What Business Owners Miss When They Treat Tax Planning Separately

For some business owners, tax planning is something they deal with only tangentially. They simply send the numbers to their CPA, ask them to find as many deductions, write-offs, and tax breaks as possible, and hope for the best. But when tax planning is treated as a separate, necessary-but-unpleasant business function disconnected from financial strategy, legal structure, and long-term goals, it becomes short-sighted at best and expensive at worst.

Taxes should not be an afterthought. Taxes should be planned-for ahead of time, integrated into how you operate and time specific transactions. Ensign Partners approaches professional advice strategically, and that means coordinating your tax planning with an overall strategy designed to optimize your business and personal financial goals.

Here are some critical items you miss when tax strategy operates separately from your overall business strategy—and how integrated planning can change the game.

1. Missed Opportunities to Build Wealth

Your tax strategy shouldn’t just be about paying less this year; it’s also about setting up long-term financial wins so that you pay less over the long haul. But if your CPA doesn’t understand your broader goals (for example, selling the business, buying real estate, creating generational wealth), those opportunities never make it to the table.

Examples of what gets missed:

• Structuring your business for capital gains treatment at exit
• Maximizing contributions to tax-advantaged retirement or defined benefit plans
• Using trusts or holding companies to shift future income and reduce estate taxes
• Timing income and expenses around high-liquidity events

Tactical tax prep saves you nickels in the short term. Integrated tax strategy can save you millions in the long term—millions that could end up funding your family’s or your employees’ stable and comfortable retirement rather than filling government coffers.

2. Inconsistent Legal and Financial Decisions

If your tax planning isn’t coordinated with your legal and financial decisions, you may find yourself solving one problem only to find out later that it creates another.

Your lawyer might recommend a tax-inefficient entity structure; your wealth advisor may suggest an investment strategy that creates unnecessary tax drag, or your CFO may be optimizing for cash flow in a way that triggers higher taxable income. These conflicts can fly under the radar—until it’s too late.

3. Poor Exit Outcomes

Selling a business without a proactive, integrated tax strategy is one of the most expensive mistakes an owner can make. Unfortunately, it’s not unusual to see deals where a lack of early and intentional tax planning costs the seller 20% or more of their after-tax proceeds.

Common pitfalls include:

• Failing to qualify for Section 1202 (Qualified Small Business Stock)
• Triggering ordinary income treatment instead of capital gains
• Not using installment sales, trusts, or charitable structures to reduce exposure

4. No Connection to Personal Wealth Goals

Your business’s tax strategy should tie directly to your personal financial plan. Not because you’re commingling funds—but because your business exists to serve your life, not the other way around.

You need to answer key questions like:

• How much do I need to pull from the business each year?
• How much revenue should stay in the business to fuel growth?
• What’s my liquidity target to fund my next venture or retirement?

When your tax strategy is connected to a broader wealth plan, every move serves a purpose.

The Fix: Tax Planning in Context

The solution to more successful tax planning isn’t identifying more tax tricks—it’s better coordination between your overall goals and your tax strategy.

At Ensign Partners, we integrate tax strategy with business, legal, insurance, and financial planning. That means:

• You’re not the middleman between your advisors
• Every strategy is vetted for how it impacts your whole picture
• You make decisions faster, with fewer surprises

Paradoxically, coordination between these aspects of your business reduces complexity and increases clarity. And clarity leads to better outcomes.