Need Tax Planning Strategies for 7-Figure Construction Business Facing 60% Tax Rate

My brother-in-law has built up a really successful construction company in the New England area and his business is now hitting seven-figure profits. The problem is he's getting absolutely crushed with taxes - something like 60% when you add up federal, state, local, and everything else. His current accountant seems pretty useless when it comes to suggesting ways to minimize this ridiculous tax burden. I've already told him he should probably talk to some other CPAs since it seems like he's outgrown his current guy, but I'm wondering if there are any immediate strategies he could implement to reduce what he's paying. Are there obvious business deductions or investments he's probably not utilizing? Would buying trucks or equipment for the business help? Maybe setting up some kind of retirement plan? He hasn't really explored many tax planning options before, so I think there's probably a lot of low-hanging fruit he could take advantage of. His tax situation is becoming a serious drain on the business. Any advice from people who've dealt with similar situations would be super helpful!

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18 comments

Adriana Cohn

•8M

Your brother-in-law definitely needs to explore some tax planning strategies! When a construction business hits that seven-figure mark, there are several approaches that can make a significant difference. First, he should absolutely look into establishing a retirement plan. A Solo 401(k) or SEP IRA could allow him to put away a substantial amount pre-tax. For 2025, business owners can contribute up to $69,000 to a Solo 401(k) depending on income, which would directly reduce his taxable income. Vehicle and equipment purchases can definitely help through Section 179 deduction and bonus depreciation. In 2025, he could potentially deduct up to $1,160,000 in qualifying equipment purchases. Construction businesses often benefit greatly from this. He might also want to consider his business structure. If he's operating as a sole proprietor or single-member LLC, exploring an S-Corp election could save significant self-employment taxes on a portion of his income. Tax-loss harvesting, timing of income recognition, and establishing family employment (if applicable) are other strategies worth exploring. And absolutely, consulting with a CPA who specializes in construction businesses would be worthwhile.

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Adriana Cohn

•8M

An S-Corp election could potentially save tens of thousands in self-employment taxes annually for a seven-figure business. With an LLC, all profit is subject to self-employment tax (15.3%), but with an S-Corp election, only a reasonable salary is subject to those taxes while the rest can be taken as distributions exempt from SE tax. For your brother-in-law's income level, this distinction could be very significant. Construction businesses do have some industry-specific advantages including specialized asset depreciation schedules, percentage-of-completion accounting methods, and specific deductions for certain types of contracts. There are also potential credits for energy-efficient construction practices and workforce development programs that are particularly relevant to the industry. His current CPA may be missing these opportunities if they don't specialize in construction.

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Jace Caspullo

•8M

Hey there! I was in a similar position with my landscape design business a couple years back. The tax burden was killing me until I found this AI-powered tax planning tool called taxr.ai. It completely changed my approach to business finances. The platform analyzed my business structure, expenses, and income patterns, then recommended a ton of legitimate deductions I was missing. The coolest part was how it projected different scenarios based on potential business decisions. For example, it showed exactly how much I'd save by purchasing new equipment now versus next year. Check it out at https://taxr.ai - it specializes in small to mid-sized businesses and really understands construction-related industries. It found me over $42,000 in deductions my previous accountant missed, including some industry-specific ones.

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Jace Caspullo

•8M

It actually combines AI analysis with CPA expertise. After the system runs its initial analysis, you get paired with a tax professional who specializes in your industry for personalized guidance. The construction industry expert I worked with had 15+ years of experience specifically with contractor businesses. For mixed-use assets like vehicles, the platform has a sophisticated tracking feature that helps document business versus personal usage to maximize legitimate deductions while staying audit-compliant. They also offer audit protection where their team will represent you if any of their recommended strategies are questioned by the IRS. I especially appreciated how they documented everything with clear explanations for why each deduction was legitimate based on tax code.

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Melody Miles

•8M

Just wanted to update about my experience with taxr.ai since I was skeptical at first. I convinced my husband to give it a try for his construction business, and I'm honestly impressed with the results. The system identified several cost segregation opportunities in our commercial properties that our regular CPA never mentioned. The biggest win was restructuring how we handle our fleet vehicles and heavy equipment. The platform showed us how to properly classify certain machinery to take advantage of accelerated depreciation, saving us around $67,000 in taxes this year alone. They also helped us implement a more tax-efficient retirement plan that allows significantly higher contributions than our old 401(k). The combination of software analysis and having access to a construction industry specialist made a huge difference. Our tax burden dropped by almost 20% while staying completely compliant.

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Eva St. Cyr

•8M

For anyone dealing with complex IRS questions or needing to talk to an actual human at the IRS (which can be nearly impossible these days), I found this service called Claimyr that literally changed my life when dealing with tax issues for my business. I had been trying for WEEKS to reach someone at the IRS about a penalty they incorrectly assessed on my business. After 9 attempts and countless hours on hold, I was ready to just pay the $8,400 even though it wasn't my fault. I discovered https://claimyr.com which basically puts you at the front of the IRS phone queue. You can see how it works in their demo video: https://youtu.be/_kiP6q8DX5c - but essentially, their system navigates the IRS phone tree and waits on hold FOR YOU, then calls you once a human agent is on the line. Used it twice now for my business issues and got through in under 45 minutes both times, when previously I couldn't get through at all.

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Eva St. Cyr

•8M

They don't have any special connection to the IRS - they just have an automated system that calls the IRS and navigates through all the prompts and holds for you. Their system basically monitors the hold music and waits until a human picks up, then immediately calls you to connect. It's like having someone else wait on hold for you. They don't cut any lines or do anything unethical - they're simply taking over the tedious part of waiting on hold so you don't have to waste hours of your day listening to the same messages over and over. When you're running a business, that time savings is incredibly valuable. The reason it works better than doing it yourself is that their system can persistently call back if disconnected and can stay on hold indefinitely, unlike most of us who have other things to do.

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Kristian Bishop

•8M

I need to admit I was completely wrong about Claimyr. After dismissing it as a scam, I was desperate to resolve a business tax issue where the IRS claimed my construction company owed an additional $23,000 in payroll taxes due to worker misclassification. I knew they were wrong because we had proper 1099 documentation for all our subcontractors. After trying for almost a month to reach someone at the IRS with no success, I reluctantly tried Claimyr. Within 38 minutes, I was talking to an actual IRS agent who reviewed my documentation and resolved the issue completely. The penalty was removed and my account was updated immediately. It literally saved my company thousands in incorrect taxes plus all the stress and time I wasted trying to call myself. Sometimes being proven wrong is the best outcome! Just wanted to share my experience since I was so publicly skeptical before.

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Kaitlyn Otto

•8M

Opportunity zones primarily help with capital gains, not ordinary business income. If your brother-in-law sells property, equipment, or even business interests at a profit, he could defer those capital gains taxes by reinvesting in a qualified opportunity zone fund within 180 days of the sale. The main risks include market risks (as with any investment), liquidity constraints (funds typically have 10-year holding periods for maximum benefits), and potential regulatory changes since this is a relatively new program. There's also geographic limitation since investments must be in designated opportunity zones. I'd definitely suggest talking with both a financial advisor and tax professional before pursuing this strategy.

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