January money moves high-earners often miss

If you’re a high-earning business owner, January is a great time to build a repeatable system

That frees you up the rest of the year to focus on your business - while your wealth compounds in the background.

Here are the moves I see underused even among high earners (especially S-Corp and partnership/LLC owners).

Build your tax system - this is the time to do it

Most owners think about minimizing taxes. Eliminating penalty risk and surprise bills is equally important. Here’s how to do it:

1. Use the safe-harbor approach (for estimated taxes)

Instead of trying to perfectly predict your earnings this year, aim to pay enough estimated taxes to satisfy IRS “safe harbor” thresholds.

This reduces the risk of penalties - even if income ends up higher than expected. Ask your CPA to calculate this for you.

2. If your income is lumpy, don’t let the IRS pretend it was smooth

If you earn most of your income in the back half of the year (big invoices, commissions, etc), there’s a method that can help align estimated tax payments with when income actually arrived.

It’s called the Annualized Income Installment method - it calculates a lower payment for slow periods and a higher one for busy periods.

It’s great for freelancers and business owners with lumpy / seasonal income. Talk to your CPA about it.

3. Automate estimated taxes

Set up a system to automate your estimated taxes so you don’t underpay or overpay.

Here’s how to do it:

• Setup a dedicated business savings account - for your estimated taxes.

• Every month (or week), transfer a fixed percentage of your revenue to this savings account.

• Ask your CPA to compute this for you - and align with your safe-harbor amount

Why this is a January move: your system has to exist before the revenue hits.

The savings live in “boring paperwork”

A lot of tax savings is just documentation done correctly. Here’s 2 common areas that trip up S-Corp or LLC owners

1. Accountable plan reimbursements

If you’re an S-Corp owner, you want the company reimbursing legitimate expenses under what’s called an accountable plan structure (with receipts/substantiation).

Make sure you have this setup in the beginning of the year. Without it, your reimbursements may be treated as taxable wages, subject to payroll taxes.

2. S-Corp health insurance - make sure its setup right

As an S-Corp, it’s usually favorable for the health insurance premiums to be paid via the employer. For >2% shareholder-employees however, the mechanics matter.

Not setting this up properly at the beginning of the year, means losing out on significant tax-savings.

Retirement savings - it’s more than just “max your 401(k)”

High earners often make some retirement contributions, but miss the higher-order question: What’s the optimal retirement savings strategy for me?

Here are three things to consider in January:

1. Solo 401(k) has two “hats” - make sure you know to use them

If you’re self-employed, contributions can come from different buckets — either as an employer or an employee. Each has different planning implications.

This is the time to plan your contribution strategy.

2. Setup Roth contributions for your retirement plan

Starting in 2026, more types of retirement plans (e.g. SEP IRA & SIMPLE IRA) can now support Roth-style contributions.

Roth savings grow tax-free - a massive advantage. Don’t miss out on it.

3. Consider a cash-balance/defined benefit plan.

This isn’t for everyone.

But if you have very high & consistent profitability and want tax-advantaged savings far beyond “normal” contribution levels, a cash-balance / defined benefit plan is worth exploring.

It’s also a beginning-of-year conversation because setup and funding mechanics matter.

Investing with a strategy - key to long-term wealth

High earners don’t lose because they chose the “wrong stock.” They lose because they don’t have a real strategy.

1. Diversification is critical - you don’t want all eggs in one basket

If your investing strategy is just the S&P 500, you are taking on a huge amount of risk. And buying a bunch of mutual funds is not diversification.

You need to go beyond stocks.

And diversify using bonds, commodities, precious metals, crypto & alternatives - in the right amounts. 

Getting this right in the beginning of the year is critical.

2. Don’t ignore tax-optimized investing

There are multiple strategies such as tax-loss harvesting, investment location (right asset in the right account) that can significantly increase your after-tax returns.

Do this now in January - and not scramble in December.

3. Keep the right amount of cash - in the right buckets

Many owners keep too much money in the wrong bucket. Here’s a quick breakdown of how to think of your cash buckets:

• Business Operating cash: Use this for near-term business needs

• Tax cash: Discussed above. Keep this for making your estimated tax payments

• Emergency funds: Your liquidity buffer for urgent, unexpected financial needs.

And invest whatever is left.

The 14-Day January Checklist (high earners)

If you do nothing else, do this:

1. Setup your tax system: Open/confirm a dedicated tax account + automate a % sweep of revenue

2. Setup your entity mechanics: S-Corp vs partnership—make sure payroll/distributions + reimbursements are intentional

3. Invest for long-term wealth: diversification + tax-optimization + cash management

We are here to help

I work with successful business owners and self-employed individuals. Most are extremely busy running very successful businesses.

Having a team that can manage and grow your wealth will not just save you thousands of dollars - it can shave several years off your financial independence journey.

If you’d like to learn how we can transform your finances, just reply to this email.

Till next time,

Sumeet @ InverseWealth

The Fine Print

This content is for educational purposes only. Not investment, tax or legal advice. Do your own due diligence and consult with a professional before making any decisions.