, of course, the story has already been written. There’s no time to adjust salary. No space to strategize. Just clean up and file.
But when you review your numbers monthly, even just briefly, something shifts.
You begin to:
- Spot issues early (like double charges, missing expenses, or underreported income)
- Adjust your salary or distributions before year-end
- Plan for tax payments without panic
- See opportunities for growth or cost savings in real time
And, most importantly, you gain peace of mind.
At Insogna, our clients aren’t left guessing. We help implement monthly or quarterly reviews as a normal part of their financial rhythm. This allows them to stay grounded especially during seasons of growth or uncertainty.
It’s not about being perfect. It’s about being present. Because when you’re informed, you lead better.
3. Use Retirement Contributions as a Strategic Tax Lever
If you’re not contributing to a retirement plan as a solo entrepreneur, you may be missing out on one of the most powerful and underutilized tax tools available to you.
Here’s the reality: as the owner of your business, you can wear two hats—employee and employer. That gives you access to retirement planning advantages most W-2 employees don’t have.
Let’s look at the options:
- Solo 401(k): You can contribute as an employee (up to $23,000 in 2025) and as the employer, for a total of $69,000 depending on your income and age.
- SEP IRA: Easier to administer, with up to 25% of your compensation eligible for contribution (up to $69,000).
- Traditional IRA or Roth IRA: These still offer personal contribution opportunities, though smaller in scale.
Now imagine pairing that contribution with a solid salary strategy. You reduce your taxable income today while building long-term wealth. It’s not just tax-smart, it’s future-smart.
Yet many entrepreneurs we meet are either under-contributing or missing this entirely.
We often hear: “I’ll contribute once I know I’ve had a good year.”
The truth? Waiting until year-end rarely leaves enough time to plan properly. Your contributions should be built into your broader tax and compensation strategy, not treated as an afterthought.
4. Stay Ahead of Quarterly Estimated Taxes
Let’s talk about a topic no one enjoys but everyone needs: quarterly estimated taxes.
If you’re a solo entrepreneur, the IRS expects you to pay your taxes as you earn income not just once a year. That means four payments throughout the year, based on your income projections.
But here’s where things break down: many entrepreneurs either forget, underpay, or guess. And when the bill comes due? They scramble.
If you’ve ever:
- Missed a quarterly deadline
- Sent a payment based on gut feeling, not numbers
- Gotten hit with a penalty you didn’t expect
You’re not alone. We’ve seen it countless times. And it’s completely avoidable.
With regular income tracking (see monthly reconciliation above), you can accurately estimate your quarterly payments and keep more cash in your pocket throughout the year.
We help our clients create simple, tailored payment schedules based on actual earnings. That way, tax season becomes a review not a rescue mission.
And just as important? We check in to make adjustments. Because businesses are living, breathing entities. If your income increases or slows down, so should your estimates.
5. Review Your Entity Structure Annually Not Just Once
When you first formed your business, you likely chose the simplest structure available. Maybe it was an LLC. Maybe you eventually elected S Corp status. And at the time, it made sense.
But here’s what most solo entrepreneurs don’t realize: your entity structure should evolve with your business.
Each year, you should be asking:
- Is this still the most tax-efficient structure for where I am now?
- Has my revenue grown to the point where I should reconsider?
- Are there liability or planning reasons to make a shift?
Your entity structure influences everything: how you pay yourself, how you’re taxed, how much you contribute to retirement, and how much you can save.
We often meet clients who are:
- Still sole proprietors even after reaching six-figure revenue
- Using an S Corp but not paying themselves correctly
- Taking distributions but no salary, exposing themselves to IRS risk
That’s why we treat your entity structure as part of your overall strategy, not a one-time filing. It’s a conversation that should happen every year and it’s one of the most powerful ways to realign your business with your goals.
The Real Goal Behind All This
This isn’t just about tax planning. It’s about leadership. It’s about building a business that honors your effort, supports your lifestyle, and creates options for the future.
Too often, solo entrepreneurs carry the weight of uncertainty. Wondering if they’re doing it right, hoping they don’t get it wrong. That stress shows up in your decisions, your energy, your sense of momentum.
But when your tax strategy is proactive, when you understand your numbers, when your CPA is a true strategic partner that weight lifts.
You gain clarity. Confidence. Control.
At Insogna, that’s what we offer. Not just tax preparation, but proactive partnership. We walk with our clients every step of the way because we believe you shouldn’t have to navigate this alone.
Let’s Build Your Strategy Together
If any part of this blog resonated with you—if you’ve felt the stress of not knowing, the worry of tax season, or the frustration of being unsure what to pay yourself—it’s time to take the next step.
We’re here to help.
Reach out to Insogna. Let’s build a tax plan that aligns with your goals, protects your business, and brings peace of mind back into your year.
You’ve earned the freedom to lead with clarity. Let’s make that your new normal.