Business Owner v’s Employee: The key differences during tax planning

The key differences between a business owner and an employee during tax planning: 

• Business owners often have more control over their taxable income through strategies such as expense management, where as an employee typically has a set salary
• Business owners may have access to more tax deductions such as business expenses, whereas employees typically have limited deductions
• Business owners may have more options for retirement savings including self-employed retirement plans, whereas employees typically rely on employee preferred plans
• Business owners have more control over their investment strategies including the types of investments and the timing of the investment decisions, whereas employees have limited control over these decisions
• Business owners have more control over the structure of their business such as whether to operate as a sole proprietor, company, trust, which can affect their tax liability. Employees do not have this level of control