Tax planning is the proactive, year-round process of arranging a business’s or individual’s finances to optimize their taxes. For business owners, that means entity structure (LLC vs. S-corp vs. C-corp), income timing, and owner compensation. For individuals, it means when to exercise or liquidate equity compensation and how investments are structured, often alongside a financial planner. Both aim at the same target: legally minimizing tax over a lifetime, not just this return.
Where tax preparation looks backward and reports what already happened, tax planning looks forward and shapes it. Preparation tells the IRS what has already happened, while planning determines how much you pay in taxes.
A tax strategy is the end result of the planning process, it is a forward-looking design that takes into account your goals, your obligations and your anticipated income. A tax strategy is a living document that reflects and reacts to the changing circumstances of your life and goals. The birth of children or grandchildren, for example, can be a catalyst that changes financial goals, tax planning options and thus results in a new strategy. Other events that commonly drive big changes in strategy include marriage, planning to start or sell a business, accelerating or delaying retirement and selling vested equity.
A dedicated tax strategist maps these moves, suggests their timing, and projects multi-year savings. Not all tax strategies result in immediate tax savings, sometimes the best strategy for a goal might result in a slightly high tax burden today for a large tax savings in the future. At Tax By Design, we don’t just build the strategy, we then advise you on how to execute the strategy, helping you maintain compliance through tax preparation and filing. Tax planning is not a once-a-year scramble but a process that adapts as income, entity, and goals change.
Most of the time and for most clients, yes. Over a lifetime, the tax saved usually exceeds the planning fee, often by multiples, because the gains from these strategies compound over time. For example, a founder who structures for QSBS at incorporation, rather than after, can exclude a substantial portion of gain on an eventual exit under current law. A small business owner – properly advised on entity selection, deferred taxation through retirement savings and tax credits – might recover the entire cost of tax design and strategy just through gains from investing the monies saved.
Many of our clients also value the peace of mind that comes in working with a knowledgeable, reliable, responsive tax expert. Non-resident founders of US companies, for example, are subject to significant penalties if they fail to report various kinds of transactions. Small business owners with S-corps are subject to penalties for underpayment of reasonable compensation. A single $25,000 penalty from the IRS can wipe out the savings from working with a low-cost tax prep service. As income levels rise, and financial complexity increases, the cost of getting it wrong can be significant. Thus, the value of getting it right goes up.
Entity structure is the single largest lever most business owners control. We select and adjust it as your situation changes, from sole proprietor to S-corporation, C-corporation, partnership, or holding company. What our entity structuring service includes:
How you pay yourself may have tax consequences. We balance salary, distributions, and fringe benefits under IRS rules to reduce payroll and self-employment tax without inviting scrutiny. What our owner compensation planning includes:
Timing determines how much of a gain you keep. We plan qualified small business stock, RSU, and ISO events well before they occur, not after. What our equity and capital-gains service includes:
Retirement contributions convert tax owed today into wealth kept for later. We build deferral into the plan using the accounts that fit your income level. What our retirement and deferral service includes:
We test a raise, a sale, a move, or an entity change against your tax position before anything is committed, so the decision is made with the number already in view. What our projection and modeling service includes:
Credits reduce tax dollar for dollar rather than just lowering income, which makes a well-documented credit one of the highest-return items in a plan. We identify and document what a business has earned, starting with the R&D tax credit. What our credits and incentives service includes:
We size your quarterly payments against real, updated projections, so underpayment doesn’t trigger penalties or a cash-flow surprise. What our estimated tax planning includes:
Where income is taxed can matter as much as how much. We plan state, multi-state, and residency positions across Colorado, the New York Metro, and beyond. What our state and residency service includes:
Business Owners & Founders
The biggest levers - entity structure, owner compensation, QSBS, retirement contributions and exit timing - sit under their control. Coordinating them keeps more of the business's growth with its owner instead of lost to avoidable tax.
Professionals with Equity Compensation
RSUs, ISOs, and ESPPs can trigger tax long before the stock is sold. Planning vesting, exercises, 83(b), and AMT in advance prevents a surprise bill.
High-Income & Multi-Income Households
Salary, business, and investment income rarely land in the same bracket or year. Timing income, deductions, and the 3.8 percent net investment income tax smooths it into a lower, steadier liability.
Investors & Real Estate Owners
The goal is controlling when and how gains are recognized. Capital-gains timing, loss harvesting, cost segregation, and Section 1031 exchanges defer and reduce tax on appreciating assets.
Reduces Your Lifetime Tax Bill
Savings compound across years, not a single return. Coordinated entity, timing, and deferral decisions lower the total tax paid over a lifetime, not just the current filing.
Prevents Surprise Bills & Penalties
Estimates are planned in advance, so there are no April shocks. Quarterly payments sized to real projections keep the taxpayer inside the safe harbor and clear of underpayment penalties.
Enables Smarter Business & Investment Decisions
Every major move carries a tax cost that is knowable beforehand. Modeling a raise, sale, or entity change first means decisions are made with the number already in view.
Provides Year-Round Advisor Access
Tax questions rarely wait for filing season. A dedicated strategist stays reachable as live events happen, from a new hire to a liquidity event, before they become irreversible.
Unifies Strategy & Filing Under One Roof
The team that designs the plan also files the return. Strategy and preparation stay connected, so nothing is lost in a hand-off and every position is documented.
Discovery & Financial Review
We start by reviewing your trajectory, entity, income, investments, and goals to find where tax is leaking. This baseline surfaces missed elections, mistimed income, and unclaimed credits before anything else is decided.
Build Your Custom Tax Plan
Findings become a written roadmap of the specific moves, their timing, and the projected savings. The plan names each strategy, from an S-election to a retirement vehicle, so the path to a lower bill is explicit.
Multi-Year Projections
We model this year and the years ahead so no decision is made blind. Projecting a raise, sale, or entity change in advance shows which year each dollar of income and gain should land in.
Implement the Plan
With the plan approved, we execute the elections, payroll, retirement setup, and estimated payments that make it real. Implementation is where a strategy on paper becomes a reduction on the return.
Year-Round Advisory
We stay on call as live events happen, such as a new hire, a liquidity event, or a move, before they become irreversible. Reaching us before the event, not after, is what allows us to shape the outcome.
Compliant Preparation & Filing
Your return is filed as the output of the plan, by the same team that designed it. Because strategy and preparation sit under one roof, every position on the return is already documented.
Annual Review & Refresh
Each year we update the plan as your life and the tax law change. A strategy that fit last year is re-tested against new income, new goals, and new rules so the savings keep compounding.
Strategy + Preparation Under One Roof
The team that builds the plan also files the return, so there are no hand-offs where savings get lost. Strategy and compliance stay aligned from the first projection to the final filing.
Proactive, Not Reactive
Planning happens year-round, before events lock in, not after the year closes. That timing is what keeps entity, income, and gain decisions still open.
CPAs + Enrolled Agents on Staff
Advanced strategy and full IRS representation come from the same staff. If a notice or audit arises, the firm that designed the plan can defend it end-to-end.
Regional Expertise, Colorado Front Range & New York Metro
Deep knowledge of Colorado and New York Metro tax rules informs every plan. Local jurisdiction insight matters for residency, apportionment, and state-level savings.
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