Travis Babb, CFP® and Enrolled Agent at Babb Financial Group, contributed an article to Kiplinger covering nine tax planning questions that high-income earners and business owners commonly face as income grows and financial decisions become more complex.
The article covers topics including Roth strategies for high earners, HSA planning, S-corporation elections, hiring family members, home rental arrangements with a business, and how to evaluate tax-shelter investments. Each topic reflects questions that come up regularly in planning conversations with clients who have outgrown basic tax preparation and need more coordinated, forward-looking strategy.
A summary of the key topics is below. The full article is available at Kiplinger.
Summary of the Article
1. Are Roth Strategies Available for High-Income Earners?
Many high earners assume Roth accounts are off‑limits, but that isn’t always the case. Different types of strategies can create access depending on your situation and how your accounts are structured.
Why it matters: Roth planning may support long‑term tax‑free growth and help create more flexibility in retirement.
2. Is a Health Savings Account Worth It for High Earners?
For those with a high‑deductible health plan, HSAs offer a combination of tax benefits that’s difficult to match. Yet many people who qualify don’t use them — or don’t use them fully.
Why it matters: HSAs can support both current healthcare needs and long‑term planning when used thoughtfully.
3. How Should Self-Employed Business Owners Deduct Health Insurance?
Business owners often ask this because the deduction doesn’t show up where most people expect it. It’s easy to apply incorrectly — and easy to overlook altogether.
Why it matters: Getting this right can meaningfully reduce taxable income.
4. Can a Business Owner Rent Their Home to Their Business?
There is a tax rule that, in certain cases, allows a homeowner to rent their residence to their business for legitimate purposes. But it’s far more nuanced than it sounds.
Why it matters: When used correctly, it may shift income into a more favorable tax position — but documentation and valuation are essential.
5. Is It Beneficial to Hire Family Members in a Small Business?
This is a very common question among business owners. Under the right circumstances, employing family can make sense both financially and administratively.
Why it matters: It must be real work at reasonable pay, but when that’s true, it can open the door to additional planning opportunities.
6. Should Your Business Elect S-Corporation Status?
As businesses grow, many owners start wondering whether their current structure is still the right fit. S‑Corporations can offer advantages — but only under the right conditions.
Why it matters: The election can reduce certain taxes when income, salary structure, and operations support it.
7. Is Your Business Structure More Complex Than It Needs to Be?
It’s not uncommon for entrepreneurs to accumulate multiple entities or layers over time — some of which may no longer serve a purpose.
Why it matters: Keeping things simple can reduce administrative work, filings, and mistakes.
8. Does a Tax Deduction Make a Purchase Worth Making?
This comes up a lot, especially toward the end of the year. The appeal of a deduction can make a purchase look more attractive than it really is.
Why it matters: A tax break doesn’t automatically turn an unnecessary expense into a smart financial decision.
9. Are Tax-Shelter Investments Worth the Complexity?
Some investments are marketed primarily for their tax benefits. They often sound compelling, but they may carry more complexity and risk than expected.
Why it matters: Any investment should make sense on its own — not just because of the deduction attached to it.
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Travis Babb is a CERTIFIED FINANCIAL PLANNER® professional and Enrolled Agent authorized to practice before the IRS. He is the president of Babb Financial Group, headquartered in Flagstaff, Arizona, with clients in Sedona and across the country. His work has been published in Kiplinger and recognized in The Wall Street Journal.
If you have found yourself asking any of the questions covered in this article, that is usually a sign that your financial picture has grown complex enough to benefit from more coordinated planning. We work with high-income earners and business owners on exactly these decisions, where tax strategy, retirement planning, and investment management are reviewed together rather than separately.
If you would like to talk through your situation, we are happy to be a resource.
The opinions contained herein and in the aforementioned Kiplinger article are subject to change without notice. This content is for informational purposes only and should not be construed as investment advice.
