Let me ask you something honest. When was the last time your CPA called you with a strategy to save money — not just to tell you what you owe?

If you’re sitting there thinking, “Never,” you’re not alone. And you’re also not the problem.

Here’s the truth most tax professionals won’t say out loud: 99% of tax law is written for business owners, not against them. The deductions, the structures, the rules — they exist specifically to give you options. But if your CPA’s job is to file your return and move on, you’ll never hear about them.

I’ve worked with hundreds of small business owners — especially women who’ve been talked down to, ignored, or simply never given a straight answer. They all had one thing in common: they were overpaying. Not because they did anything wrong. Because nobody showed them a better way.

So today, I’m going to change that. Below are the five questions I get asked most often — and the real answers.

1. I’m a 1099 Contractor With an LLC — Where Do I Even Start?

First things first: if you’re getting paid on a 1099, you are a business owner in the eyes of the IRS. Not a side hustler. Not a gig worker. A business owner — with access to every deduction and strategy that W2 employees simply don’t get.

The LLC is your foundation. Yes, it protects your personal assets legally, but the bigger reason to set one up is what it makes possible down the road. Once your profit consistently hits around $50,000–$60,000 a year, you can elect to be taxed as an S-Corporation. That single move can save you thousands — sometimes tens of thousands — in self-employment taxes every year. But you can’t get there without the LLC in place first.

The other piece that trips people up early on: mixing personal and business finances. Open a dedicated business bank account and run every dollar of income and every business expense through it. This isn’t just good bookkeeping. It’s your first line of defense if the IRS ever comes knocking. Auditors love commingled finances because it makes it easy to disallow your deductions.

Real story: Jessica started as a freelance designer earning $20,000 a year. She set up an LLC, separated her finances, and tracked every legitimate expense. Two years later, she was making over $100,000 and we moved her to an S-Corp. Her tax bill dropped by more than $20,000 — money she used to hire her first employee.

2. What Is Schedule C and Why Does It Actually Matter?

If you’re a sole proprietor or single-member LLC, Schedule C is the form you use to report your business income and expenses. Most people treat it like paperwork. It’s actually one of the most powerful tools you have.

Here’s what most CPAs leave on the table: the IRS fully expects you to deduct legitimate business expenses. That’s not a loophole — it’s the law. Home office, mileage, cell phone, internet, business meals, travel, continuing education, software, marketing costs — all deductible. Even a portion of your utilities if you work from home.

The key is documentation. Keep receipts. Log your mileage. Write a quick note about the business purpose of each expense. A simple app or spreadsheet works fine. If you’re ever audited, you’ll be ready. If you’re not, the IRS will happily take what you didn’t claim.

The difference between a tax preparer and a tax strategist is this: a preparer plugs in your numbers. A strategist helps you plan ahead so those numbers work in your favor.

Real story: Mary, a nurse practitioner who started consulting on the side, missed over $8,000 in deductions her first year because her previous CPA never walked her through Schedule C. Once we set up a simple tracking system and went line by line, we cut her tax bill in half. She told me, “I finally feel like I’m in control of my money.”

3. Do I Need an LLC to Claim Home Office or Mileage Deductions?

Short answer: no. You do not need an LLC to take business deductions. Sole proprietors have full access to every legitimate deduction the IRS allows.

The LLC’s value isn’t in unlocking current deductions — it’s in legal protection and future flexibility. Think of it as planting a tree. The best time was five years ago. The second best time is today.

When your profits hit that $50,000–$60,000 mark, the S-Corp election becomes available to you — and it can dramatically reduce your self-employment tax burden. But that door only opens if the LLC is already in place. Business owners who wait too long on this end up overpaying for years they can never get back.

Real story: Adam ran a small construction business as a sole proprietor for over a decade. His old CPA told him an LLC wasn’t necessary. When he finally set one up and made the S-Corp election, his first-year savings more than paid for a new work truck. His words: “I wish I had done this years ago.”

