How a Small Business Owner Saved Over $60K Through Smart Timing and Structure

The Challenge

Allen formed an LLC in June 2024. Operations had not begun and upfront costs were significant. Permits cleared in January 2025 with an expected launch around May 2025. Revenue is projected near $40K per month with roughly $25K in monthly operating expenses, excluding initial setup. At the same time, he receives high W-2 and RSU income in New York and owns two rentals that are generating losses. He needed to use 2024 and early 2025 business losses against personal income, then pivot quickly to minimize taxes once profitable. Business books had to be completed before personal filing, so an extension was the practical move.

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The Gelt Strategic Approach

Here’s the high-level playbook we used, built around timing, structure, and clean documentation so early losses work harder now and future profits are taxed on our terms.

1) Align today’s losses with tomorrow’s profits
We synchronized the timing of business activity with personal income so early losses work harder now and the structure is ready for a smooth pivot once profits begin.

2) Right-size the entity and compensation
We selected a structure that balances simplicity with future tax efficiency and designed owner pay to manage employment taxes without starving cash flow.

3) Capture what is already on the table
We cleaned up recordkeeping, formalized reimbursements, and prioritized deductions that are often missed by busy owners.

4) Use equipment and startup costs wisely
We mapped an acquisition and write-off plan that fits cash needs today and optimizes deductions across the first profitable years.

5) Build state and local efficiency into the plan
We incorporated an entity-level state tax strategy that preserves deductibility while keeping compliance practical.

6) Coordinate equity, benefits, and savings
We aligned RSUs, retirement contributions, and charitable planning with the business ramp so spikes are managed and long-term savings are maximized.

7) Set up for wealth moves later
We created windows for future Roth opportunities, education funding flexibility, and family payroll strategies with clean documentation from the start.

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Results & Implementation Roadmap

Immediate wins for 2024 to early 2025

• File a personal extension so business books are finished first and losses pass through accurately.
• Classify and deduct eligible startup and organizational costs, plus interest tied to business use.
• Refresh itemized deductions with well-documented non-cash gifts.
• Enable tax loss harvesting in the brokerage account.
• Adopt an accountable plan for home office and mixed-use reimbursements.

Launch year beginning May 2025

• Apply the equipment write-off strategy where suitable once operations begin.
• Calendar formal business meetings at market-supported rates when using the residence.
• Turn on the state entity-level tax election once profitability stabilizes.
• Prepare an S-Corp election for the first full profitable tax year with a salary study.
• Bring children on for age-appropriate tasks with time sheets and job descriptions.
• Coordinate RSU vesting and cash flow to avoid stacking income spikes.

Projected impact

• Pre-profit savings: High-bracket offsets from pass-through losses, deductible interest, and tightened itemization.
• Ongoing savings: State entity-level tax benefits, payroll tax control through structure and compensation, documented business use of the residence, and family payroll planning. Together these drive over $60K in annual savings, with upside as operations scale and equipment strategy is optimized.

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Conclusion

This engagement turned a complex transition year into a coordinated plan. By capturing losses today and setting up efficient structure, state strategy, and disciplined documentation for tomorrow, Allen moves from reactive filing to proactive strategy. The result is a tax-efficient launch, clearer cash flow, and confidence that each milestone translates into real savings.

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Gelt gave me a step-by-step playbook. I finally see how today’s losses and tomorrow’s profits fit together, and I can watch the savings add up.

— Allen, NJ/NY Business Owner