The Biggest Tax Planning Mistake Business Owners Make in June
Most business owners spend time thinking about taxes in March and April. Unfortunately, by then many tax-saving opportunities are already gone.
One of the biggest tax planning mistakes I see is waiting until year-end or tax season to evaluate profits, payroll, deductions, and estimated tax payments.
June is actually one of the best times to review your tax situation because there is still enough time left in the year to make meaningful adjustments.
Why June Matters
By June, most businesses have completed nearly half of the year.
That means you can begin answering important questions:
- Is business income ahead of expectations?
- Are estimated tax payments sufficient?
- Is S-corporation owner compensation reasonable?
- Are there large equipment purchases planned?
- Is retirement plan funding being maximized?
- Are there opportunities to accelerate deductions?
Waiting until December often limits your options. Planning in June gives you time to implement strategies before year-end.
S Corporation Owners Should Review Compensation
Many S-corporation owners either pay themselves too little or too much.
Paying too little can create IRS reasonable compensation issues. Paying too much may result in unnecessary payroll taxes.
A mid-year review can help determine whether adjustments should be made before year-end.
Real Estate Investors Should Review Their Tax Position
Real estate investors often overlook planning opportunities until tax preparation begins.
Mid-year is a good time to evaluate:
- Property acquisitions
- Cost segregation opportunities
- 1031 exchange planning
- Short-term rental participation
- Depreciation strategies
These decisions can significantly impact your tax liability.
Don’t Wait Until Tax Season
Tax preparation looks backward.
Tax planning looks forward.
The most valuable conversations typically happen before major business or investment decisions are finalized.
If your income, business profits, or investment activity has changed this year, now may be the right time to review your tax situation before year-end.
Schedule a Tax Planning Consultation
At Madsen and Company, we help business owners, S-corporation owners, and real estate investors identify opportunities to reduce taxes and make informed financial decisions throughout the year.
If you’d like to discuss your situation, schedule a consultation today.
Steve Madsen, CPA is a tax planning specialist and the founder of Madsen and Company, a virtual-first CPA firm based in South Jordan, Utah.
With over 30 years of experience, Steve helps business owners and real estate investors reduce taxes through proactive, year-round planning — not just tax preparation.