📺  Watch the Full Tax Strategy Breakdown Here

“The tax code is a roadmap, not a punishment. You don’t build wealth by making more money — you build it by keeping more of it.”

4. What Happens to My Home Office Deduction When I Sell My House?

This question stops a lot of people from taking the deduction at all. Don’t let it.

There are two ways to claim the home office deduction. The simplified method gives you $5 per square foot, up to 300 square feet — no depreciation involved, no recapture when you sell. The actual expense method calculates a percentage of your real home expenses, including depreciation, which gives you a larger deduction but does come with recapture rules when you eventually sell.

Here’s the reality check: for the vast majority of business owners, the depreciation recapture tax when they sell is a tiny fraction of the total savings they received over the years.

Real story: Mike used the actual method for 10 years, saving over $25,000 in taxes. When he sold his house, his recapture tax came out to less than $2,000. “That’s the best investment I ever made in my business,” he said.

Don’t let fear of a small future tax bill cost you thousands today. Keep good records, know which method you’re using, and let your strategist run the numbers when it’s time to sell.

5. Can I Use the Augusta Rule AND the Home Office Deduction Together in My S-Corp?

Yes — and this is one of the most underused strategies in the tax code.

The Augusta Rule (Section 280A) allows you to rent your personal home to your business for up to 14 days per year, completely tax-free to you personally. Your business deducts the rent as a legitimate business expense, and you receive that money tax-free. It’s a legal, IRS-sanctioned way to shift money from your business to your pocket.

The home office deduction covers a specific space in your home used regularly and exclusively for business. The Augusta Rule covers occasional use of a different space — a dining room for a board meeting, a living room for a client retreat.

The keys to using both: keep them in separate rooms, for separate purposes, with separate documentation. Charge fair market rent for the Augusta Rule days. As long as those boxes are checked, you’re on solid legal ground.

Real story: Jaylen runs a consulting firm from home. Her basement is her dedicated home office. Her dining room hosts quarterly board meetings under the Augusta Rule. Combining both strategies, she saves over $10,000 a year — money she puts directly into her retirement account.

Frequently Asked Questions (FAQ)

Q: Is using these tax strategies considered tax evasion? Absolutely not. Every strategy covered here is explicitly allowed under the IRS tax code. Tax evasion means hiding income. Tax strategy means legally using the rules that already exist — the same rules wealthy business owners use every single day.

Q: How do I know if I’m ready for an S-Corp election? Generally, once your net profit from your business hits $50,000–$60,000 consistently, an S-Corp election is worth evaluating. A tax strategist can run a comparison to show you the exact savings.

Q: What’s the difference between a CPA and a tax strategist? A CPA is trained primarily for compliance — making sure your return is filed correctly. A tax strategist focuses on proactive planning — how to legally minimize what you owe before you file. Ideally, you want someone who does both.

Q: How important is documentation really? It’s everything. The IRS doesn’t deny deductions because they’re illegitimate — they deny them because they’re not properly documented. A receipt, a mileage log, a note about business purpose. That’s the difference between keeping your deduction and losing it in an audit.

Q: What’s changing with taxes in 2026? Several provisions from the 2017 Tax Cuts and Jobs Act are set to expire, which could significantly impact small business owners. Now is the time to plan ahead — the window to lock in current rates and structures may be closing.

Q: Can I really claim my cell phone and internet as business deductions? Yes, the portion you use for business purposes is deductible. If you use your phone 70% for business, you can deduct 70% of the cost. Tracking this and documenting it consistently is what makes it bulletproof.

Your biggest expense isn’t rent or payroll. It’s taxes. And unlike most expenses, this one is actually within your control — if you know the rules.

The strategies in this post aren’t loopholes for the rich. They’re written into the tax code specifically to help business owners like you. The difference between business owners who build real wealth and those who stay stuck isn’t income — it’s what they keep.

You don’t need a massive company to get started. You need the right structure, the right documentation habits, and someone in your corner who’s playing offense, not just filing paperwork.

Start there. The savings will follow.