TaxWise Strategy #2:

Owning a small business is the best tax deal in America.

Whether it's a $10K side hustle or a $10M operation, business income unlocks tax advantages that W-2 employees can only dream about.

Let me walk you through exactly how it works:

BUSINESS EXPENSES:

Your phone bill? Business expense.

Home internet? Business expense.

That conference in Miami? Business expense.

The laptop you'd buy anyway? Business expense.

W-2 employees buy all of this with after-tax dollars. Business owners buy it pre-tax.

On $100K income, that's the difference between spending $100 or $70 for the same thing.

S-CORP ELECTION: Once you hit ~$60K in profit, form an S-Corp. Pay yourself an appropriate salary. Take the rest as distributions.

You just saved 15.3% on that distribution amount in self-employment taxes.

At $150K total income, that's five figures in your pocket instead of Social Security's.

RETIREMENT ACCOUNTS: Solo 401(k): Contribute $24K as employee PLUS 25% of business income as employer. Defined Benefit Plan: At higher incomes, shelter up to $300K/year.

W-2 employee at same income: Limited to $24K.

That's $277K more in tax-deferred savings. Per year.

QBI DEDUCTION: 20% of your business income just... disappears for tax purposes. Make $200K? You're only taxed on $160K.

This gift from the Tax Cuts and Jobs Act is worth $15-20K/year for many business owners.

But here's where it gets beautiful:

THE STACKING EFFECT: Start with $200K business income.

Subtract $30K in legitimate business expenses = $170K

Take 20% QBI deduction = Taxed on $136K Pay yourself

$60K salary (deductible to biz) = $76K taxable

Max $39K to retirement = $37K taxable business income

Your actual tax burden on $200K? Same as a W-2 earner making $96K.