Only 48% of Founders Feel Confident About Their Taxes — Here's How to Join Them

Entrepreneur

6 days ago

Most founders feel tax season is a black box, but treating taxes as a year-round strategy instead of a once-a-year scramble can unlock cash for hiring, reduce financing costs and fuel smarter growth.
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Nearly three out of four founders admit they go into every filing season with gnawing doubt about whether they paid the right amount, overpaid or overlooked a key incentive. QuickBooks' 2025 Financial-Literacy survey shows that fewer than half of business owners (48%) feel confident they're paying taxes correctly — a confidence gap that scales to roughly seventy-plus percent who feel exposed in some way.
Additionally, the share of owners ranking "taxes" as their single biggest problem jumped to 18%, the highest reading since November 2021, according to the NFIB's March 2025 Small Business Economic Trends report.
It's reasonable to feel anxious if you wait until April to think about taxes. By then, key strategies like switching your business entity, timing bonus depreciation or funding a cash-balance plan are already out of reach. But the good news is, the same tax code that keeps you up at night can become a growth engine once you integrate it into every quarter's operating cadence.
Related: 4 Tax Strategies Every High-Earning Entrepreneur Needs to Know
Start your tax season in Q1
When my leadership team gathers during the first week of every quarter, we place tax projections on the same page as revenue, hiring and product plans. That one strategy has helped us realign every future decision from pricing to payroll around its true after-tax impact.
For one, it gives the team cash clarity all year. Rolling 24-month models show exactly when quarterly estimates, R&D credits or PTET payments hit the bank. CFOs can stage inventory builds or ad pushes without cash-flow whiplash.
Another benefit is that strategic windows stay open. If you want Section 179 to offset new equipment, plan the purchase while there is still time to place the order. If you need a new holding-company structure to capture foreign profits, get documents drafted before summer so state filings are live on January 1st of the following year.
Use tax insights for better business decisions
Once taxes move from a "report card" and start being a built-in part of your business plan, they directly shape the three growth levers founders care about most:
Cash-funded hiring. Knowing the precise week a credit lands lets you schedule a senior engineer or enterprise rep in the same pay period, effectively letting the IRS subsidize the first month of payroll. Launch timing with margin in mind. One client planned to ship a new hardware SKU in September. Our forecast showed that delaying tooling expenses until October would push the bulk of deductible spend into the next fiscal year, inflating taxable income now and starving Q4 cash. We flipped the sequence: cap-ex first, launch in November. We were able to unlock six figures in year-end liquidity. Cheaper capital. Banks like certainty. When we refinanced an eight-figure line this winter, presenting lender-ready tax models alongside GAAP statements shaved 150 basis points (BPS) off the rate because underwriters trusted our free-cash-flow math.
Actionable tax strategies and execution tips
Some tax moves don't make splashy headlines but quietly swing six-figure outcomes for mid-market firms — if you catch them before the calendar locks.
Start with an accountable plan for reimbursement. When you formalize how the company repays owners for business expenses, you move those costs from after-tax to pre-tax dollars and raise take-home pay without bumping salary. Put the plan in place before filing the return; with clean receipts, you can even back-date benefits to January 1st.
Next, combine a 401(k) with a cash-balance pension. The pairing can shelter anywhere from $200,000 to $350,000 a year, but the paperwork must be signed by September 15th to claim the deduction in the current year.
A timely pass-through entity tax (PTET) election is another overlooked win. In states that offer it, PTET sidesteps the $10,000 SALT cap and returns roughly 4-6% of qualified income — yet the advantage disappears if you miss the early-year election window or delay the quarterly estimates that follow.
Lastly, never ignore revenue-recognition management. Adjusting contract terms or release dates to smooth income spikes keeps profits in lower brackets and steadies Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) multiples — an advantage that shows up the moment you start courting lenders or acquirers. Coordinate any ASC 606 tweaks with your product-launch calendar so compliance keeps pace with growth.
Related: 7 Advanced Tax Strategies for the Self-Employed
Partnership benefits and important notes on extensions
A year-round CPA partnership is what turns this list into cash. Continuous check-ins surface mid-season law changes, keep mileage logs and cost-seg studies audit-ready and let your internal finance team focus on operations instead of parsing Congressional markup.
While filing an extension can be smart if you're waiting on K-1s or still closing the books, remember that an extension delays paperwork, not payment. If you miss the original due date, you'll rack up penalties, interest and — if numbers look sloppy — heightened audit risk. Poor tax management also unnerves lenders and investors who comb your returns for red flags. Use extensions strategically, but pair them with accurate estimated payments and a living forecast so you never trade one stress for a bigger one.
The shift to ongoing tax management
Taxes remain the single largest controllable expense for most growth-stage companies. If you continue to ignore them until April, they will pull your cash out of the business. Build them into every quarter's sprint review so they actively drive your hiring initiatives, support funding launches and help reduce the cost of capital.
The code is dense and, yes, specialist talent is scarce, but that complexity is your moat once you master it. Start each Q1 with a living forecast, insist that every strategic initiative carries a tax scenario, and partner with an advisor who sees beyond the return itself. Do that, and instead of bracing for tax season, you'll start using it as a tool to fund what's next. This will turn tax anxiety into a competitive edge and unlock growth that the IRS no longer gets to tax.