Business-Owner Tax Plays

Family-management LLC. Pay your minor children up to the kiddie-tax limit (~$15,500) in legitimate W-2 wages through an LLC structured as a sole proprietorship, deductible to the business, tax-free to the kids. Roth-401(k) ownership designs. Sophisticated structures that allow significant after-tax wealth to move into Roth accounts that never see another tax bill. Owner-tuned retirement plan design. Beyond the off-the-shelf 401(k): cash-balance plans, defined-benefit overlays, profit-sharing tiers designed around the owner's contribution capacity.

An S-corp owner with two children (ages 10 and 12) sets up a family-management LLC taxed as a sole proprietorship. The LLC handles light marketing and admin work, employing the kids for $15,000 each per year. That's a $30,000 business deduction and $30,000 of tax-free income to the children, roughly $10,000 in annual tax savings, every year, while the kids are under the kiddie-tax age threshold.

S-corp and LLC owners with profits north of $250K and a tax bill that reflects it. Owners with minor children or planning a meaningful Roth strategy. Pre-exit owners looking to compress decades of wealth into tax-advantaged buckets before the sale.