Seven Effective Tax Strategies for High-Income Business Owners in California

August 7, 2025 - 18:45

The OBBBA is lengthy and complex, but it offers valuable opportunities for high-income business owners in California to minimize their tax liabilities. Here are seven strategies that can help optimize tax savings this year and in the future.

1. Maximize Retirement Contributions: Take full advantage of retirement plans like a 401(k) or a SEP IRA. Contributing the maximum allowed can significantly reduce taxable income.

2. Utilize Business Expenses: Keep meticulous records of all business-related expenses. Deductions for operating costs, travel, and equipment can lower taxable income.

3. Consider an S-Corporation: Electing S-Corp status can help business owners avoid double taxation and potentially reduce self-employment taxes.

4. Leverage Tax Credits: Explore available tax credits, such as those for hiring employees or investing in renewable energy. These can directly reduce tax liability.

5. Invest in Depreciable Assets: Purchasing equipment or property can provide depreciation deductions, which lower taxable income over time.

6. Plan Charitable Contributions: Donating to qualified charities not only supports good causes but also provides tax deductions.

7. Consult a Tax Professional: Engaging a tax advisor can help navigate the complexities of the OBBBA and identify personalized strategies that align with specific business goals.

By implementing these strategies, high-income business owners in California can effectively manage their tax obligations and enhance their financial health.