Rachel Harbor, CPA
Founder & Managing Partner · May 20, 2026
Most Tampa small business owners think about taxes once a year, in the weeks before a filing deadline. That approach works — it gets the return filed — but it misses most of the actual opportunity. The tax code is a planning document as much as a compliance document. Here are seven moves that our business clients use year-round to reduce what they owe legally.
1. Max out your SEP-IRA or Solo 401(k) before December 31. Self-employed individuals can contribute up to 25% of net self-employment income (up to $69,000 in 2025) to a SEP-IRA. A Solo 401(k) allows even higher contributions if you have no employees. The deduction reduces both your federal income tax and your self-employment tax — a double benefit most people miss.
2. Use the Augusta Rule if you hold business meetings at your home. Under IRC Section 280A(g), homeowners can rent their home to their business for up to 14 days per year tax-free — meaning the rental income is excluded from your personal return, and the business deducts the expense. The rate should reflect a fair market rental value for similar meeting space. We set this up for several Tampa clients each year.
3. Run a Section 179 analysis before purchasing equipment. Under Section 179, you can deduct the full purchase price of qualifying equipment in the year it's placed in service rather than depreciating it over years. In 2025, the deduction limit is $1.16 million. For a profitable S-Corp owner, the tax math often makes buying equipment in December more valuable than January.
4. Review your S-Corp reasonable compensation annually. If you operate as an S-Corp, the IRS requires you to pay yourself a 'reasonable salary' before taking distributions. Too low and you risk an audit; too high and you're overpaying payroll tax unnecessarily. We benchmark compensation annually against IRS standards and industry data for your role and location.
5. Track your home office carefully. The home office deduction is legitimate and valuable — but it requires that the space be used regularly and exclusively for business. The simplified method ($5/sq ft, up to 300 sq ft) is easier to document; the regular method based on actual expenses can yield a larger deduction for higher-cost home situations. We calculate both and apply whichever is better.
6. Prepay deductible expenses in December if you expect a high-income year. If December looks profitable and next year looks leaner, prepaying January expenses — rent, subscriptions, insurance premiums — in December accelerates deductions into the higher-income year. Timing is everything when your marginal rate fluctuates.
7. Keep mileage records in real time. The 2025 IRS standard mileage rate is 70 cents per mile. A Tampa business owner driving 15,000 business miles annually has a $10,500 deduction. Most of our clients who didn't track mileage say 'I drive a lot for work' but can't substantiate it. Use MileIQ, TripLog, or a simple spreadsheet — but track in real time, not from memory in April.
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